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A Popular Vision: The Arts and the Left in New Zealand 1930-1950

The Collapse of the PPS

The Collapse of the PPS

The collapse of the Progressive Publishing Society turned out to be as spectacular as its initial success. From a deficit of £41 in April 1944 it ended the year to February 1945 with a net trading loss of £1075. By the end of March it had debts of over £852 to overseas publishers and £240 locally. Half of the initial capital had been lost. The extent to which it was able to meet its commitments was estimated at 5/- in the pound. A crisis report on the society in May 1945 reflected: 'What is lacked in cash it had tried to make up in enthusiasm and audacity.'63 But neither enthusiasm and audacity, nor a decision of its emergency committee to suspend all publication and go into temporary recess, were enough to prevent the society's by now imminent collapse.

By late 1944 the cooperative book societies were becoming concerned about the threat to their own survival posed by the publishing society's increasingly apparent financial problems. During 1944 the Wellington and Auckland societies had been sending all of their new capital to the PPS. In December that year the WCBS sought a legal opinion on the extent of its liability for any PPS losses; it was informed that the three partners were individually and collectively page 162 liable for any financial obligations of the publishing society. In January 1945 Modern Books' chairman, R. S. Parker, raised with the publishing society's lawyer, Alan Free, the possibility of legally constituting the PPS as a separate body.

Like the cooperative book societies, the publishing society's major financial problem was undercapitalisation. Chairman Ian Mackay warned in December 1944 that the society needed either greatly increased turnover or 'several thousand pounds' more capital if it was to survive. Its application for a £1000 bank overdraft had been turned down as it could not provide guarantors. Instead it would have to either mount a campaign for more share capital or try to raise a loan.64 The first strategy had been tried before, and had not proved very successful. In July 1944 a major share campaign was launched with the aim of increasing the membership from 1500 to 5000. The campaign involved the publication of the Freedom to Publish booklet (published for the society by Whitcombe and Tombs) which was distributed free to prospective members, identified as 'people with radical tendencies or who are interested in New Zealand literature', the holding of literary competitions, and the setting of monthly membership quotas for each of the shops. These quotas were to be met through public meetings, circularising organisations such as the Society for Closer Relations with Russia, the Rationalist Association, trade unions, the Communist Party, Labour Party branches and literary, art and dramatic circles, and involving 'influential or active persons from circles of people we want to become members:—Trade Unionists, Intellectuals, Professional classes, etc' in membership campaign committees. It was hoped 'to break new ground in a big way among trade union membership' through publicity in 'the progressive press'.65 Progressive Books gave priority to the latter objective with 'works meetings (i.e., Sugar Workers, Railway Workshops, Watersiders)', a public rally and screening of a Russian film, reportedly attended by over 1000 people, and circulars to trade unions which received an 'encouraging' response.66 The Christchurch society also canvassed trade unions.

The results of this campaign numbered in the hundreds rather than the thousands: 390 new members and £490 capital had been attained by August 1944. A particularly poor showing from the South Island reflected the weaker financial position of the Dunedin and Christchurch shops. Among the debts owed to the society at the end of 1944 were sums totalling more than £1000 by the co-op bookshops themselves, most of which was owed by the Co-op Bookshop and Dunedin Modern Books. The society also secured two small loans of £30 and £50 in 1943, but these efforts were not enough to offset a substantial trading loss on its publications, increasing overhead expenses, and further losses through over-ordering in the 1944-5 financial year.

An auditor's report prepared at the request of the WCBS management page 163 committee in February 1945 reiterated Mackay's comment on the need for substantially increased turnover and capital. The society's now serious financial position was in part the result of greatly increased overhead expenses, which absorbed 90 per cent of gross profit in 1944 compared with 55 per cent the previous year. More significantly, the auditor commented on the 'considerable' amount of dead stock held: PPS publications which were not selling and which he considered had been substantially undervalued in the accounts. The August 1944 financial report had shown 10 items as slow sellers but 'only 5 of these had been written down'; 50 per cent of the titles at that date, the auditor observed, 'have been valued below cost'.67 A larger publishing concern could absorb a certain amount of unprofitable and slow-moving stock, but as the PPS's manager had remarked to the October 1944 conference, 'it is impossible to carry any considerable stocks of any titles without adequate capital/ He had also noted a 'marked drop' in sales of 'Political and War publications' and Very considerable difficulty ... in selling much of the Moscow material'.68

