THE MIDLAND RAILWAY

New Zealand Herald, Volume XXXIII, Issue 10034, 22 January 1896, Page 6

THE MIDLAND RAILWAY

INTERVIEW WITH THE CHAIRMAN '

OP DIRECTORS. Mb. Thomas Salt, chairman of the New ZeaUnd Midland Railway Company, left Auckland last night by the Manapouri for Sydney, on his way back to England, which he expects to reach early in March. Although, perhaps, best known in the colony from his connection with the Midland Railway, Mr. Salfrhas for many years occupied a prominent position in political and financial circles at home. He belongs to an old Staffordshire family, and was born 65 years ago. He was eduoated at Balliol College, Oxford, where he took first class in Law and History, and for many years was a P'' at | banker, being connected with the Stafford old bank and the firm of Bosanquet, Salt, and Co. In 1859 he entered the House of Commons, and continued a member of that body until a few years ago, when he retired from active political life on account of his health. He was Parliamentary secretary to the Local Government Board in the Conservative Administration of 187oSO. For some time lie was chairman of the Lunacy Commission, and isstill a member of the I'ublic Works LoanCommrasionaudau Ecclesiastical Commissioner. He is also chairman of that great financial institution known as Lloyds Banking Company, and of tho North Staffordshire Railway Company. _ In the course of an interview which a Herald representative had with Mr. Salt' yesterday afternoon, it was natural that the chief topic of conversation should hinge almost entirely upon Midland Railway affairs. Although the experience of that railway company in New Zealand has been the reverse of agreeable, Mr. Salt spoke without any bitterness, and in referring to the colony expressed himself in terms of the highest praise as regards its great capabilities.

THE MIDLAND RAILWAY. " Yes," he said, in reply to our representative, " I am chairman of the Midland Railway Company, but I should like to say that although I am of course largely interested directly and indirectly in holders, I do not represent them." " What is the present position of matters? " The company still exists and in all probability will continue to do so. The debenture-holders have < since the award was made appointed a receiver whose duty it is to conserve their interests." " Can you say what position the Company takes in reference to the award ?" "I cannot of course at present speak with any degree of authority. When I arrive home the position will be fully considered. Personally, I do 'not in any way grudge the colony the advantage (if any) which the Government consider they may have gained by the decision. Those interested in the Company are also in many ways largely interested in the welfare of the colony, and throughout, while, of course, they have desired to see the Company succeed in its undertaking, they have also considered the construction of the railway to be a work of great public benefit, and one which would be likely to advance the public interest. It was absolutely essential to both the Company and the colony that the questions at issue should be settled in oue way or the other, and I accept loyally the decision of the umpire (subject, of course, to any right of review which the Company may have), upon the general questions placed before him." " And do you do so in regard to the seizure of the line?" " That is a very different matter. Of course I cannot in this speak with auy authority. In the first place, the line was mortgaged to the debenture-holders, and the debenture-holders were not parties to the submission of this question to arbitration, and were not represented or present in any way at the hearing. It seems to me that the umpire's decision cannot affect their position, and in fact that was, I understand, the view Mr. Blake himself took. Secondly. Mr. Blake himself considered that he had no power at all to determine this question, and that was the view which from the very outset was taken by the Government Very difficult and complicated questions of the respective rights of the debenture-holders and the Government and the Company have arisen. The debenture-holders have a very strong position, and the matter rests chiefly with them, but as I have said before, the Company also exists, and its position has to be carefully considered, and its rights and powers'are not yet completely ascertainable. From first to last, however, the feeling of myself and my Board has always been, and is now, thoroughly loyal and friendly to the Colony, and we recognise that by forbearance and an impartial consideration of what is best for the Colony, the Company, and tho debenture-holders, an arrangement may be reached such as would conduce to the completion of tho railway, and a mutual good understanding for the future. This will require time, and very anxious thought and consideration, and the full examination and consideration by the debenture-holders of their legal position and equities." ORIGIN OF THE COMPANY. "What was the origin of the Company, Mr. Salt." " The Company came into existence in 1887. Prior to that there had, I believe been a considerable agitation in Canterbury for the construction by the colony of the east and west line, connectiug the West Coast with Christchurch and Lyttelton. _ The colony, however, appears to have declined to undertake the line, and then a syndicate, consisting mainly of Christchurch gentlemen, was formed tor the purpose of inducing capitalists at home to construct the railway. The New Zealand Parliament passed an Act in 1881 agreeing to subsidise the line with a grant of laud, and some of the syndicate went home, and placed their scheme before railway men, myself among the number, they were fortified with excellent reports, prepared under the authority of the Government showing the feasibility of the undertaking, and by strong recommendation from the then Government, and they were also strongly supported by the recommendations and assistance of the then Agent-General. It was distinctly stated that the timber and land, apart even from the traffic, would go far to pay for the building of the line; and eventually induced by all these factors, and believing. that the proposed undertaking would be both a financial success and a benefit to the colony, I and other gentlemen interested in the colony and in railway matters formed the company." THE CONTRACTS, " Was the company ever in a position to carry out the work ?" "Certainly. In 1887 the whole of the capital was offered sufficient to build the lino east and west and north and south on the principle and conditions in the Act of 1884, namely, that 50 per cent, of the statutory cost (£2,500,000) would be granted in land. But delays arose, because it was considered by the then Government, that notwithstanding the provisions of that Act, and assignment by the syndicate to the company of the 'Chrystall contract'—which assignment, by the way, was expressly assented to by the Agent-General— power was necessary to enable the colony to enter into a contract with the company, and it was not till August, 1888, that that contract was finally obtained. In the meantime, three years and a-half of the time originally fixed for the construction of the railway— 10 years from January, 1885, had expired, and this naturally materially affected us; but still the company was determined to do the best it could, and as soon as the contract was signed proceeded to a vigorous prosecution of the work. By 1892 they had constructed a large section of the railway, and had expended over a million of money. The amount spent in the bare cost of construction and rolling stock being some £750,000. I mention these matters rather fully because I really do not think the public of the colony have properly understood our position. Of course, it was seen at the outset that the railway could not be possibly finished by January, 1895, as over a third of the ten years had expired before the company were in the position in which they could legally commence the work, and we had the assurance of the then Agent-General that the contract time would be extended."

