THE WATERWORKS AND THE CORPORATION.

Evening Star, Issue 3360, 26 November 1873, Page 2

THE WATERWORKS AND THE CORPORATION.

The following letter was read at this afternoon’s meeting of the City Council; — City Council Chambers, Dunedin, 25th Nov., 1873. Sir,—l have been directed by the Council to acknowledge the receipt of your letter of date as per margin (Nov. 3), enclosing copy of a certain resolution of your directors, as submitted to a meeting of the shareholders of the Dunedin Waterworks Company, held on the 27th October, also enclosing copy of three resolutions submitted to, and passed by the Company on that date. [Stripped of surplusage and certain objectionable expressions, which probably are not intended as surplusage, your letter may shortly be read thus “That neither the Council nor the citizens, nor tire shareholders of the Dunedin Waterworks Company are or have been in a position to form a proper estimate of the value of the Company’s works. That, when in June 1812 the Company, by a resolution supposed to be buna fide, agreed to sell at LIS per share, as per a draft agreement; and that, when in due course you, by letter dated 2fith June, 1872, conveyed such resolution to the Council, there was no serious intention to complete the bargain.” The Council is justified in this assumption, seeing that you now state that in the past the Company lias not in any sense been bound by the resolution to which I have referred. It would indeed seem to be true, probably, that the Council “is unable” to form a correct opinion of the directors’ idea of the value of the Company's works ; and certainly the Council is unable to estimate very highly the directors’ sense of honorable dealing, latterly, as regards their negotiations with the Corporation. It was certainly with the hope that the shareholders would have been thereby dissuaded from adopting the directors’ recommendation as to proposing arbitration to the Corporation, that the Council passed and forwarded to you a resolution declining to agree, at this late period of the long standing negotiations, to refer the matter of price to arbitrators. Possibly arbitration might not have been regarded by the Council with disfavor some two years ago, whenthenegotiations were commencing and when the Company’s shares were quoted at, or under, paf; hut to suggest that method of a settlement now, after the price has been long since agreed upon, and after through the alone offer of the Corporation of Dunedin in making the almost profligate offer which it has made, the Company’s shares are at their present quotations, is regarded by the Council as lacking in straightforwardness and honest dealing. The Directois of the Dunedin Waterworks Company are aware of the following facts: (I.) That on August 21st, 1872, the draft agreement unprepared by you for the sale of the works to the Corporation at Lls per share, was by letter confirmed by the Council. From that moment there was a contract between men of high principle, though, as the agreement was not scaled by the Company, there was none between the two Corporations. (2.) That through the action of the General Legislature, by what means brought about need not now be inquired (probably your directors know), the Council was subsequently, at the close of last year, rendered unable to issue fifty years’ bonds—thirty years’ bonds could only be issued. That so soon as the error which the Government had allowed in the Act was discovered. it was placed before your directors in an ingenuous manner, and prompt steps were taken to rectify the same. That the Government did, without tardiness, enable the Council to issue fifty’ years bonds, whereupon the ('orporation announced its readiness to issue the Ponds accordingly, and to complete the purchase. As indicative of the insincerity with which latterly the directors of the Company have pursued the negotiations with the Corporation, notice may be taken of the fagt, o£, which your directors arc not in ignorance, in making the proposal for arbitration, that the Council has not the power, had it even the disposition, to bind the Corporation to such an undefined liability us arbitration possibly might incur. Before closing this reply, it is impossible to refrain from allusion to your extraordinary argument that as—so it is stated—certain of your directors had given one or more members of the Council information of the directors’ intention to call upon the shareholders of the Company to support a reference to arbitration, and as, forsooth ! such member or menibefs of Council bad not made any “ serious remonstrance'’ thereon, that therefore the arbitration proposal was to pass unchallenged. Did ever a public company reason in so uubusiuess-like a fashion? What, need of Boards or Councils if private members of cither side are to conduct the shareholders’ and citizens’ business by word of mouth at street corners ? Rather, it ought to have seemed to your directors, if any Councillor had unluckily expressed an individual opinion to them, that such expression was given in confidence, and was entitled to receive confidential treatment, and not to be placed to the unworthy purpose for which it found a use. In conclusion, I am directed to say that it ia li?ce&p*rily impotwbl* to coacur ia your propo*

sal for arbitration. TBe Council is reluctantly onnmpllad to conclude that your directors even £vi not seriously believe.l it to he practicable that the Corporation can arbitrate,'and ventures to hope that even yet your Board may see a way to retract, with conciliatory feeling, this late unhappy proposal.- I am, &c., Jos. M. Massf.v, Town Clerk. Mr 'J'lios. Dick, Secretary Dunedin Waterworks Company.