Settler Kaponga 1881–1914 — A Frontier Fragment of the Western World
The Dairy Industry
The Dairy Industry
The dairy industry was now the established heart of the making of Kaponga livings. Season by season saw new records in gallons of milk delivered to the factory, and in the daily output of boxes of butter and, from 1907, of cheeses. Shopkeepers were delighted with the steady rise in monthly payouts, which were spent largely on their premises. Over these 15 years the co-op's annual milk intake rose by over 60 per cent from around 14 million gallons to over 23 million.1 Farmers were conscious that their industry was forging ahead throughout the country, becoming a weighty element in its economy. In 1900 butter and cheese earned about one-thirteenth of New Zealand's export income; by 1914 the figure neared one-fifth. In 1900 New Zealand supplied 4.85 per cent of British butter imports in 1914, 8.98 per cent; in 1900, 3.05 per cent of the cheese imports, in 1914, an impressive 30.5 per cent. The Kaponga district reflected almost all significant national trends, such as growing dairy cow numbers and milk production, a marked shift from butter to cheese production, and a move from proprietary to co-operative factories. In the 1900–01 season New Zealand had 372,416 dairy cows; in 1914–15 there were 725,403. Measured by butterfat content, milk production increased by 130 per cent between the 1901–02 and 1914–15 seasons. In the 1899–1900 season Taranaki was the leading butter province with 41.75 per cent of production, but only third in cheese production; in the 1914–15 season it was first in cheese with 47.96 per cent, but only third in butter. In 1900 some 42 per cent of the country's dairy factories were co-operatives; in 1914, 72 per cent.2 To show how Kaponga fitted into the burgeoning national industry we first survey the various local concerns and then concentrate on the dominant one, the Kaponga co-op.
Palmer Road (‘Kapuni’) Creamery of the Loan and Mercantile's Mangatoki butter factory,
c. 1900. The settlers, from left, are: George Roots, Julius Lindgren, Fred Hollard, George
Smith, Con Crowley, Willie Watkins, Syd Clark (all of Palmer Road). The creamery employee
on the receiving stand is unknown
Early on the directors had to make some basic ‘infrastructure’ decisions about packaging and transport. Against south Taranaki dairying's general consensus, which opted for Patea as its local port, they chose New page 239 Plymouth, probably influenced by its long-term prospects as an overseas port and Moturoa's coolstores. A coolstore agreement was among their earliest decisions and within a year or two they inspected Moturoa's facilities and become shareholders in the concern.6 To ensure a reliable supply of packaging they combined with many other Taranaki dairy companies as shareholders in the Egmont Box Company.7
Pressure from cost-conscious shareholders probably hastened the shift from steam to water power. Questioned at the first AGM, chairman Wilkie said that the directorate did not at present contemplate water power to drive the refrigerator. At the 1899 AGM he himself raised the issue, remarking that firewood had proved a very heavy item, and it was decided to get estimates on changing to water power.8 A year later water power was adopted. ‘Our Own’ (17/10/00) reported that this had been forced by problems in firewood supply due to labour scarcity and decay in the available logs. In feeding their hearth and furnace fires the townsfolk must have cleared their town's vicinity of logs.
In 1907 the directors faltered in handling the introduction of cheese manufacture. The 1905–06 season saw butter factories throughout Taranaki, including the Kaponga co-op, losing suppliers to cheese factories offering better payouts. T.L. Joll's plan to build five cheese factories aroused vigorous debate among the co-op's shareholders early in 1907.9 At a special meeting on 12 March co-op chairman R.T.B. Mellow put forward the proposition of installing dual plant and gave £5740 as the estimated cost of putting in cheese factories at their three sites. He said he would vote for the proposal provided shareholders agreed to sign a new ‘joint and several’, but did not give a strong lead, suggesting that labour would be more difficult to find than the money, as the three plants would require 30 men. His seconder, Geoffrey O'Sullivan, supported the proposal vigorously, saying they would lose out to strong rivals if they did not move. Maurice Fitzgerald also gave strong support, giving figures comparing his dairying income with that of a neighbour supplying a cheese factory. Chairman Mellow then expressed agreement with Fitzgerald and told of an offer to erect a cheese factory near his own property if he would guarantee 300 cows. With the matter thus put fairly starkly to them the 40 shareholders present decided to adjourn for a fortnight, many suppliers having been unable to attend due to bush fires raging around Riverlea.
