The Gisborne Times PUBLISHED EVERY MORNING. TUESDAY, NOVEMBER 26, 1907.. THE WELLINGTON-MANAWATU RAILWAY.

Gisborne Times, Volume XXV, Issue 2047, 26 November 1907, Page 2

The Gisborne Times PUBLISHED EVERY MORNING. TUESDAY, NOVEMBER 26, 1907.. THE WELLINGTON-MANAWATU RAILWAY.

YViliilst no oue would seriously advocate private ownership of railways for New Zealand, it is certainly worthy of comment that in the only case in which an important lino lias been constructed and maintained by private enterprise the result has been at least equal to the best achievements of tlio State in the same direction. YVe refer, of course to the Mana.watu line, which is receiving special attention at the present time by reason of the fact that the Government has decided to givo notice of . its intention to take over the railway. It is significant in considering the present prosperous position of the Mianawa.tu Railway Comxiany that it was originated to carry out a work which the Government of the day refused to complete, on the ground that it would provo unprofitable. The work of connecting YY’ellington and Longburn was actually commenced under the Premiership of Sir George Grey in 1879, but the need for economy caused the. work to be stopped, and a Royal Commission reported that the line would prove an unprofitable investment. It was under these circumstances that a number of YVellington citizens took the matter in hand, aiid-dotc-rmiireA-+/>-Up"*-] —nne~ni‘st, iu,22u snares were allotted on September 22nd, 1881, notwithstanding tbe fact that intending subscribers were informed that they were not to look for any direct return from their investment. The great idea in floating the" company was to open up the back country, and thereby afford facilities for land settlement, with consequent advantage to the City of YVellington. The company was registered in 1881, and entered into a contract with the Government on March 22nd, 1882, to complete the railway. Desperate efforts were made to raise the necessary capital, and thirteen YY'ellingtoii gentlemen, responding to an appeal from the directors, agreed to take up 2000 shares each. Following their example, other subscribers came forward, and in a few days the subscribed capital reached £300,000. The floating of the first issue of £400,000 worth of debentures was carried out by Sir Julius Y’ogel on behalf of the company. In ltc, however, the affairs of the enterprise reached a financial crisis. The Ministry was appealed to, and negotiations were set on foot to sel-l the line back to the Government. At tliis juncture a number of gentlemen, including the directors, came to the assistance of the company, and guaranteed £6OOO each to secure an advance from the bank to continue the construction of the line. The ceremony of driving the last spike to celebrate the completion of the railway was performed by the then Governor, Gir William Jervois, on November 3rd, 1886. T.lio confidence of the promoters in tho district to he served by the railway lias been fully justified, for its success has been unmisln habile, whilst its great benefit to tbe YY’ellingtou province and city is generally recognised. The capital value of the land served by the line has risen from £2,566,670 ill 1885 to £8,936.507 iu 1905, while the gain to the city can scarcely bo estimated. The position of YY’ellington today ns the capital and chief commercial centre of the Dominion has ■been very largely contributed to by the operations of the Maiiawatu lino.

So well has tlie enterprise been managed that in addition to paying i! |) to the end of February, 1905, no less a sum than £118,550 in local si iul general taxation, the company Ins paid a dividend of 7 per cent, for some years. The plant and permanent ivay has been kept in firsitclass condition and is well “written

down,” and the directors have seen their way, when the hulk of the debentures mature next year, to pay off £170,000 wort'll, and add tins amount to the paid-up. capital, thereby making each share paid up ito £2 instead of £1 as at present.

It will thus be seen that the State is in the position of having .the right to acquire a line of railway which must form an essential portion of the Main Trunk line be-

tween Wellington and Auckland, and which is already a financial success and in perfect- running condition.

According to the Act which gave the company its charter, the Government is oxpected to pay a price

to be fixod by arbitration, and there is no liability to allow anything for the (goodwill. Sir Joseph YY’iard, ill a debate in the House, let fall a remark to the effect Hint it would coat a million sterling to acquire the railway. At this price it would he a splendid investment, sinco according to the last balance-sheet tho igross profits from the traffio receipts, after deducting expenditure, amounted to £00,451, representing

upwards of 6 per cent, oil tho capital of a million, as against 3.45 per cent., the amount earned on tho General Government railways. The debentures of the company bear 5 per cent, interest, but probably the Government could raise the amount necessary at 4 per cent. The present debenture capita] is £680,000, while tho paid-up share capital is £170,000. Presuming one million is paicT*for the line, it is estimated in YY’ellington tlr.it tho amount received by the shareholders would work out at about. £2 12s 6d per share. Previous to the announcement of the Government’s intention to take over the line, shares were selling in the market at about £2 2s. The amount suggested constitutes a fair advance upon this price, although the sum mentioned, of course, is considerably below what it would be if tho Government had to pay for the goodwill of the company. YY’hen considering tho equity of ■the position it is as well to bear in mind that the Governments in

power in the eighties not only lent to YY’ellington citizens tlio task of undertaking this enterprise, but actually failed to carry out tlio country’s share in the agreement. Under

this agreement, in accordance with the provisions of tlio ’MI villi' ays Construction and Land Act, 1881,” the company was entitled to endowments of land to the extent of 30 per cent, of the cost of constructing the railway, provided that such cost for the purposes of the Act did not exceed £SOOO per mile. The length of the lino was 84J miles, and the value of tho land receive!wo amounted to £126,3i5. Of this amount some £93,000 worth was allo-

cated from lands then in possession of tlio Government, leaving due a balance of £33,029 worth. The Government failed to acquire the ne-

cessary land from the Natives within the five years mentioned in the contract, and all that the company ever got was additional land to the value of £5339, which the directors were obliged to accept owing to the period named in tho contract having expired. The State must have the line to complete its own system of railways, and under the circumstances i.t is to be hoped the Government will meet in a. fair and reasonable manner those shareholders who took the risk that the Parliament of 1881 should have taken, •and who since that time have carried out the undertaking with untold benefit to the community.