IN OPPOSITION.

Stratford Evening Post, Volume XXXII, Issue 48, 21 February 1912, Page 5

IN OPPOSITION.

TO BOROUGH ELECTRIC LIGHT LOAN PROPOSAL.

THREE DISSENTIENT COUNCILLORS ADDRESS BIG MEETING .

SOME INTERESTING ADDRESSES

There Avas a splendid attendance last night at "the Town Hall, when Councillors Paget, Morisou, and Hcaly replied tp_the address deliA r ered by his Worship the Mayor on the electric light question. aMr. P. F. Ralfe, Avho took the chair, said the gentlemen named were there to give tnem the other side of the question. They thought it was necessary and right that thev, the ratepayers, should hear both' sides, because they considered the matter or very great importance to the borough —one of the most Important, indeed, that it had ever had to consider since it became a ,borough. The first' speaker was Councillor Healy, Avho saad that as one of the representatives the Borough Council tvho Avas opposed ( to the borough taking over the Electrical Supply Company’s undertaking, .- he considered it his duty to give his reasons.- He said that the origifial '.report had been considered misleading because in provided £15,000 to take ewer the concern; instead of. the £14,000 thev were noAv asked to pay*. However, he, did not think even £15,000 'would he sufficient to'acquire the property. They, Avoid'd have to pay for all additional work ithat'must jbe done after a certain ! sate. ‘ The speaker then quoted figures arid ‘criticised in detail the Mayor’s figures. They were asked to pay £4OOO for a goodAvill AA'hich runs out in seven and a half years. If the goodwill AA - as worth'-(that-amount, jt should earn that amount'Avithin that time. That AA-orked out at something like £545 per annum. He took it that this amount Avould have to he annually set aside to repay the goodAvill. After .allowing adequate depreciation, and' paying the amount of £545 to wipe off; the' goodAvill in seven and a half "years,, after paying interest on the) loan, and providing for a sinking fundj/ as Hyell , hs' payipg any additional amounts after . the valuators had done, he reckoned that the profit to the Council would only be something like £7l per annum. He failed to see Avhore the great benefit to the ratepayers came in. Continuing, lie criticised the Mayor’s statement that one hundred lamps could be put in at the cost of one. He ridiculed the remark that the company AA-ould not at the expiry of their concession Avalk out, but Avere going tp fight. He did not see why the Council should take over the concern at the present time. The company were installing a neAV plant, and Avould give them as good a light as the Council could provide. On the profits he had 'shoAni there Avas no room for many neAV lights, and he urged the ratepayers in the back ■streets Avho might be led to vote for the scheme on this account to consider the position.' Then the Mayor’s estimate that the day load Avould earn £450 extra Avas purely assumption. There Avas not a single figure to warrant if. He Avas not one of those Avho wanted something for nothing, but he Avould like to see the company run out its full term. He would prefer to pay a fair vajuation then, rather than pay the price asked noAv. (Applause.) The ; next speaker was Councillor R. McK. Morison.- He, too, considered that it avas not in the best interests of the ratepayers to take over this concern. He entered an emphatic protest against tho borough being saddled Avith it. His Worship the Mayor had said he Avas not going to bring undue influence to bear to force the ratepayers to vote for this scheme, yet from every conceivable, point of yieAV he urged the ratepayers to take it over., He eA*en went -so far as to laud to the skies a certain section of the Councillors Avho agreed Avith him. The Mayor had said Councillor King Avas a fine fellow—well, he said so, too—hut did they think it Ava* human for a man to give away a concern that Avas going to pay £7OO per annum, just for the love or the ratepayers? “I do not believe it, gentlemen, and you can take it for Avhat it is Avorth.” Mr. Masters had said that he thought the borough should oavu this concern, all things being equal. He said hear, hear. But all things Avere not equal—they. Avere very unequal. The Council Avere getting a very bad deal. Why in the name of, fortune did not the company go on,and leave the ratepayers alone? lie Avould give them every reasonable fa-

cility for carrying out their contract. He considered that Mr. Masters had stretched a point when he said that the Council’s lighting bill amounted to £3OO. per annum. For the life of him he could not make that out. The actual amount was £260 per annum. The street lighting was only £18!) out of this; £47 of the amount was paid for lighting the Town Half, and while they were paying that amount the company that hired the hall payed it hack again. That their lighting bill would amount to £SOO in two years was only a more guess, and it was not right to build on that guess. Again, he did not consider Mr. Masters had been fair when he said that some of them wanted to let the matter rip. He went on to refer to the fact tjmt Hastings had erected an up-to-date plant—one of the best of its kind in the Dominion, for £SOOO odd. It would be economical, and would use Taranaki nil. Was it reasonable to pay £II,OOO for an old concern, when a

borough was getting an up-to-date lighting concern for, including mains, £3(144? “I think tnat the ratepayers of this town can very ill afford to push along in the dark—although wo are speaking of the light.” (baugliter.) Another point raised by Mr. Moricon w'as with the completion of the railway, the Ohura coalfields would be opened up. Within that seven and a half years they might want to put up a- gasworks. They could very well afford to wait that period. (Applause.l As he sat down Mr, Mormon said he knew they weic thirsting tor somebody else, general laughter ensuing. Councillor Paget then left the stage for a moment to bring in a blackboard, for the purpose of emphasising his figures. A voice; You’re not going, doctor?

