Wanganui Meat Preserving Company.

Wanganui Herald, Volume XXIV, Issue 7108, 22 May 1890, Page 2

Wanganui Meat Preserving Company.

ANNUAL MEETING.

ASSERTIONS AND CONTRA-

DI'JTION.-i.

AN INQUIRY AGREED TO.

Tho fourth inmral meeting of shareholders in the above Company was held at the Sleam Packet Hotel yesterday, when there wore present — Mo«srs H. C. Field (chairman), F. R. Jackson, D. Peat, J. W. Peake, Lupton, Fleming C. Cameron, J. Handloy, iSimpson, J. Laird, A. Perry, W. Alkcn, Hughes, Straohan, Lomax, Watkins, J. Alexander, L. Jones, Lilliton, Pol-on, S. Handley, F. Harrison, Bunting, Ot. Hutchison, M.H.1?., A McDonald, Moon, Bremer, Black, Wyburnc, Downes, R, Hair, Currie, and W. Bamber.

Thefollowingieporthasbeen submitted. — . You have been called together rather later \ than usual, partly boiaiisc the iili.ess of the j Manager delated the maMng-up of lliepist j year's accounts, and partly because >onr j Directors considoivd it neccsary to j thoroughly investigate tho euises that have led to the unsatisfactory position of the Company which the accounts have revealed It i 3 with extreme regret that jour Directors have to lay before you a Balance Sheet oven less favourable than that of last, jcar. Duiing the enily part of the 3 ear just ended the Company's position appeared to improve, owin" to contracts having been taken at remunerative lates : in fad, when roughly estimating tho results of tho first six. months' operation?, your Directors considered that (he loss of the previous) ear had beon retiioved Tho arrival of account sales from London, however,, show ed that the loss had beon far greater that had been . estimated; and those which have come 101 0 hand during tho half-year ending February 28th disclosed further very heavy 1 losses. Even the results of the eoutiaets weie far less than had been anticipated, through causes which could not havo beon foreseen. A iciy largo proportion of the amount which appeals in this ye ir's Balance ' Sheet as having been lo3t was actually lost timing the two pi'eMOus years, on consignments of which account sales had not come to hand at date ot last Report. Your Du'ectois have lately turned attention to tne extension of the Colonial trade, which they find to be more remunerative, through its affording quicker returns, and involving less expen.o in various ways, Yonr . Director* hope to sco a full attendance of Shareholders nt tho Annual Meeting, 'lhe ■ business for tlie meeting is to adopt tho Balanco Sheet, and to elect four Directors and an Auditor. Mc^sis C. Cameron, J. McGiegor, and J. Handley rctiro by '• efllimon of timo, but are all eligible for re- ' election. Mr Jackson retired somo months ago.— ll. C. Field, Chairman. Tho balance-sheet for tho year ending 28th Febvuan, 1890, was as follows : — LIAMH l'II!S.

Audited, found correct, and to bo in accord inco with tho Company's books : Ed. Biiotroiuox, Auditor. Mr Field, in moving the adoption of the above, read a long statement, of which we mako the following condensation :—: —