' THE BEGINNING OF THE DIFFICULTIES, '" It was about this time, was it not, Mr. Salt, that the company petitioned the House " Yes, there had been a change in the incidence of taxation, and the time was drawing near to the end of the original period of 10 years, and the difficulties had commenced respecting the mining reserves, all of which had seriously affected the company, and in respect of which the company considered they had just complaints against the colony. I should state that hud these circumstances not arisen, the Company would, I believe, have had no difficulty in finding, the necessary capital, When, however, in the end of 1891 and the beginning of 1892 these circumstances I have mentioned arose, the value of the land grant, and the prospects of the Company were so seriously affected that we found it impossible to obtain further capital unless the conditions of the contract in respect to time and other matters were modified. These were the reasons for our petition. No doubt, had the company then proceeded to arbitration, their position would have been much stronger, as the subsequent delays very seriously prejudiced us. But they desired to avoid, if possible, any conflict, and negotiations between the company and the Government continued. Eventually an arrangement was come to between the Government and the company, upon which the Bill of 1894 was introduced.." "That Bill was thrown out, was it not?" "Yea; I believe the rejection of this mea-

sure was a calamity both to the colony and the company. Mr. Seddon was most emphatic in his support of it, and subsequent events have justified his forecast of what would happen if it was rejected. ' Had that Bill been carried very great expense would have been saved to both parties, the east and west line would have been approaching completion, through communication would have been practically established between the West and Bast Coast, the land grant would have been released, and the liability to the colony would have been comparatively small. The rejeotion of that measure compelled arbitration, and in respect to this I should lite to say that, while the company failed iu the opinion of the umpire to establish a legal claim against the colony, they must, I think, have satisfied him that they had some equitable case, or he would not have ordered the Government to pay their own costs of the trial, and of the colony's arbitrator, and half of the umpire's charges." THE SEIZURE OF THE LINE. "I asked you just now, Mr. Salt, your opinion on the seizure. May I ask you who holds the line now ?"

" Well, in point of fact, the Government, as they took possession of it in May last. In point of law I believe the debenture-holders do, as they are first mortgagees. In any instance the seizure of the line has not by any moans destroyed the company's rights. Even if the Government were entitled to seize it they can only hold it as trustees, and are bound under the Act to strictly account every six months for their dealings with it. Let me say this, that the company has up to the present time only received from the colony a little over £200,000 worth of land, a very large portion of which has not yet been sold. They have expended iu construction and on other necessary matters over a million of money, and the colony has not expended one penny. Yet the Government have in the meantime taken possession of the line, and consequently of the debentureholders' security. 1 no not think that it is the desire cither of the Government or the colony that this position should continue, and that the debenture-holders should be forced into litigation with the colouy, or that the colony should seek to retain a lino, the cost of construction of which has been borne not by tho colony but by tilt English investors.'' DETRIMENTAL TO THE INTERESTS OF THE COLONY. " Do you think such a course would be detrimental to the interest of the colony?" " I certainly think it would. It would be impossible for mo to give you in a short interview my full reasons for this; but lam satisfied that any harsh or inequitable action by the Government against the interests of the debenture-holders would be detrimental to the credit and reputation of the colony. I hope, however, that no such position will arise, for I think all parties desire to see the matters amicably arranged. At present I cannot say what the intentions of the Government may be; but throughout the greater part of the arbitration proceedings there was good feeling shown ou both sides." " By the way, who are the directors of the company. Mr. Salt ?" "Mr. Brodie Hoare, M.P., Mr. Walter Chamberlain (brother of the right honorable Joseph Chamberlain), Captain Hart-Davis, Mr. Sherriff Hilton, Mr. D'Avigdor (who was connected with Sir Julian (joldsmid, M.P.) was on the Board up to tho time of his death a few mouths ago, and I myself, as chairman."

