THE TAUPO SCHEME.

Dominion, Volume 4, Issue 1239, 22 September 1911, Page 3

THE TAUPO SCHEME.

e -» » PROPOSED PRIVATE RAILWAY. 0 INQUIRY OPENED, • 0 e NATIVE LANDS HKtjVIREU. e _____ 10 Kviiiento was given by jfr, 1\ G. Bnl- " aiell, chairman of directors of the Taupo \ t Totara Timber Company, yesterday morny ing before tho special Parliamentary <-' Committee regarding tho company's pre--1 posals for the' extension of its private ~ railroad to Taupo township. The inemli bers of the committee present were; '■ Messrs. T. 11. Davey (chairman), W. D. J S. Macdonald, W. leaser, 1). H. Guthrie, „ G. AY. Forbes, p. Mander, E. Newman, and A. M. .Myers. < The petitioner of the company asks for an Onter-iu-Council authorising the extension of the existing line from Hie present terminus at Mokai to Taupo, a dis- ' tauce of 20 mile?, and the purchase and 5 disposal of 200,000 acres of Native, lands. ! A report was received from Mr. 11. J. H. Blow, Under-Seerctary for Public Works, who stated that as the proposed t extension is situated in the county of 1 East Taupo, and as the Counties Act is 1 not in force in that county, it is open - lo the company to apply for and obtain = an order authorising the construction of - the extension under Section 5 of tho • Tramways Act, 1908. The question of 1 authorising the extension of the tram--1 way is a matter in which the ; ' intervention of Parliament seems (0 be scarcely necessary. Sufficient authority • exists iiuder the Tramways Act or the 1 District Knilways Act to" authorise the " construction of the extension. Mr. Y. G.-Dalziell, one of the petitioners, said that Mr. Blow's statement reJ garding the legal position was correct, c but it was desired that the fullest pub- ! licity should bo given to the project and ' that opportunity should be given to those ' who were opposed to it to state their views. Mr. Dalziell's Evidence. Mr. Dalziell opened his evidence with a historical review of the company's operations, in the course of which he stated that sawmilling was begun towards the end of 11105, when the tramway was completed, and in the first two years there was a substantial loss, but at 'the present timo its operations wero being carried on at a profit. During the eleven years of its existence the company had always paid interest on its debenture loans, biit it had never paid any dividends to its shareholders, though there wero accumulated dividends amounting to X' 50,000. In later years it had been found that the quantity of timber in the bush had been under-estimated, and in the present circumstances of the company's business thero was almost no possibility of capital being returned to the ordinary shareholders, and little prospect of returning tho capital of the preferential shareholders, though in all probability tho A share and debenture capital would be repaid. During the past ci-;ut .or nine years tho company employed an. average of 250 men, and during the last six years paid an average of .£11,(100 in railway freights, and, in addition, .£6OO per annum in rates and taxes. The company did not; ask for State assistance, but for lair consideration of its proposal that would enable it to extend its operations and to assist in the development of the district. Discussing the financial aspect oi tho proposition, Mr. Dalziell said that tho company had decided that any proposal which involved i'mancing b"y the Government was not likely to be acceptablo in the near future. It had been made plain to them that tho Auckland members were committed to urge the construction of other railways, and that until these lines were completed, it was unlikely that tho Government would, give any assistance.. The railway proposition alone was not sufficient to 'tempt people to put their "capital into it, but if there could be associated with .the railway propositiou a scheme for the purchase and development of a substantial area of land and for the working of the tourist resorts of tho districts, it was believed that capital could bo found for the completion of tlio line. The Case- Summarised. , The witness then summarised the reasons in favour of tho proposition:—(l) Tho area served by the railway comprised' a million and a half to two" million acres, ot which 800,000 acres wero Native lands, 330,000 acres Crown lands, and the balance private lands or"reserves. (2) Practically none of it was cultivated, but nearly all was capable of cultivation and could bo profitably used. . (3) If the proposal was adopted a railway servinu this area would be ■provided, and 250,000 acres of land developed without risk to tho State, but wholly at the risk of the proposed syndicate. (4) If the syndicate was successful, the whole of the area mentioned would be immediately available for profitable cultivation, and the climatic and other conditions were such that it would inevitably be occupied by a largo population. (5) On the completion of the lino Taupo would be nine hours' journey irora Auckland and 22 hours from Wellington, and would become a highly popular, tourist resort. (6) The Stato would obtain a large amount of revenue from tho development of the area of land to bo acquired, and would also have the increased value given to tho 350,000 acres of Crown land in the vicinity, now lying absolutely idle. Some timo ago a run of 20,000 acres in the district was offered at .£2O a year, or £1 per 1000 acres, and he believed it was not taken up. The company was not asking for any concession rom the State. It could onlv buy the land from the Natives with tho consent of the owners, and at the full present value. In. order to obtain any prolit it must spend a largo amount of money in the development of tho district. lie'calculated tho annual loss to the community :hrough the million and a half acres of land lying idle at ,£IOO,OOO a year. The provisions of the Native Land "Act would ully safeguard tho interests of the Natives from whom it was proposed to purchase lands, and they would also derive great benefit through their other lands by tho completion of tho line. In Answer to Objections. Objections had been made to :ho proposal by several of tho leading newspapers who very properly argued that the interests of tho State should be protected. Tho Eotorua Chamber of Commerce had also opposed the company's application for an extension of its charter. One of its reasons was that it-was opposed to tho interests of tho community that any railway should bo privately owned and worked. The matter was, however, purely one of business, and should bo regarded as such. There was no public policy which was opposed to the 1 construction of railways by private capital. The company did not ask for the construction of a new railway, but only for an extension of twenty inilos of an existing line of 50 miles, for which the whole district was crying out. The company would willingly sell its property to the Stato at the price which tho proposed syndicate would pay, but it recognised that there was no practie.ablo possibility of the Stato purchasing

