WELLINGTON-MANAWATU RAILWAY: CORRESPONDENCE IN CONNECTION WITH OFFER OF THE COMPANY TO SELL THE LINE TO THE GOVERNMENT.

Appendix to the Journals of the House of Representatives, 1901 Session I, D-13

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1901. NEW ZEALAND.

WELLINGTON -MANAWATU RAILWAY: CORRESPONDENCE IN CONNECTION WITH OFFER OF THE COMPANY TO SELL THE LINE TO THE GOVERNMENT.

Laid on the Table of the House of Representatives by Leave.

Mr. T. G. Macabthy, Chairman of Directors, to the Et. Hon. the Peemibe. Sic, — Wellington, 2nd September, 1901. Last September I had the honour to communicate to you the terms on which the directors of the Wellington and Manawatu Railway Company (Limited) were willing, subject to the confirmation by the shareholders, to sell to the Government the whole of the assets of the company. Your reply, dated the 14th March, 1901, stated that the Government was not prepared to purchase at the price expressed in my letter above referred to, but was willing to consider further proposals for the acquirement of the land and line on better terms. Since the date of your reply, I have had the honour of discussing with you the financial position of the company, and the suitability of its railway to carry a greatly increased volume of traffic. To make the financial position of the company quite clear, I now attach hereto a proformd statement of its assets and liabilities made up to the 14th August, 1901, showing a balance of assets over liabilities of £257,520 16s. 5d., equivalent to £1 10s. 3£d. per share on 170,000 shares, that being the number of shares issued by the company on which calls to the amount of £1 per share have been paid. I have now the honour to inform you that the directors of the Wellington and Manawatu Railway Company are willing, subject to confirmation by shareholders, to sell to the Government the whole of the assets of the company for the sum of £276,250, that amount being an advance 7-| per centum on the balance of assets over liabilities; payment for shares held in England to be made there, and to local shareholders in Wellington. This offer to sell is made subject to the following conditions and reservations: — (1.) The statement of assets and liabilities hereto attached is to be accepted as the basis on which the value of the shares is calculated. (2.) That the Government assume the liability of providing for the redemption in London, at their due date, of the debentures (£680,000) issued by the company and all interest thereon, and all expenses necessary to the extinction of the liability, together with all other liabilities of the company accruing and accrued. (3.) Should your Government elect to purchase, it would be essential, for the purposes of liquidation, that the seal, minute-books, and office records should be retained by the company until liquidation is completed, the Government having the right of access thereto at all reasonable times. (4.) Until payment of the purchase-money agreed on the company to carry on its business as at present. The purchase-money to bear interest at the rate of 4 per cent, per annum from the 17th August, 1901, to be calculated from day to day. Directors' honorarium and London office expenses to be calculated in a similar manner. (5.) This offer will remain open to the Government for acceptance until the 15th October, and is made without prejudice to all rights of the company under the contract now existing. The directors of the company desire me to renew the request contained in my letter to you of the 17th September, 1900—that, should the Government make a purchase of the company's assets, employment should be provided in the public service for our clerical staff and our well-trained employes in positions and emoluments similar to those which they now hold. The high character for efficiency borne by our staff and employes will, I trust, secure most favourable consideration for my request. At the date of my letter to you first quoted the balance of assets over liabilities was £240,424; the balance now is £257,520, an increase of £17,096 in eighteen months. The price then required to purchase the property of the company was, after payment of all other liabilities, repayment of the shareholders' capital, £170,000, with compound interest thereon at the rate of 6 per cent, per

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annum, equal to £1 15s. 6d. per share. I now quote £1 12s. 6d. per share, a reduction of 3s. per share on 170,000 shares, equal to £25,500. The assets now show an increase of £17,096, a total of ' I think I am justified in claiming that this offer to sell the property of the company is on very much better terms to the Government. Should you require further information or explanation to establish the financial position of the company, I will be very pleased to attend you. I have, &c, Thos. G. Macakthy, The Eight Hon. the Premier, Wellington; Chairman of Directors.

Wellington and Manawatu Bail way Company (Limited). Statement of Assets and Liabilities. A sse t s Liabilities. £ s. d. 30th May, 1901. & s. d. £ s. d. Debentures 680,000 0 0 Railway rolling-stock, Sundry creditors .. .. •• 4,027 9 d land and buildings.. 951,879 15 6 Debenture interest accrued .. .. 16,346 d 1 Less written ofi .. 191,255 410 760,624 10 8 Freehold lands .. •• •• 51,931 6 9 Balances due by land-purchasers .. 51,524 9 3 Deposits and interest accrued .. .. 40,814 15 1 Sundry debtors .. •■ ■■ 3,48119 11 Railway stores 4,177 14 5 Cash balanoes — Bank of New Zealand 10,264 15 11 In hand—Head offioe 424 8 6 Stations.. 45 0 0 Imprest .. 22 3 3 Petty cash 10 19 9 London agents and in £700,373 12 4 transit.. .. 34,660 14 6 Balance o£ asseta .. .. ~ 257,609 5 8 £957,982 18 0 £957,982 18 0 £257,609 ss. Bd., divided by 170,000 shares, equals £1 10s. 3d. per share. 13th August, 1901.

