TATJPO TOTARA RAILWAY

New Zealand Herald, Volume LXI, Issue 18709, 15 May 1924, Page 9

TATJPO TOTARA RAILWAY

—■'■■■ • ♦ »- PROPOSAL FOR PURCHASE, PUTAEURU BOARD'S PROBLEM | THE QUESTION. OF FINANCE. DISCUSSION AT CONFERENCE Railway; timber? and settlement interests throughout the Putaruru-Taupo district were discussed at a conference yesterday in 1 the Auckland Chamber of Commerce between th©- district railway board representatives of tho ?Taupo Totara Timber : Company :, and several bush-land owners. The discussion revealed "wide differences of opinion and the varied difficulties concerning the purposes of; the new board and the settlement of the dis--trict. '; ■'? .' .' . ' ■ .• ' ; ~,.. . ■ '

The. conference was called by the ; Putaruru-Taupo :; Railway ; Board for the primary 1 purpose of coming at.long last to soma -definite, arrangement or understanding about a proposal to purchase a section of the Timber Company's line, and the subsequent financing .. of • the whole business. The board was represented by Messrs. H. Friedlander (chairman}, K. S. Cox H. W. Bullock, J. Campbell,' Dr. F. J. ?Rayner;?the Taupo Totara Timber Company by Messrs. F. G. Dalziell (chairman), H. Coupe and R. S. Abraham.? District timber interests were represented by Messrs. J. M Hume, W. H. Wackrow, F. J. Carter, each owning 400 acres of bush-land at Whakamaru, Mr. G. J. Goldfinch, 300 acres at Waipapa and Oruni;? and Mr. R. D. Dansey, 400 acres at Maroa, Pakuri and Waipapa. The New : Zealand Railway Department was represented by Mr. E. J. Guinness. \- Mr. Friedlander was chairman of the conference. '- •-..''.

Mr. Friedlander explained- thai the board started -without finances and still had none. Hence the conference With a view to discussing the position with ths timber-owners and the timber company. It -was ; the board's duty to give a large number of timber-owners a square deal. Mr. Dalziell: Do you regard the board as being in a position to give mv company a square deal! . ; :-•<• The Chairman: It is the intention of tue . board to give everybody a square deal.' : The . chairman said it would % probably accelerate a decision if the conference decided how the board in its impecunious position was to carry on. , '■ - Further discussion followed, ■ without any prospect of finality. >v Timber Company's Conditions. ; With a %iew "to making progress, ■ Dr. Rayner said he would ask if the timber company were prepared to sell the 19-mile stretch of its railway. ; The Chairman: I think it is prepared to sell. ■■.:■' '■'■•••■".•■■ '-ft .■■*■. v.'/'Mr. Dalziell: That is so. : ; ;; : ] . lv Dr. Bayner: Possibly the representatives of the company will be prepared: to, say what they want for it? ' ■-'.!";. Mr. Hume: Can j the board give us any idea as to what sum it- requires to , carry out its operations -\ '->" .:■■ - The J Chairman: > That is really an unknown quantity. It entirely depends on the way we get- on- with the vendors. If they : could tell us what pi-ice they want and what their running rights f are to be we could come :to a decision almost imme-

. diately. What we want is a concrete offer. The board is depending on the timber-owners to pledge their sawn * timber at Is per 100 ft. as security for the purchase money. They cannot, say anything about security unless something 'definite is put before them. __'■•' , Mr. Hume said the syndicate he repre-sented-was quite-willing to- pay up to a »point, but he; did not think the timberowners should : carry all the burden straight away. He thought the settlers . should also " bear a share of the \. initial liability. , .' "*- -. "'.•"..- - The chairman said he thought .■;•■•; the settlers had-been given to. : understand there would be no rate levied upon: them. * Mr. Dalziell said the original proposal < did not contemplate the settlers paying for. administration. p - ; y ■ ■:-.'■■ -:'■ The: chairman ; admitted , it would \ take" a considerable amount of; trouble to enable" the board to obtain the necessary status to strike '.at rate.. It \ was difficult to see how "the hoard :was going .to.- * carry on without "financial, assistance. -~ :) Bights of the Company. :;;"/>: Attention -was; next given S to, the company's running rights,. but very little progress was made. * . • Members pressed to know if the timber company wanted cash or debentures, ana; /what did tit: seek iin = respect of running rights over J the ; 19-mile section. Mr. : Dalziell ; said the company was not hawking its property. If an arrangement for the carrying of outside timber were wanted, leV the » board and .other .timber-owners ;>' come forward .=-' and " make la proposal. ''*'./' " ' ' "*' :'.,' * The Chairman ": No, we won't. y - Mr. j Dalziell: '; r Are ; you • speaking : 't as a 'timber-owner or as chairman of the board ? ■•>' : ■':' r^-:i:. : -.-:. j i*-~ : ><iy:y ,y';.; .'\ : .;/-"''.-' ■? .->• '•.-■-;'■.

