Wellington – Manawatu Railway.

Manawatu Standard, Volume IX, Issue 100, 31 March 1885, Page 2

Wellington - Manawatu Railway.

♦ (Marton paper) We cannot help thinking that the news published the other evening to the effect that terms has been arranged between the directors of the Wellington-Manawa-tu liailway Company and the Government for the transfer of the company's property to the State will be hailed with satisfaction by everybody iv tho colony except the shareholders m the company. Briefly stated, we understand that the arrangement is that the company shall retire from the field on being recouped their actual outlay. This agreement will, of course, have to be sanctioned m the first place by the shareholders m the company, and m the second place it will have to be ratified by Parliament. We fancy that Parliament will be only too willing to endorse the conduct of Ministers m this matter. The Act authorising the construction of the railway contemplated its being taken over by the State on its completion. The terms provided m the Act are that the. company shall receive the full sum expended Qnjthe line, with ten per cent, ad ded ; and that tho company shall retain all their endowments. Nearly the whole of the extensive endowments originally granted to the compnay still remain . m their possession, aud hence the terms now proposed and those specified m the Act are. widely different, the difference, of course, being m favor of the colony. The question arises, Will the shareholders agree to the proposals made by the directors ? In the interests of the general public, we hope that. they will. No doubt the endowments possessed by the company are large, but we are inclined to believe that their value has been greatly over-rated. The directors are regarded as thoroughly capable business men, and they are themselves very largo shareholders m the concerni It is morally certain that they would not have decided on the course which they adopted if "the magnificent profits " that some people talk so glibly about had much prospect of being ever realised. Mr J. E. Nathan, chairman of the directory, is not the sort of man to " chuck away " a " good thiug," at all events when he is himself likely to share largely m its advantages. It goes without saying that he and his co-directors are much better acquainted with the real position of affairs, including the value of the company's endowments, than any outsider can possibly be. We understand that the immediate cause of the offer made to the Government was that the company's directors found themselves somewhat m financial difficulties. The total failure of the company's great land sale a short time ago led people to expect that funds were urgently needed, for the terms as to the payment tor the sections offered were so stringent that the company could not expeot to compete against the very liberal terms offered by Government re the sale of land of a quality superior to that advertised by the company. We mentioned further back the terms provided for m the Act for disposing ot the company's railway to the Government. It should be added, however, that the clause is purely optional. The Government of the day are not bound by it to take over the line ; the matter is left to their discretion. Four courses are open to the shareholders : They may endorse the action of the directors, and thus escape without loss, even if they make no profit. They may increase the capital of the company by one hundred and fifty thousand pounds ; they may try to float a loan for the sum required ; or they may sacrifice their large endowments by rushing them into the market and selling them much below their real value, m which case the " magnificent profits " would vanish. ...