THE T.T.T. RAILWAY.

Putaruru Press, Volume II, Issue 36, 19 June 1924, Page 2

THE T.T.T. RAILWAY.

SECTIONAL PURCHASE IDEA. Further Negotiations. The Board and the Company

Since the conference in Auckland on the Uth of last month, correspondence has been passing between th» clerk to the Putaruru-Taupo Railway Board, Mr. Wm. C. Hewitt, and the chairman of the Taupo lotara Timber Company, Mr. F. G. Dalziell, as to the exact nature of the offer made by Mr. Dalziell at the conference for the sale to the board of the company’s interest in the section of its railway from Putaruru to the 19-mile peg. On May 19 Mr. Hewitt wrote that the offer, as understood by the board, was as follows:—“That the company will sell to the board the interest of the company in the said 19-mile section of its railway at valuation, subject to the company having running rights over this section equivalent to those it now has, and subject to such running rights being guaranteed by the Government or secured to the company by a charge over this section; that in the event of the output of the company being increased such running rights are to be increased proportionately; that the company will pay for such running rights at schedule rates equivalent to those which other timber owners would be paying, it being understood that timber owners using their own rolling stock would pay less than others without rolling stock; that the purchase price is to be paid in cash 01 by guaranteed or approved security debentures.” QUESTION OF EXTENSION. To this Mr. Dalziell replied:—“l am in receipt of you:' letter of the 19th inst., which correctly states the terras mentioned at the meeting upon which my company is prepared to sell the 19-mile section of its railway. You will remember, however, that I explained to the meeting that the terms of the company’s offer of its 19-mile section set out in the correspondence between Sir John Findlay and the chairman of your board had been arrived at after a very full consideration of ■ the many difficult questions introduced into this subject by your board’s proposal to build an extension of the 19-mile seotion to serve the timber bushes in the ‘district.

“ i told the meeting that the representatives of the company present could not for the purpose of the meeting alter the terms of that offer, but that I was prepared to give particulars upon the points about which the chairman desired further information. These points and my answers are correctly stated in your letter, so that Sir John Findlay’s letters to the chairman of November 14 and February 5 last, together with the terms set out in your letter now under reply, may be treated by your board as containing the company’s offer in respect of the 19-mile section. “ j may say, however, that the terms of Sir John Findlay’s two letters are in no way inconsistent with the terms set out in your letter of the 19th inst., hut if you will read these two letters you will see that there are statements in them which are necessary to the full understanding of the company’s offer. In order to save any misunderstanding I think it well to mention the fact that m-y company has not been informed of the terms of the negotiations between your board and the other timber owners with regard to their finding the purchase money of the 19-mile section, or the cost of construction of the proposed extension. We do not understand, therefore, that any sum for sinking fund would be included in the board’s transport charges to the company. At the same time I may state that the proposal that the timber owners should find the capital cost of the whole of the company’s line so that the settlers should have the line free of capital cost originated with the company, which is still prepared to consider any proposal of that nature. It seems well, also, that I should remind your board of the fact mentioned in Sir John Findlay’s letters to the chairman, that in his opinion the board has no authority to construct the proposed extension from the 19-mile section, for it has neither secured an Order-in-Council under the terms of sub-section (7) of the 1923 legislation, nor entered into negotiations to purchase the company’s railway as contemplated by that sub-section.” VALUE OF COMPANY’S OFFER. To this Mr. Hewitt replied on May 27:—“ I have been instructed by the chairman of my board to say that it will be only a waste of time and a useless expenditure of the board’s meagre funds to convene a meeting of the members of the board to consider, again Sir John Findlay’s letters of

Novc;\ib:r 14 and February 5 last, as the ouers therein contained arc j so hedged in with conditions and as- ; sumptions as to make them worth- ' less. Your letter is equally evasive. The board is not, therefore, in possession of an offer from your company which, if accepted by my board, would be enforceable in any court of law. The chairman of my board suggests that we begin de novo and that I ask you to be good enough to make my board a definite offer as to price, terms and conditions for the sale of all your company’s interest in that section of your railway line from Putaruru to the 19-mile peg. 1 need hardly poir..’; out again, as the chairman has already done, that it is essential that my board should be put in possession of a concrete offer of the section of the line it is prepared to purchase, so that my board may be in a position to bring the timber owners in the district into line. The question of the board’s authority to construct an extension has so far not arisen, as it is obvious that nothing definite can be done in that direction until the board has under firm offer the company’s interest in the section of its railway to the 19-mile peg. To make it once more quite clear, the board has requested me to inform you that it has definitely decided not to negotiate Further for the purchase of your railway line as a whole. I shall be glad of an early reply.’