Mr. Morisou: .Don’t you fear, tiie doctor’s going to have his say now. (Appkuse.) Councillor Paget, who was applauded, said he was going to give His audience a few figures, hut before entering upon that question, was going to make a few general remarks. First he explained that when he came into the hall that evening (Friday night) he heard the Mayor remark: ‘That man’s a scoundrel.” For a moment ho thought he had suddenly arrived in the borough Council Chambers, because he was so used to hearing such words from the chair. (Laughter.) It seemed, however, that the remark was intended to mean some other gentleman, and not himself. The Mayor had mad; a great song about the hard' words that had been said about him. Who was responsible for that? The lighting question had boon met with the secrecy of the Starr chamber, and Mr. Masters himself had been responsible if suspicions had been aroused in the minds cf the people. He considered that it was unfortunate that the head cf the Borough Council should always be so closely connected with the Electric Light Supply Company when anything was on. On one occasion it had been Councillor King—now it was Mr. Masters. Ho did not blame the Mayor a bit, but it was unfortunate that his son, Mr. Robert Masters, should be the chairman of that company. He repeated the assertion that if Mr. Masters had had unjust things said about him, the secrecy' observed in dealing with the electric light was the cause. Referring to the original report, Councillor Paget went on to say it was on that report that they were to vote whether they should go to the poll on the question, and whether they should pay; or not the £4OOO for the goodwill. Li it was the whole of the information. That was the whole of the information that Avas laid before the Council, and on which they had to vote. They had no information outside that report. After adopting that report the Council decided that it should not bfe published. One of the reasons given for not publishing it was that it/would influence the valuators. The speaker ridiculed the idea that a report draivn up in that way could have any effect upon the decision of these gentlemen. He then quoted Mr. Masters’ oavu opinion of that/report, given at his meeting, and reported in the “Stratford Evening Post,” as-folloAvs“He asked Avhich report they Avould care to hoar—tke old ione which Avas , incorrect, or the later one which avas correct?, Mr. Masters explained that Avhy the former report Avas incorrect was because' tho..goodAvill had' beeh set doAvn before fill tiie data concerning profits and expenditure had been ascertained. The report Avas misleading right through.” He asked his audience AvJiat they thought of having to vote £4OOO ! bn a ! 1 Yeport, Avhich was ‘‘misleading right through.” “I say,” added Councillor Paget, “that it is no avoiider hard things are said about Mr. Masters.” (Applause.) Referring to tho goodAvill, the ' speaker* * said that a .clause in the original report said;..‘Tn the offer of the company to the Council, your committee assume that the most important/ matter to be considered is the question of goodAvill, and Avhcthcr if Avould be advantageous to pay tin price asked.” He quite agreed Avith that, yet the question had been decided on a report that was “misleading right through.” He had found out that tho company had paid out approximately in dividends during the tiriie it had existed the sum of £I7OO —though he might be overstating it slightly. It Avas a remarkable fact that when the valuators came to value the’ assets of the company they Avrote down the assets of the company equal' to the sum paid out in dividends as shoAvn by the company’s balance-sheet —they Avrote doAvn the assets by £1703. The fact Avas there never Avere any profits. That money should have gone to Avrite off depreciation. The company had never earned a profit, and under its present management, he considered that it never would. (Laughter.) He asked why all this was not found out before that £4OOO for goodAvill Avas voted? Why was not a chartered accountant employed tc go into the figures? Councillor Paget ttien stated that out of their oavu pockets certain public-spirited citizens had paid for the services of a Qualified man—an A.C.A., of Loudon. That accountant, and ho Avould give the gentleman’s name to tho chairman that they migfit see tnat the opinion Avas a bona fide one, had expressed the view that £4OOO was far too much to pay for the goodAvill. Despite strenuous opposition on the part of himself and tho Councillors Avith him on the platform, Councillor Paget went on to say, the report Avas adopted, and as a result it was decided that the Mayor and others entered into “an agreement” with, the company. What sort of an agreement? Any ole agreement, apparently, Avould do. (Laughter.) That was the Ayay in Avhich the business Avas conducted. When the report was .brought, down he had moved that no action lie taken until the offer of the company be made for a certain period, say six months. Was that business or not? After the Council had shown its hand, the company could have Avithclrawn its offer at any moment. The motion Avas a sound business one, and it Avas carried. That resolution, however, Avas absolutely ignored, although it was never withdrawn or rescinded. Was that fair play? Was it honourable? He said “No.” (Applause.) He then came to the agreement which these gentlemen signed. He did not think it had ever been published. Why, he did not Iciioav. -The ratepayers had a right to knoAV Avlint was in it, and they ought to know its contents. He Avas going to tell something of Avliat Avas in it. It set rut that a poll should bo taken, CVIOO should be paid for the goodwill, £l6O for the Avator rights, and sundry other sums. But one clause provided that the Council should pay to tho Council “any sum that they may spend after a certain date to the time they take it over.” This sum included pionoy spent on hoav plant, delivery, erection, construction, Customs’ fees, etc. He had asked Mr. Fookos several questions regarding the liability of tho Council in the matter. He asked whether there Avas any limitation to the Council’s liability in the matter. and lie replied “No.” If the plant cost £5600 they Avould have to pay it, and if it cost £20,000 they would have to pay it. ff the plant was found unsuitable when it was erected they bad no redress. They wore not bound by