Mr Field said the fiuaucial position of the Company hid taken the directors quito by siirpri-o. They had been getting better prices at Homo, extending their local trade and putting then 1 shop business on a bettor looting, and had thought they would bo iiblu to show that last year's deficit was considerably reduced. The delay in getting in ro'urns, occasioned by tho dock stukc, obliged them to incur an overdraft. When the auditor endorsed tho bilanco-shoot they found there was something wrong, and had instituted investigations. Tho fundamental evil was, he considered, their system of accounts. He did not know who arranged tho books, nkethor MrC'owio or Mr Jackson, but these doublo entry accounts had been a kind of Chinese puzzle to him. A s mere book-keoping the system is perfect. Everything balances, but, as accounts enablirg them to see at once whether the vaiious departments were profitable or not, they were not only delusive but misleading. Their main loss had occurred through the English trade, but this they did not know till recently because thero were outstanding returns for meat sent Home in 1887. Frozen meat ventures had resulted in a loss of 15(iO directly, besides tho indirect loss of the f jre-quartcrs in preserving. One result of their book-keeping was that they ne\er knew what their preserved meat cost when it loft the works. Ab a matter of fact they now found that it cost them 4Jd, with all Colonial and London charges to be added beforo any profit could bo nmdo. Thus for 2u'3 8321bs pieseivcd fiom Novomber, 18S7, to October, IBSB, at nu inorago cost of -W, they netted only ljd at Home, and as they dhl not see the returns till late in 1889 they did not know till then that they had lost £1300. Those losses affected this j car's balance-sheet, though they properly belonged to )Bt>7 and 1883 In both the first and second bnlanco-shcets lho proceeds of goods sent Home had been estimated at far more than they realised, and in the presont balance-sheet they had not calculated on any surplus at all. The shop tr;>de, tallow, pigs, and colonial trade in proservod meat all paid more or less. Ho had prepared returns showing tho actual results of tho export departments. Ho had found it impo-siblo to divido tho charges exactly owing (0 tho way in which the books wcro kepi, but he had apportioned them H9 neaily as possible. Proceeding to anaiyte the balance sheets ho commenced with that ot February 1888, and drew attentiou to tho fact that tho amount paid tor sheop and cattle did not appear nt nil. Ho had remarked on this at tho time, but Mr Jackson assured him it was all right, as tlipjlmd made 0, profit on tho stock account, which appeared on the other Bicto. For this reason, though ho did not understand such a system of keeping accounts, ho did not question a similar ltom in tho 1889 billanco sheet. Tho result of their systom was that tho cost of stock camo out of capital, any profit mado went to help it, but tho losses aro not charged till tho annual bnlanco sheet is mucto up, and it nas impossible to tell tho ultimate result without tracing tho meat through tho various accounts. The pro isional directors took over 300 acros at Pickwick which weie not wanted, and of which only 80 acros were used, (he rest being sub-let at a loss, "hoy had nl first used tins land for gra/ang stock which they sold, but if tho rent of tho land had bcon deducted from tho " profit " tho result would havo been much less than £559 3s •1:1. The next item on the credit side was £896 3s 2d, which was utterly dclusne, and had a fair proportion of the working expenses been charged there would have been an actual loss. On tho first four shipments a small profit had been made and tho profit on tho other nine shipments was calculated on thut basis Somo ot thoso returns came to hand tho following joar and appeared in tho isyO lls Id loss 111 tho balance sheet of March 1887. Now the returns were all in they found that the nicuts shipped in their first year actiiully resulted in 11 loss of £1835 8s 9d in placo ol a profit ot ABO 63s 2d as shown in tho balance sheet. Tallow

