MANAWATU RAILWAY COMPANY.

New Zealand Mail, Issue 1205, 5 April 1895, Page 13

MANAWATU RAILWAY COMPANY.

The annual meeting of the shareholders of the Wellington-Manawatu Railway Company was held at the Chamber of Commerce on April 3at noon. There were about fifty shareholders present. Mr T. G. Macarthy, chairman of directors, presided.

In moving the adoption of the annual report (already published) and balancesheet, the Chairman said : Since I last had the pleasure of addressing you here, we have to regret the loss the boa,rd has sustained by the resignation of Mr C. Pharazyn, one of our most valued colleagues, and Mr James Wallace, our late secretary and general manager. Last autumn, for reasons unconnected with the business of the Company, Mr PharaZyfl decided to visit England. As the duration of his absence was uncertain, he placed his resignation at the disposal of the board, by whom it was accepted with much regret. I hear Mr Pharazyn will shortly return to the Colony. I feel quite sure that his great experience in dealing with land will then be at our service. To complete the number of your directors, Mr David Nathan accepted a seat on the board. Mr Nathan and members of his family - have always been large shareholders in this Company, and his accession to the board will be of considerable advantage to the Company. Mr James Wallace resigned his appointment as secretary last July. We all know the very important share borne by Mr Wallace in the management of the affairs of the Company, from the first meeting of the public convened for the, purpose of arranging for the construction of the line to the date of his resignation. As directors entrusted with the control of the business of the Company, we made a money allowance to Mr Wallace on his retirement equal to one year’s salary, but inasmuch as a shareholder has given a formal notice of his intention to move a resolution authorising the payment to Mr Wallace of an additional sum by way of retiring allowance, I do not think it necessary to detain you further now. The board have not considered it necessary to appoint a new general manager, but from a number of gentlemen with firstclass recommendations, Mr Hannay was selected and appointed secretary to the Company. I think we were exceedingly fortunate in being able to secure Mr Hannay’s services. Already his intimate knowledge of railway work has enabled him to arrange for economical alterations in our business of distinct benefit to the public and the Company. TRAFFIC FOR THE YEAR.

Although the past twelve months has been a period of serious commercial depression, accompanied by a material shrinkage in the export value of nearly all agricultural and pastoral products, the volume of our railway traffic, compared with that of last year, shows an increase, not quite up to our average of the past four or five years, but still the satisfactory amount of <£3476, the difference between =£91,779, our receipts for the year, as compared with <£88,303, our incomeffrom the same source during the previous year. The charges for maintenance absorbed 47 per cent, of our receipts. The increased volume of our traffic is not expressed by the additional amount of money earned. In no case have we advanced our scale of charges. On the contrary, many alterations have been made in the tariff classification, all in the direction of lessening the rates charged to the public. By comparing our statistical records, I find that we have carried 31,449 sheep, 809,800 feet timber, 1518 tons merchandise, 1603 tons grain, 563 cattle, in excess of the quantity carried last year. We must, however, note a decrease of 3536 in the number of passengers carried, and what is of very material importance, only 382 tons of flax passed over our line, as compared with 1586 tons the year previous. The decrease in the number of passengers is wholly local, and is no doubt largely brought about by the lessened output of flax. Pour years ago we delivered in Wellington for shipment 4700 tons of this article, since then, year by year, the demand has become less, and the price is now so low that its preparation for export is no longer remunerative. Of the various items of produce constituting our goods traffic to Wellington, flax lias been one of the most important, not so much by reason of the amount of freight earned, for which our rate has been very low, but owing to the labour involved in its preparation affording employment to so many persons, to whom our railway affords the readiest means of access to Wellington. An advance of a very few pounds sterling per. ton in the price of this staple will be of great benefit to the Colony, and furnish a large increase in the amount of our passenger receipts. Of sheep and cattle, as I have already informed you, we carried an increased number last year. The tariff rate for both classes of stock is, however,

so low, and the margin for profit so small;, that I question whether increased traffic, means increase of profit. Another increase worthy of note is that of merchandise, 1518 tons, of which butter and cheese are two important items. To stimulate the production of these valuable articles for export and enable country settlers to secure better facilities for shipment, we have for several months, in conjunction with the Government railway authorities, ran two night trains weekly. As the amount of freight carried has not reached our expectations, w e shall probably have to economise in our outlay bn this service. The continuance of even one train means considerable expenditure, but we hope during the coming season to receive a larger measure of support. The timber traffic on the railway has now assumed very large proportions. Many new buildings erected in Wellington required a large amount of sawn timber for their completion, which has to a considerable extent been supplied by the mills on our line. EXPENDITURE ON CONSTRUCTION.

