WELLINGTON AND MANAWATU RAILWAY CO.

New Zealand Times, Volume LI, Issue 8966, 17 April 1890, Page 1 (Supplement)

WELLINGTON AND MANAWATU RAILWAY CO.

NINTH ANNUAL MEETING,

The ninth annual meeting of shareholders In this Company was held Wednesday, Ajmi 2. There was a large attendance, and Mr T. G. Macartby, Chairman of Directors, preaided. | ANNUAL REPORT AND BALANCE-SHEET. The Chairman, in moving the adoption of the report (already published) and balancesheet, said :—I beg to move the adoption of the report and balance-sheet, but before proceeding to discuss details I venture to express the opinion of the Board of Director —with which opinion I think shareholders will agree—that the annual statement of accounts now presented marks an epoch in the history of this Company, Hitherto each annual statement has consisted mainly of a series of accounts showing how subscribed capital and borrowed money has been expended. But in the statements now before us for the year just closed, we have proof that the earnings of the railway and the income derived from the mortgages held by the Company are now sufficient to defray the whole of the charges for the year, and leave a surplus of £5079 available for dividend purposes, which amount we recommend shall be carried forward. In making this recommendation we ore convinced that the interests of shareholders will bo best served by leaving the profit for the year undivided, thereby aiding the efforts of Directors to place the indebtedness of the Company to sundry creditors on a more economical and satisfactory basis. You will notice that in addition to'the annual statement of receipts and expenditure and balance-sheet usually placed before you, wo have this year furnished a profit and loss railway account, also a profit and loss land revenue account. Hitherto the railway and land- revenue together have not been sufficient to defray all charges. This year both accounts show a surplus, and therefore this is a fitting opportunity to finally separate the accounts, showing the results of the transactions of the year under the headings railway account and land revenue account, charging each with its share of expenses, ratea, taxes, debenture interest, etc.; and also showing the amount available from each account for dividend purposes. In effecting this division of accounts we have placed our land revenue under two heads ; one showing the amount treated as income during the year, amounting to L 3442 4s 2d, against which we charge £SOO as a proportion of office charges, Directors’ fees and expenses, leaving a balanoe of £2942 4s 2d available for dividend purposes. The other shows the gross profit on the lands sold during the year of £9922 18s 4d. Against this sum we charge £IOOO, being 5 per cent debenture interest on £20,000, this being the estimated cost of land-purchased with borrowed money, and still unsold. Kates and taxes, £1216, represents the amount of Property-tax and local rates paid during the year on unsold land. Under the heading of general charges appears £B4B 16s 3d, leaving £6858 2s Id not available for dividend purposes. During the year, 14,135 acres were sold for the sum of £22,031 5s Bd, being an average of £1 lis 2d per acre. This average shows a considerable falling off as compared with £X 19s 5d realised previously, one reason for which is the very small proportion of township land sold during the year. Shareholders must bear thie in mind : a largo portion of the land in close proximity to the railway has been sold, and although we have (say) 183.000 acres to be disposed of, we must be prepared to accept smaller prices, as the land becomes more difficult of access. Our landed estate, as you are aware, consisted of 210,500 acres of allocated and about 33,000 acres of purchased land. Of the allocated lands, 45,573 acres have been sold for £78,595 0a 4d. We have also sold 8955 acres of purchased land for the sum of £22,999 10s 9d, making the total area of land sold 54,528 acres, and the purchase money £101,594 11a Id. We still have for sale (say) 188,000 acres, of which about 140.000 acres have been surveyed and laid off In blooks for sale. As experience has