am’ estimate. The Mayor had said that ho would not discuss “technicalities ” He (the speaker) Avas prepared to discuss any technical point as tar as the knowledge he had gained would allow. They had taken the trouble to <rei the opinions of engineers, and had circularised three, as follows:“Would you advise any town to ,m----stal an electrical plant for poAAei and, iioht of 100 volts alternating current with -10 periodicity? We would like you to reply ‘Yes’ or ‘No,’ on th s note, in order to put you to as ltpudlc as possible. If you feel inclined to add any reasons Ave would *u.rroatly pleased.” One had repHed, "Emphatically, No.” Another, No. The third replied as follows: have asked me a most difficult question, as every lighting system has to be treated on its merits. One bundled volt lighting is very loav, but lamps can bo supplied much cheaper. 1 o motor Avork s ngle phase is rather unusual, the motors being costly as compared with three phase. Torty periodicity is not objectionable, except that it is not standard,, so that jou are limited to makers. You-.may or may not be aware that oO periods is a standard practice. Your system at. Stratford is not economical, owing to the. low voltages you work at, which Avill b<e discovered Avhen the Dicssel engine is running.” They were going to pay, if they took the company s estimate, £3300 for that Dieses! engine and plant. Yet the majority on the Borono-h Council had never taken th. trouble to get an engineers men ion or if thev had done so they had kept it up their sleeve— (laughter)—like they had kept the whole thing. Imairnio spending £3600 on a plant which this gentleman considers will not bo “economical?” He avoulu now go on and discuss some figures brought down by the Mayor, which were freely and palpably absurd ihe Mayor had claimed that the profit on the Avorking account of the company last year Avas £1043, and that the Council Avas entitled to add to that the sum of £338 which he claimed Avould be saved through bank interest (£196), income tax (£42), and secretary’s salary (£100). Mr. Masters also claimed that £450 extra profit AA’Oiild lie immediately forthcoming, being earned bv this neAV plant they Avere going to' instal. The net profit fast year was £543. and the Mayor told them that the Council Avould just double that. Against this Cr. Paget placed his own figures— Goodwill extinction account ... 5-^5 Interst on £II,OOO at 5$ p.c. ... 008 Sinking fund on machinery ... 700 Payment of interest at Sydney 2