I think I have commented on the most noticeable items of our traffiic to which we may attribute the increase of our receipts for the year. I will now pass in review our expenditure on construction and maintenance, and explain the cause of our expenditure on maintenance being .£43,151, an increase of <£2024 bn our expenditure of <£41,127 for the same purpose last year. Passenger traffic represents the most profitably portion of our business. On this, as I have already explained to you, there is a considerable falling-off, whilst on the least remunerative of our goods traffic there is a material increase, that rendered necessary 3926 miles of additional train service during the year. These two items alone account in a large measure for the increased percentage of expenditure, which now absorbs 47 per cent, of our receipts, as compared with 46'57, the amount expended for the like purpose last year. During this year we have expended more than usual in maintenance of the railway line. In many places the banks have been widened to 16ft, thereby increasing its stability for heavy traffic ; 651 b steel rails and appropriate fastenings have replaced for a few miles the 531 b steel rails originally laid; defective sleepers have been replaced by new, mostly of ironbark; guards’ vans have been fitted with telephonic apparatus and attachments, with which, in the event of accident or stoppage on any part of the line, communication can at once be established with the various stations, in fact no outlay has been withheld which was necessary to maintain the line and buildings in substantial repair. Our construction account is included in the line “ railway and rolling stock,” shown in our balance-sheet last year under the heading of assets as .£763,728; it now appears as <£771,684, an increase of .£7956. This demands explanation. During the year we have imported two new compound Baldwin locomotives. Fitted for work they cost ,£5373. An additional and somewhat expensive line of telephone has been completed between Wellington and Longburn. The cost of that work was <£Bl3. This expenditure was necessary to enable our officers to maintain efficient control of the train service. New goods waggons have been built; these were requisite for the conveyance of the extra amount of timber carried Several of the railway sidings havp. been lengthened during the year, and our Wellington station and yard has been greatly improved so that the increasing traffic may be handled economically. Nona of these items of expenditure could bo justly charged to maintenance. Our engineer (Mr Fulton) reports very favourably on the working of the new compound locomotives—they require less fuel than the single cylinder engines, are more powerful, and better adapted to the requirements of our traffic; but whatever has been saved by their use, has been expended in other directions on maintenance. The first introduction by us to railway work in New Zealand of compound locomotives may be considered a bold step, but the result has justified the venture. I am unable to announce to you any proposed alteration of our time-table. I know ? the convenience of the travelling public requires a third daily train between Longburn and Wellington, but we are so heavily handicapped by taxation that an alteration in this direction would mean disappearance of profit available for dividends from railway earnings. The net result of the working of our railway for the year, as shown in profit and loss railway account, is <£3304, balance carried down available for dividend. .

LAND TRANSACTIONS. Our laud revenue appears as <£3342, from which has to be deducted various charges shown in the profit and loss account now before you, leaving' available for dividend purposes <£1962, making I with <£8304 railway revenue, which I have just referred to, a total of <£10,266, from which we recommend payment of a dividend at the rate of 6 per cent, on the paid up capital of the Company, thus disposing of <£10,200, practically the whole of our net earnings for the year. Land was sold during the year to the amount of <£6911. After making provision for the payment of the various amounts which we charge against our receipts for land, there remain a a surplus of -£4127, which we classify as not available for dividend purposes, but is held for the security of debentureholders, and appears on the liability side of the balance-sheet under the heading, “ not available for dividends land account/ 1 making a total of .£34,053 thus held. Before I pass from the subject of our land revenue accounts I must confess to you that we have not altogether escaped the troubles which have vexed so many land companies and mortgagees during the year. We have had some experience of the depreciation in the value of country lands. Several settlers,, purchasers in times gone by of land from the Company, have been unable to carry out their engagements ; as a consequence the Company as mortgagors

