RAILWAY TO TAUPO

Evening Post, Volume LXXXV, Issue 30, 5 February 1913, Page 10

RAILWAY TO TAUPO

AN EASILY COMPLETED LINK PRIVATE LIGHT LINE, WHICH STATE MAY RESUME IS THE COMPANY'S OFFER FAIR ? (By Out 1 Special Reporter.) No. V. On© question remains—Whether' the terms, rf or rather the basis of terms, which the Taupo Totara Timber Company says it will agree to, may be considered reasonable from the public standpoint. When 1 the , company went before the Parliamentary Committee last session, it offered an • alternative— (l) That the company should complete its line and hand it ' over to the Government for £180,000; or (2) that the companyshould keep its line and receive authority to buy 200,000 acres of Native land. Neither of these proposals' was endorsed by the committee. Instead, the committee adopted a. third plan, which, since it is acceptable to tho company and seems to be fair to. the State, may be regarded as the line of least resistance. What th> committee recommend/ed ie that the Government permit the company to extend the line to Taupo, and guarantee the cost of such extension not exceeding £50.000, provided adequate security is given, and on the following conditions : (1) That the construction of the permanent way ,is carried out to the satisfaction of the < Government. (2) That uniform freight and passenger rates over tho Completed system from Putaruru to Taupo are. controlled in the public intei-psh (5) That the Government have the, vijlil at any time to purchase the line and plant in working order ivfc n price not to exceed the actual cost of construction 6uch price to include goodwill.' SECURITY— AND FREIGHTS. . That means that the Government, whenever it likes, can have the line by paying tho actual cost of construction I as it appeal's in the company's books, aad nothing for goodwill. Under the committee's basi.«, which the, company says it will accept, certain matters' of negotiation between, it and tile Govern-" ment will ; arise, and two of these are tho security, and the freight and pas seiiger rates. In putting the case to the | committee, Sir John Findlay said tftat the company would accept the responsibility of convincing the Government that it could offer sufficient security in return for the Government guarantee. Government control of fares and freights may lead to some difference^ of opinion, n^ settlers interested will be likely to bring pressure on the Government, but Mr. Dalziell (chairman of directors of the company) has proposed what appeaia to be f a fair governing principle. It is that the Government should have "full i access to the company's books, and. if t more than a lair rate of interest is being made, things should be equalised either by a reduction of rates or by giving greater facilities to users of the railway. From the settler's standpoint, Mr. E. E. Vaile placed before the committee fieveral important points with regard to freights, some of which the company will no doubt be prepared to concede. There seems to_ be Ho insuperable obstacle to a satisfactory mutual understanding on the fares and freights ques tion. STATE CAN BUY WHENEVER IT LIKES. In his evidence before the Parliamentary Committee Mr. Dalziell said that "the only interest that the Taupo Company has is to get back the value of its line, arid then only if it is worth the sum as a permanent line." This reasonable requirement is the most that the company can hope for under the committee's recommendation, for it is optional with the Government to purchase at any time, or not to purchase. On the assumption that the timber will be cut out in 15 or 18 years, the line becomes, to the company, "a dwindling asset," to use Sir John Findlay's words, unless a permanent traffic can be made for it. , By getting the, assistance of the Government guarantee to enable it to complete the line from Mokai to Taupo, at a cost of £50.000, including rolling stock, the company hopes to gain a permanent traffic from (1) the pastoral development of the pumice lands, (2) tourist traffic to Lake Taupo. In the circumstances, it is likely that the lino will, say in five years' time, jay, and possibly it will pay handsomely In that case, the company apparently cannot hope to secure the windfall created by its persistence, plus the State guarantee, because the Government can . exercise its right to buy at coat. "If it(the line) pays," said Mr. Dalziell in evidence, "we are content to hold it; if it does not pay, the Government need not take it. . . There is no profit asked on this proposal ; it is merely j the cO3t of the line." ARGUMENTS AGAINST DELAY. It is hard to imagine how the State could make a better bargain- for itself unless it decided to hold its land, tie up the progress of the district, wait fifteen years or so for the cutting out of the timber, and then endeavour to get Jthe railway for a "song." Two objections may be taken to this course. One- is that, in course of time, the railway may win itself a permanent traffic even without the extension to Taupo, and independent of any Government guarantee or pre-ernf tive right j in which case there would be no "song" to sing. The, second objection is that taken before V tho committee by Sir John Findlay, who said it would be unworthy \oi the .Government to take advantage of the company's necessity, and the delay would be unprofitable to the State. This plea has much to support it. It is truethat'the real test is- the public interest, but would it be in the public interest to starve out a company which was> courageously enterprising, which spent a large amount of money in making the district, which has Continuously employed an excellent and loyal body of workmen, which has irretrievably lost its ordinary share capital, and which is making an effort to get back the money sunk in its railway '! Either on this plea, ' or on the ground of pure cold business, the basis of terms proposed is surely one for the Government to earnestly consider. A FREIGHT TRAFFIC READY, Many other points in favour of the Mokai-Taupo connection, on the basis of terms propoxed, might be taken. Taupo would bo only ten hours from Auckland, and would be within the reach of many anglers and trippers now debarred through the tini9 factor. Unlike the Rotorua-Waiotapu connection, the Mokai line can oft'er an existing, bush and timber traffic, and the company guarantees for fifteen years timber freights amounting to £11,606 a year— a fine pot-boiler to depend on while the permanent business is being worked" up. To date, the cost of the line, the company 'states, is £130,000, and another £50,000 will carry it to Taupo, making the total cost of construction £180,000. The Government guarantee is asked for in order to enablo the company to raise the extra £50,000, which g is to include tha t^ost of 'suitable rolling stock for passeiigoi" Uuj£y«. At £¥.cficut> the company baa uo

