342 QUEENSLAND AGRICULTURAL JOURNAL. [1 May, 1898. 
directors and a capable manager is an easier and certainly safer business 
than the handling of milk and the manufacture of butter or cheese. Milk is 
a very risky article. Wheat, once in the bag, is one of the least risky. Butter 
and cheese making are extremely susceptible to climatic changes, while flour 
making is not. Butter, once made, has to be got on to the market as quickly 
as possible, while wheat or flour can be kept with safety for a much longer 
period. The necessity for refrigeration makes butter an expensive commodity 
to carry either by rail or ship, but wheat and flour are the easiest and cheapest 
of all transportable merchandise, either by rail or as cargo. Butter is subject 
to deterioration on shipboard, while wheat and flour gain in weight, so as to 
help considerably to pay the freight. After what the farmers have done in the 
successful running of co-operative butter factories, it is not reasonable to 
arbitrarily say that they cannot be equally successful with co-operative flour- 
mills, and as to the main objection with respect to the ‘necessary capital being. 
greater, there is valuable experience on this point in the past presenting itself 
asa guide. The earliest butter factories of Victoria were started on a basis 
that contained within it the germs of destruction, and they necessarily failed. 
In order to obtain the required capital, non-producing shareholders were allowed 
to join, and the interests of these not being at one with those of the producers 
eventually broke them up. . Then the rule was adopted that members should be 
confined to producers of milk, and these only, so that the co-operative principle 
of obtaining progress payments on the milk, with an eventual full distribution 
of the profits upon the sale of the butter, was allowed to come into opera- 
tion, and that has been successful, although not perfectly so for a certain 
reason. A modified form of non-producing membership was allowed to 
enter in the shape of the machinery supplying and butter selling agent, 
who yolunteered to saye the co-operators from having to pay up the full 
value of their shares, by erecting the factory, equipping it, and crediting them 
with the cost. Thus he got his foot in, and apart from handsome commis- 
sions on the machinery, &c., together with the heavy interest on the advances, 
secured the remunerative selling business in connection with the disposal of 
the products. In this way many factories got into middlemen’s books to such 
an extent as to make it a work of years to get out, so as to be independent 
with regard to availing themselves of the advantages of direct trading. In this 
regard the butter factory directors in the south coast districts of New South 
Wales were more wary, and their example is one that farmers contemplating 
the establishment of co-operative flour-mills can be commended to jollow impli- 
citly, because it is eminently safe. They declined to allow anyone to interfere 
in the slightest degree with the cardinal principle that they, and they only, 
should be the independent controllers of their own affairs. First of all they 
called up all the capital possible from their own shareholders, but. any further 
funds required they borrowed on fixed loan, so as to be able with the command 
of their cash to buy to the best advantage, and further keep themselves 
unfettered as to the future. The representative of the loan, usually the local 
bank manager, was given a seat on the directorate, but he had no controlling 
power over the association, such as inevitably takes place when capital is raised by 
letting in to a producers’ co-operative organisation a number of non-produeing 
shareholders. The business of the loan representative was to look after the 
payment of his interest, and when, as soon as possible, the loan was paid off, 
his connection with the directorate ceased. Assuming, then, that in this pro- 
posed new departure the wheat-growers take care to retain full control of their 
business, by fitst admitting none but producers into their co-operation; second, 
raising as much of the necessary capital as possible by paying up on their 
shares ; and third, by obtaining the rest of the capital by loan, either privately 
or, what would be still better, o1 the principle of the loans to the Maffra beet 
sugar factory and the up-country wineries, from the Government, which can 
obtain money at the cheapest rate of interest, there does not seem, under such 
conditions, any good reasons against, but many in favour of, the establishment 
of co-operative flour-mills by the farmers. 