3iave had to resume possession of the various properties, representing a value of -£3103 and involving a loss of interest of -£585 13s, which amounts we have deducted from our receipts, thus finally disposing Of it. On making an examination of oiir land accounts I find that we have how sold a total of 90,042 acres for the sum of <£153,370, in part payment of which we hold mortgages for <£57,360, shown as balances due by land purchasers, and we have received cash to the amount of <£96,010. This amount has been used principally for railway purposes and the payment of our overdraft. Next year in the preparation of our profit and less account it will probably be well to give our land revenue account credit and charge our railway account with interest on the amount thus diverted from land to railway account. Another unusual item is land allocated to the Company, £5339. For years we have petitioned Parliament and pressed successive Ministries for a settlement of our several land claims. Small offers were made to us at various times, but we declined them as being inadequate. Negotiations for a. settlement were resumed last year, and after exhausting every reasonable means to secure in your interest better terms, we decided to accept land of the schedule value shown, viz., <£5339. In announcing the settlement to you we cannot expect you to be better pleased than ourselves. It is indisputable that every condition of our contract with the Government for the construction and maintenance of the railway has been fulfilled to the letter by this Company. On the other hand we may safely say Government has very carefully escaped making an effort to discharge their obligation to the Company. When English shareholders learn that we have as a last resource accepted land; of the value of £5339 in satisfaction of our claim of upwards -of <£30,0(10, a claim against the validity of which ho Government have advanced even a reasonable argument, they will probably consider it necessary to be exceedingly circumspect before they engage in the construction of another railway in New Zealand. THE COMPANY’S IjAND

I have explained to you the acreage of lands sold, the amount of cash received, and the face value of the mortgages that we now hold for the unpaid balances due by land purchasers. Some further information regarding our unsold land will no doubt be acceptable. In round figures we have had allocated to us about 214,000 acres, and we have purchased in all about 33,000 acres, ihaking a total of 247,000 acres. ‘Of this total wo have sold 90,042 acres, to which must be added some thousands of acres dedicated to the Crown for the purposes of roads alfordirig access, not only to : land which we have sold, but also to a considerable portion of the laud unsold. We shall probably be well within the mark estimating our unsold land as having an area of 145,000 acres. Now, a very large portion of this area consists of poor, hilly, pastoral land, but slightly benefited by the railway, almost as expensive to clear of timber and lay down in grass as really good land, and for whicli, unless there is a very material improvement in the selling price of sheep, we cannot expect to find purchasers for some good

time to come. A second portion is land of a better character, situated principally between the Masterton railway, the Ofcaki River, and our own railway. Much of this land is well timbered, but it is under, the

disadvantage of being difficult of access. In places the country is so broken that after repeated examinations our survey staff have not succeeded in discovering routes suitable for wheel traffic. The timber, however, •in places is of such a character as to afford some ground for hope that it will in future prove .to be of more value than the land on which it is growing. The balance of our unsold land is mostly in the vicinity of the Manawatu River and the Makerua swamp. In places boi dering on the swamp we have really first-class land that will sell readily at any time, but which it is advisable to x-etain until the reolaimable portion of the swamp land is sold, the purchasers of which will then have an opportunity of securing a refuge for their stock in the event of the swamp being flooded. During the past year the unusual continuance of wet weather greatly retarded the drainage works on the swamp. For several months our contractors were idle. Advantage has been taken of the recent spell of fine weather, and good progress made in ex-

tending the drains in the direction of the Linton township. In all, Ilf xmles of surface drains have been cut, and four miles of the Tokomaru RivOr cleared of logs and snags, so as to permit of the working of a dredge to widen and deepen its bed. TAXATION. In the matter of taxation this Company has always had substantial grounds for complaint at the treatment we have experienced from successive Parliaments and Ministries. The statement I have placed before you at each of our annual meetings shows the amount and incidence of the taxation imposed upon ns. At the commencement of our operations as a railway company we were not liable to any taxations. Subsequent legislation imposed upon us the payment of a property tax of a continually increasing amount. The working of that system of taxation was found to be so unfair and unjust as to demand its abolition, and a new system, the Land and Income Tax Assessment Act, introduced by a late Colonial Treasurer, was announced