Half-yearly Statement of Assets and Liabilities. Assets. £ s. d. £ s. d. , Liabilities. £ c. d. Railway rolling-stock Ac." 952,452 12 5 (Debentures 680,000 0 0 Less written ofi .. 191,255 410 Sundry creditors 4,429 110 761,237 7 8 Debenture interest .. .. ■• 7,265 16 0 Wrflphold lands .. •■ 51,221 16 0 Appropriation for dividend at 3 per cent. „ '~ „ lalates due by .. 14 8 To shareholders for half-year .. 5,1,0 0 0 Deposits and accrued interest .. •■ 40,527 13 2 Railway stores .. •• •• 10,181 8 2 Sundry debtors .. •• •• 2,107 19 8 Cash Balances — Bank of New Zealand 3,479 11 5 In hand—Head office 348 15 1 In hand—Stations .. 45 0 0 Imprest .. 36 10 4 Petty cash 6 16 4 London agents and in « fi q ß R , 4 ■.„ lf) transit .. .. *MoJ 37,269 14 11 Balance of assets 257,520 16 5 JS £954,365 14 3 £257,502 divided by 170,000 shares equals £1 10s. 3Jd. per share. Thos. G. Macaethy, 30th August, 1901. Chairman of Directors.

Eight Hon. the Premiee to Mr. T. G. Macaethy. Dear Sib - Premier's Office, Wellington, 28th October, 1901. At the time you delivered to me your memorandum of the 2nd September, 1901, in which it was stated that the directors of the Wellington and Manawatu Eailway Company (Limited), subiect to confirmation by the shareholders, were prepared to sell to the Government the whole of the assets of the company, I informed you that the Government could not think of purchasing at the price named in such memorandum. The offer of the company contained therein was to remain open to the Government for acceptance till the 15th October That time has now expired. I stated publicly, at the opening of the Waikanae Bridge, that the Government had been prepared, subject to confirmation by Parliament, to offer for the assets as set forth in the table attached to your memorandum, an amount equal to £1 10s. per share for 170,000 shares, and aggregating an amount almost equal to the total value of the assets over liabilities as shown in the statement of the assets and liabilities submitted by the company. Seeing that there was

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no prospect of coming to terms, no action has been taken with regard to the other suggestions submitted in your communication. The opinion of the Government remains unchanged, and, as the session is now nearing termination, presumably negotiations may be considered to be at an end for the present. Yours faithfully, T. G. Macarthy, Esq., Chairman of Directors, B. J. Seddon. Wellington and Manawatu Bailway Company, Wellington.

