The Evening Star SATURDAY, NOVEMBER 15, 1873.

Evening Star, Issue 3351, 15 November 1873, Page 2

The Evening Star SATURDAY, NOVEMBER 15, 1873.

It would be unfair to criticise Mr Dick’s letter to the Corporation too severely, as it is to be presumed the importance of the subject necessitated its being submitted to the Directors of the Waterworks Company prior to transmission. It must, therefore, be considered as another move on the part of the shrewd business men on the Directory, so admired by the Daily Times, to obtain a further advance upon the offer made by the Corporation. We are glad to see that there is no disposition on the part of the Council to move in the matter, notwithstanding the exceedingly oily tone adopted by the Directors. It is evident that from the very first offer to buy the Waterworks there lias been a settled purpose to leave a hole to creep out of every bargain with the City Council, in order to make a stand for a higher price. When Mr Gillies said that at one time the property might have , been obtained by the Corporation for twelve pounds per share, he pronounced the most emphatic condemnation of the course of proceeding adopted by the Company, if that were the case, why was not the offer, of sale made in a fair, straightforward, busi-ness-like manner? The real state of the case is, however, that until the Corporation made an offer, no standard price could have been named j and could the proceedings of the Corporation have been conducted with equal secrecy to the business transactions of a private firm, we have no hesitation in expressing our conviction that before this time every share might have been bought up at very little above, or very probably under par. The difference of price, therefore, between par and the last offer of the Corporation represents the cost of discussing financial matters publicly. For this, perhaps, there is no remedy in a small place like Dunedin, although the English Government contrives to manage things differently in its stock transactions. This morning the Daily Times somewhat tauntingly recommends reference to arbitration. To this, we think the City should not consent. There is a limit to the value of everything, and we consider that limit already exceeded in the offer of sixteen pounds per share. We do not think that it will be at all wise on the part of the Corporation to give such a price for the Waterworks as will entail, the necessity for charging the present water rates in order to recoup the interest of the money. Yet this might be the case if the matter were submitted to arbitration; and even at sixteen pounds per share no such reduction could be made in the water rates for some years to come as to render possession of the property by the Corporation very desirable. It is purely a matter for consideration what the works are worth to the City, and that is easily ascertainable by reference to the outlay and income; there needs no arbitrator to determine that: it is a mere question of accountantship. Already one estimate has been given, since which time deterioration of value must have taken place in some portion of the works, while new shares have been created to meet the additional outlay. Virtually, fifteen pounds a share was mutually agreed upon between the Company and the Corporation after that estimate was made ; and we know of nothing that has occurred to increase the value of the shares since that time. The proposition of the Waterworks Company really amounts to asking the Corporation to increase their offer, for the Directors refuse to accept sixteen pounds a share. It is utter nonsense now to talk about a maximum and a minimum offer. Suppose the Corporation fix as the lowest that which they may now be considered morally bound to—sixteen pounds—and the Company as their highest somewhere between twenty and twenty-five, or say twenty ; Mr A., a man of undoubted probity, is called upon to arbitrate. As a matter of course, he must,, in view of such a disparity, award more than sixteen pounds, for he is called upon to reconcile a difference : so that the shrewd business men on the Directory would very dexterously contrive to gain another step on the Corporation. It must not be forgotten that one hundred thousand pounds, which would not buy the works at sixteen pounds a share, is about one-half more than the cost of new works would be, and that in view of the constantly increasing demand for extension of water supply, additional arrangements will inevitably become necessary. Already application has been made to the Government to reserve the available sources of supply, and the matter is of too great public importance to allow them to pass into the hands of a private company. The experience gained by the construction of the present works will enable the Corporation to lay out their money to much better advantage ; and as by the constant grasping of the “ shrewd business men on the Directory,” the Company is put beyond the pale of public sympathy, it is not at all likely that an application to Parliament for extinction of the monopoly on equitable terms will be refused. If any further negotiations take place in regard to the purchase, we recommend the Corporation to take a leaf out of the Company’s book, and as sixteen

pounds a share has been refused, to take its next stand, upon fifteen, and go gradually clown to twelve, Mr Gillies’s standard price, at which, as money is rising in value, the works may possibly be obtained in a couple of years. As the Daily Times admires the slippery process on one side, perhaps its admiration may equally extend to the other, now Mr Fish is out of the Corporation.