as aititofigst, b'thbr Changes intended to afford rdliei to a railway company, the Maliawatu, from unjust taxation. By thb last-mentioned Act public railways were exempted from taxation, but a debenture tax was imposed on the holders of our debentures in lieu of the property tax previously paid by the Company, an income tax on the net earnings of the|railway> and a graduated land and mortgage tak oil oiir lands and mortgages* to be paid by the Company* Aftef the lapse of one year de-benture-holders were by an amending Act relieved from payment of the debenture tax, and the Company made liable therefor. With respect to the income tax and the graduated land and mortgage tax, the demands of the Land and Income Tax Commissioner were so excessive [that we had to appeal to the Supreme Court, and obtained a judgment mainly in support of our contention as to the extent of the I burden of taxation imposed upon us. The net result to the Company of the working I of the different systems of taxation I have referred to is that, after having by an expensive Supreme Court suit secured a material reduction in the amount of the I Land and Income Tax Commissioner’s Assessment, we now pay more taxation than I was exacted from us prior to the enactment of the Act intended to afford us relief. The statement that I placed before you at our last annual meeting showed that we had then paid—

General Government taxation

Rates to local bodies

In addition to which during the past year we paid— General Government taxation Rates to local bodies

£27,527 1 10 14,546 8 10

£42,073 10 8

£3,656 11 3 2,861 16 6

.£18,591 18 5 Debenture * holders have paid £2403 as debenture tax. From the commencement of the railway till the present time shareholders have received in dividends £33,150, about onethird less than the sum paid as taxation. Need we wonder at the present stagnation in business, and disinclination evinced by people with capital to invest in industrial occupations? The energy: and enterprise displayed by the Manawatu Company in the construction and working of what is admitted to be the most imported indusI trial undertaking completed in the Colony is rewarded by the imposition of taxation without a precedent for its extent and unfairness. PARLIAMENT AND THE COMPANY. Parliament and the Government of the Colony have carefully escaped the fulfil- | ment of those portions of the contract by which the Company were to be placed in I possession of land at a specified value, concurrent on the completion of the railway. The treatment which this Company has experienced from successive Parliaments and Ministries has been severly criticised and unsparingly condemned by many of the leading newspapers of the Colony, hitherto without even securing an exemption from a taxation which is almost uni- I versally admitted to be both unjust and oppressive, and was certainly not necessary for revenue purposes. Let us hope that we may still continue to receive the generous support of those who have in the past endeavoured to secure for us more equit- I able treatment, and that their assistance may bring about the fair treatment to which we claim we are entitled. If I have trespassed on your patience with my lengthy address, in justification I must ask you to bear in mind that about two-thirds of our shareholders are resident in England, and that they rely on the published report of our proceedings here to-day, and the statistical reports of our engineer, for I information as to the extent and result of our operations for the year.

THE STAFF. Before I conclude I wish to express the satisfaction of the directors at the very efficient manner in which our secretary, Mr Hannay, and our engineer, Mr Fulton, have controlled the operations of the respective departments of the Company’s business entrusted to their charge. Those gentlemen, and the whole of the employees of the Company, have by their unremitting attention to their duties earned the good wishes and deserve the thanks of the shareholders. lix conclusion, if any shareholder wishes for information on any matter to which I have not referred, I shall be very pleased to reply to any question. I now move the adoption of the report and balance-sheet. Mr C. T. Richardson seconded the motion.

Mr S. Lancaster asked what was the directors’ intention with regard to the reclaimed land down by the Company’s station ? Did the directors think it should continue to lie dormant as it had done for so many years ? The endowment should bring in something to the shareholders. The Chairman explained that a large portion of the land was required for station purposes. The Council had a strip of land 33ft wide between the Company’s road and theirs which had been dedicated for Council purposes, but they had declined to make the road, and consequently the Company had no frontage. They also all knew perfectly well that the Government had the right to take over the railway on specified terms, and the probability was that before long the line would be taken over, and then the land would be required by the Government for railway purposes. The land in that case would be

more valuable than it would be now if cut up for building purposes without an access to any road. The directors were acting in the interests of the shareholders in allowing the land to apparently lie idle for the present. Mr W. Perry asked if the directors had any official information from the Goverhmenfc as to When they were likely to take otfer the line-.

