Tumut Co-Op Store

Tumut Co-Op Store

Wynyard Street




Board of Directors Empowered to Borrow Up To £25,000 to Finance the Business Biggest news in Tumut for a long period was the decision at a special general meeting of shareholders of the Tumut Co-operative Dairy Co. held in the Oddfellows' Hall on Saturday morning last that the company engage in the business of general storekeeping and merchandising, extending the co-operative movement to the supply of dairy men's farm and domestic requirements.

The Board of Directors has succeeded in securing an option over Mr. Fred Bakers stores/

No goodwill is to be paid for and the option price includes the store buildings and land and the old flour mill and land on the corner of the Adelong and Gundagai roads.

Permission has been granted by the Commonwealth authorities to purchase and raise the money necessary to cover the cost. Plant and stock will be valued and purchased at a fair price.

The Board intends to convert the old mill into a store for wheat and other heavy supplies.

The shareholders carried a resolution that the Directors be empowered to borrow up to £25,000 to finance the business.

It is the intention of the Board to immediately apply for permission to increase the capital of the company by £5000 or £6000 -with the object of admitting as many farmers as possible to membership. Existing snareholders will not be obliged to subscribe further capital.

Mr Fred Baker has frequently stated that at anytime he decided to sell he would prefer to see the farmers of this district (who helped to build the business to the dimensions it has attained) participate in the advantages to be secured by conducting their own business.

There were over 100 shareholders present at the meeting which was presided over by the Chairman of the Board of Directors, Mr A. Hassett.

The first business was to consider revised model rules for a rural society with amendments as may be found desirable including an exteursion of the Society's objects to enable the Society to engage in the business of general storekeeping aud merchandising.

After the amended rules had been read by Mr. J. C. Orr. (solicitor) they were adopted on the motion of Messrs. A. McGillivray and Mr. Crouch.

The second item on the business paper sent to shareholders was to consider a special resolution 'that the Directors be empowered to borrow by way of overdraft or otherwise such sums as may from time to time be found necessary to finauce the business of the society, provided that the Directors shall not borrow in excess of £20,000, Without the further sanction of the shareholders.'

CHAIRMAN'S ADDRESS - Mr A Hassett addressed the gathering as follows: —

The next business to be dealt with is the Board's proposal to engage in the business of general storekeeping and 1 wish to refer briefly to some aspects of co-operation and to place before you the position as we see it.

To illustrate the benefits of cooperation it is necessary to look back to the early days of the dairying industry and compare the position then, with the position that exists to-day .

1 am not suggesting that farmers are receiving anything approaching a satisfactory price for their products, but will endeavor to show that they have made considerable progress in their business affairs.

When dairying was first started in this country. all butter was made on the farms and sold by proprietary interests. After years of chaos and low prices farmers decided that the only way dairying could be carried on with any degree of success was by the farmers setting up their own manufactoring concerns, hereby cutting out farm butter making and reducing costs to a minimum.

They therefore built and controlled their own factories and the success that attended their efforts can be easily seen to-day.

Later similar drawbacks were encountered in the marketing of butter; Agents bought the butter when prices were low, held it off the market for a time in order to allow prices to rise and then sold at a profit of possibly more than the price received by the farmer for producing the butter.

Again, the farmers found that the only satisfactory method of raisin ater was by eo-operiitive selling and,: with the object of putting this into practice, established their own- co operative selling houses. 1 Many years of hard work and many setbacks were encountered before the opposition was overcome, but to-day over !)() per cent I of the butter produced in New South Wales is marketed through cooperative channels uhd,--but for the war, more than half of the Australiun butter. in Lohdqii would now be disposed of through co-operative houses, which are owned and controlled by Dominion co-operative organisations.

Even the Governments of this country are realising the advantage of doing business through these avenues. Advances are made by the State Goveminent through the Commonwealth Bank, with the object of enabling cream carriers to tit.i producer-gji.s, nnit.s to their cream Worries but, before the: liionev; advanced, factories have to accept, the responsibility for repayments, and the advances and repayments are made through the factories.