convinced us of the utility of offering for sale lands unprovided with roads, arrangements have -been made with the Te Hero and Wirokino Road Boards to lay off and complete roads giving access to about 40.000 acres of the Company’s lands, situate partly on the Otaki River and partly in the Tokomaru Valley. The funds necessary for the formation of these roads are provided by the Government under the provisions of the Government Loans to Local Bodies Act, 1886, the land benefited by the outlay being subject to a special rate oflfdin the pound on its assessed capital value to provide interest and sinking fund for the repayment of the loan. We expect these roads to be completed at an early date, and that their completion will enable us to dispose of the land to advantage. The high price ruling for llax during the past year has attracted considerable attention to the Makerua Swamp, and some very extravagant opinions have been advanced as to its value, baaed in a largo measure on an erroneous estimate of its extent. Shareholders will do well to boar in mind that the total area Is short of 19,000 acres, 4000 of which are held by Native owners, 1600 by the Government, and the balance by the Company. Before the whole of this large area can be made available either for settlement or the growth of flax a very large expenditure will be necessary. During the past year, under authority obtained from Parliament in the Wellington andManawatu Railway Company’s Drainage Empowering Act, 1889, about £7OO has been expended in cutting drains on three of the most aoces- ■ olble portions of the swamp. This expenditure must be regarded as being of an experimental character; and it would be premature ae yet to hazard any decided opinion as to' the ultimate results. I now propose to place before you some details as to the revenue from the railway, When I last had the pleasure of addressing you here I informed you that during the last seven months of the years ISBB-1899 alterations bad been made in the arrangements for the maintenance and working of the rail way, the effect of which was to enable us to materially reduce the working expenses. During the present year the system then initiated baa been continued, and, combined with the largely increased passenger traffic, enables us to place before you accounts showing a very large increase of profit. Our gross receipts for the jrear (£67,167 5s 8d) as compared with last year (£55,249 18a 3d) show an increase of £11,917 7s sd. Our working expenses for this year are £23,339 2s Bd, as compared with £20,087 5s 9d, showing an increase of only £3251 16s lid. The net railway earnings for the year were £43,828 3s, as compared with £35,162 12s 6d, a substantial advance of £8665 10s 6d—in other words, our receipts show an increase of 21 *5 per cent; the working expenses are also increased by 16*2 per cent ; but our profits give the largest ra'tio of income, 24/6. The working expenses for the year absorb 34‘7 per cent of the revenue, as compared with 36 "32, the figures for last year. Our net earnings per mile were £799 12s 2d. Last year the amount was £(>s7 14s 9d, Our totil working expenses per mile, £277 16s lid, as compared with £239 2s Bd, show an increased expenditure of £3B 14s 3d, as against which we have an increased return of £l4l 7s 5d per mile. Taking as a basis, for calculation £740,986 Is Sd, the amount that appears in our statement of assets as-the value of the railway and rollingstock, our profit £43,828 Ss, represents a net return of nearly 6 per cent. For this very gratifying result shareholders are largely indebted to our very excellent staff of employes. Mr James Wallace, onr Secretary and General Manager, and Mr J. E. Fulton, Traffic Manager and Locomotive Superintendent, have been unremitting in. their efforts to advance the Interests of the Company. As a result of their good management, seconded by the intelligence and industry of their subordinates, the traffic for the year has been conducted without accident, and the line and rolling stock maintained in a high state of efficiency; I cannot leave this subject without reference to ] the sad loss the Company has sustained since -