-■: The Chairman :t;l am speaking for the board, which is not prepared and is not going to be a buffer between -your, company .atod , other -Jtimberf-ownefrs. /What is your company prepared to do in regard to the 19-mile'section? . '

Mr. Daisiell r replied that if the 19-mile section were purchased by the board nis company ,would; want ; the ; same s running rights as it now possessed, with a pru- , portional increase *if the output of its timber increased., , " The. Chairman : Do you want, to sell or do you not want to sell. There is no use wasting time. If you want cash, &ay : so; if you want security, say so; but let /us gat to the point. ..• . ;|; . ,>;'> ■'.-;■ Mr. Dalziell . replied 7 : that the ■ company ■had stated its terms x. in writing. These terms stand. I do not know how to make it plainer.'■'■"'-'■■.' '.:-• .'■ . " '"'* ; .■■'_ ; - '■'■ ' Mr. Bullock: Does the company want cash? What exactly are the»financial arrangements?. Mr. Dalziell : Your board has no funds at all It comes here and aaks for expenses. . You have nothing ■ behind youThe Chairman: ..How/ do you know we have nothing behind 'us? *. .*\,, Mr. Dalziell: You ■ have told us the board has no funds.;; v . Mr. Bullock pointed i out that , the board had statutory right to strike a rate of Is per 100 ft. on sawn timber. . Mr. Dalziell, in reply ; to further questions, -. said his company ; was prepared : ; to sell the 19-mile section on the terms already stated. The exact running rights could not be specified at the moment. It was a question for . experts. r But ; the company must have facilities equal to those it now . possessed, r and it wanted guaranteed rights. After further argument .it was-agreed to adjourn for an hour and a half, on the understanding that the company's representatives would in : the interval prepare a definite offer for the sale of the 19-mile section of its railway.

The conference was resumed at 2;30 o'clock, when the Public Works Department's - engineer-in-chief and ■■■ UnderSecretary, Mr. F. W. Furkert, and the district engineer, Mr. A". J. Baker, attended, explaining that they had been . misinformed as, to the opening hour of the conference. ■:':,'. : :''. . *"

" Company's Specific Offer. _ In reply to the chairman, Mr. Dalziell announced that his company was willing to sell the 19-mile section of its railway at valuation, subject to its having reasonable running, facilities equivalent to what it now had, and, of course, covering any additional : output it ; might require. The company would pay : for ;, these ;; running facilities at scheduled rates'equivalent to ■those that -other ; timber ; owners .'were: paying. It was impossible 'to specify just then what : these • running ' rights .Were to be. y That was a matter i: for experts, but •: as the company v would be 'running its own" rolling "stock ' he took : it that : the rates would riot be the ; same as those charged to timber! owners without'rolling

stock. 4 Another condition was that these running rights were to be guaranteed by the. board. - v - Mr. Fnrkert: What form of guarantee! ,- ■.'..■-.•'■. - : ' ;; Mr. Dalziell replied that ' the , question of r security , was ■ a i matter; of * arrangement. The company naturally, expected;' that? the security would be |a" charge on the line itself. i.; Such ;? security ;? would ;? be quite satisfactory. : There was a further ; question to; be con- ? sidered, continued Mr. Dalziell. Thin [ concerned the : purchase money. The board ' asked the company if it'' would | take a/ charge of Is per 100 ft. on outI side timber. The company was not going ,to ■;'sell? its ; 19-mile I section ; and .?also i, find" I part of the purchase money. V i The _ Chairman : You would ; have to; come in ultir '«??.? Iy>? since the additional ; rights : would roe 'worth Is per 100 ft. of timber. '.. ■ • "■'-;■ '' : 'r r ' '■■' ' -

,? Mr. Dalziell: I don't see how that would work out. The board has burst up the old arrangement,", and now proposes something different. Our offer ? implies that you are going to pay?cash." Our offer is on a cash; basis. ;i-Tf you pay us there is no ■ further trouble, but the ;. company? is willing to considet any othetr proposal-the board likes to make that will give us 'reasonable ■ security,■'■;, Will the board suggest its security ?;.;?... ;;???;■'- ."■■' - ;;;r .'.?.;• ;;.,':-??■ '' The chairman replied that under ?, the 1922 legislation it was agreed that the company would sell its line, as a whole. or in part,? v at the option of the Railway Board, the timber-owners to pay a royalty of Is per 100 ft. as security, ~it was estimated that there were? 800,000,000 cubic feet of timber which on the royalty rate mentioned would represent £400,000. ' In addition, of course, the company would hold '■ as security the line itself. The security of the line, therefore, was supported by a revenue of £400,000. % Mr. Dalziell: Our trouble is that you won't carry out that arrangement. > It is a very different proposition than that the board should buy the whole line. '?■ The Chairman: What additional security do you require ? Mr. Dalziell: If you give us the line and the rate of .Is per 100 ft. that i would be quite sufficient. The Chairman :T have no authority for saying it, but supposing tho board arranged with the Government to guarantee the debentures, would vou accept them ? ;K Mr. Dalziell": ; Yes. He added that if the board made an extension of the 19mile section after its purchase with the approval of the Government, and gave the company a charge over that line, the company would be satisfied. The extension was estimated to cost £250,000, and if it were approved by the Government and the company given a charge on it as, security, the company would agree. That was the only security it could accept. It was not prepared to accept part of the risk. The : company wanted cash or its equivalent in guaranteed debentures.After discussion, the sum of £500 /was promised by various timber owners for the preliminary expenses of the board. •. The offer of the Taupo Totara Timber Company will be considered by the board. y