THE COMPANY’S EXPLANATION. On June 2 Mr. Dalziell replied as follows: — “ Your chairman’s assertion that the terms of Sir John Findlay’s letters of November 14 and February 5 and of my letter 21st ult. are evasive does not need reply, nor is there any justification for the statement that the company’s offer contained in the above letters, if accepted by your board, would not be enforceable in a court of law. Your chairman seems to be under the impression that my company has some legal or moral obligation to make a fgnmal offer to your board of the 19-mile section of its line, that offer to contain such particulars as will meet all the needs of the scheme your board has in mind, the details of which have been carefully concealed from us. It is well, therefore, that I should again remind you that the company would prefer not to sell its 19-mile section. The offer of this section was made on the suggestion of the Minister of Public Works, and for the purpose of facilitating land settlement in that locality. The terms of the offer were settled by Sir John Findlay after consultation with the Minister and bis advisers. At the recent meeting in Auckland the company’s representatives could not gather what your chairman meant - when he said the company had not made a definite offer of the 19-mile section. We therefore discussed the matter during the lunch adjournment with Messrs. Cox and Hume, who both assured us they understood what the company is prepared to do, and that it is sufficient for their purpose. Mr. Cox said he would so inform the chairman.

“ With regard to the suggestion that we should start de novo and that the company should now make a fresh offer to the board, the answer is that we cannot do this. In .the first place, the chairman prefaces this proposal by an accusation of evasion against Sir John Findlay and me, which does not seem a sound basis on which to make a fresh start. But the real difficulty is this: When your "board approached the company after the passing of the 1923 legislation we wrote suggesting that negotiations should be personally conducted in Wellington in the presence of the Government officers upon whose advice the Governor-in-Council would act in determining if the company had been reasonable. Your board declined to do this. It insisted • upon the negotiations being conducted by letter, and in the lengthy correspondence that has since taken place it has made every endeavour to create the impression that my company has' been unreasonable. This correspondence forms the major part of the negotiations that have taken place. It-is therefore an essential part of the circumstances which must be reviewed by the Government if your board seeks authority to act under sub-section (2) of the 1923 legislation. If, to meet the needs of your board’s plans, you desire any further particulars explaining the company’s offer, I will of course be glad to supply them, for, as we have repeatedly told you, we are prepared to make any reasonable adjustment to meet the needs of the situation. If, however, your board-does not understand the company’s offer, why does it not put forward its own proposals, It is your board, not the company, that is required by the 1923 legislation to enter into negotiation, arid as your board presumably knows the requirements of its scheme, and we do noit, it is surely jffain that this is the true course. From the statements made at the Auckland meeting' and * in your letter under reply, it may now be plainly seen that your board’s present purpose rt to acquire tlie 19-mile section as part

of a line to be extended to Oruanui, the whole of which is to be financed by the timber owners in the district served by the company’s railway. In other words, your board is noit proposing to acquire the 19-mile section as an independent line, but as part of a line it is prohibited by sub-section (7) of the 1923 legislation from constructing until (as that sub-section provides) it has satisfied the Gover-nor-General-in-Council ‘ that negotiations had been entered into in good faith by the board with the Taupo Totara Timber Company for purchase by the board of that company’s railway, and that the terms or conditions required by the said company are unreasonable, having regard to all the present circumstances of the said railway.’

“ Sub-section (2) empowers your board, if authorised by Order-in-Council, to 1 construct arid 1 maintain a railway within its district for the primary purpose of enabling the timber on the timber-bearing lands within the district to be utilised.’ My company opposed the granting* of this power upon the ground that it is not in the national interest that a nev line should be constructed to serve the timber already served by the company’s line. The Government accepted this view and inserted subsection (7) above referred to. It will be seen, then, that it is the company’s railway as serving the timber areas in the district that your board must negotiate for, before it can do anything towards the construction of a competing line. Your board has all along definitely declined to negotiate for this railway, and you emphasise this decision in your letter under reply. Presumably your board is under the impression that if it purchases the 19-mile section, which serves no timber, it has complied with the terms of sub-section (7). But that sub-section refers to the company’s railway, not to a part of it, and reading the clause, as one must, with sub-section (2), the intention is plain that the railway the board must negotiate for is that which serves the timber in the district, i.e., the whole line.

“My reason - for again drawing attention to the fact that your board has at present no authority to do anything under sub-section (2) of the 1923 legislation is that otherwise it might be suggested that my company has abandoned the protection given it by sub-section (7), which it has no intention of doing. “ The position therefore is that the company’s offer of the 19-mile section contained in the correspondence stands, whether your board requires that section as an independent line or (having obtained the necessary authority under sub-section (2) above referred to) desires it as part of the proposed new railway. In conclusion, I repeat that if your board wants further particulars on any point we will supply them if we reasonably can, and if it cares to make proposals of its own we will give them every reasonable consideration.” TOKOROA LEAQUE’S REPLY. The following letter has been forwarded by the chairman of the Tokoroa Progress League, Mr. C. P. Lock, to Mr. Dlaziell in reply to Mr. Dalziell’s last letter to the League:— “ We have to thank you for your letter of June 4, and also the copies of the latest correspondence between your company and the Railway Board. The Railway Board has kept us well posted with copies of the correspondence to date. As previously stated in our letter to you, the settlers here have every confidence in ,the ability of the Railway Board to carry on in the best interests of all concerned. We therefore must advise you that we are forwarding* a copy of your letters and any future correspondence from you to the Railway Board for .them to deal with.”