our last meeting in the untimely death of our late engineer and traffic manager, Mr A. K. W. Fulton. An officer bo capable and devoted to his duties is indeed hard to replace, but the Directors feel that they have made a wise choice in the appointment of hie brother, Mr J. E. Falcon, as hie successor. The details that 1 have placed before you should go a long way to prove that the business of the Company during \ the past year has been conducted with a strict regard to economy. The interests of the public have also been served by a lessening of the time occupied by the mail train between Longburn and Wellington, Reductions have bren made in the rates charged on dairy produce and flax, and increased storage accommodation provided at Wellington and several country stations. Our prospects for the year now ensuing are sufficiently promising to justify the expectation that our traffic will continue to increase. The railway now in conrse of construction to connect Palmerston with the WoodvilleNapier section of the Government railway will bo opened for traffic during the year, and form an additional feeder to our line. It passes through a large area of fertile country, and also renders available ono of the most valuable tofcara forests in New Zealand. The demand for dairy producj for exportation, meat for freezing purposes, and flax, combined with the large increase of population on the West Coast, must necesavrilv result in an increasing traffic, to provide for which wo have made arrangements for additions to our rolling stock for both goods and passenger accommodation. It will be in the recollection of shareholders that at the date of our contract with the Government for the making of our line, it was agreed that land to the value of £126,000 should be allocated by the Crown to the Company. It is a matter of history how this agreement has only partially been fulfilled by the Government. The laud allocated fell ehort of tbs agreed value by £29,805. The matter has been pressed upon the attention of successive Governments time after time, but all _ alike have turned a'deaf ear to our just claims. Individual memba's of different Governments have strongly expressed before a Parliamentary Committee their opinions as to the wrong that has been- done us (notably this has been so in the case of the present Premier and Si; John Hall), but no redress whatever has been obtained. In the years 1887 and 1888 the Company specially petitioned Parliament for relief. The petition was, in both years, referred to the Waste i Lands Committee, with the result that no : satisfaction whatever was obtained, and in the year 1888 the Committee, by a majority i of one, and against the opinion of the i Chairman, who had no vote, reported against i us. To the surprise of your Directors the i Government thereupon advertisedfor sale laud i at Horowhenua which was purchased by the ; Crown within the area of allocation after the signing of the contract. To onr remonstancea tlfey paid noattention. Afterconsultation with . their solicitor, and, acting on bis advice, your Directors thought it their duty to assert i their right in a Court of law. This was done I in accordance with a promise made to yod at the last annual meeting, that the Direc--1 tors would take every step in their power to i obtain the land that justly should have been i granted to the Company. I regret to say i that wo have exhausted all the resources of ■ the law in the endeavour to enforce this - claim, but, so far, without success. The i next point I desire to call your attention to is : one that was also brought prominently ’ before your no ice at the last annual raeetI ing. It is bhetvery heavy taxation to which ; the Company s subject. Daring the last i year we have piaid for property-tax the sum of ■ £3640 15s, and for local ratea £2138 15s ltd. : These amounts press upon ua very severely. I The paid-up capital of the Company is £170,000, and we have raised by debea- ' tures a further sum of £680,030, In ordi--1 nary cases, an individual who has borrowed : on his property is allowed to deduct in his : property-tax return the amount of his mort i gage debt. This, it has been held, we ean- ■ not do, as the debentures issued by the i Company are not held in the Colony, The ; result is that, with a paid-up capital of i £l7o,oooonly, we ha veto pay tax on £850,000, ■ This really amounts to about 5 l-7d in the pound—a crushing tax. Again as to our local ratea. Wo do not in the i least object to pay the rates levied on our i lands for local purposes. It is quite fair i that we should pay this. What we object i to is that we are assessed on our line in each . local district upon the assumed value in that i district of the line running through it as part i of a complete work, This is manifestly unfair, i What we ought to be rated upon is the value 1 of the land as land in any district plus the i actual value of improvements. During the I last session of Parliament your Directors 1 presented , a petition to Parliament setting : forth their grievances in respect of these . matters. The subject came before the • Public Petitions Committee in ordinary course. The committee reported that the ■ capital of the Company ought to be assessed i at the market value of the shares, that the ■ Company should have power to deduct from i. its debenture-holders the amount of propertyi tax paid by it on the amount held by the debenture-holders, and referred to the coni sideration of Government the subject of local : rating. On this report the Government has ■ taken no action whatever. The Directors, i however, hope that the matter will receive i the earnest attention of the Government and - Parliament during the coming session. The proposal to assess the Company for the i property-tax at the market value of the i shares seems fair and reasonable. This is , the system adopted in all mining companies, ; and if the principle is sound in such cases i it is hard to see why it should nob be extended, I may here refer to the plan ■ adopted by the Dominion- Parliament in , dealing with the Company which constructed i the Canadian Pacific Railway. A grant was made to the Company of 25,000,000d01s and 25,000,000 acres of land. The whole of i the property of the Company except land was freed from general and local taxation for : ever, and the land was freed from taxation for a period of 20 years after the grant from the Crown unless previously sold or occupied, The terms given by the Dominion Parliament and those to which we are called on to submit are very noteworthy. Before I conclude I will ask your attention to-the paragraph in the Directors’ report referring to our late Chief Engineer, Mr Higginson, and likewise to a circular addressed to shareholders by Mr James Barry. In order, that shareholders may have clearly before thorn the position occupied by Directors, I will endeavour to explain as briefly as possible the claim of Mr Higginson on the Company. Mr Higginson entered the service of the Company as Chief Engineer on the 4th of April, 1882. The conditions of hia engagement are recorded in the Directors’ minute book of that date. One of these conditions reads thus —“Directors agree to reoommend to shareholders that Mr Higginson receive a bonus —provided the Railway be completed speedily and tc the satisfaction of the Company and the Government.” The time fixed by the Company and the Government for the completion of the railway was five years, dating from the 25th of September, 1882. The railway was completed to the satisfaction of the Government and the Company, and opened for traffic November 29, 18S6, nearly ten months before the date agreed upon, as a consequence of which the Company were able to work the line, and thereby earn nearly £24,000 toward the payment of debenture interest, and also saved the amount of Mr Higginson’a" salary.for about eight months. At the annual meeting of shareholders held on the 6th April,!SS7, Directors recommended that a bonus begiven to Mr Higginson. The motion was put, and after some disenssion carried; But after the meeting, Mr James Barry (through his solicitor) warned the Directors against paying the amount voted. Directors were quite aware that they had no profits then from which they could legally pay the amount, and the subject remained in abey- | ance. At the annual meeting of shareholders held April 4, ISSB, the matter was again . referred to by the Chairman in his address, and regret expressed that the Company were unable to discharge their obligation to Mr Higginson. Now the Directors are -

