CHEAPER BREAD.

Gisborne Times, Volume XXVI, Issue 2272, 18 August 1908, Page 2

CHEAPER BREAD.

PROPOSAL TO ESTABLISH A CO OPERATIVE BAKERY.

LARGE MEETING IN TOWNLEY’S

HALL

About one hundred gentlemen attended a meeting at Townley’s Hall last evening to discuss a proposal to form a co-operative company to establish a bakery business in Gisborne. Mr. 0. F. Lewis occupied the chair, and explained that tho meeting had boon called to form a genuine cooperative bakery in keeping with a movement that had beon in hand for some time. The prime movers m the idea considered it necessary to clear away a misunderstanding in reference to a prospectus issued by a local baker, and adopting the same name as the. original promoters. This company was not truly co-operative, but was a limited liability company. They all knew there were large profits in the bakery business. If big profits could be amassed without capital, as was stated in tho prospectus, they could bo assured that there would bo very little risk of loss. Many neoplo had been told that the original scheme to form a society was dead, hut the meeting shewed it was much alive. The original oromoters of tho society had been approached with a suggestion that they should buy tho business now offered as a going concern to the limited company. Tho society he desired to form wished to break down tho bakery combino and give customers, whether shareholders or not, cheap bread. There would ho no clause jtliat if a man did not take up five shares ho should not share ip the profits. That was not co-operation. (Applause.) To have the capital subscribed by a few capitalists was not cooperation, and if such a scheme was promoted ho would liavo nothing to do with it. About 400 people had signed the share list he held in hand, and ho hoped tho capital would speedily bo subscribed and a start made with tho business. He felt it was not wise to launch out into business until sufficient capital had been subscribed. No broker had been employed to canvass for shares; but the movers had been their own brokers, because they know the value of the movement. Co-oper-ative bakeries had succeeded in other towns, and would do so in Gisborne. It was not intended to limit the reduced price of bread to shareholders, although they were told that if that was done tho bakere would start to cut. Such an act would be of no consequence, for a co-operativo company could stand against individuals. Mr. Sievwright asked why it was not intended to amalgamate with tho Poverty Bay Co-operative Society? Mr. Lewis said that would be a matter for after-consideration after the society had been formed. One speaker said the meeting had no protest against the price of tea and sugar, but against the price of bread.

The chairman explained that the promoters had an offer to build an oven, and that £7OO of capital would probably bo sufficient- to start business.

Mr. Somervell said, the largo attendance was evidence of tho desire to form a co-operative society. The one question was to find customers for tile bread, and it would bo wise to show customers that they were part proprietors. He thought the meeting should appoint a, committee to canvass for shareholders and estimate what quantity of bread would be consumed each week. The initial difficulty would be to fill the . oven at each baking. Mr. McLeod said that unless the society had sufficient capital to start one, deep water would soon be readied. The registration of the company did not matter very much,. so long as it was properly registered,’ because the shareholders would be jointly and severally liable. Mr. Turner expressed -the opinion that business should " not be started without strong capital, because other bakers would come into competition, seek to cut prices, and so drive the society out of existence.

Air. lan Simson said he came to the meeting with the idea of getting cheap , bread in the future. He had put his name to the list of shareholders. They were told there was a business for sale, and he would say if a business could be bought cheaply ;as a going concern let them form a cooperative company and buy it. Alost of those present were novices, and he thought if they could buy a business, with, all its ovens, cart 6, and horses, buy it if the terms suited, and get the advantages of the customers on the baker’s list. He would like some one who ivas interested iu the limited company to tell them of the business tliat was for sale.

Air. AfcLeod took exception to that suggestion, and thought the society should build up its own business, and not discuss any other proposed company. (Hear, bear.) The chairman said tho man who Wished to sell his business wanted £350 goodwill; but the people’s custom was the goodwill, and if the people became the members of a good co-operative bakery they became the owners of their own business and made their own goodwill. A tradesman could not sell tlie souls and bodies of liis customers.