"Do you know how the debentures are held

" A considerable number are held by small investors who took them, believing them to be a good, sound iuvestmeuc of the ordinary class of railway debentures, a security looked upon as of a non-speculative character." NEW ZEALAND A FINE COUNTRY. Having disposed of the Midland Railway the conversation became more discursive. "I have seen," said Mr. Salt, "a good deal of New Zealand, both North and South, and speaking generally I think it is a fine country with great capabilities, both in a commercial and agricultural sense. Besides that it has got timber and coal and gold. From what I hear its agricultural prospects are very fair. Of course large fortuues are not likely to be made in the future in the same way that they have been mado in the past, but I thiuk agriculturalists coming here with a little capital, if they are industrious and intelligent,ought to do exceedingly well. The number of tradesmen of course cannot be largely increased so as to make a profit until the population and wealth of the colony increase, but there is ample room for land settlement. Then, too, I am quite satisfied that the coal and timber in New Zealand are very valuable.andyouonly require rail way facilities to make great progress. Much the same may be said about the gold mines, but I cannot speak with equal confidence on that Doiit, because gold mining is essentially a matter of much greater uncertainty. After all, however, the great thing wanted is population, which would create more demand for labour and more opportunities for trade, and settle the Unci. If it had five million inhabitants instead of five or six hundred thousand this would be a country of immense capabilities and wealth."

WHAT IS WAITED. i " What New Zealand wants," proceeded Mr. Salt, "is every encouragement for the introduction of capital, and of the people who would follow capital all of a steady aud industrious character. My own experience shows that capital is not encouraged as I was led to hope. I think this arises from two causes chiefly, partly because so much is treated from the point of view of politics that would he much better dealt with as ordinary business quite apart from politics ; and secondly because there still exists a certain amount of jealousy between different parts of the colony. However, as time goes on, and wealth and population increase, all the local jealousies will disappear, and it will be recognised that the interest of the whole country is best served when it is considered as one united entity." RAILWAY MANAGEMENT. As Mr. Salt is an authority on railway matters, our representative asked for an expression of opinion regarding the Mew Zealand railways. "I think." said Mr. Salt, "that your railways require more development, and that with economical management they would pay well. My opinion, however, is that all railways ought to be managed purely as a business concern, and absolutely apart from politics. A commission for the management of railways might do very well so long as it was in the position in which somecommisious are placed—that is, perfectly independent of political purposes -but where it is made the medium of political patronage it is a great misfortune in the interests of the trading community." #

LAND SETTLEMENT. Mr. Salt again reverted to what he insisted on as the one thing needful—the right class of people to settle on the land. " You want," he said, " people who will cultivate it, and to do that they must have means. There is, of course, a great deal of poor land, but on the other hand there is a great deal of land that will bear higher cultivation. I am not, however, in favour of pouring all sorts of people on the land. Depend upon it that wealth and population of the right sort will always display their natural tendency for finding the places that are suitable for them if uo impediments are put iii their way. New Zealand is getting better known every day in the old country, and everything ought to be done to improve the means of communication, and thereby encourage greater traffic between the two countries."

CHECK TO THE INTRODUCTION OF CAPITAL. In answer to a question, Mr. Salt admitted that the experience of the Midland Railway Company would most certainly have a deterrent effect upon capital coming to the colony, and ho mentioned an instance within his own knowledge where some financiers who were approached regarding a company, and who were perfectly satisfied respecting it, declined to have anything to do with it when they found that it was a New Zealand Company. " Of course," said he, " the colony is bound to advance, but these things are checks." A COUNTRY WHERE LIFE IS HAPPY AND EASY. Mr. Salt, in conclusion, said he thought life in the colony was very happy and easy. He was not prepared to say that the social distinctions existing here were less marked than at home. The climate seemed to be as changeable as the English but warmer, but its great feature was that whether one lived in the north of the North Island or in the south of the South island there was a climate in which life was made pleasant and easy. That contrasted very much with the climate of almost every other country. "There is," he said, "one thing which struokmevery modi in travelling through New Zealand, and that was the immense amount that has been done by so small a population. It shows that the people naturally have great intelligence and great energy, and a good deal of wealth, too." Mr. Salt said that he would carry away with him mauy pleasant recollections of friends he had made in New Zealand add of kindnesses that had been shown him, and he # hoped that he would he spired to again visit so favoured a country,