AUCKLAND FARMERS' FREEZING CO.

Waikato Times, Volume LVII, Issue 8006, 11 September 1906, Page 2

AUCKLAND FARMERS' FREEZING CO.

MEETING OF SHAREHOLDERS. PURCHASE OF AUCKLAND WORKS SANCTIONED. (By Telkukai'h.—Special to "Waikato Times). AUCKLAND. This Day. A sp« j ci 11 general meeting of shareholders in the Auckland Farmers' Freezing Company was held yesterday afternoon in the Chamber of Commerce rooms, Auck la'id. Mr J. Barugh, Chairman of Directors, presided, and there was aa attendance of nearly 30, including Captain Worsp and Messrs W.N. Sturges, Makgill, J. C. Allen, and H. ! '. Smith, directors. The Chairman moved the special resolution, to alter the articles of association of the Company in connection with the agreement to purchase Messrs Hellaby's works. This resolution has byen circulated among shareholders. Mr Makgill seconded. Capt. Worsp moved, and Mr Sturges seconded, an amendment which provided that although Messrs Hellaby's under the original motion might transfer shares to whom tht>v pleased, such transferee may nut sell to a third party without the consent of the directors, as now required in the case of all other shares. Mr Mahony, the Company's solicitor, explained the amendment, which was adopted by the mover and seconder of the original motion. Mr J. ''. Allen said there seemed to have been a little misunderstanding between himself and his fellow-directors. Mr Barugh had telegraphed to hmi asking him to ationd the meeting held recently in Hamilton, 'ut the wire did not reach him until Thursday morning, which made it quite impossible for him to go. He (the speaker) admitted thtt he fee nded the resolution passed at the directors' meeting in favour of amalgamation with Messrs Hellaby, but on further reflection he concluded that such amalgamation would not be in the inter of the shareholders. He accordingly informed his co-directors that he could not support them, and he voted accordingly at a subsequent meeting. With regard to the dead meat trade, the speaker read a resolution of a former meeting which determined inter alia that the Company should if possible, buy direct from farmers by weight; and should supply all classes of meat, including small goods. This showed, Mr Allen went on to say, that the directors said they could not act so well in the capacity of agents as they could if they were acting as direct purchasers from farmers, and it was now proposed that the Farmers' Freezing Company should shut itself out of the dead me it trade for fifteen years, but there w s no telling what might occur during that time. Perhaps, if they attempted to do business as agents, Messrs Heliaby might get an injunction to restrain them; also it would be very difficult for anybody outside the Company to start in

the dead meat business with Messrs Hellaby against them. It had been stated that there was 3ome gain in the weight of meat treated at Messrs Hellaby'a works a3 compared with that at other works, o.ving to the methods employed. He had, however, made inquiries from the Company's engineer, who had inspected all the principal freezing works in the colony, and who assured him such was impossible; in fact they had no reaaon to fear the competition of Messrs Hellaby. He had learned that during the present season that firm had bought lambs at 14s a head in Waikato and sold them at 10s a head in Auckland. Messrs Hellaby had had no beef to freeze all the time tha farmers' works were open ; they certainly got a good deal of butter, some of which would still go to them, but as factories found out how much better it could be dealt with at Penrose, the farmers' worlts would get an increasing share of their trade. Under the proposed amalgamation, butter would be brought to Auckland to freeze, while the Glasgow works were closed, and would thus have to pay more railage.

Anoths-r effect would be that stock, which would otherwise be exported, would be retained in the country. At the present price of beef in England, cattle were worth 21s to 22s per lOOlbs at the works, but if the direct irs' proposals were adopted, the cimpetition for stock would not be so keen, and uric >8 would go down, and in his opinion, good prices for stock were more desirable than dividends to shareholders. (Hear, hear.) Messrs Hellaby had a freight contract whic'i expired on June Ist, 1!X)6; the Farmers' Company also had one under which they were bound to ship all meat by one line of vessels. When Messrs Hellaby's contract expired, freights came down by an amount equivalent to adding £2 par head to the price of bullocks iu England. Freight concessions given Messrs Hellaby must also be given the Farmers' Company. Similar concessions had also bean given in the freight of sheep and lambs, but under amalgamation they would not be able to battle for such reduction as Messrs Hellaby could. Also, Hellaby's would wish to keep the stock in the country to keep the prices down, but the farmers wished to send them away to keep prices up, and thu< they would have men on the directorate working against the farmers' interests. The Company now had

a credit balance of between iMOO and £SOO, which would be iuoreased if the season proved good. The director? proposed to give up the right to sell tinned meat for fifteen years, which he thought was a mistake. They were also giving Messrs Hellaby the right to transfer shares to whomsoever tney liked. He thought one of the chief reasons which moved the directors was the fear that Messrs Hellaby might drive them out of the business, but there was no ground for such fear. The farmers' works had every prospect of going on and increasing in prosperity. Besides all these considerations, there was in his mind a certain moral objection to the proposals. He wished to make no reflection on his codirectors ; each man must do what he thought right, but he would consider if he supported them he would not be acting fairly towards the shareholders whom tie had asked t > put money into the concern. Here Mr Mien read the first lines of the prospectus, stating that the Company had been former for the purpose of freezing and cannii, ,' meat at reasonable prices, manufacturing byproducts and improving the market for stock. The prospectus further stated that thore was a strong consonsus of opinion among farmers favouring the freezing works being owned and managed by farmers, but, Mr Allen contended, under the proposed agreement they would not be owned or managed by farmers. The prospectus went on to state that the Company was to be run on the lines of the Belfast works, also that they would promote a healthy competition for stock. Whatever other objection might be raised, he for one could not support a proposal whereby a part of the control of the Com-

