THE WATERWORKS AND THE CORPORATION.

Evening Star, Issue 3333, 25 October 1873, Page 2

THE WATERWORKS AND THE CORPORATION.

The meeting of shareholders in the Water Company, held in the lower hall of the Athena'iim yesterday--tin*, business being to consider whether the works should be sold to the Corporation, and if so at what price was largely attended, Mr llorkkt (In.LlKs, ns Chairman of the Board of Di rectors, presided, and in introducing the business, sketched the negotiations between the Corporation and the Company for the purchase of the works by tiie former, and observed : -He desired to make a few remarks in bringing before the meeting the first resolution submitted by the Directors Resolved That, in accordance with the recommendation of tlie Board, the works and plant of the ('ompany he sold to the ('orporation.” He had not come there to advocate that matter as a ratepayer, or as one having an interest in the City. He was there as Chairman of the Company’s Board of Directors, and it was in that light alone he looked upon the question. He had always said he was willing to sell for Lib, although' he had considered the shares worth Ll7 ; and lie was still willing to sell at Lib, if the Company resolved to do so. Looking back at what had occurred during the past two years, ho thought the Company would say hj« had fought earnestly for their interests; and he would now say that tho meeting could not make a greater mistake than by negativing the motion, and thereby refusing to sell to the Corporation. H was ail very well to say, ‘‘ Oil, the Corporation can never force us to sell/’ _ It was true the Assembly would never sanction any spoliation of their property so long us they acted rightly, hut if they practised a sort of dog in the manger prineiiile, they might safely look out for very different treatment from that which they had' experienced. Wl/at, in fact, gave the Com pany so much power m (die Assembly was the fact that the ('orporation acted wrongly, ('ortainJy there was baldly a member of the Assembly who did not think that the Company's powers were greater than they ought to possess. The gentleman who cbliductecl the

