DUNEDIN WATERWORKS COMPANY.

Evening Star, Issue 2915, 22 June 1872, Page 2

DUNEDIN WATERWORKS COMPANY.

An extraordinary meeting of the shareholders of this Company Avas held in Murray’s Hall, Kattray street, yesterday, “to receive an offer made by the Corporation of the City of Dunedin for the purchase of the works, and to take such action thereon as may he deemed advisable ; and, further, to submit a report of the action taken by the Directors in reference to the payment of Colonel Kitchener’s mortgage, and to receive from the shareholders directions as to further proceedings in connection therewith.” The chairman of the Company (Mr 11. Gillies) presided. The Directors’ report stated that the negotiations Avith the City Council for the purchase of the works had resulted in the following offer by the Corporation :—The Corporation to pay L 5 bonus per share on the original paid up capital of the Company, understood to be represented by 4,400 LlO shares ; 15s bonus per share on the 650 unguaranteed shares recently issued, upon Avhich only 30s per share have been paid up ; the Council to take up the Company’s debentures, L 15,000, and to arrange with Colonel Kitchener as to LSOOO advanced by him to the Company. The Corporation to take over all the liabilities of the Company, provided they receive all share capital on hand ; to take over the works from some quarter day, on the understanding that all rates due to the day on which the Avorks are taken over are the property of the Company, which shall be authorised to collect arrears after the works are transferred ; and to take over or give compensation to all the servants of the Company, except the collector, who will not bo required by the Corporation, and who, it is supposed by the City Council, will be needed by the Company to collect the arrears of rates, and being paid by the Company, will not require compensation from the Corporation. The Directors recommended the acceptance ef the Corporation’s offer, subject to the conditions imposed by that body ; and that the Company’s collector receive six months' salary. The Directors further reported that some difficulty had arisen in connexion Avith the loan of Colonel Kitchener, inasmuch as he desired to retain 600 shares which were given him in security for his loan of LSOOO, while the Directors desire to pay off theToan, and obtain possession of the shares. At the beginning of the year notice avas given to Colonel Kitchener of the Company’s intention to pay off the loan, and on the 3rd instant a tender Avas made to Mr Eliott, agent for Colonel Kitchener, of the LSOOO, which he refused to accept ; a tender was also made by Mr Eliott to the Secretary of LIOOO, which would be L6OOO in all, or the amount at par of 600 shares, which Colonel Kitchener holds in security. This sum the Secretary declined to receive. The Directors asked instructions in the matter, as it would be necessary to take some action if the sale to the Corporation was not effected. If that sale Avas carried out, the Corporation having agreed to take over the liability, no action Avould be necessary by the Company. Mr W. H. .Reynolds moved to the effect —“ That the works be offered to the Corporation at L 5 per share premium on 5050 shares allotted, on the conditions arranged Avith the Corporation as per report, and that the Collector receiA r e six months’ salary.” The motion was seconded by Dr Alexander.

Mr G. W. Elliott opposed the motion, because he did not think the price named a sufficient compensation for the Company’s works and privileges. Should the Company sell at Lls per share, there would immediately be a very large sum o£ money thrown upon the market for investment, which could not be securely employed at a higher figure than 6 per cent. More than six or seven per cent, could not be got at the present time for money in large sums on really unquestionable security such security as they had in the Company’s 'property. For years they had been getting seven or eight per cent., and there was every probability of their being able to ; get shortly nine or even ten per cent. Take the smaller figure, and what were they asked to do ? Simply to part with the works at equivalent to par, because for the Lls which they wott'd get from the Corporation, they would not receive a greater income than they would obtain in a very short time for their money ; for each LlO share, which would pay them at the rate of nine per cent, they would rece v; exactly the same revenue from Lls invested at 6 per cent. ; yet they were coolly asked to part with their property at its present income value, ignoring altogether its very great prospective value. He did not hesitate to say that within eighteen years the Company would be able to pay Llo upon the original capital, in which case the shares would sell readily in the market at L2O each and upwards. In a few years the Company would be ? able to pay dividends of 20 per cent. If they retained possess’d! of their property, they would find that his predictions as to the value of the shares would, within four years, be realised. He firmly believed that tbe property could be placed upon the London market at from L 120,000 to LInO.OOO. There was so much money for investment, not only in London, but in Australia, New Zealand, and other Colonies, that he was confident that at that price many would be glad to secure the property. Even supposin -r the meeting decided to sell, he would ask that there should be a delay of twelve months, at the expiration of which time the shareholders would have a better idea of the value of their shares than they had now. He moved as an amendment :—“That the works of the Com pany be not sold to the Corporation, and that all further negotiations with that body ceaso.” Mr Mathews seconded the amendment.

In reply to a question put by Mr A. H. Jack, who said that some of the shareholders wished to know how they would be paid, The CHAIRMAN stated that the Corporation would pay cash to those shareholders who might require it, and those who wished to invest would get debentures. The Hon. Mr Paterson counselled an adjournment for fourteen days, in order that the shareholders might have placed before them information on which they could form a better oninion.

M r Smith could not see the advantage of delay, and would vote for the motion. He quite agreed with the remarks which had been made by Mr Eliott as to the increasing value of the Company’s property, and probably if it were disposed of in the London market a better price would he obtained than was asked by the resolution ; but he (Mr Smith) did not think that that was the proper way to look at this matter. They were, the fellow-citizens of those who had complained that the Company possessed ex-

traordinary privileges ia the matter of the supply o£ one of the necessaries of life. These complaints were likely to be continued, and it was probable that a strong a'id combined effort would hereafter be made to induce the General Legislature to exercise the power which was expressly reserved in the Act under which the Company carried on its operations; and the Assembly, considering that the inhabitants of Dunedin were paying too much for such a necessary of life as water, might deem it their bounden duty, upon pressure being brought to tear upon them, to interfere with a view of obtaining a reduction The compromise offered he regarded as a fair one. Mr Cuttkn considered the offer a good one ; and that, so far as the monetary part of the matter was concerned, it was, after all, merely a change in name, for instead of holding shares, they would hold Corporation bonds, and therefore the money market, at least, would not be disturbed. The amendment to adjourn was put and lost. Mr Eliott’s amendment was then put, and declared to have been lost by a large majority. After some further discussion, The Chairman said he considered the shares were worth LI 7; but as a shareholder he would be willing, if it was the desire of the other shareholders, to sell to the Corporation at LIS. On Mr Reynolds’s motion being put, the voting was found to be as follow : For the motion—Messrs Quick, Hawthorne, Logan, Street, Rennie, Macandrew, Hill, Butterworth, Brent, Alexander, Smith, W. Wat-ion, A. Barr, Jas Watson, Hardy, HisL p, Sinclair, Wilkinson, Laing, Jackson, Reynolds, and Wilkie. Against the motion—Messrs R. Watson, Tennant, Robersm, H. Livingston, Park, Walker, West, Bower, Matthews. Eliott, Davidson, Cutten, Stratford, Sanders, and Murcott. The result, counting shares, was 455 as against 305, leaving a majority of 150 in favor of the motion. The question in reference to the payment of Col. Kitchener’s mortgage was considered, but discussion was ultimately adjourned until the Ist prox,