Olio gentleman said lie had experience in co-operative concerns, and found that it was not so much a question of capital a® the number of customers. That had been proved, to be the case in AVailii -where tile co-op-erative stores were threatened with rum. by private business people, but the private business people soon saw they could not broak the co-operative societies. In the companies with which he bad been connected tlie directors bad been elected by the shareholders. Mr. Sievwright said tlie scheme had ins entire sympathy, but lie was sorry the bakery business could not be run in conjunction with the present cooperative supply stores. Ho thought the end could be bettor attained by working with the existing society. file chairman said the- directors cou d consider that proposal and place it before the shareholders. ,It -was useless to discus® ivliat they would do until tho share list liad been subscribed. One gentleman, said some speakers weio only drawing a red herring across the track by raising side isues. He felt, the public had been overcharged by the bakers in the past, bre!id 1<? ,VIS °btain cheaper

Air. Somervell moved that tills meeting form a co-operative bakery society. 1

Air. inriier seconded tlie motion, and asked if the signatories upon the list ol subscribers were, by doiim so. in any wav pledged to purchase* tlie bakery business which i s being offered to a company. Mr. Lewis said those signing the fists wero not pledged to the purchase ol tlie business, and the promoters had nothing to do with tlie new company that was being formed. He (Air. Lewis) had been offered tlie business; but declined to consider tlie oner,. Bakers said there were lio profits in the business, but the’ prospectus showed there -were handsome profits. 1

Air. Harold Kane said he was down as a director on the limited company, apd could say it--was-not-tlielntention of the shareholders to make. big profits but to pay bonuses to the consumers. To make profit would not be co-operation. The meeting was in favor of and the question was, Which was the best way to go about it. The business now being ljoftteg into a company had three hundred customers, and these were of value, go tliat it would be as well if the meoting could join forces with the company and reap the benelit of the business that was for sale. Archdeacon AVillianis said his name appeared on the list of subscribers to the proposed co-operative association, and also on the list of directors of the other company. He did not care winch company succeeded so long as the public got cheap bread. The prospectus said tlie directors had power to give credit, but not indiscriminately, for. it might be necessary to give credit in other ways. It did not follow that, because a company was a limited liability company tliatit- was not also a co-operative company, because some of the largest limited liability companies in the world were co-operative associations. Air, Piesse asked the chairman who

offered him the bakery business now in tho market.

The Chairman said an agent upproachod him on the subject. Mr. I’icNKO said he wished to deny that such a thing was dono. Mr. Ries.se questioned tho chairman’s criticism of the prospectus and the goodwill. Mr. Somervell’s motion was then put and carried. Mr. Somervell also moved that a provisional committee be formed to collect information as to tho working of a society and to report to a future mooting. Mr. Turner seconded tho motion, which was carried.

Tho chairman moved that Mr. Lawton bo appointed secretary pro torn. The motion was carried.

The following were appointed tho committee to collect information: Messrs W. Somervell, Pavitt, Lewis, Paltridgo, Cox, It. K. Graham and Archdeacon Williams.

A vote of thanks to the chairman brought tho meeting to a close.

CO-OPERATION. [To the Editor.] Sir, —ICwiis very evident that few persons at the meeting in Townley’s Hall last evening had any idea of what co-operation is, especially when one gentleman told those present that a limited liability company could be a co-operative company, when the very opposite is the case. A co-opera-tivo society is an unlimited company, unlimited in its number of shares and in the number of shareholders, limiting only the number of shares that can he held by any one i person, and so as to prevent dummy ism, the interest that shall be paid upon shares as invested capital. The promoters of tho movement will find it necessary to provide a small rate of interest upon invested capital, say 3 or 4 per cent, otherwise there will be no incentive for people to come into the society. They will find it necessary to have an unlimited number of (shares, which can he issued by the secretary on demand, so ias to make the society truly co-operative, and to * guard against tho traffic in shares which would inevitably result should the number be limited. A co-operative society should be a profit-sharing society among its customers, but unless investors are guaranteed some safety and a. small rate of interest on their hardearned savings, it could hardly be expected they would sink £5 or £lO in. the concern so as ito provide nonshareholders with cheaper bread, This is not a philanthropic age of business, and those providing the capital are in the first instance entitled to some consideration.—l am, etc., “HUSBAND.”