TEE NEW ZEALAND MIDLAND RAILWAY.

New Zealand Herald, Volume XXXIV, Issue 10378, 1 March 1897, Page 6

TEE NEW ZEALAND MIDLAND RAILWAY.

MORE LITIGATION. [FKOlf OCR OWH CORRESPONDENT.] LoxDON, January 23. The case of the New Zealand Midland Railway Company was before ihe Court again a few days ago, when Mr. Renshnw, Q.C., moved the appointment of a receiver in substitution for Mr. Parker; while Mr. Carson, for the Gas, Water, and General Investment Trust, large debenture-holders, urged that a meeting should be called to ascertain the wishes of the debentureholders; and Mr. Warrington, Q.C., for the Trustees, contended that it was not desirable to m-ike any change in the personnel at the present moment. Mr. justice Kekewich remaiked that the case was one of great difficulty, but he found it advisable that a receiver should be appointed by the Court, as this would enable him to deal with greater authority with the New Zealand (Jovernment. There was nothing to be said against the Trustees or Mr. Parker, but the Judge thought it advisable that a meeting of debenture-holders should be called to suggest a suitable person, after which the appointment would be made in Chambers. In this connection, Mr. J. A. Kelman has issued a lengthy circular to the debentureholders, inviting them to nominate him for the Receivership, as representing some very large holders of the Midland debentures. This recommendation is supported by another circular signed by Lord Claude Hamilton, chairman to the Great Eastern Railway Company; Mr. Thomas Salt, chairman of Lloyd's Bank; Mr. Brodie Hoare, M.P.; Mr. A. Sclanders, New Zealand merchant; Mr. F. Williams, director of the New Zealand Electrical Syndicate, and others. Mr. Kelman in his circular advocates as his policy the removal of the caveats which had been entered by tho present Receiver against certain mortgages—thus getting rid of expensive litigation, the revival of negotiations for the sale of the properties affected, the opening of immediate negotiations with the New Zealand Government, with the view to the recognition by them ot the debenture-holders' rights, and the reconstruction of the Company on suitable lines. Mr, Kelman expressed his convictiou that the Government would agree to any reasonable proposal put forth , by an accredited representative, and scouts the idea that " when the matter is properly represented to them the Government of an English colony would adopt a course which would savour of confiscation." All this is well enough so far as it goes, but unfortunately unanimity does not evou yet appear within measurable distance, for a second circular' has been issued to the de-benture-holders. It proceeds from Mr. Geo. A. Touch, who, as chairman of the debentureholders' committee, suggests to debentureholders the desirableness of withholding their support of Mr. Kelman's candidature until they have further information, as his appointment to be receiver for the de-benture-holders would involve tho risk of his duties in that capacity conflicting with the interests as a member of the committee appointed by the shareholders on the 31st ultimo. Mr. W. fl. Bishop, in a letter published in the city article of The Times, puts the case thus:—"ln their letter published by you on the sth inst, the solicitors to the trustees for the debenture-holders of tho New Zealand Midland Railway Company state that' they have no reason to suppose the New Zealand Government is not prepared to fairly consider the claims of the debenture-holders.' The paragraph appears to me singularly weak, if the character of the debentures be considered. The company mortgaged their line, lands and timber thereupon, to the deben-ture-holders under conditions submitted to the Agent-General of New Zealand. The Government have taken possession of the line. Surely the Goverument .has assumed tlie obligations of the company, in whose place they stand qua the debenture-holders. The words used by the solicitors to the trustees imply some sort of compromise. How can the debenture-holders be expected to listen to any compromise? Their bonds were taken upon a railway where their money has been spent with a view to the development of the resources of New Zealand, the Government is continuing the construction of the line and adding to the value ot the deben-ture-holders' security. The debenture-hold-ers will look to the Government to fulfil the conditions of the deed. I have, among others, signed a requisition to the trustees to call a meeting of debenture-holders, which I hope will be called; and 1 trust that the trustees will adopt a tone in accordance with the debenture-holders' rights in negotiations with the Government."

And yesterday this unhappy undertaking came yet once more before court, Mr. Davis, Q.C., moviugthat the case of the Gtis, Water, and General might be joined as defendants in the action Smith v. Lubbock, or alternatively that they should have liberty to attend the proceedings. He explained that his clients were debentureholders, and had the support of holders of about £300,000 of debentures. Naturally they desired to see that their rights were protected, and it was understood that the appointment of a receiver was about to he proceeded with. Ultimately it was arranged that the motion should stand over to be heard by Mr. Justice Kekewich. Today there is a perfect rush of correspondence in the financial papers touching the Midland Railway, and the proposed appointment of a receiver. A writer signing himself "OM Dominion," says: —"I liavc perused with much indignation the various letters respecting the treatment of the debenture and stock holders of the New Zealand Midland Railway. That any Government of modern civilization should have taken to itself such methods of enhancing tho success of a British colony is to me extraordinary. To enter into a. contract for the performance of a certain thing, and then to make the performance of that thing an impossibility, Urns occasioning forfeiture, is certainly a new principle of equity that should recommend itself to all small Statc3 setting up in life, and I sincerely trust that in the event of tae event of the New Zealand Government failing to recognise its obligations, not only toward this railway, but toward the customary law of financial relationship, the London Stock Exchange Committee will take such steps by way of reprisal as may bring these very little Engenders to their senses, and demonstrate the truth of the old axiom, ' Honesty is the best policy. , "