tho line for many years to come. He suggested that only three conditions need bo imposed on the company: (1) That the train service should be a reasonable one; (2) that the freight rates should bo reasonable; (.1) that tho Crown should be entitled to resume the lino at a. reasonable price The company was prepared to agree to such conditions. Tourist Attractions. The second objection of the Rotorua Chamber of Commerce was that the Government had spent large sums in develop-, ing; liutonu as a tourist rc-ort and induced people to take- njj township .sections on the understanding that Rotorv.aV position as the chief tourist centre should be maintained, and that therefore tho Government should oppose the suggested new railway. Jn answer to this, witness urged that the Government could not held (hat in oniw to miun'.ain the pre-eminence of Rotorusi they must retard the development of Taupo and incur the loss of leaving a large tract of country idle and unproductive. Tho Kotorua people appeared to think that tho construction of a railway from Rotorua to- Taupo was feasible, but tho route had not been surveyed, and it: was not certain that a satisfactory route could be found. .Such a line woulil he about the same length as that proposed by tho company, but it would nuke Tallin ■!'- mile- further from any port I now available, than it would be by the lino. The Him woulil not pay iiparl. I'i'oiii the company's limber IratHc. and this would not bo available for a Kotoruu-Taupo Hue. It should also be 1

borne in mind that Rotoma. would greatly benefit from the development of lho pnniico country under the company's scheme. Tho third objection wa* (hat tho pro-ixi.-iil involved, a private monopoly of the thermal wonders of '.he Taupo basin. There could be no question of monopoly, for Tokaanu and 0110 half of the famous geyser valley at Wairakoi were Crown lands not under lej.EO. while tho Terraces and the Spa were Crown lands under le:i'-3 i'oi- fcrty year.-!. Tho Native Lands. Tho fourth objection was that the proposed purolutj-e of Nniivo land? was contrary to the public, inteivsl. Ho suggested that this view was erroneous. Thoro was nothing in the laws of New Zealand w prohibit a syndicate from negotiating with Natives Inv the snio of lauds to persona nominated by the syndicate. Tho prohibitive provisions of tho"Native Land Act determined that no person should acquire for his own use more than a limited area of Native lands, and he suggested thai' the solo purpose of this legislation was to compel the occupation of land in small areas and to assure the Natives of a fair price for their property. He was convinced that 'the legislation w.ns noi; intended to prohibit; such a proposal as that under review. The Natives would receive the full present value of their land and tho value of tho remaining Nα- v tivo lands would ba greatly enhanced, £300,000 to be Spent. Tho amount involved b.v tho currying out of lho scheme would bo probably ■£300,000 and if was desirable that eucli a sum should be invested in the development of the country. It was hoped that a daily passenger servico in both diroctions would be provided by means of motor .trains such as wero in oporalinn m America and in England. A dnilv goods servico would also bo provided if possible. The company's charier jlxcd the rates which might; be cliurgcd-Jo' tho present terminus, but tho company was prepared to go into the question of rates without regard to its rights .under the charter. Questions regarding tho rates and services would have to lie determined by experts. As to the price at which the Crown should be enabled (o take over the railway, it would be remembered that tho Manawatu Railway Company got £3 a ' share, but the Taupo Company would not expect such a price as tiiat! The cost of construction, plus 10 per cent, would probably be a fair price, but (ho company should not be left with an unrecouped loss on running the line up to the time it was taken over by the Stale. j.'he question was one for experts. In reply to Mr. Macdonald, Mr. D:\lzlell said it was intended that the pur- - chasing syndicate should dispose of tho G Native lands in accordance with the liiui- I cation provisions of the Native Land Act. In view of" tho character of the laud, it ' would be