Total annual charge 1855 The loss on the Avorking account Avould thus be £124. The capital of £14,000 must be divided into— £4ooo for the goodwill account, and £IO,OOO for the Avorking account. Since the concession to the company lasted only about a period of seven years, it followed that the goodAvill must lie extinguished; iu that time. This entailed a cost against the Avorking account of £545 per annum. Mr. Masters- had neither alloAyed for this, nor had he alloAved for . depreciation. He quoted from the opinion of the chartered accountant as folloAA’S “I am regarding .depreciation as actual loSscs, and Avould strongly advise the Council to 'enquire Avhether adequate depreciation] has been written off, because, thoughj this factor may not influence the pur-| chase price (seeing that it is to be I settled" by arbitration and valuation) it has a considerable bearing on the, item of goodwill.” On the basis of a loss of £124, as shown, per annum, the Council A\-ould he out of.pocket in the seven years to the amount of £IO2O. But that £ 150 of extra revenue estimated by the Mayor Avas capable of being safely cut down to £l5O per annum, Avhich Avoyld leavb a loss of £424. per annum. This loss Avould be made each year, and, Avitli interest, would amount at the end of seven years to a total loss of £3230. Councillor Paget then proceeded to give a more detailed criticism of the figures, and made special reference to the situation of the plant. It Avas badly situated on a lease .that had five and a half , years to run, and then the property reverted to the lessor. It did not revert to the Public Trustee, at all. When the lease expired they could remove the running gear, but they could not remove the Avater-race, and they could not remove the Aveir. Mr. Masters said the valuators had alloAved nothing for the Aveir, but he found that the item of £IO3B Avas for poAver station, buildings, etc. Whore did the poAver station derive its poaaer from if it was not from the Avoir and Avater-race? Of what value Avas the poAver station Avithout the Avoir and Avater race? The Aveir and Avaterrace Avere included in that amount of £IO3B. (Applause.) Tho company found it necessary to Avrite off 12V per cent, depreciation from their Aveir; he Avas Avriting off 7} per cent, on the Avhole. Noav, the valuators say: “Wo think it is only right to point out that the company’s tAvo generating machines, Avhich are hoav ton years and eleven years old respectively, cannot be considered as unsuitable for further service. They Avere in good condition, and had been well cared for. With a continuance of the same degree cf care, they considered they were good for a useful life of several years, though it might possible prove advisable to discard them Avliile serviceable, oAving to the groAvth of the business demanding a - more concentrated generating plant.” Did his audience think that after five years it was going to be Avorth their Avliile “to go on running those things doAvn there, a mile aAvay from the other?” For the right to do that they Avere going to pay the company £3OO. This £3OO Avas being paid for water rights on one side of the river only. They would thus have to Avrite off for that property in fiA r e years the sum ol £IO3B. They must look at that carefully, from a conservative and not an optimistic point of A’icAV. ’I o allow no depreciation, to Avrite off no goodAvill. would land them very much in queer street. Ho Avas quite sure they would see that his figures Avere infinitely more correct than those Mr. Masteis had given them the other night. (Applause.') Next, Councillor Paget Avent mi to tho matter of the street lights. The statement that £3OO Avas paid for tho lighting of this borough was absolutely and grossly incorrect. He gave the figures given by previous speakers. sboAving that £-17 avus paid for the lighting of the Town Hall, ,and that the total amount paid Avasm the neighbourhood ol £2OO. He did not think tho item of lighting the Borough Council Chambers Avould in crease. If more light Avas renuired in tiie Council, it avoir required in the minds of tho Councillors. (Laughter.) Therefore avliou Mr. Masters says the street lighting bill is going < to nul into £6OO, that statement is absolutely inaccurate. Double the actual amount it costs you to light your streets (£189), and you get £378. Mr. Masters says that in a year or two avo Avill bo paying £OOO. Mr. Masters: No!

Councillor Paget: Well, I hoard it. Councillor Paget Avent on to refer to the Mayor’s statement that extra lights Avould cost nothing. Ho remarked, amidst much laughter, that if they believed that, in that case theymight supply the whole of Noav Zealand, cand make a very handsome pro-

fit. Had they OA-er hoard such nonsense? He granted that if they had more water power than' they could do with, and that the plant Avas not running to its full capacity, the extra lighting might not cost anything. But they were to be running Avitli a Diessol engine, and it cost something for fuel, so hoav were they going to supply poAVer for nothing? Summing up tiie position in the statement that after tho seven years they Avould be about £3232 to the bad, Councillor Paget said that that Avas the scheme of which the Mayor had said Avhat scoundrels they would be if they did not seize the opportunity, and gather some of this large sum of money. Another point that Avas criticised by Councillor Paget Avas the statement by tne Mayor that they could not compel the company to remove their poles and lines, and that Avhen the concession was up tho Council would have to pay tho company’s price for these things. He did not think the Council Avould have to do this. The company had had every concession they Avould get. Councillor Paget then made tiie point that at tiie end of tiie seven and a half years if the company wanted the concession reneAved, they Avould have to pay a price. If seven and a half years’ concession Avas Avorth £4OOO uoav, Avhat Avould it bo Avorth to the company Avhen their time Avas up? That Avas logical dealing. Mr. Masters had said that they were going to strike a rate of l]d, but that it Avould never be collected. Not onh AA-ould they find themselves in the position of having to pay that rate, bui they Avould probably bo in the position of having to pay a further rate on another loan. (Applause.) He asked for the co-operation of the genen.* public to defeat a scheme Avhich, if it Avere carried out, Avould lie absolutely disastrous to Stratford. (Applause.) A fe-,v questions were satisfactorily answered, and a vote of thanks to the chair concluded the meeting.