AVheafc for pig feed is distributed as far as possible through factories, while, the Commonwealth Government's proposed scheme for storing wheat for farmers will he conducted through butter factories. The proposal to make advances to farmers against fodder stored on farms will also be ar1''|J'r®d' in the same mannor

Finally as an illustration of what can be achieved by producers for ganisations lake the Commonwealth Bank. Produce Eipialisation ? Oom I'Huj . 'J'ilib is a voluntary company made up by the producers and every pound of factory butter produced in Queensland, New South. Wales and in Victoria is controlled by this company. Ka les of but (eiy -both overseas 1 and on the Auslralian markets are equalised in order to give dairymen, irrespective of where they iirt- . situ- Iiited. eijuifabhv treatment.

The organisation of this company is recognised by the Commonwealth and State Goveninientii as being as nearly perfect as possible. What I have stated may not have much bearing on the business before the meeting out is serves to illustrate the success achieved by farmers in the manufacturing and marketing of their own products and proves beyond doubt that they are equal to any other section of the community in conducting their own affairs. If all this has been achieved by the farmer controlling his own business, there is surely hope of milking some saving on the purchase and sale of other commodities.

Cooperative trading concerns are being conducted successfully in almost every country in the world in Victoria quite a number of the large butter factories conduct their own. cooperative stores with marked success.

One factory has in addition to its store a motor service station, a bakery and butchery, and each of these ventures has proved of value to farmers. The directors of several factories in New South Wales have added a trading branch to their business, and in one instance a co-operative factory is- conducting by far the largest store in the town.

This concern has been in operation for many years, and so successful has it proved that for a number of years shareholding customers have been given a rebate of 12 percent, or 2/0 in the puund, on their purchases over twelve months and the ruling prices of the goods compare favorably with other business houses in the town.

Put another way, shareholders receive six weeks goods for nothing each year. Not many miles distant another factory has recently opened a trailing branch aii(l progress has been so satisfactory that it is expected, as soon as the war is over, the size of the premises will need to be greatly increased. It takes some years' to reach the stage where rebates such as those mentioned can be returned to shareholders; but, properly conducted, at least some advantage must come to farthers in the first few years, as all profits above dividend and a small reserve would be returned to customers.

Dairymen in this district have for sometime been advocating the establishing of a trading concern, in conjunction with the factory. In fact, one gentleman stated at the 1011 meeting of shareholders, that he. wouldnot be satisfied until this company had its own trading concern.

Bearing all this in mind and realising the possible benefits to farmers, the Directors have taken advantage of the first opportunity to put these ideas into operation. They have succeeded in securing an option over a centrally situated business in town, on what the Board considers very favorable terms.

Permission has been obtained from the Commonwealth authorities to purchase and to raise the money necessary to cover the cost. All that is. How. re(ju)red is the sanction of the shareholders to finalise the purchase.

The Directors are asking share holders to authorise them to raise by way of overdraft or otherwise, a limit of £20,000 if, found necessary to finance the business. The amount mentioned includes £SOflO authorised at last annual meeting of shareholders.

It is not anticipated that the full amount will be used, but under the National Security Regulations country stores are required to carry certain emergency stores to cover three months trading.

For many months each year the butter factory is mostly in credit at the bank an djl-hiK, would be set off against the debit of the store account. No goodwill is to be paid and no book debts taken over.

The building is offered, at a very satisfactory figure, with at valuation and stock taken and valued by a reliable and experienced firm of city accountants. Included in the price for the store building and land is the old flour mill and land, at corner of Adelong and Gundagai roads. With the expenditure of a few hundred pounds the mill building could be converted into a very satisfactory store for wheat and other heavy supplies, a railway siding is available and trucks could be shunted to the building and unloaded at a very low cost.

v.'-.nvillK !l' f?livll,fr 111 ' cartage i Willi this shed in the control of the company, dairymen would not be obliged to order such large quantities of wheat, and would not need to take delivery off truck nor would they have to wait weeks for the delivery of the wheat ordered.