Kaponga Co-op Dairy Co's cheese factory, 1909. On the left the covered way with two
receiving stages, next the making room, and on the right the cool curing room
Kaponga Co-op Dairy Co's cheese factory, 1909. Inside view of the two receiving stages
A motion to erect cheese plants was moved by Robert Gibson, who estimated that cheese would have brought them at least £5277 more the previous season. Richardson, a shareholder supplying a cheese factory, painted a grim picture of a declining number of suppliers paying dearly for the manufacture of their butter if they refused to move to a dual plant. A Mr White stated that in December he had supplied a butter factory, in January a cheese one, and with 100lb less milk had received £38 more. Several others spoke in favour of the cheese venture but leading settlers William Swadling and E. Wright of Rowan spoke against it. The motion was lost on a show of hands. There was immediate dissatisfaction with this result, with rumours that Fitzgerald had resigned his directorship. A few days later ‘Our Own’ (2/4/07) reported that very few were satisfied with the outcome, that four directors including the chairman had resigned, and that another meeting was being called to reconsider the whole matter.
Mellow opened this meeting on 11 April by expressing strong support for cheese plants. It had been widely felt that had a ballot been taken at the previous meeting the motion would have passed. The company had already lost further suppliers. Wright continued his opposition, stating that ‘all our neighbours, including Stratford and Eltham, had rejected the proposal to install dual plants’. His points were given specific answers by other speakers. Dealing with what must have been a common concern, settler Gamlin said that he had supplied a cheese factory for three seasons and got on very well with whey, especially for pigs, though it was not as good as skim milk for calves. Swadling now expressed his position as ‘quite in favour of going with the majority’. On a show of hands there were 26 for, seven against. Wright asked for a ballot. Based on shareholdings this gave 154 for, 47 against. Clearly there had been a good core of supporters for cheese from the start, including most of the directors, but it had taken weeks of debate to bring a wavering majority to see the proposal as something more likely than a daring and expensive gamble.
The directors implemented the decision swiftly. While new buildings were being planned, by mid-May cheese-making was already under way in existing premises at both Kaponga and Riverlea. When Kaponga's new cheese factory adjoining the butter factory was completed ‘Our Own’ (21/ 11/07) reported that ‘it is believed to be the most up-to-date factory in the Dominion’:
Kaponga Co-op Dairy Co's cheese factory, 1909. Inside the cool-curing room
Box room, 24ft × 24ft. Drying room, 31ft 2in × 8ft. Covered way, 64ft × 14ft, has two receiving stages. Three small rooms, namely, starter, wash-up and storerooms, each 12ft 3in × 4ft 6in…. As to the timber, the framing throughout is heart of rimu (seasoned), lining all seasoned kauri, floors in box and packing rooms seasoned heart of matai. Cool curing room outside walls are covered with 6 × 1 T. and G. dressed seasoned heart of kauri, covered over the whole with two-ply insulating paper. All walls surrounding the room are insulated. The floors in making, curing and drying rooms are of concrete thickness.
The move to dual plants added a new dimension to one of the directors' most demanding decision-making tasks: negotiating the sale of their produce. It was now not only a question of when to sell (i.e. should they commit only the current month's output or enter a longer commitment?) and where to sell (i.e. locally in response to buyer offers or in London, having consigned it for auction there?) but also of deciding whether prospects looked better for butter or cheese. We will now consider how they handled this task down through the years. At the first AGM (5/9/98), three days after production had begun, chairman Wilkie was able to report that they page 243 … had received an offer for their butter that would enable them to pay more for their butter fat than any other company that had as yet proclaimed its price, for the first part of the season. After that they would be guided by the markets.
