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

[Wellington Paper.]

The announcement that the Colonial Treasurer had bought up m the London market a large proportion of the debentures ot the Wellington-Manawatu Railway loan, and the further (apparently authoritative) statement that the Government had concluded a bargain with the Directors for the abandonment of the contract between the Government and the Company, the handing over of the works, and the surrender of all the rights of the Company on terms which would do little more than keep the shareholders from actual loss, have caused a good deal of surprise and some dissatisfaction. The accuracy of the second half of the information has been questioned, and though we do not profess to be able to enlighten the public fully as to what has really been done and what is m contemplation, we may, perhaps, succeed m removing some of the erroneous impressions which have got abroad; We will preface our remarks by saying that, as far as we are enabled to judge, it is- the wish of the New Zealand community that the general railway system should be m the hands of the State, either directly or through the medium of a non-political- Board. That has been the feeling all along, and it still exists m full force, though it is admitted that the State has not yet arrived at a satisfactory solution of the question of how to work the lines to the best advantage. It is felt that if the State is to retain any of the railways it should possess them all, and that only m that way can the Colony gat the most of them. Parliament would unquestionably endorse that view, if the simple issue were to be placed before it. Sir Julius Yogel is of that opinion, and it accounts for 'his anxiety about the District Bailways last yoar. If he remains m office there is no doubt that every railway m the country will.be owned by the State. He regards the possession of the railway system as a matter of perhaps vital importance to the Colony. It is not surprising, therefore, that he should already nave entered into negotiations with the Wellington-Manawatu Railway Company for the transfer of the property to the Government. The purchase of debentures, as soon as negotiations had been determined on and before the rise which the bare rumour of negotiations would occasion, was a wise precaution. But the assertion that the bargain between the Government and the directors is actually concluded is not eorreot. It is quite clear lhat it could not be so. It is evident that the directors have not the power to bind the Company m such a matter, nor has the Government the power to bind the country. We do not know how far the preliminary negotia? tions have advanced, but before the directors can conclude with the Government the shareholders must be a consenting party, and, m like manner, before the Government can conclude with the directors the sanction of Parliament must be obtained. Again, it seems to have been assumed m certain quarters that not only have the directors committedtheshareholders to a handingoverof the concern to the Government, but that an uncommonly bad bargain has been made, and that the shareholders have been deprived of the. opportunity ot oarrying out a splendid speculation and netting .something like half a million of money. If we were to assume that the directors had completed an arrangement which was binding on the Company, it. would be unfair to go furthor and assume, without a particle of evidence, that they had sacrificed the interests of the body of which they themselves are members. Until the contrary were shown we should at least have to give thorn credit for having been actuated by a strong desire, to do the best lor those whose interests had been committed to their keeping. Nor could we pre-sup-pose the directors to have acted unwisely. They are men of sound business capacity, and have managed the Company's aftaiia with groat ability and gooa judgment, If latterly matters

li ivc hoc turned out satisfactorily, it has nut been iv cousequnce of maladministration by those who have had the control. It was an essential part of the scheme that the construction of the line should to some extent depend upon tlio proceeds of the sale of the Company's lauds The allocated and the purchased land was to be soled as the railway progressed ; and, m the prospectus for the loan, the opinion was expressed that the arrangement made under the contract with the Government (by which the company was to obtain possession of the equivalent percentage of the allocated land on each of the twelve sections of the Hue as each was completed) " would enable the Directors, with the calls of the capital already subscribed, and the sale of debentures to the amount of £250,000, to carry out the eutire works." It is unnecessary to go into the matter minutely, but up to the present time those hopes have not been realised. There was a failure with regard to the Fitzherbert Block and the township of Linton, and there cau be no doubt that the recent action of the Government m pushing forward a scheme of special settlement on Crown lands injured very materially the prospect of disposing of the Company's sections. The Government gave better terms than the Company could afford to offar, and the result was inevitable. In fact, the ground was cut from under the Company's feet. It is obvious that the same cause will operate disadvantageous^ m the future. No one will think of blaming the Minister of Lands for endeavouring to settle the public estate. If by his special settlement scheme and by a generally liberal administration he can succeed iv placing largely increased numbers of suitable persons on the waste' lands of the Colony, so much the better. The special settlements are on their trial, but, whether for good or evil, they are at present popular, and, as long as the demand is supplied, intending settlers will prefer to buy iv what is unquestionably the cheaper market. But however good the scheme may. bo from a public point of view, it has certainly had a depressing effect on the operations of tho Government and the Directors. They will of course have to vindicate their action before the shareholders, but m the 'meanwhile it would be folly for the latter to suppose that, their interests have been sacrificed. There is no reason whatever for believing anything of tho sort, and, whatever may be m contemplation, we feel satisfied that any arrangement into which the Government may be disposed to enter, will involve the full completion of the line by the Company; The contract between the Government. and' the Company, under which the Wellingtoo-Mauawatu Hailway is being constructed, provides that the. power of purchase conferred upon tho Governor by" "The Railways Construction Act, 1881," may be exercised at any time after the expiration of throe years f rum the completion of the Hue. But those terms can of course be varied by agreement between the parties, and under the sanctiou of Parliament.