pany would be given to two mea who were not farmers, and two-fifths of the capital would be held by others than farmers, and the allairß of the Company would not be managed or run on the lines laid down when they canvassed for shares. Mr John Allen, of Waingaro, in supporting the resolution, said he did not think the company would be giving anything away in agreeing to keep out of the retail trade. For his part he would never consent to the company engaging in that trade. The annals of the Auokland Police Court furnished a warning te them in that matter. He did not believe two men on a directorate of sevou would manage the whole business, but in working for themselves those two would also as far as the freezing was concerned, be working for the farmers. (Hear, hear.) They would also get more shareholders, for he had found that some h«d held back from purchasing shares because they did not wish to be working against Messrs Hellaby. The Chairman, replying to Mr J. C. Allen's remarks, said it was true the com pany had bound itself to ship all its meat through one company for 5 years, but one clause in thu agreement was that if any other company tarried meat at a lower rate from any New Zealand port, the company could olaim the same reduction. The concession made at the time that Messrs llollaby's contract ran out was due to competition among the shipping companies. Under the new scheme most of the meat would be fr< zen at Uasgow. and some of the freezing chambers at the Auckland works could be let for store rooms. In speaking of Messrs Hellaby getting control of the business, Mr Al'en had pud a viry poor compliment to his fellow directors. With men on the board like Captain Worsp and Messrs Ambury and Smith, who were successful men of business, there need be no fear that farmers' interests would suffer. Iq regard to the sale of meat in Auckland, neither the Belfast nor the Gisborno works bought on their own account or sold in the towns, and they were extremely prosperous, especially Gisborne. He thought that by uot touching that branoh of the trade they

were safeguarding the c impany. The Christchurch Meat Company had tried the enterprise and withdrawn from it. This waa a freezing company, and he would say, let them stick to that. But they might help any other company that liked to start.

In reply to a question asked by Dr. Coatea, the Chairman t-aid that the purchase of the Auckland works would not creite a monopoly in buying freezing stock. He took it that shareholders had all along considered it a duty to deal with the company, and he supposed they would still have Messrs Bevins and LSorthwiek buying in the district to compete with the company. They would really be gaining a customer instead of losing cne. Mr A\. S. Allen said he was very much oppoFed totberesoiuti'n. The shareholders were being thoroughly, though innocently, taken in by the directors. They were told when the company was formed that it would do away with the monopoly which was preventing them getting fair prices for their stock, and as a matter of fact the prices had risen since the Company was formed. But now a gr»at and crushing monopoly wa3 to be formed, and prices were sure to go down. It hud been s.id that two men against five could not do any harm, but those two uould be shrewed hard-headed business men. (Laughter.—A Director : Not very complimentary to us') The directors whom he saw around him were amiable men, and full of living-kindness, but not able to cope with the wickedness of the wor.d. (More laughter.—Captain Worsp: We don't want a sermon, Mr Allen.) There was great dmger of Messrs Hellaby getting control. He moved an amendment at the Hamilton meeting, but it was lo>t partly because they were told there that the board was unanimous in favour of the proposal. Four directors were there, but none of them contradicted that statement. He would like to ask the company's solicitor if the directors ware not liable to an action for misrepresentation. He had hardly ever met with an act of such stupendous folly as was about to be committed, and they would bitterly regret it. Mr Mahoney declined to give the opinion asked for by the last speaker. He also pointed out the inconsistency of Mr J. C. Allen in complaining at one time that Messrs Hellaby would get control of the board of directors, and at another that they were to be allowed to go out too easily. He ridiculed the suggestion that the farmers on the board were unable to take care of their own business interests. Mr Barugh, referring to Mr W. S. Allen's accusation of misrepresentation, said that he caused to be read at the Hamilton meeting an extract from the minutes, showing that the directors were unanimously in favour of the proposed purchase, when the resolution was carried to appoint a committee to act in themalter. Mr J. C. Allen had never until now exp'ained bis objections to his fellow directors. Mr J. C. Allen said he stated his reasons to four of his colleagues, including the Chairman, on one occasion when a meeting was called but not held. Mr G. A. Cruickshank supported the resolution. In reply to the question of another shareholder, it was stated that three formed a quorum at a directors' meeting, and it was pointed out that one of them could prevent any resolution being passed by withdrawing. On a show of hands, the motion was approved by 22 votes to 3. The Chairman said there was no need to go into the proxies. The number received within tbe time limit wa3 570, of wbioa 535 were in support of the purchase proposals. Mr J. C. Allen wished to demand a poll, but it was pointed out that a poll could not be taken unless requisitioned uy five shareholders.

The Chairman said that after 14 days, another meeting would ba called to confirm the resolution, which could be done by a bare nujority. Mr John Gordon congratulated the directors on the adoption of their proposals. He hoped that the minority would tako it in the right way and that all would work heartily together. (Hear, hear.) He urged the directors to encourage all the dairy factories to come in as shareholders. That would make dairy farmers shareholders indirectly, if they were not so directly. The company would thus become one of the strongest concerns imaginable. (Applause). This concluded the meetiug.