The minute book shows that as early as 7 July the 8 ½d offer of Reimann Bros (probably a British firm) had been accepted, and also that once this agreement ran out sales were for a time made on a monthly basis. For example on 28 February 1899 the offer of British firm Pearson and Rutter of 8d per pound for the March butter was accepted, and on 21 March agreement was reached with New Plymouth's Newton King for 300 boxes of the April output. For some idea of how the continuing game between sellers and buyers was played let us go on Wednesday, 30 April 1902, to Kaponga's Commercial Hotel where Gray, Pearson and Rutter's New Zealand agent, has brought Pearson, a principal of the firm visiting New Zealand, to be entertained by the co-op's directors. We pick up Pearson's response to the toast of the day at the point where he is referring to
… the beneficial effect of the Government brand. The public had a guarantee of good faith in the brand. It was not so in Australia, whence they sent their butter home unbranded by the Government. Speaking of prices last year, he said they topped the market, and although he hoped the same price would rule this year, circumstances at present did not look so rosy. Of course, last year Australia's output was 40 per cent less than previous years; that gave us start. Our natural advantages stood us in good stead. The Argentine, he considered, would prove a great competitor, also in the near future South Africa…. On the selling New Zealand butter as Irish butter he said there was not much of that kind of thing done. For one thing Ireland produced eight times as much butter as New Zealand, and it took ten weeks for our produce to be placed in the consumer's hands, which of course told against it when placed beside the fresh article.
From this we see that the task facing the directors was to shape up an equation that took account of such elements as the growing reputation of New Zealand butter in Britain, the consequences of production fluctuations such as those created by Australian droughts, and the effect of rising new competing producers, and come up with a prediction of the state of the British market in a month or two's time. If they got it right there were bigger payouts for suppliers and new suppliers won over from less astute or lucky neighbouring concerns, if wrong, the reverse was the case. But how were they to cut through buyer propaganda to discern the truth? And how could they circumvent the playing off of one producer against another? For about a year, beginning in the spring of 1904, they and about a dozen other Taranaki producers had high hopes of an initiative of the Hawera Chamber of Commerce. This was the setting up of a Dairy Produce Exchange in Hawera. At the initial meeting on the morning of 8 September 65 people page 244 assembled in the Hawera Council Chambers, including representatives of eight firms of buyers and of factories as far north as Uruti and as far south as Waverley. Kaponga was represented by its chairman, Mellow, and Maurice Fitzgerald. Although Fitzgerald said he could not understand how the exchange would work as he thought the exchanges in Britian acted between the dealer and the consumer, the motion to set up the Taranaki and West Coast Dairy Produce Exchange was carried unanimously. The meeting adjourned while a committee drafted rules for the exchange and these were approved when it reassembled in the afternoon. What a Star editorial (25/ 3/05) called the Exchange's ‘first practical step’ was taken at its meeting of 23 March 1905. The editorial described it thus:
There was a representative gathering of factory delegates, and a determination was arrived at to consign the April butter to the London market unless 10d per 1b. can be obtained for it on outright sale. When the establishment of the Exchange was first proposed certain directors of factories appeared to view the suggestion with some suspicion because of the fact that it was the ‘buyers’ who were advocating it. But the first actual move on the part of members is one which gives consideration to only one community—the producers. At once the real purpose of the Exchange, from the producers' point of view, is disclosed, and the decision arrived at should have the effect of immediately stimulating interest in the operation of the Exchange. On the other hand there can be no doubt that its existence will save buyers large amounts of time and money.
The editor then reported a move for a similar institution in Stratford. Hawera delegates would attend to recommend uniform action and the convenience of Hawera as its centre. A Star editorial of 29 April reported that all members who stood out for the agreed 10d a pound had obtained it. It then answered a criticism ‘in some of our contemporaries’ that the exchange lacked definiteness of idea, arguing that ‘experience will crystallise tentativeness into set rules’.
Kaponga Co-op Dairy Co directors with manager and secretary, 1910 or 1911. Standing: A. V.
Tait, G. B. Hill, J. B. Bennie (secretary), C. Farley (manager). Seated: A. McEwan, C. Bates, W.
Swadling (chairman), R. Gibson, G. Hollard
… an estimate of the amount to be sold should be forwarded to the buyers a week previous to the meeting. Then they could come prepared with the limits which they would be prepared to offer. If there was a farthing between the limits they could split the difference, and the business could be done at the exchange instead of by telegraph afterwards. At present the buyers came to the exchange for information.
