FARMERS' AUCTIONEERING COMPANY.

Waikato Times, Volume LVII, Issue 8060, 19 November 1906, Page 2

FARMERS' AUCTIONEERING COMPANY.

MEETING AT 'IE AWAMUTU. A meeting of fanner? to consider the proposal if starting a Farmers' Co-Operative \ucti >neering Company and absorbing the business of Messrs MoNicol aud Co. was held in the Town Hall, Te Awamutu, on Saturday. Mr Irvine was voted to the chair and in'roduced Mr Allen Bell, a member of the, provisional committee, calling upoii him to lay the proposal before the meeting. Mr bell said that as the aims and objects of the proposed Company had been put so rully before the public by means of the circular and reports in the press, it was at this stage unnecessary to again traverse that ground. Unfortunately there had been a lot of misunderstanding with regard to the details of taking over Messrs McNicol and Co.'b business. These misunderstandings he now wished to oleai away and would explain the various obj ictions that had been brought under hie, notice during the past three weeks while engaged on the flotation of the Company, tin was pleased to say that in ether districts which he visited, after these objections had been explained away about 05 per cent, of the farmers whom he bad appr. ached had taken up shares. The committee courted the fullest inquiry and at the close of the meeting he would be pleased to answer any questions they might wish to put cogs Btent with the safeguarding nf the interests of Messrs tfotiidl and Co. Of course they would understand until the Company was certain of fl >ating the oommittoe would not be justified in making public all the information that had been piaced before them by vendors. A question that had been pat to bim times out of number was "If the business is such a good thing as is stated in the circular, why do Messrs McNicol and Co, wish to get rid of it." He was in a position to inform them that the firm did not wish to dispose of their business, nor bad they made any overtures to the farmers to take it over. The whole proposals had emanated from the Farmers' Committee who considered that the time had arrived for the farmers to strike out and wurk their auctioneering business on co-opera-tive lines. He could also inform them that MoNicol and Co. had had an exceptionally good offer for their business from an outside flcm, but Mr Storey had absolutely refused to treat with them. When approached by Jthe- farmers' couimitttee he said that the business had been built up with the assistance of the farmers and it they wished to throw in their lot with the firm and work on o-operative lines he wis prepared to do so but he would not have anything to do with an outside firm. Another point on which there had been a lot of misunderstanding was that of goodwill, value of property and book debts. A large number of people were under the impreision that if the farmers subscribed the necessary £15,000 to float the Company, £SOOO of that sum would be immediately taken out and handed to the firm for goodwill. This was quite wrong. The goodwill was to be paid out of the total subscribed cipital of the Company, as Messrs McNiool were putting in assets to the value of about £30,000 and the farmers about £15,000, two thirds of the goodwill would be paid by the vendors themselves. They were thus stepping into one of the most prosperous and solid businesses in the Auckland province for a small consideration. The assets which would be put into the Company by the vendors consisted of land and other property valued at probably about £7500, the remaining £22,000 odd consisted of working capital and book debts. With regard to the taking over of the book debts the vendors had given the committee three alternatives. They could take over the debts as they stand on the booki, writing off a Certain per centage tor bad debts. I'hey oould go through the books and strike off any names which they thought ware not good, or they could throw over the whole of the book debts leaving on the present firm the responsibility of collecting them, (his showed the absolute confiience the firm had in those with whom they were doing business and surely a more generous proposal had never been heard ot in the annals of Company flotation. A number ot pe iple had got hold of the idea that the £30,000 to be put into the Company by the vendors was simply by way of a loan on whioh the Company would pay interest at the rate of 6 per oent. This was also quite wrong. The whole of this capital would be put in in exchange for shares which also showed the confidence the firm had in their business. In addition to this, the vendors had also guaranteed interest on share capital at the rate of six per cent, for five years. Mr Storey had offered to make the guarantee eight per cent, but the committee considered six per cent, an extremely liberal offer and insisted on the guarantee being fixed at that amount. The vendors had also agreed to have their voting power limited to 300 votes with two seats on the dkxtorate out of seven. A few farmers had taken exception to the proposal en the ground that instead of the system of rebates, the commission should have been lowered at once to three per cent. He oould assure them that the committee had given the question of commission their most earnest consideration and were convinced that they were working on the soundest business liaes. By keeping the commission at their present rate, and giving a rebate, the shareholders would reap the full benefit, while those who were not shareholders would pay the full commission. This would be a strong inducement for the farmers to become shareholders and stick to their company, and would get over the difficulty of ihose few men who were not public spirited enough to take up a few share-, reaping equal benefits with those who had put up the capital. Unf >rtuaately, the-e conditions obtained in the Farmers' Freezing Company, and he had met men who were noc ashamed to boast of the fact that, although not holdijg shares, they had the same advantages as those who had supplied the capital j and they had also shareholders, in whom the bump of selfishness was so strongly developed, that last ye«r they put their stock through the opposition company for the sake of a paltry 2J per cent. In the case of the proposed company, after paying 6 per cent, interest on share capital, working expenses and the establishment of a reserve fund, the whole of the remaining profits would be handed bick to the shareholders, who were selling through the company, in the shape of a rebite on commission, which would probably amount to not less than 25 per cent. Another question that he had had brought before him was the question of salaries paid to the members of the present firm, whom the company wished to retain on the staff. The proposal of the committee was that the sum of £1416 be paid to the two members of the firm and the auctioneer. Surely if they gave the question -a moment's thought they would see that thij was an extremely moderate allowance, u m sidering that they were taking over men of proved business ability and integrity. If the farmers were to start a ooncern of their own and place low salaried men at the head thy would probably find ruin staring the business in the face before very long. In the present case they had an auctioneer : probably lone of the best in the colony! while in their Managing Director, Mr Storey, they would have a gentleman who though his good business ability and straight dealing commanded the esteem and respect of every farmer throughout the Waikato. In retaining the services of the gentlemen mentioned in the circular they had an absolute guarantee that the business would be conducted on the sound , and sujoessful lines on which it had : hitherto run. It had been said by some I people that the farmers had made a mis- • take in not the late Mr Hunter's j business when it was in the market a few i years ago. He, the speiker, contended that I under the present arrangement they were | starting under infinitely bettar conditions. j In the first case they would have had to J pay goodwill to the extent of £BOOO and i also find the whole of the working capitnl , which v/ould have meant raising at least j fifty to sixty thousaal pounds. Under the ! present scheme they were stepping into a j most prosperous and growing business and also having the use of capital to the extent of about £30,000, whioh as he said before, the vendors were going to take out in shares. In conclusion Mr Bell said that the committee were convinced that the proposition wbb one ef the soundest that had i ever been put before the publio of the colony and the farmers would be extremely : ill-advised if they did not tike the chance 1

now open to them, a i hance whioh they might nev. r have a^am. Mr J. B. !easdale (Te Awamutu) said tint hitherto he had been qu te in the dark with regard to poiub ot the details of the proposal but after hearing the clear k explanation be was convinced that the propofial was entirely in the interests of the farmers. He had much pleasure in moving " That this meeting approves of the formation of a Farmers' Co-operative Auctioneering Company on the lines laid down in the circular letters." This was seconded by Mr Bertram (Hairini), and carried unanimously. £tlo worth of shares were subscribed in the room and a subsequent interview with the farmers at the saleyaids ;rebulted in another £025 being booked.