account, £363 19s 2a, wag right as far aa it wont, but if the proportion of worting expenses had beon deducted it •would b 3 reduced to £156 6s Bd. Tho profits on the Bliops were delusive and unfair to the shopsi and carts, which we.ro paying well The r<'fl-on why Ouy *c? nod so httle profitable was thnt the surplus meal, which had been put into the shops at ljd an.i 2d per lb, was transferred to the preserving woi'Vb at fir.3t at }d and afterwirds at VI per lb. Ho found tint an average weight of about 1 OOlbs per day was 80 transferred : equal to a bullock and a half and three or four sheep. There could not be that quantity of absolutely unsaleable moat j and there could be no question that tho built of what went lo preserving at -jd or id was meat which other butchers sold at from Id to l^ri. It went into tho shops al IJd 2d per ib, and when it was passed into the preserving works at those ruinous rates, the loss was charged to the shops, which thuseeomed to yield so little. As their r.'nts were not charged to them, but appeared in a separate account, thoy still showed ism ill profit. It w ou!d have paid thoin bett er to have sold the meat at the piice3 charged lo the preserving works thin to have preserved it. There wa? a Ios« of 25 per cent weig'it. in preserving, and after allowing for the bones, they only got Inlf a pound of picservpd meat for each pound sent in. Piactically, the;) made the farmers a pvesent of 4CO cattle and 1200 sheep during tlioycnr, besides losing £1800 in preserving the meat. At first he had thought the meat was being transferred at Id per lb. Had bo known it was transferred at Id, he would have seen that there must bo a heavy loss. Tho cost of tinplate, solder, mating tins, labels, etc , could not put down at les3 than 2Jd per lb, so that tho meat Btood them in 4d the first year, and even nure in the second. In the second balanco-sheet there wa3 a loss of £43 7s on frozen meat, but all the returns were not in, and tho actual loss came to 15G0, of whhh. £300 were on the shipments made before the balance-sheot was drawn tip. They sent Homo first-class meat, and got second and third clas3 prices. So with their preserved meats. As to the frozen meat, they had grave doubts whether the moat sold as theirs wa3 theirs at all, and though the best beasts were sent away, those killed here paid the best The animals sent away in any draft were of evon quality, yet the prices at Home indicated that what were sold as thoirs varied enormously. In one case, they bought pait of a draft of cattle, and the seller nob being ablo to dispose of the rest equally satisfactory, sent them to bo frozen, Their shipment and his went Homo by the same vessel, though through different agencies, and the result was that his beasts netted nboiit twice as much as theirs. Tocronn oil, they 6enfc a shipment Homo by one vessel, nnd received returns of the meat as by another. The weights sold at Homo 'w'ero 5 or 6 per cent, less than those charged as frozen, though on one lot the weight was 1801 b more than at Home. This being unsatisfactory, they were glad to get rid of their space. By tho frozen meat statement he had prepared, it was seen that tho charges on meat killed in Wanganui wero much less than on meat killed in ', Wellington. Mr Field then went over some ! of the items in tho 1888-9 balance-sheet, explaining that the Eidgway Street shop '. bad been cloned, as it was loung tbe company monpy, and reforring to other items » w hich showed a profit bb not being so profitl> ablo as thoy looked, because a fair share of L working expenses was not charged. This ■ year's balanco-sheet was drawn up on the ! same linos, in fact, had to be to agree with the books. The item preserving, £3389, , would bs increased by adding its share of ; working expenses, but the portion of the ) loss from the prei ious tw o years' shipments 5 would have to be deducted. Tho loss, so i far as returns went, on this year's work ap5 poured to bo £1833 Is 2d, but they had not I rccched any returns since October 30th, 1 and as they had only credited tho lastship- • ments with the 2UI to 3d per lb, actually > riraun on them, they might fairly expect surpluses which would go to mince this apparent bss. Tho same .' was the ca^o with tho tallow. 