Next day the Star reported that at least one buyer thought the producers had no chance of getting the price asked for, particularly as a great many factories were not represented. The Star thought that these factories would stand by the exchange's price and that with ‘a few good months like the past one’ they would be joining up. The Star could not have been more wrong.page 246
When the exchange reassembled on 1 June it was clear that the May output had not been taken up at the price demanded. Thus Mellow and Fitzgerald of Kaponga reported that they had 550 boxes of May butter unsold. The producers' debate showed strong differences of opinion, but Spratt of Hawera who contended that ‘if the producers sat tight they would come off all right’ found little support. It was finally decided that ‘the May butter be sold at the discretion of factories and that 10 ½d be the price for June’. The three buyers' representatives present were then admitted. Clearly local demand had not absorbed as much as expected, for seven producers offered a total of 1350 June boxes to the buyers (200 by Kaponga). When Barleyman of Kaupokonui said his company would not guarantee its offer of 200 boxes, buyer Griffiths expressed displeasure, saying they could not buy imaginary quantities. He gave an instance of selling 200 boxes on an estimate and then getting only 100 of them.
The last news of the exchange was of its AGM on 4 August 1905. When arrangements for the new season came up it fell to Mellow of Kaponga to convey the buyers' message that they did not want a meeting, preferring to meet the sellers at the factories. A major defect in the exchange approach became apparent when one member said that they could not bring the whole Board of Directors to Hawera’. Clearly some boards would not trust delegates with full bargaining powers. The final arrangement for the new season was to appoint a committee to draw up an itinerary for buyers to visit sellers. It was hoped that the many factories that had not joined the exchange would accept this amount of leadership from the 14 that had. The movement's high hopes had proved to be unfounded. Even had all Taranaki factories joined it was quite unrealistic to think they could have operated as a ring deciding their price on a world market.
The lesson for Kaponga's directors was that they were on their own when selling and must depend on their own wits in playing the market. Over the following years they showed considerable nerve. For the 1906–07 season, on a sellers' market, they were able to negotiate record prices with the local buyers.11 At the AGM on 2 September 1907 chairman Mellow suggested consigning their output rather than selling to local agents. Encouragement for this probably came from the appointment of Charles Mackie, formerly secretary of the Eltham Dairy Company, as the National Dairy Association's London representative. Mackie's reply to a request for advice on whether butter or cheese offered the better prospects for the 1907– 08 season was read to the meeting. He advised that most dealers had lost on butter last season and would be very careful in the new one. On the other hand increased cheese production due to good prices might bring its price down. His news on cheese production, stocks and imports included specific infornation on New South Wales and Canada. At the beginning of the 1908–09 season the directors took the plunge. After meeting with a number of buyers they decided to consign the season's output. Uncertain of the outcome they kept payouts lower than their neighbours, leading by page 247 December 1908 to some strain on supplier loyalty. Their reward was to report to the 1909 AGM on the most successful season to date.12 Over the following years they showed considerable acumen in playing the changes on both the butter versus cheese issue and the sales to agents versus consigning one. Thus the 1912 AGM was told of some intricate negotiations, in which the Kaponga co-op had come to different conclusions from its neighbours and been proved right. They had held to their judgment even when some shareholders ‘ordered’ them to accept an offer that the outcome showed would have lost over £7000. Their good judgment was confirmed when at the end of the meeting
Mr Turner, representing Lonsdale's of London, was invited to address the meeting. He did so briefly and mainly on the question of consignment and selling. Some factories, he said, did the wrong thing every year—sold when they should have consigned, and consigned when they should have sold. Kaponga had done the right thing for the last three years, and their directors could not have done better if they had had the best advice in the world.13
His one criticism was that the previous year Kaponga had lost £1500 through making butter until the end of October in order to raise £1000 worth of calves. The directors would, of course, have been more aware than was Turner that it was wise to pay some heed to the desires of their suppliers.