case in the Lower House had over and over again expressed that opinion. The gentleman who had the arrangement of the matter in the Tipper House expressed himself in a similar manner; and that same gentleman (Captain Eraser) called upon him (Air Gillies) anti warned him if the Company did not act fairly tuwanls the ('orpot ation and sell at a fair price, they might look out for what the Assembly would do in the future. He had already said that the Assembly would not allow any spoliation ; but there were several ways in which the Company's property could bo affected. As the gentlemen of the Press were present,_ lie was placed in a somewhat difficult position, and dare not say all lie could say. There were matters connected with the Company which lie could not mention in public, hut lie would say this : It was patent to the shareholders last year that the supply of water ran short, ami they had to stop the supply for the streets, the Government crushing machine, and other purposes. Let them picture to themselves the City of Dunedin without water fora week, which was an occurrence by no means impossible. If such should bo the case they would hear a howl of indignation such as they would not lie aide to withstand; ami he contended that the Company was bound, when the Corporation came in a fair and upright way, to say they would sell at a fair price. The meeting must bear in mind that the default in carrying out the last agreement arose through no absolute ami deliberate choice of the Corporation, hut through a legal difficulty which arose, ami of which they had no former knowledge. Therefore, morally, and as men of honor, those that voted for the sale of the works on the last occasion were bound to vote for the sale of the works now. He ditl not say they were bound to take Llo. He did not think they were. The arrangement was lint completed at the time, and therefore the sliaroholders were fairly entitled to consideration in respect of the rise in property that might have since occurred. Had the value of property gone down he supposed (hey would not have received the price then agreed upon, Mr Kish : Uh, yes (laughter) the Corporation offered to bind itself to pay Lib as soon as it got power to issue b() years’ debentures under deed. ( Air (In,lies; Hut, unfortunately, the Corporation had not the power to hind itself. Well, there was another objection he had heard to selling to the (‘orporation. I t was said there were many shareholders who ditl not want to be buying ami selling ; that they wanted a settled income. Hut that was really no argument at all. It would he admitted that the Corporation debentures were as gootl an investment as shaivs. Air Cuttkn : Hut regarding the amount ? Air (Hu,IKS : The whole question, as Air Cut-ten said, was one of amount; but as regarded the main principle of selling or not selling, lie said that those shareholders who wished lor an investment would be equally well oil' if they sold to the Corporation, that was to say, provided they got a fair price for their property. I ’ut regarding the first motion to be bi ought before the meeting, he considered it would be suicidal for any shareholder to.vote against it, ltecau.se they would by that means put a weapon into the hands of the Corporation that would he used to their disadvantage, and justify the statement that they wanted to hack out of the transaction. If ho thought there was any great number of the shareholders who would vote against the motion, 2b per cent., he could say a great deal more, but he would not like to hear himself running down the Company’s property.—(Mr Elliott : It would be very distasteful if you did.) Therefore, in what he said lie labored under a disadvantage ; but it could be clearly ami distinctly shown (hat it would be to tlie interest of the shareholders to sell, and if the meeting would consent to the exclusion of the representatives of the Press, he would have no objection to shew why. A.s far as the resolution was concerned, /.ho whole of the Directors present except two voted f.'A it, There was another thing. Be; marks hinX been n/iplp as to the dividends paid running up as high as 20 Jig).’ cent., but it was a mistake to suppose that uhtheir position they could go on paying such dividends. ' Their capital was nearly expended. They had no i.npital to enable them to supply the increasing’ numbe” of houses. They were bound to create a reserve fgm). Of course, the shareholders would get the money H/at was reserved, ami they might take it as a certainty that for a iiinnber of years they would not got a dividend of 10 per pent. —(Mr Wilkie : “it is 12n0w.”) Ami nobody knows better than Air Wilkie why. But the question vpis whether it would be wise in the future to pay more tlj;m 10 per eept,, seeing that they would have to extend tl;ejr work?, He would now move the first resolution : Tlpit, in accordance with the it solution of the Loan!, tfie works and plant of the Company be sold to the Corporation.' Mr find moved as an amendment the addition of the following words to the motion u At the price of Lib per shank’' He was at a loss to know why the meeting had been called. On February the shareholders resolved jd/at jdje works and plant should be sold at Lib, ami full power to sell was given the directors. There was no limit ;js to time. The Corporation said they would give fifty years’ debentures, provided Parliament gave them power to do so ; that if Parliament (lid not give such powers, that they (the Corporation) would then say it was their fault the thing hud happened, anti they would commence proceedings de novo; and that if the Company thought they would be at any loss in carrying that out, they won Id nay nine per cent, in'the interim, or allow them to appropriate the profits arising from among the shareholders; and he (Mr Fish) said that if the Directors of the Company had been actuated by a bona Jidc desire to cany out the bargain they should hj ive at once acceded to the reouest of the Corporation, The Corporation hail done every thing they could to consult the convenience of t);« Directors and get the matter settled. Ho trusted tjiat, in the interest of the City the Corporation would not buy the works, but rather erect new works of their own ; therefore he would not he sorry to see the resolution lost. Mr fish then proceeded to read from a speech made by Air Gillies eight months ago, in the course of which that gentleman expressed the opinion that the Company’s shares would bo well sold at Lib; that the oiler was a very liberal one ; that a better oiler from the Corporation wvu)d never be got; that if the Company refused such tin offer it would be brought ;,s evidence against tnein wh;;ji they would bo .compelled to ask the Legislature to extend their jlowers ; fhaf; if the Company could hut'supp,'--the City with water, it would be the Corporation's duty to take tlye ma,titer jn hand at once, in which contingency the Company would have competition—and would the value yf i/lpiriis he anything like Lib? Air (Lilies had also said " Then/ were also other weighty matters which lie could not give expression to on that occasion, but which the Directors were cognisant of.” What were those weighty matters? Did not they refer b, Hie imperfect state of the works, and the inability pf the Company to supply the wants of the City? oth/d'wise why ditl tiic Chairman use words of such' Strang* import '■ Therefore that perhaps was an additionaj reason why the Corporation should not buy the works : particularly if the question of “ time ” was to bu ijpide an excuse for extorting more money from the pm,kefs of the ratepayers. Jf the Corporation were expected tsi pay more than Lib per share, it might save time to staft,* that they would be prevented from doing so by reason of tiic fact that the extent of their borrowing powers - Lloo,ooo—would be exceeded. Air ( 'ittf.Jj remarked that Air fish evidently appeared as the advocate of the Corporation, and it was only reasonable to prcsi/me that the weight of Ids argument would be accepted as in proportion to the number of shares he held, which was one only.—(Laughter.) His (Mr Cutten’s) mind had i-hanged in regal'd to the matter, and he moved, “Don’t sell to the Corporation,” The Hon. Ajr I’,,\tiioatK seconded it, and contended that as mud/ /'espect ought to lie paid to the opinions of the man who held only one share as to those of others is ho were regarded as bloated capitalists, Regarding the ’ oiler of Lib by the Corporation, had he been a. member of that hotly, lie would not in the interests of the citizens have made such an oiler. The Company was indebted to the Corporation for the rise in value of the works, for before the tiller of the Corporation was made, there were no negotiations for the piirehai-e of thewoiks. While on (lie one hand the Corporation were bound to adhere to their otter, the Company on the other were bound to accept it ; if net, all the