The auditor concluded that £2000 more capital was needed to cover the current publishing programme. This should be raised by increasing turnover through an increase in imports, 'concentrating on quick-selling lines', rather than in the society's own publications, and promoting 'backwinners', that is, strong-selling PPS titles.69 Doubtless this advice did not go down well with the Christchurch board which had already objected to the allocation of £1000 for reprinting popular overseas fiction. But the disappointing truth was that imports on the whole sold more successfully than the society's own publications; the return on its import licence was the most profitable part of the PPS's business. An increasing proportion of PPS publications rather than imports handled by the society, with its own titles making up 29 per cent in 1943 and 48 per cent in 1944, was a measure of its commitment to New Zealand publishing but was not good for its financial health. The manager's report to the 1944 conference pointed out that although only one publication in the last year had failed to cover publishing costs, nine (it was not specified which) had not yet covered all expenses. Three of the society's major publications together lost over £1000. Meanwhile, £600 had been lost through over-ordering of one imported title. The survival of the society would also depend of course on the profitability of its coming publications. The manager had commented in his 1944 report that only Medical Advice from a Backblocks Hospital and the import The Socialist Sixth of the World came into the category of'books for which there is a steady demand' (the latter pamphlet had sold 22,000 copies in New Zealand at June 1943); such books were necessary if the society was to become 'permanently established and accepted in the publishing world and by the trade generally'.70

In March 1945 the society rejected the advice of its own auditor, its acting manager and an investigating accountant that it go into voluntary liquidation, page 164 and instead set up an emergency committee, in view of 'the serious effect the liquidation of the P.P.S. would have on the four Co-operative Book Societies, the whole cooperative movement and all the progressive forces in New Zealand'.71 The committee's proposals included complete suspension of the current publishing programme, retrenchment of staff and overseas ordering, the appointment of a part-time accountant and reduction in overhead expenses. This action was to be seen as a

breathing space . . . [which] will be used to develop a technique of control in which those two features of successful co-operative enterprise—sound business economy and the freest possible play for the democratic and idealistic impulses . . . —will be effectively and harmoniously combined.72

The committee's commitment to the ideal was laudable but its optimism misplaced. A final decision to wind up the society was made in July 1945 following the advice of the Auckland and Wellington shops that they were no longer prepared to jeopardise their own survival to support the publishing society. The Wellington Co-operative Book Society reflected in its annual report for that year: 'The co-operative bookshops have paid rather dearly for their experiment in the publishing business, but it was a gallant effort and there are some good things to show for it.'73

63 'Crisis in PPS Affairs', CB, May 1945 (v.2, n.5), p.1

64 Mackay to secretary, WCBS,9 Dec. 1944. WCBS Papers: 7; 'A Challenging Proposal', CB, Jan. 1945 (v.2, n.1), p.1

65 Fenton to secretary, WCBS, 31 Mar. 1944. WCBS Papers: 6; J. Finlay, secretary, PPS to branch secretaries, [nd]. WCBS Papers: 6

66 'Share Campaign in Auckland', CB, Jan. 1944 (v.1, n.3), p.3

67 Report of auditor, V.P. O'Kane, 9 Feb. 1945, p.1. Modern Books, Dunedin, Papers, 1944-55. Ms Papers 711. Hocken Library

68 Manager's report to the 1944 conference, [Oct. 1944], pp.6, 2-3. Dunedin Modern Books Papers

69 Auditor's report, 9 Feb. 1945, p.1

70 Manager's report to 1944 conference, p.6

71 PPS management committee minutes, 20 Mar. 1945. WCBS Papers: 14

72 'Crisis in PPS Affairs'

73 WCBS annual report, 1945. WCBS Papers: 13