3 The shop trade, through comppti- , tion, had been less profitable than before, } but it had more than piid its way. As to t tho items on the profit side the working ox- , penses would have swallowed up tho differ2 enee on the fro/.en meat; and pigs aud tallow t would be reduced, the lutttor by tbvee- » fourths. In concluding Mr Field 6aid ho thought ho hud shown how the appearance ~. of the accounts would have been changed if each department hud been debited with a 2 fair share of the working expenses, instead 2 of bumping them together on one side of - tho account and making imaginary profits 1 appear on the othnr. If this had been done, monthly or quarterly, as ho thought it should have been, they would have seen what thoy were about instead of being in , the dark. After alluding to tho high charges by their agents which had tho effect of 0 rendering their contracts less profitable Ij than expected, Mr Field mentioned that the overdraft on tho balance sheet had boen f reduced by about £500, and concluded by 0 moving tho adoption of the report and r balance sheet. B Mr F. It. Jackson seconded tho motion „ pro forma, and characterised the statement just >ea<l and tho rppoit and bilancc sheet as scandalous, discreditable and unjust. It was scandalous becauso itrcvoalod , the ( acl that a state oE affair 3 existed which JJ the chairman and director ought to have been very well aware of, and which when j published would create a scandal in the j district ; discreditable becauso they ought to „ havo made themselves acquainted with tho position as they progrcsaod, whereas it was perfectly clear to him that they knew nothing J about tlie business till Mr Cowio brought c before them the balance sheet of February „ 2Sth ; and unjust becauao the directors tried to thiow tho blame on their predecos- ( j sors. 'llio meeting might consider these remarks too strong; if they did bo when he ; had finished with his figures he would cry '" peccavi. Ho had inaugurated the system .. of book-keeping himself, and adopted tho ordinary double ontry principle, and for f this reason that if it wero desired nfc any J time to know exactly how the Company ,f stood, all Mr Cowio had to do was to tako !|. his balances, take stock, add up the figures r and in a few hours he could plaoo before the directors tho position of the Company. " (Mr Peat -Hear, hear). Mr Field had [I admitted that ho know nothing of bookd keeping, but Mr Cowie understood the r systom thoroughly, and must havo known \ that ho was misleading the directors, when l' he did not put before thorn tho balance ' sheet for tho montli as was dono in his (Hr y Jackson's) time. (Mr Cowie— Every quar- (. tor, Mr Jackson). He would ask them to go through the repoit with him. From tho first paiagraph it was clear that till 'i. February 28lh tho directors know nothing jof tho accounts— lhey say so thembolves. Ho r (Mr Jackson) took the whole responsibility j. of inaugurating the systom of book-keeping 3 adopted, and ho considered his reputation [ as a business man was at stako when accu- ' satious such as Mr Field madoworo brought j against him. He had, theiefore, prepared some figures, and had them printed for tho 1 convenience of thoso present. The balanco shoot of 188S show cd a surplus of £1092 17s Id, nnd tint of 1880 show ed a debit balanco j ort'uPO lla Id. That included the whole cost 5 of moat and other pioduco they had bought, j He wanted this clearly understood, They know then what tho meat had j cost, and that it cost more than B thoy wero getting for it, and thoreforo f thoy cuitailcd tho preserving to one day a 3 weok. Tho balanco, ho mentioned, included ovcrylbing, w& if tho company hod j then iitoppod payment, nothing could havo [ affected "that balance, but results from meat I ullo it, in store, aud in London for sale — . becanso tho cost piico had beon takon into j account, and the pr'serving account showed exactly what tho cost was, and on the other I Bido thoy had placed only the amount j drawn ngainst tho meat. , Mr Lilliton— Yqu moan that if the oqst j price was not realised at Home, the bnjanco 3 would bo increased. 1, Mr Jankson — Yes, nothing clso could f have affected the Company. The cost was b debited, and tho balance loft was £590. t From this year's report tho shareholders • would lmngtno that tho bulk of tho losses i had been inclined in his (Mr Jackson's) t limp. Ho would, howevor, lny on (lie table j a statement of surpluses and deficiencies j from February 18S9 to September 1889, I which showed on preserved meats a defiuionoy of £'158 0s sd, on beof £3S 10s Id, . and on tallow a surplus of £200 17s 5(1, , leaving a net deficiency of i 289 ISs Id. , This whs the total loss incmred duu'ng his [ term of office, but to proceed to Ihe i '■luither icry heavy losses." A second statement produced showed that fiom ■ October 1889 to Fobruary 28th, 1890, there woie no losses on meats, tallow or beef, but a surplus of i 768 3s Id. TJ ore was not iv ■ single penny of a deficiency, yet tho report i said tho deficiencies were oven 1 irger than they wore before. From February 23th to '