Corporation had to do was this : It was a rule in Parliament that there should be no monopoly; and if the Corporation chose, their success was merely a question of time. They must not semi to Parliament an unsupported petition ; but all they had to do was to incur a little expense to enable a few householders, for instance, to proceed to Wellington to show that they had applied for water and could not get it, and then the Corporation would succeed. Mr Crn’l'.N said he disagreed with tho resolutiou, because it did not state the price at which the Company were prepared to still. — (Mr fisir : Hear, hear.) If the Company intended to sell they should fix a price. The works hail been, and would be, far better managed by the ('ompany than they would be by the Corporation. Again, he did not altogether see why gentlemen should insist upon spending money merely to supply outlying districts. lie believed that even in spite of the threatened opposition the Company would bo able to pay dividends as usual, furthermore, he did not believe in the yam about the works being imperfect. If the immense waste of water was taken into consideration they would say the Company was perfectly sound; it was likewise prosperous, and every year its prosperity would increase. Why then should they hand the works over to the Corporation now? —(Mr f isil : because you have sold them already).—No. If an unfor tnnate bargain were made, and the property rose in value, the bargain was generally considered off, ami no sale was effected, unless at a fair price. And the works of the Company .were now worth more than Lib. The shareholders could sell at Lid, and it was therefore monstrous to ask them to sell for less. As for tiic Covemnieut taking away their powers, he ditl not believe in that sort of thing. At any rate ho was not in favor of selling, unless at a rattling good price.—(Laughter.) Let them say L‘2o down, and he would be on. —(Renewed laughter and applause.) Mr A. Rk.vmk also addressed the meeting in support of the sale. Air E, B. Caki; ill said lie was not a large shareholder, and ditl not pretend to take as great a personal interest in the matter as some others. Hut he had boon a shareholder from the beginning. At a certain point he had to retire from the Directory, in consequence of the matter coming into contact with the City Council, He certainly had thought that the tiller made by the Corporation to the Company was exceedingly liberal; and that in all that had taken place in regard to the giving effect to that bargain, the Corporation would be hold to have acted in perfect good faith. It was certainly not their fault that they could not give fifty years' debentures. They were originally nnder the impression that they could do so, and the ('ompany were also of that opinion. Consequently it was a mere error which the Council fell into, and it was not inconsistent witii their wish to act in the most perfect good faith. It seemed to him that where one party had acted strictly up to the terms of an engagement, the other party should hesitate to take advantage of an error of that sort. —(Hear, hear.) His opinion was that the Company were bound to act in a fair spirit towards the Corporation, and to carry out the original agreement in its entirety ; and if there had been a mistake through no fault of the Corporation, the Company should not east the question adrift, but by compensatory means settle it at once anti lor ever,-•(Applause.) Air William Watson said he thought it would save time and trouble, and meet the views of many of the shareholders, if they substituted LI (5 for Lib. Mr Fish explained that the Corporation were now in a position to carry out the original contract by issuing fifty years’ debentures. Air fish's amendment was lost by a large majority, only throe hands being raised in support of it. Mr Watson then moved that the words “the sum of LIG” per share be inserted for Lib ; the arrangement to take effect from the Ist January, 1871. His object in proposing this was because the amount came between Lib and Ll7, which latter amount lie had heard it was likely would be recommended. He therefore had thought that DIG would he likely to meet the views of all parties. He had heard it said by one or two Councillors that if the Company wore at all liberal the Corporation would be inclined to give way ; and lie did not think it would he advisable to ask too much. He considered Lls would pay them all very well. Mr Hardy seconded the amendment. There voted for the amendment 11; and 20 against it. The amendment was therefore lost. The original motion was carried by 27 votes against 3. On the motion of Mr Eliott, the consideration of the other resolutions was postponed until Monday at 7 p.m., until which hour the meeting adjourned.