in this position; We have profits ! from which, as we are advised, the amount can legally be paid. A resolution of shareholders unanimously agreed to at a general meeting directs them to pay to Mr Higginson a sum equ M to half a year’s salary, or to allow him to eclect land to that value. We are now in position to discharge this obligat ion, and propose to do so, and thereby establish as a principle that this Company are determined to meat every legitimate demand fairly and honestly. Mr Barry in his circular places the subject before shareholders in a manner calculated to convey an erroneous impression. He states that Directors propose to give a bonus of £625 to Mr Higginson. We do nothing of the kind. We propose to give effect to the unanimous resolution of shareholders passed, as I have explained, at the general meeting held in 1887. If Mr Barry considered Mr Higginson was not entitled to this amount, or that shareholders would, at his instigation, rescind the resolution, he should have taken steps in that direction daring the three years that have elapsed since the recommendation of Directors was adopted by shareholders. There are two subjects dealt with in Mr Barry’s circular which are really additions to our articles of association. As the notice of Mr Barry’s intention to propose these additions was only given on Wednesday, March 26th, not seven days before the day of meeting, we are advised by onr solicitor that we cannot legally place the matter before this meeting. Mr C. J, Johnston, in seconding the motion, heartily congratulated Directors and shareholders on the position of the Company. Mr W. T. L. Travers informed the meeting that ho had received a letter from the Undersecretary, intimating that the Government were perfectly satisfied with ths Propertytax Commissioner’s valuation of the Company’s property, and saw no reason to refer the question of interpretation of Acts providing for local rating in such oases as that of the Company to the Crown Law officers. Mr J. Barry moved to strike out that portion of the clause referring to the bonus to Mr Higginson. 1 Mr R. Prouse seconded this amendment, holding that Mr Higginson ought not to be paid a bonus until shareholders had received a fair return for their outlay. The Chairman said if Mr Barry’s object was to have the subject of the bonus postponed in order that he might give due notice and have it dealt with by a speaial meeting, the Directors would facilitate that being done. Mr Barry said he did not doubt that Mr Higginson was entitled to the bonus, but he held that it should be kept back until shareholders had received some remuneration. Mr W. H. Quick suggested that Mr Barry should put his amendment in this way—That so much of the report as refers to the bonus to be given to Mr Higginson be eliminated, with a view to the subject matter of that clause being brought up for consideration at the.next annual meeting. At the suggestion of the Chairman, Mr Barry agreed to substitute the wording suggested by Mr Quick, with the exception of the reference to the next annual meeting. Mr Barry undertaking to give the requisite notice for a special meeting to consider the subject. Mr W. H. Levin, speaking as one of the Directors at the time Mr Higginson was oppointod to take charge of the construction of the lino, and explained that Mr Higginson asked £ISOO a year, but the Directors agreed to give him £1250 a year and a bonus if the work was completed within the estimated period. Mr Higginson 1 performed his [work in an exceptional manner, and placed the Company in possession of the line some time earlier than they had expected. Subsequently this undertaking was ratified by a meeting of the shareholders; and he held that the Company was morally bound to discharge the debt, just as anyone was bound to pay the bills he incurred in ordinary life. Mr Higginson referred to a letter in that morning’s paper signed “by a man named James Barry,” whom he did not know, but whose letter he characterised as a tissue of deliberate falsehoods, Mr Higginson proceeded to reply to various insinuations made by Mr Barry in the letter, pointing out that he was not responsible for the neglect to drain the swamp or for the design of engines imported, and in this and all other matters referred to by Mr Barry he challenged reference to the official correspondence. Mr Barry asked Mr Levin whether he had not stated that Mr Higginson said he could build the line in two years if he was furnished with the money. Mr Levin ; No, I don’t recollect ever saying so, Mr Bell warmly urged the shareholders not to refuse to carry out honourably an engagement entered into by the Directors to pay this sum to Mr Higginson. Before the Committee of the House he had asserted that the Company had honourably fulfilled its engagements ; but could he say so if it refused to fulfil this one ? Mr Travers thought it was unfortunate that the Directors had not treated this bonus as a part of the cost of construction. That was a common way of dealing with such a matter, and there could then have been no difficulty at all about it. Mr Quick pointed out that Mr Barry did not wish to do Mr Higginson out of the money, He suggested that this was not the proper time to pay it, seeing that the Company’s surplus was only £SOOO, and that that sum did not represent profit, seeing that the Company had ah overdraft of £28,000 or £30,000. The report and balance-sheet were adopted unanimously, the reference to Mr Higginson’s bonus being struck out on Mr Barry’s undertaking to give requisite notice for a special meeting to consider that subject. The Chairman reported that the Directors would facilitate such a meeting. DIRECTORS. On -the motion of Mr E.W. Mills, seconded by Mr D, J. Nathan, Messrs T, G. Macarthy and James Smith, retiring Directors, were re-elected Directors. Mr Smith returned thanks. AUDITORS. Messrs T. K. Macdonald and H. Kember were re-eleoted auditors at the same remuneration as last year. VOTE OF THANKS.

On the motion of Mr H. D. Bell, a hearty vote.of thanks was passed to the Directors and officers, Mr Bell remarking that he did not think any company in the Colony had a better Chairman than this one had, (Hear, bear.) • Mr Macarthy and Mr James Wallace (General Manager) returned thanks, and the meeting terminated.