passenger-carrying license, and the Mokai people are crying out for better carriages, and the Prime Minister has suggested that the company might apply to the Government for a license. To' this the company replies that while it would be warranted in buying special rolling stock for a through service to Taupo, the traffic to Mokai is not sufficient to justify the expenditure ; the whole can be served, but not the part. If the Government decidpd to let the . company drift, _ the latter could, in the finish, remove its rails but' not the permanent way. It will be remembered, however, that Tokoroa settlers, to whom the continuity of railway communication is the cornerstone of confidence, were assured by the Prime Minister that the rails would never be pulled up. STATE NEED NOT FIND A PENNY By offering the State the right of purchase at any time, the company has cut the ground from under much of the criticism that was levelled at it as a private monopolistic concern. Some room for argument remains as to whether- the railway, as a light line with sharp curves, will *be worth cost price when taken over; but as against that there is the good-will which development should create. Much depends on the successful opening up of the country, but that is a risk 'which the Government would have to'take in any case, and in this instance it _ seems a very good risk. A great point, in these days of financial tightness, is ■ that the Government is not asked to 3nd one penny cash. Other things being equal, a State-owned railway is to be preferred to a private railway j but where the Government's commitments are so heavy in proportion to its borrowing power, either the development of new country must be postponed or private enterprise must be allowed scope under fail' safeguards. In^the case of the Taupo Company, those safeguards seem to be absolute, and the demands of the company moderate. It asks only for the cost price of its railway. It does not attempt -to secure any mortgage on the new permanent traffic in passengers and floods. And though its 43,000 acres of [ freehold land will no doubt be bettered by thfe ( improved access and. increased, population, this increment will only be on the same scale as that of plenty of other lands in the district. - To sum up, the Government should either connect Taupo with the railway system at once, or allow someone else to do so on approved terms. And it is difficult to imagine a better basis of terms than that which the Parliamentary Committee recommends and which the 'Taupo Totara Timber Company says it will agree to. •