WELLINGTON MANAWATU RAILWAY COMPANY.

New Zealand Times, Volume LII, Issue 9274, 21 April 1891, Page 1 (Supplement)

WELLINGTON MANAWATU RAILWAY COMPANY.

ANNUAL MEETING.

The tenth annual meeting o£ the Wellington Manawatu Railway Company was held in the Chamber of Commerce at noon on April 2. There was a large attendance of shareholders, and Mr T. G. Macarthy (Chairman of Directors) presided. The annual report and balancesheet, which have already appeared in these columns,-having been taken as read, the Chairman said :—Gentlemen, —l beg to move the adoption of the report and balance-sheet. At our last annual meeting X had the pleasure of congratulating shareholders on the fact that, after making provision for the payment of the whole of the charges for the year, there remained unappropriated the sum of L 5079 Os Gd available for dividend purposes. Instead of distributing that amount by way of dividend, shareholders, acting on the recommendation of Directors, decided that it should be carried forward for dividend purposes, thereby forming the nucleus of a fund from which, with oar profit balances, the Board trust to be able to pay a regular annual dividend. This year lam still more fortunate, inasmuch as it is now my duty to endeavour to place before you some of the most important items of the business of a still more successful year; and, in addition, I am the first Chairman of Directors of the Company who has occupied the enviable position ot being authorised to propose a resolution to pay a dividend on shareholders’ capital. Prom the statement of accounts now submitted for your adoption there appears, on the profit balances available for dividend purposes, this year, the sum of L733S 10s 9d, making with the L 5079 Os 6d just mentioned, a total of L 12.417 17a 3d. From this amount we recommend the payment to shareholders of a dividend of L 3 10s per cent on the paid up capital, L 170.000, of the Company. The payment of this dividend will absorb L 5950, leaving available for future dividend purposes LGIG7 17s 3d. We are well aware that during the last two months considerable difference of opinion has existed, and in some instances has been expressed by shareholders as to the amount of dividend likely to be declared at this meeting. Therefore I think it would be as well for me, before proceeding, to explain to you how the profit for the year has been derived, to place before you the reasons influencing the Board to recommend the payment of this, from a colonial point of view, comparatively small dividend. Our present indebtedness to sundry creditors, which includes bank overdraft, added to debenture interest, accrued but not paid, amounts to L 37.142 lls sd, as shown by the balance sheet. We know that a considerable sum will be required during the present year for the purchase ok additional rolling stock absolutely requisite to meet the requirements of increased traffic. We have already ordered two new locomotives which will cost nearly and it may be prudent to expend more money on the improvement of our landed estate. Inifinancial demands are in themselves ample justification for the course we adopt in recommending the payment of the smallest amount of dividend consistent with the right of shareholders, in view of the improved position of the Company, to receive a. small return on their invested capital. It is true that we have a sum of L 12.417 17s 3d available for dividend purposes, but of this amount only L 7338 16s 9d was derived from the year’s transactions. Had we proposed to pay even a 4 per cent dividend we should have disposed of nearly the whole of the profit for the year. We contend that the most prudent course to adopt is to pay as our first dividend the amount recommended, and to carry the balance forward for dividend purposes, thereby placing the Company in such a position that at our next annual meeting we shall be able, with the increased amounts we may reasonably expect both from our railway accounts and our land income, to pay a larger dividend for the incoming year; or, in the event of our transactions being less profitable—a most unlikely occurrence—we shall still be able to pay a per cent dividend from our present balance. We assume that shareholders desire that the busine>B of the Company shall be conducted in all respects in the interest of those who consider their shares a permanent investment likely to yield an annual and increasing income. Therefore we must be exceedingly careful in making onr recommendation that the amount of dividend we propose is well within our means, and cot lik*dy to be lessened in amount in future. I will new proceed to explain to you the particulars of our income, comparing the amounts received with those derived from the same sources last year. Uur land transactions will first receive attention. In the report now taken as read the total of our transactions from sales of land and on account of land revenue is shown as £21,808 10s 2d, During the year we sold 13,G65 acres 1 rood 13 perches of rural land for L 16.557 la Bd, and 15S acres 3 roods 25 perches of township land for L 1413 13s 7d, making a total of 13,824 acres 38 perches sold for LIB.OOO 15s 3d. The cost price to the Company of this land we assume to be its