Wellington and Manawatu Bail way Company (Limited). Statement of Receipts and Expenditure (from the Ist March, 1900, to the 28th February, 1901). Receipts. £ s. d. Expenditure. £ s. d. Balance 28th February, 1900 .. .. 41,396 9 7 Debenture interest .. .. .. 34,000 0 0 Traffic .. .. .. .. 94,418 5 5 Traffio .. .. .. .. 31,072 3 7 Land— £ s. d. Deposits .. .. .. .. 20,000 0 0 Principal .. .. 11,304 7 6 Stores .. .. .. .. 11,777 16 8 Interest .. .. 2,365 19 10 Dividends ... .. .. .. 8,510 12 8 Rents, &c. .. 369 7 6 Rates and taxes .. .. .. 6,232 18 5 — 14,039 14 10 Rolling-stock and machinery .. .. 1,484 12 5 Refunds, &c. .. .. .. 3,126 11 2 Directors'fees .. .. .. 1,000 0 0 Transfer and sorip fees— Land .. .. .. .. 885 2 5 Wellington .. 6 6 6 Construction .. .. .. 701 15 7 London .. .. 6 13. 6 London offioe charges .. ... 546 5 0 13 0 0 Refunds, advanoes, &o. .. .. 309 14 4 Commission and discount .. .. 205 0 0 Auditors' fees .. .. .. 157 10 0 Cash balances— Bank of New Zealand, Wellington .. £1,294 12 10 London .. .. 34,117 12 1 35,412 4 11 In hand, Head Office, and stations .. 698 5 0 £152,094 1 0 £152,994 1 0 Profit and Loss : Railway Account. 28th February, 1901. Dr. £ s. d. Gr. £ s. d. £ s. d. Interest on debentures .. .. 34,000 0 0 Traffic proceeds (gross) .. 96,270 1 0 Rates and taxes .. .. .. 5,239 11 1 Less expenditure .. 46,562 0 1 Directors'feee .. .. .. 1,000 0 0 49,708 011 London offioe charges .. .. .. 546 5 0 Interest .. .. .. .. 1,018 10 10 Commission and exchange .. .. 205 0 0 Transfer and scrip fees .. .. 13 0 0 Auditors' fees .. .. .. 157 10 0 Proportion of directors' fees transferred Balanoe carried down, available for divi- to Land Account .. .. 200 0 0 dends .. .. .. .. 9,791 5 8 £50,939 11 9 £50,939 11 9 Balanoe brought down, £9,791 ss. Bd. Profit and Loss : Land Account. 28th February, 1901. Available foe Dividends. Dr. . £ s. d. Gr. £ s. d. Proportion of directors' fees transferred Interest on mortgages .. .. .. 2,617 18 7 from Railway Aocount .. .. 200 0 0 Sundry revenue .. .. 379 7 6 Land-tax paid on mortgages .. .. 220 6 3 Balanoe carried down, being net profit available for dividends .. .. 2,576 19 10 £2,997 6 1 £2,997 6 1 Balanoe brought down, £2,576 19s. 10d. Not Available fob Dividends. £ s. d. £ s , a. General charges .. .. .. 84116 11 Gross profits on land sales .. .. 5,785 11 9 Proportion rates and taxes .. .. 773 1 1 Balance carried down, being net profit on * land sales not available for dividends, and held as further security for deben-ture-holders .. .. .. .. 4,270 13 9 £5,785 11 9 £5,785 11 9 Balance brought down, £4,270 13s. 9d.

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Balance-sheet. 28th February, 1901. Liabilities. Assets. Capital— £ s. d. £ s. A. London register, 104,903 shares; Wei- Railway .. .. .. .. 763,408 311 lington register,6s,o97shares: to»al, Freehold lands .. 52,698 6 9 170,000, at £1 .. .. .. 170,000 0 0 Balances due by land purchasers .. 52,010 12 3 Debentures .. .. .. 680,000 0 0 Deposits and accrued interest .. 40,872 0 4 Sundry oreditors .. .. .. 7,322 12 5 Sundry debtors .. .. .. 3,416 10 1 Debenture interest accrued .. .. 8,500 0-0 Railway stores .. .. .. 4,369 9 5 Balances available for dividends— Cash balanoes— £ s. d. As per balance-sheet, 28th £ s. d. Bank of New Zealand .. 1,294 12 10 Feb., 1900 .. .. 27,634 0 5 In hand, Head Office .. 653 5 0 Less dividend paid 8,500 0 0 Stations .. .. 45 0 0 London agents .. 3,117 12 1 19,134 0 5 In transit to London .. 31,000 0 0 Railway Account —Net 36,110 9 11 profit for year ending 28th Feb., 1901 ..9,791 5 8 Land Account —Net profit for year ending 28th Feb., 1901 .. .. 2,576 19 10 Total net profit available for dividends 31,502.5 11 Not available for dividends— • Land Acoount— Aβ per balance - sheet, 28th Feb., 1900 ..51,290 0 7 Net profit from land sales for year ending 28th Feb., 1901 .. 4,270 13 9 55,560 14 4 £952,885 12 8 £952,885 12 8 Auditors' Repobt. We, the undersigned auditors, duly appointed by the shareholders, hereby oertify that we have examined the books, papers, and accounts of the Wellington and Manawatu Railway Company (Limited), have compared them with the bank-books and vouchers, and find the same correct. We are of opinion that the above balance-sheet exhibits a true and correct state of the company's affairs from the Ist day of March, 1900, to the 28th day of February, 1901, inclusive, and contains the whole of the particulars required under " The Companies Act, 1882," and the articles of association of the company. Heney Kembeb, F.1.A.N.Z.,] . ~, Dated at Wellington this 16th day of March, 1901. D. T. Stuabt, F.1.A.N.Z., J Auaicors -

Ebpoet op the Board of Dikectobs. Your directors have much pleasure in submitting for your information and approval the accompanying statement of receipts and expenditure and bala , ice-sheet. Notwithstanding material reductions of rates, the traffic earnings for the year—£96,27o Is. — represents the largest volume of traffic handled in any year since the opening of the railway. The income from the railway and land has been so satisfactory that the directors feel justified in recommmending the payment of a dividend of 6 per cent, for the year. Messrs. Kirkcaldie and Plimmer are the retiring directors, and, being eligible, offer themselves for re-election. Messrs. Kember and Stuart, the retiring auditors, also offer themselves for re-election. T. G. Macaethy, Chairman.

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