Story: Large companies
Page 2 – Large companies in the 1800s
The New Zealand Company
The New Zealand Company was the first large company to operate in New Zealand. It was set up in London in 1839 with a paid up capital of £100,000 in £100 shares. Dividends to shareholders were to come from selling to colonists land bought from Māori on easy terms. The company promoted colonisation, but by 1845 was £60,000 in debt. In 1850 the British government paid it £268,000 for its landholdings, and this was used to pay out shareholders. The company was dissolved in 1858.
Commercial ventures established from the 1840s were mainly traders, importers and retailers. Many remained small-scale operations, but some would grow into major New Zealand companies. David Nathan opened a small merchant store in Auckland in 1841. The city grew rapidly, and he diversified working as a shipping agent, tea importer and kauri-gum exporter.
The scale of early enterprise did not often warrant the trouble or expense of registration of companies in London. Early entrepreneurs such as John Logan Campbell, Thomas Henderson, David Nathan and Thomas Russell all conducted their initial enterprise on an unincorporated basis.
From the 1840s until the 1870s the great opportunities for business growth lay in importing goods the new migrants required. Drapery, tea and sugar were dominant imports. The demand for drapery allowed the growth of firms such as DIC (Drapery and General Importing Company), Sargood, Son and Ewen in Dunedin, and Levin and Company in Wellington.
A burgeoning population created strong demand and factories producing goods such as shoes and boots began to compete with importers. Companies such as clothing manufacturer and chain store retailer Hallensteins (founded in 1863) grew quickly as the population grew. By 1900 it had 36 branches. Another example was Wellington ironmongery E. W. Mills, established in 1856, which had over 120 staff by 1871.
From the 1880s the economy changed from one dominated by imports to one based on exporting. Yet this did not give rise to large companies. If anything it had the opposite effect. There were only a few large companies involved in 19th-century New Zealand farming. A key company was the New Zealand and Australian Land Company, which had large landholdings but, more crucially, was a pioneer in refrigerated shipping. This generated intensive dairy farming and raising lambs for frozen meat from the 1880s. Refrigerated shipping allowed the rise of the owner-operator (family) farm, with small workforces as the basic unit of production.
A unique feature of agricultural processing especially in the dairy industry was the cooperative structure of companies. Cooperatives were owned by farmers who were paid through the price of their milk. Dairy farmers had no choice but to use the services of factories for processing their milk into butter and cheese.
Meat freezing involved both cooperatives and standard shareholder-owned companies. The first freezing works established in the 1880s were owned by farmer cooperatives. After 1900 they were increasingly owned by British meat importing firms. The most important of these were Vestey, and Thomas Borthwick and Sons. Sheep farmers could sell their sheep to processors or they could retain ownership, pay a fee for processing and for transport, and sell their own (identified) produce in an overseas market. As farmers had options, large companies – even overseas-owned ones – could not dominate the market.