Cliairhiaii said they had not had any Official intimation, but the Government could not hold their hands for many more years, because of the additional penalties whicli would be attached to the purchase of the line. The Government would no doubt consider the requirements of the settlers on the West Coast and take the line over with a view possibly of lowering the rates.

I Mr Perry asked in what time did the additional penalties come into force. The Chairman replied, before many I years,but he could not say definitely because I it was a matter on which the lawyers did not agree. I Mr E. B. Brown asked if the list of I travelling expenses included salaries of officers [in the profit and loss account. The Chairman replied that it included everything that could be properly charged to the expenses of the yeai. The motion for the adoption of the report and balance-sheet was carried unanimously. THE DIVIDEND. I The Chairman moved,That a dividend of 6 per cent on the paid-up capital of the Company be payable to the shareholders on and after Wednesday, 10th April, at the office of the Company, and to the English shareholders at the office of the agents in London on receipt of advice." Mr E. "Vi . Mills seconded the motion, which was carried unanimously. ELECTION OF DIRECTORS. Mr C. E. W. Willeston moved that Messrs C. B. Izard and J. Plimmer be reelected directors. Mr E. W. Mills seconded the motion, which was carried. ELECTION OF AUDITORS. Mr L. L. Harris moved that the retiring auditors (Messrs Kernber and Stuart) be re-elected at a remuneration of £75 a year. The reason he suggested an increase in the remuneration was because the large increase in the Company’s business warranted it. He asked the chairman whether be did not consider that the increase of the Company’s business warranted an increase of remuneration to the auditors. Mr A. E. Gibbes seconded the motion.

The Chairman thought the directors had no right to interfere with the appointment of auditors. The appointmentment was wholly in the hands of the shareholders. They met there once a year, and he thought one of their most important duties was the election of auditors. The work was greater now than it was some years back, and if they thought 75 guineas was not unreasonable they had no objection. The directors would exercise their privileges in voting as shareholders, not as directors. Mr C. T. Richardson thought it would perhaps be better to divide the motion. Mr Harris did not think there was any necessity for that. Mr T. W. McKenzie thought the opinion of the meeting was in favour of the reappointment of the auditors and increasing their remuneration. The shareholders were well aware of the amount of work they had had to do, and wanted to show their appreciation. Those who knew the auditors knew that they could be relied upon. He bad listened to the able speech delivered by the chairman, and knew the difficulties the Company had had to contend with and overcome. The results redounded to the credit of the Company, and he hoped they would go on and continue to improve, for he considered the Company to have been almost the salvation of Wellington. (Hear, hear.) If it had not been for one or two gentlemen he questioned whether there would have been any railway at all. The opening of the West Coast had put Wellington in an entirely different position to what it was before.

Mr W. R. E. Brown thought the amount ought to be in a separate motion ; the proposal placed shareholders in an invidious position, for some might think the present remuneration was sufficient, while they wished the present auditors to be reappointed.

Mr Harris said the auditors were getting £SO a year when the Company’s volume of business was only .£4OOO. Now the Company’s business had increased to <£91,000, and he thought that justified the increase. The Chairman thought they should fall in with the sug-gestion made to elect the auditors first, afterwards fixing the amount of remuneration to be paid to them by a separate resolution. The motion that Messrs Kember and Stuart he auditors for the ensuing year was then agreed to.

Mr Harris then moved that the remuneration of the auditors for the ensuing year be 75 guineas each. Mr Gibbes seconded the motion. Mr W. R. E. Brown moved as an amendment that the remuneration he 50 guineas, the same as before.

The amendment, failing to be seconded, lapsed, and the motion was agreed to.