If sharehoIderS agreed to the Directors proposal it is the intention of the Board to immediately apply for permission to increase the capital of the company by five or six thousand pounds, with the object of admitting as many farmers as possible to membership.

Existing shareholders of course, would not be obliged to subscribe further capital as the directors prefer to issue new capital in limited amounts to as many persons as possible.

The owner of this store has frequently stateed that, ut any time he decided to sell he would prefer to see the farmers of this district who helped to build the business to the dimensions it has attained participate in the advantages to be secured by conducting their own business

I will now formally move 'That the directors be empowered to borrow, by way of Bank overdraft or otherwise, such sums as may from time to time be found necessary to finance the business of the Society, provided that the directors shall not borrow in ox cess of twentyrlive thousand pounds £25,000) without the further sanction of the shareholders, and if some share holder will kindly second this resolution the matter will be open for discussion.

In seconding Mr. Hassett's resolution, Mr. A. C. Asimus said he did so with confidence that he would have the loyal support of every primary producer. This enterprise had not been, hurriedly considered, many weeks of study and thought had been put into the question by the Board of Directors. He was convinced they, were doing something that would be of great benefit to themselves and to every primary producer in the district with the loyal support of shareholders the Board, would make a success of it. The fact that the brains and services of their factory manager, Mr. A. F. Heydon, were to he available was a recommendation to go on with the new enterprise. Manage, meiit would he a major factor in its success .

Mr. J. Sullivan: How much is to be paid for the land and buildings?

The Chairman £7000. Mr. A. Davis, in supporting the motion, said he was the man mentioned in Mr Hassett's report who had previously advocated a cooperative store. He considered it a move in the right direction. There were many problems to be overcome, the main one being finance, but everything had to have a beginning. Tumut had been in existence for about 100 years now and in the establishment of a cooperative trading concern they did not want another 100 years to pass before it became a fact.

He also would like to see a bacon factory established, which he thought would be a good move. They all knew what cooperation had done in the past. As an instance the M.U.I.O.O.F. had grown from a membership of nine with finances at 13/0, to a membership of 70,000 with finance at over £1,000,000. Co-operative stores had proved a success the world over. The more he looked and heard of cooperation in still respect the more he liked it. -Before the war was over they would be forced into cooperation. He could see nothing detrimental to the enterprise and thought it was opportunity knocking at the door.

Mr Davis asked all to give the scheme their loyal support, and their cooperation when the stores were established. Mr Hassett said that when Mr.Heydon came to Tumut as manager of the factory they, owed £1-1,000. Since that time this debt had been wiped out and in addition, about £20,000 worth of new machinery and factory additions had been made.

To-day they did not owe a shilling Mr. J. B. Sharp was in agreement with the Board's intentions. The means for the purchase of the business was available in three different channels. If the nations of the world would only have similar ideas of cooperation there would be no wars.

Mr E Roddy, as a dairyman and an advocate of co-operation strongly supported the move. He had always thought they should go in for a trading concern and he was pleased that the directors were grasping the opportunity offering. The store had the best stauil. in town and had been a wonderful business over the years. Although little benefit would be delived until after the war, those of them who were getting on in years would have the satisfaction of knowing that their children would have the benefit it in the future.

Mr. /ltodily said he had also always been an advocate for the establishment of a bacon factory and he could not understand why one had not been gone on with. The farmers in this district were losing thousands of pounds by the satisfaction of their bobby calves owing to no method being available of processing this meat. The establishment of a bacon factory was another instance for further cooperation.

Mr. A. McGillivray said the enterprise was a very progressive project. He mentioned that shareholders should not just pressure on directors in endeavoring to get neighbours of their families on the staff.

In reply to Mr McAlester also stated that the option included in under standing why the owner wanted to start a similar business within a rail as of 30 miles from Tumut for ten years. The motion was then put to the meeting and was declared carried there were four dissentors Mr Hassett thanked those present or their attendance and also their good judgment. Trading will restricted for the present, but after the war the benefits of their decision would he realised in full.

This report is submitted in good faith. All endeavours have been made to make all entries authentic and correct. For any corrections and additional valuable information, maps and photos you may have please contact John

To Home page