inadvisable lo require tho syndicate to dispose of the land within a short period. He thought the syndicate should lie allowed ten or fifteen years to effect this. In his opinion it would hnve to sell the area as cultivated land; it would probably make more profit out of it ill that way. What Will the Government Do? "Is this scheme likely to meet with the approval of tho Government?" asked Mr; Frascr. The comiuittcc might wastn much time in examining a proposal which' ■ might bo met with an absolute "No" from : tho ..Government, on the ground tliat it ! was against public policy. . i Mr. Dalziell replied that no application '■ had bean made to the Government in connection with the matter. "My idea," he said, "was that it was better'first of all to go to tho House in order that tho whole proposal might have as inucli light as possible thrown upon it. This proceeding gives to the transaction more pub- j licit;,- than it can possibly get by other ' moans. Our purpof-a. is to get a recom- ! mendntion with which we can go to Me ! Government. It seems to us the best course to obtain what we desire. Ido not know the attitude the Government j will take up in the matter." ! Witness also said the compafiy tiad not < yet made any binding contract with any- ] body in ,the matter. His object at present was to secure for the company what was necessary to enable it to enter into a contract. He hoped the committee- i •would be- able ■•to , come to a definitn con- ! elusion for or against the proposal, and j make a recommendation accordingly this j session. Legislation would not bo neces- i sarv. . i

Mr. IVaser: Then if (his committee gave a general approval, the Executive could give, effect lo the scheme without Parliament having any voice in it?— "Yes."

Then, by giving our approval, we should fi bo accepting a very grave responsibility lj —"Doubtless. That is why I have put the | matter very fully before you.' , . H

Just so. You have given a very inter- K esting and apparently a very full state- |j ment.- ' M

Mr. Fraser added that the committee H ought to have another opportunity of ex- B amining Mr. Dalniell after hearing other g, witnesses, such as Mr. Blow, Under-Sec- — rotary fon Public Works,, and Mr. E. W. H ' Holmes, Chief .Engineer. To Mr, Guthrie: The company was in negotiation with regard to the formation of a syndicate, and hoped to make over the railway scheme to the syndicate altogether. Tho request for rating powers over a certain area of land had been abandoned, .and so had the request for a Government guarantee. ' Position of the Natives. Mr. Newman: Do you propose to pay cash for the land or give the Natives shares in tho company? Mr. Dalziell replied that the latter method would suit the company better, but it was unlikely (hat tlie Natives would accept shares. In reply to other questions, Mr. Dalziell said that the timber on the company's lands would keep tho business going i'or another fifteen years. The company did [ not intend to,acquire further bush lands, but only pumice lands. Tho difference between the proposed purchase and tho Mokau transaction was that an Order-iu-Council was issued in tho latter instance to confer tho right lo occupy tke lands. The extension would cost something under .£ISOO per mile. There was no time limit to lho existing charter.

Asked by Mr. Myers whether the company would undertake to spend a certain amount on the improvement of the acquired lands, Mr. Dalziell,, said that if at the end of the proposed period of ten years its experiments were not successful, and lliore was no prospect of a profitable disposal of the land, the syndicate would prefer to throw up the land and allow it to be sold for what it would fetch by the Maori Land Board. Mr. Mander: But that land has been proved productive and profitable. Mr. Dalziell: If tho amount was too large it would probably frighten tho syndicate away. He added that no less than .£50,000 would bo required to complete the existing line, and to improvo certain portions of it. The company proposed to sell fo the syndicate the completed line, with increased rolling stock for £180,000, and it guaranteed a profit of 5 per cent, for fifteen years. The chairman postponed his cross-ex-amination, and the committee adjourned until Thursday next.