Mr Kember said he had been returned as auditor by the shareholders for some 11 years past. It seemed to him that by retaining the position he still continued to retain their confidence. Therefore, on behalf of himself and Mr Stuart, he had very great pleasure in thanking them for their continued confidence. Mr Plimmer returned thanks for his and Mr Izard’s election as directors of the Company. He had not only to thank them for his election now, but for their continued confidence in him during the past 14 years. RECOGNITION FOR PAST SERVICES. Mr E. W. Mills moved: - That the sum of <£3so by way of retiring allowance, in addition to the sum allotted by the director, be paid to Mr James Wallace, in

recognition of liis services to the Company during its promotion and as secretary and general manager up to the date of his retirement. He thought that giving Mr Wallace one year’s salary for his past services; considering the plarfc hd took drigihaily ih Organising the Company, and then performing so Well the duties of his position, was scarcely sufficient recognition of his services. In doing what he proposed the shareholders would only be doing a just action. Mr C. T. Richardson, in seconding the motion, said that Mr Wallace was one of the first to start the work, and had kept up his enthusiasm and industry and fortitude

all through. The amount of work in connection with the Company’s land transactions had been very great, and he thought it would be only an act of courtesy and generosity to pass the vote.

Mr Harris asked what was the amount which had already been voted to Mr Wallace as retiring allowance? The Chairman said they had not voted any amount to Mr Wallace as retiring allowance, but when he retired from the Company's service he received from the directors <£6so. In handing that amount to him they had to bear in mind that they, were a cting - not only far themselves but for the shareholders, and that whatever they did they had to be just before they were generous. He had only been connected with the Company’s management for eight years, but he knew that Mr Wallace was the life and soul of the Company from its commencement. He could speak from his eight years’ connection with the bush ness management, and certainly bethought that no man could have been more industrious in the discharge of his duties or more untiring and zealous in promoting the interests of the Company. As directors they did not intend to interfere, but would merely exercise their vote as shareholders.

Mr S. Lancaster fully endorsed what was said with regard to Mr Wallace’s services, for almost from the very starting of the Wellington and Manawatu Railway, from personal acquaintance of Mr Wallace, he- knew that lie had laboured hard to keep the thing going. He was the first person to show the Government where a route could be got to tap the West Coast from Wellington, and he and his partner paid for the preliminary survey. He induced Mr Macandrew, during the time of the Grey Government, to commence the work, and showed them where the route could be got, and they all knew the Grey Government even started the work without a vote from Parliament. A change of Government then took place and the work was stopped, but Mr Wallace never flagged but put his whole energy into forming a company, and they all knew the result of that. He even sacrificed his own business in his endeavours to promote the railway. Considering the benefits the citizens of Wellington received by the construction of the railway, if they granted Mr Wallace a pension for all the time he lived it would still be a poor return for his services to them. Therefore he thought Mr Wallace was honestly entitled to this amount from the shareholders.

Mr W. R. E. Brown thought a false'issue had been raised. All the shareholders in the Company were not citizens of Wellington. He did not think it was the right thing to do to ask them to vote the bonus in addition to what the directors thought was a sufficient amount. He did not want to reflect upon Mr Wallace’s services, but he thought it was placing them in a false position to ask them to do this because Wellington and Wellington citizens had as a whole benefited so much by his services.

The Chairman said that when Mr Wallace retired from the Company’s service they had to look at the facts of the past, and they found that, although he had been for 13 years a salaried officer, he had never been away for a holiday. (Applause.) He said that to Mr Wallace’s credit.

The motion was agreed to, with three dissentients. Mr C. T. Richardson moved a vote of thanks to the working staff of the railway. They ought in a public way to acknowledge the manner in which the staff performed their duties.

Mr Knigge second the motion, which was agreed to. Mr W. M. Hannay (secretary) returned thanks. Mr T. W. McKenzie moved that the thanks of the meeting be accorded to the directors for the very efficient manner in which they had carried on the business of the Company during the past 12 years. Mr Perry seconded the motion, which was carried. The Chairman returned thanks.

Mr C. B. Izard returned thanks for his re-election, and he assured the shareholders that the directors devoted a great deal of time and attention to the affairs of the Company. Every matter coming before them was minutely examined and gone into, and he ventured to say that their affairs were carefully looked after. The meeting then terminated.