The following season, during the 1913 waterfront strike, the directors had occasion to show how forthright they could be in decisionmaking. Judging that there was a falling market in London they were anxious to get as much away as possible on the Athenic, sailing from Wellington. With the strike, their usual coastal consignment via New Plymouth would not have made the deadline. Their gamble on more than recouping the heavy expense of railing from Eltham to Wellington paid off. Their Athenic cheese realised 68s in London; by the following boat it would have brought only 64s.14
Kaponga Co-op Dairy Co, Kaponga factory staff, c.1911. Standing: W. Faull, H. Faull, —?,
—?. Seated: T. Souness, W. Rawcliffe, H. Briggs, —?. Of those named, all were killed on
active service in World War I except H. Briggs, who was seriously wounded
In the final analysis the co-op's success depended on the quality of the work of these 22 men. Yet we have almost no information on the company's labour relations or on how it went about making its key appointments. From the general success of the enterprise, the steady flow of show awards, and the lack of any news of friction, we are probably right to infer that these matters were prudently handled. Yet we also know of real problems in bringing dairy factory labour conditions into line with the general require ments of the Liberal government's labour legislation. A feel of the labour issues facing the Kaponga co-op through the years was given in a paper on ‘Labour and Dairying’16 read in 1901 to a dairy conference in Palmerston North by Walter Wright, Secretary of the Factory Managers' Association (Factory Butter and Cheese Makers' Association). Wright was to have a distinguished career in the industry. He contended that
… the labourer is not fairly treated. Consider for the moment the length of his working days and the number of them; seven days a week with no relaxation…. And then, as soon as the flush of the season is over, he is paid off…. Ask any factory manager what is the physical and mental state of his men, say in December, January and February, and he will tell you that the men are not capable of doing justice to their work … you work the heart and soul out of the men seven days of the week. And eight hours a day? Oh, dear, no; double this in some instances, and you will be nearer the mark. Gentlemen, I will tell you that hundreds of pounds are lost annually by this very reason; just when you want your labourer's best efforts he fails you, and that abused nature can do no more.
Wright recommended employing enough labour to roster each man a weekly day off and keep working hours within reason, and compensating for long summer hours with a four-day week in winter. He also attacked as reprehensible the practice of requiring applicants to state salary required. Employers should decide what they were prepared to pay and then get the best man available for that amount. By aiming to underpay they were driving the best men out of the industry, to their own loss. The main industrial issues raised by Wright were dealt with in an agreement thrashed out between the employers and the Taranaki Dairy Industrial Union over the winter of 1907, and in the national award that was developed shortly afterwards.17
Wright's paper and the following discussion show that the factory manager was considered the key figure in the whole enterprise, including its labour relations. Wright gave a good summary of what the co-op's directors would have been looking for in their managers:
He must be a butter and checsemakcr, thoroughly understanding the minutest detail of that work; must have a knowledge of engineering, plumbing, page 250 carpentry, tinsmithing, bookkeeping, and he must also be a man of tact to enable him to deal with the number of patrons that he is called into touch with daily, to say nothing of dealing with the number of his assistants that his business requires.
At the beginning of each day the manager faced his most sensitive duty—supervising the receipt of milk on the receiving stages, overseeing the recording of quantities and taking of samples for butterfat tests, and maintaining discipline over the quality of the milk supplied. Using tactics ranging from tactful suggestions to stern rejection of unsatisfactory milk, he could have a major influence on the quality of the intake. But handled ineptly this task could soon put him at odds with the suppliers, who as shareholders saw him as an employee. Throughout the day he had to lead his staff, setting standards for the manufacture of a high-quality product. If he had the directors' confidence he would have the men he needed and by expert leadership could ensure that their hours and conditions were acceptable.
The evidence suggests that the Kaponga co-op chose good managers, who in turn selected good assistants and handled them well. From its founding till the end of the 1913–14 season the main factory had two managers: Raymond Newitt till 1907 and Christopher Farley from 1907 to 1914. Under both the steady winning of show awards must have been a great boost to staff morale. Perhaps the most notable such achievement was the winning, in the first year it was competed for, of the Auckland A & P Association's ‘beautiful massive silver challenge shield’. This was awarded on the average grade of the company's cheese for the season together with its exhibits for the show.18 Our p. 245 photo must have been occasioned by this win of September 1910 and have been taken before the shield's return for the next show. Other indications of Kaponga's high standing include the winning of good managerships elsewhere by its staff,19 and its choice by the Department of Agriculture's Dairy Division for successful whey-butter experiments over the two seasons 1909–11.20