THE OTAGO DOCK TRUST.

Evening Star, Issue 7404, 27 December 1887, Page 1

THE OTAGO DOCK TRUST.

The Otago Dock Trust what we cannot but consider, their reprehensible folly by adopting the report -of their loan agent and ratifying and confirming the altogether preposterous agreement referred to therein—an agreement of so one-sided a character in which the interests of the Trust are so manifestly sacrificed that we are surprised that any business manshonld have entertained it for a moment. "We cannot say, however, that we are in any way surprised at the action of the Trust, it has manifestly been their object all through to get hold of money to spend at Port Chalmers ; and the majority in that body, who rule the roost, evidently have not oared a straw on what terms the loan was negotiated so long as the ready money would be forthcoming for immediate expenditure. It is amusing to hear Mr Gouslet and Mr A. Thou son professing themselves unable to understand the action of the Harbor Hoard and the Chamber of Commerce in taking measures to prevent the loan being negotiated on the strength of securities, the value of which was grossly overstated. These bodies were in this only doing their plain duty, having regard to the credit of the Colony and the prospects of other Hew Zealand undertakings. It is satisfactory that they have succeeded so far as to close the money market to the loan, and oblige recourse to be bad to aprivate firm, who, having their eyes open to the nature of the securities, hope to make a big profit out of the necessities of the Trust. Mr Aleak, it may be noticed, at the meeting on Friday, let the cat out of the bag in respect of one phase of the matter. It was not likely, he said in effect, that Government would give them* any further grant until it was proved that the present endowment was insufficient. “ If that was shown, and a good case made “ out, he felt convinced that there was “not a gentleman in the Bouse who “would not willingly vote tor a further “endowment. If the matter were repre- “ sented in the proper light, he felt con- “ vinced that no opposition would be made “to it.” The firm, whose -name is so prudently witheld, but who, the loan agent states, is “ one of the best finandal houses in “London, which has successfully negotiated loans for docks, railways, and “ waterworks all over the world,” may not impossibly have this contingency in view, and see their way thus to strengthening that portion of the security which consists of the future revenue from the docks. If this is the case, we apprehend that they are laboring under a delusion, since under all the circumstances it is extremely nnlikely that. Parliament will give away any more of the people’s land or money for the Trust to borrow on or spend at Port Chalmers. Even were a new dock required, we do not believe there would be a chance of farther endowments being granted for a purpose which would be considered purely local. Considering that the Harbor Board and Chamber of Commerce, representing the shipping and trade of the port of Otago, declare that the present dock accommodation is ample for some time to come, the idea is not likely to be entertained. The agreement is a very remarkable document indeed, and those members of the Trnst who would if they could have suppressed its publication showed a certain amount of good sense. Not only are the contractors to purchase £75,000 5 per cent, bonds of the Trust at the price of £9O for each £IOO bond, bearing interest at 5 per cent., but the Trust are to pay and discharge aU expenses for Government stamps on the bonds. The Trust, moreover, appoint the contractors agents in England for “ the purchase • “ and shipment of any machinery or supplies “required from this side” in connection with the working or construction of the dock, “ the usual commission of 2J per cent. “ to be charged by the contractors and paid “ and allowed by the Trust in relation “ thereto.” This is an entirely unnecessary expense, but plainly is thrown in as one consideration in inducing the firm to take up the business. What a falling off is there from the original instructions to the loan agent, who was appointed “to arrange “ with any joint-stock company, or any two “or more persons, or any syndicate, to “ undertake the floating of the said loan, to “ accept and tender for the said loan at par, “at a rate of interest not exceeding 4 per “ cent.” The Trust, as a matter of fact, have acted much as a man in difficulties might, who, unable to get an advance frtm his bankers, goes to a money-lender, and raises the wind on terms proportionate to the shakiness of the security. It is the purest nonsense in the loan agent and members of the Trust to attempt to make out that the statements in the circular sent Home by the Harbor Board and Chamber of Commerce were in any . respect misrepresentations. The .circular appears to have reached London early in January, and a copy was immediately forwarded to the Trust by Mr Elder. There has been, therefore, abundance of tipe for any misrepresentation to have ’been Set right; and if the Trust could have impugned the “damaging statements,” it may. be depended upon that they would have done so. Nothing, however, in tins direction was done, and so far *s the “open market ” was concerned the case was allowed to go by default. Nothing would have been easier than to have issued a counter-circular if they had bad a leg to stand bn. The vaporing of Mr A. Thomson as to the motives of those who were opposed to the, loon being raised under the existing circumstances ore hardly worthy of notice. Insinssting what must be known to be false is just as bad as telling a direct nntrnth. Mr- Deknision was absolutely correct in the assertion that there has never been any jealohsy of the new dock being constructed at Port Chalmers on the part of the mercantile public of Dunedin. If such a dock is wanted, Port Chalmers is clearly the proper locality, for many obvious reasons. There is one very curious clause in the agreement to which it is desirable that attention should be directed. The Trnst take power, “if necessary,”to “modifyor “alter the plans of the dock to such an “ extent as will enable the same to be built “ and completed for the sum to be realised “by the bonds.” We confess that we do not see our way very clearly as to the inclusion of such a proviso in the articles of agreement, and it would be interesting to know by which of the contracting parties It was introduced, and with what object. Even the Trnst would hardly be so fatuous as to contemplate the cons traction of a dock which would afford no more extensive accommodation than the present one. Tet what can they expect for “ the sum to be realised by the bonds/’ ' Where then is mystery, says the old proverb, there is always something wrong, and decidedly there is mystery here. Except from the point of view that some thousands of pounds will be spent at Port Chalmers, the Otago Dock Trust have made altogether a nice mess of it. They have to pay through the nose for the money in the first instance, and are bound to employ the firm which negotiates the loan at a handsome percentage to purchase the material and plant they may require from England. Of course they know, and the contracting firm know, that the £60,000 odd which will be available willnot construct such a dock as is projected. Is there any understanding behind this precious agreement, written or implied? We confess to a suspicion that there must be.