May.iheirsurplujea'oameto £262 lfß2cl,*na by Tuesday's mail, they received 4 farther v surplus of £40 17s Bd, making a total of. 3UTptuse3 for that sir months o£ £1121 12s -Id. These wore the correct figures, and ho defied nnyone to dispute them. Ho wuM no. 1 , ;,o fc'hcr ,i c! -!iov, liv j 8 C U as tliey weio uhi'ii ho ioifc, anil what they were to-day, and !io would show where the loss had been. Leaving out tho leasehold properties and oflice furniture on one side, andc.pitdl on tho other, and taking only the realisable ns-el?, there vere bills roeeivable £78 7i Gd. stock 12570 7s 5d sundry deblors, JgtiOO 4s 9d, cash in bank, £228 7s sd, and calla since received, £414, so that altogether they hnd assets worth £4i42 15s 2d. Their liabilities were bills payable, *707 Is lOd, and sundry creditors, <■ £415 3a 7d, leaving a net credit balance o£ ' £3320 9a 9d, and tho only thing that could havo affected that would have been the surplus or deficiency on tiie meat at Homo at tliat time. In preparing that balance-sheet thn stock was carefully valued, 5 per rent deducted from tlie sundry debtors, and no ostimato made of any surpluses on meats sont Homo. Taking this year's balance-sheet ho found billd receivable £20 7s Gdj stock-in-hand, £1517 6s 5d j sundry dobtora, £1046 lls sd ; cash, £38 18s Id -total, £2623 3s sd. As against that they had an ovei draft of £1715 19a Gd; bills payable, £B(i7 8s 4d ; and sundry creditors of £1170 9s lid— a total of 1 3715 14s 4d— so that they had a deficiency of £1130 14s 4d. So that they had actually loot this and used up as well the £3320 tho previous directors had left them. In other words tho total loss caino to £4451 4* Id. There was a reclamation of £239 13s Id on produce at Home fairly chargeable on 1883, thus reducing this year's working loss to £4161 lls, and ret the present directors tried to throw the blame on their predecessors ! The balancesheet showed a debit of £5033. Ho had mido up £415', but there was last year's balance of £590 lls Id to go ou to it, and some smaller item? which made up the amount. Sir Jackson alluded next to the sentence " Mr Jackson retired some months ngo " as misleading, he having retired at the Qrst meeting after the last unnanl meeting. Ho had warned Mr Cowie and the directors against pursuing the preserving, knowing they were losing a penny on every pound thoy tinned. Ho had arranged a scheme for freezing a hundred head of beef a month, and took up the space but the directors thought tho policy bad. Ho took some of the space himself and found the speculation to pay, and he believed if the directors had gone in for freezing in place of preserving they would have had a profit in place of a lo3s. Putting together tho total surpluses from the inception of the Company to the present time he found they came to £2330 2s 3d as against deficiencies of 1559 Is 7(1, leaving a nett surplus of £1821 Os 81. He did not want to blamo the directors unnoccssarily, they had naturally leant on Mr Oonie, and lie could not have given them a proper statement of accounts. Tho men who applied the brake to the concern wcro out of it, and off thoy went spending at the rate of £340 a month, losing iSo a week, or £14 a day. Suddenly they came to tho bottom of the hill with a crash, landing in insolvency and disgrace, and they came now and said the former balance sheets were wrong and endeavoured to cast tho blame on thosa «ho came before them. Thoy had now heard his reasons for saying the report was unfair and scandalous, and if they wore of opinion tho expressions were 100 strong he would withdraw them, (ipplause) Mr Field said they had made no charge against previous directors, but had simply Btatod facts. He took his own sharo of tho blame, and thought others should take theirs. (Hear, hear). "When the last balance sheet was mado up thero were 18 shipments of meat not aocounted for, and thoy wore not fairly chargeable to this year. The other losses were in tho working expenses which were not charged. Mr l'eat and Mr Jackson.— Tour own secretary says thoy were. Mr John Handloy.— One at a time, please. Mr Field.— They wc.-o not included. Mr Cowie made an explanation distinctly denying that he had misled tho director*. He had put everything as clearly as possible before thorn. From tho :mnnio book he showed that though while Mr Jackson was on the directorate a resolution was passed limiting tho preferring works to one day a week ut the m\xt meeting and also before ho left they took up a contract, and he was also instructed to reduce the price of meat for the local nnd colonial trade. Ho bad always carried out the wishes of tho directors in their entirety, and had dono nothing v.ithout asking them. Some timo ago he suggested that the prico of preaervod meat to colonial customers should be raised, but it was held over, and had alnays bean held over since then. Tho fact was that they had done too much preserving, aDd had not drawn anything like the amount it had cost them. Mr Jackson.— When that Imlanco sheet of £596 was brought down, did it include everything. Mr Cowio.— Everything Mr Jackson.— And nothing could havo affected it except the results from Home ? Nothing. Mr Jackson oxplainod that the meats had beon kept so long at Homo to see if there was any prospect of the market rising. Their agents, Messrs Johnson and AHsup, were men of tl-.e highest standing, and he ventured to say that their charges were as reaaouable as t oso of any firm doing business between the Australasian Colonies and London. After some conversational discussion Mr D. l'eat moved that tbo meeting stand adjourned for two weeks, and that Messrs Liftlton and Llojd Jones be appointed to go through Hie books and report as to the position: Thoy bad heard Mr Jackeou'g statement and challenge, and this would givo the shareholders an opportunity o£ ■ ecing which side was correct. He agreed that the proceedings were scandalous, and the report showed that tho directors were ignorant of the whole concern. Mr J. Handley seconded the amendment which was carried, A list of thoso who had supplied meat to the Company was then read and the meeting adjourned

in Capital Account — £ s. v. 885 shaves at £10 each ... 8830 0 0 Less unpaid shares ... 3G5 18 G £?481 1 0 Foifeited shares 17 10 0 TBSOI 11 6 „ Bunk of NAW 17 5 19 6 „ Bills payable 807 8 4 „ Sundry (.rulitors 1170 Oil £1 2,255 9 3 asshis. £ a. d. By properly & plant leaseholds 4331 4 11 „ Ollieofiumttiro G2 5 9 „ Bills receivable 20 7 6 „ Stock in hand 1517 0 5 „ Sundry debtors 104GII G „ Cash nfcoilieo 38 18 1 „ Bvknco 5038 15 2 £12,255 9 5 morn and loss account. JB s. d. To balance- forward 50G 11 1 „ Inlerest 50 4 8 „ Charges G 0 0 G „ Preserving . ... 3380 1G 2 „ Rents 232 15 10 „ Insuianco 50 19 8 „ Shop 531 \i 2 „ Sul.iries . . ... „, 259 II 8 „ Repairs 39 1 7 £37G0 13 4 B> profit on manufactures „, 721 18 2 ,', Bul.ince ... , 503S 15 2 £5700 13 4 Peieb Cowie, Secretary.