THE WATER COMPANY AND THE CORPORATION.

Evening Star, Issue 2797, 3 February 1872, Page 2

THE WATER COMPANY AND THE CORPORATION.

At the close of the ordinary business to be transacted at the Water Company’s annual meeting yesterday," the chairman (Mr Gillies ) brought under the notice of the shareholders the Corporation’s offer to purchase the works, and invited discussion thereon.

Mr Reynold’s thought Ll2 insufficient; and, for his own part, would not sell under LIS. He felt perfectly certain that within the next five years’ the dividends would amount to 18 or 20 per cent. Mr Quick reminded the meeting that the original shareholders had come forward and taken up an undertaking on public grounds, when their capital otherwise invested would have brought 12 per cent. Keeping in view what would be the growth of the town during the next tep or twenty years, the relative value of money, and thV'jnpreasing value of the property, he regarded it as equal to a perpetual annuity of L2O on each LIOO invested; and therefore thought the offer of LI 2 was perfectly absurd, Mr John Cargill pointed out a danger in selling the works to the Corporation might be that pressure would be brought to bear ou the Corporation to lower the rates, probably to an extent that ought not to be allowed. At the same time, if the company got a fair price, they ought to sell. Mr James Smith enquired what was a fair price ? ' JL)g Alexander suggested, as a mode of purchase, paying of a perpetual dividend to the shareholders on the woplfs being taken over, as in the case of the Raisley Water Works, where the shareholders received a perpetual dividend of 6J per cent, Considering the relative values of money in Dunedin and England, the price here would be about per cent. MrG. Tuknrull said they could hardly expect the Corporation to pay 124 P cr cent, when they could borrow money at 6. As one of the oldest shareholders, he could say that when the company was formed, it was the full intention to hand the works over to the Corporation as soon as they could buy them. Mr Rennie ; I never beard of it.

Mr Turnbull : At all events, that was the impression he had when he went in for the work. To say now that they should get 20 percent, in pei petuity was simply monstrous. When the dividends rose above 124 cent., there could be no doubt that snob pressure would be brought to bear on tho Government and the authorities, that the company would find it very difficult to withstand it. He should be very sorry to see the dividends 20 per cent. He understood the company was formed to supply a public want, and not as a speculation. Mr Rennie had nevt?r heapd of the intention to hand over the Works to the Corporation when they were in a position to buy them. At the same time he thought they should be in the hands of the Council, and that the Company would be bothered until they got them. They should not however, rei kon upon 8 per cent, but upon 10 per cent from the commencement of the Works. (Mu Reynolds : That will come to over Ho), because at that time money was

certainly worth 12, while many persons got 15 per cent. Mr Elliott said that nothing less than L2O should be taken, as in a few years shares would be worth that. Mr Langlands had been led to behove that the offer would be to guarantee the shareholders 10 per cent, for thirty years, with a refund of the principal at the end of the term. He would have taken that, as it would be a good investment; but the present offer should he refused. After some further diseussi n, the matter was referred to the directors, with instructions to report upon the present and probable future value of the Company’s property, and the advisability or otherwise of selling the Works ; the report to be submitted to a special meeting.