property tax value at the commencement of the year, with costs of survey, formition of tracks, and other various charges. Our gross profit on land sales during the year is L 5577 15s 8:1. Against this profit we charge L 3123 15s 6d, being the whole of the land charges for the year, thus leaving a balance of L 2751 Os 2d not available for dividend, The average price obtained for land sold during the year was LI Gs per acre, a very materia! reduction from the average of LI 11s 2d obtained last year. This reduction is mainly accounted for by the small proportion of town land sold, and by the rural land being farther distent from the railway. Last year I intimated to you that arrangements had been made with the Whirikino Road Board to lay off and complete a road into the Tokom.iru Valley, thereby affording access to a large block of land belonging to the Company. Owing to circumstances over which this Company had no, control, the commencement of this road has been delayed, Our Secretary has been informed that tenders for the work will be invited in a few days. Its completion will greatly increase the value of nearly 20,001 acres of the Company’s land, and also render it accessible from the railway. Another block of th% Company’s land, of nearly the same acreage on the Otaki River, within the boundaries of the Te Horo Road District, was also referred to by me in my address to you last year. We hid then, as. we thought, completed all arrangements for the formation of road giving access to. this block, bqt on tenders for the work being received it was found that tlio coat was considerably in access of the estimates, Fresh arrangements to provide necessary funds had therefore to be made by the Road Board, thus delaying the commencement of the work, a portion of which is now let on contract, and has to bo completed next month. Our land revenue account is made up of the interest on land mortgage and proceeds of salej <>£ timber. Our ncotne from these sources was L 3982 Cj Id ; against which we charge LBO4 IGs 24, leaving a balance of L 3177 9s lid available for dividend purposes, a very substantial advance on the amount available last year. This account is particularly interesting to shareholders, as it is one from which we must in the future look for a considerable portion of the amount requisite to enable us to pay a dividend; and for the further reasoai that in the ordinary course of events the profit balance must increase each yearuntil the who'eof our land is sold. Now that I have given you the result of our land transactions for the year, permit me to place before you some particulars of the area and proprry tax value of our unsold lands. Our total landed estate originally comprised 210.50 Q acres of allocated and 33,003 acres of purchased land, Prior to the commencement of the past year we had sold 54 538 acres for the sum of L 101.594. Daring the past year, as I have already informed you, we sold an additional area of 13,834 acres 0 roods 3 perches for the sum of LIS,OOO 15s 3d. making a total of 68,352 acres sold for 1419.595 0s 4d. We have, therefore, unsold about 175,000 acres, or, after making a liberal allowance for roads and reserves, say 160,000 acres. The property tax value of this unsold land is L 85,000, and nearly the whole of it has been surveyed and laid off in blocks of suicable sizsa for occupation. The traffic receipts last year were LC7.167. This year they amount to L 71,814, or an increase of L4G46. Bearing in mind that the very large increase in our railway receipts last year ! was, to a considerable extent, caused by the great activity then existing in the flax trade; the advance this year, though small in comparison with the larger amount then obtained, must be consideredaa being exceedingly satisfactory. About April last the flax trade suddenly collapsed, thereby materially lessening our receipt-* from possensrr ; traffic, always our most profitable source’of I revenue. This year our increased receiptor 6 I principally derived from the carriage ofahoep I and cattle, alive or frozen, both of wß°h are carried at exceedingly low rates. Th' working | expenses for the year, L 25,540 5s rd» as compared with L 23.339 2s 8d for last year, .means an increase of L25013a lid. earning the advance of L 4646 19s 3d on oi>‘ year’s receipts, we have had to thereby increasing theratio J f our expenditure to receipts to 30*99, as with 347 tba proportion for last ye?-'* The net railway earnings for the year were L 45.960 16a lOd. Transfer and serin * eOS Sd®lded Ll 32s 6d These amounts, with LSO4 16s 2d charged against the laroWenue account, make up the

Irldit fit' Vp fi Gi) which appear.! on the , credit si te r.f fr ifit .mil uailway Account, and after payment ..f debenture interest and ' other charges, in id] amounting to L42.G17 Ss , Sd, leaves us our profit on the railway account 'i !i - 10d - Tl "s Bum, with , L 3177 9* lid derived trom our lard revenue account, makes the total of L733S IGs 9J, our net earning for the year available for dividend purposes. Our railway earnings per mile are:— Earnings— £ h. d. This year 554 15 C Last year 799 12 2 Working expenses— This year... ... ... 307 12 5 Last yt.'ar 277 10 11 The figures for this year, reviewed from a profit-yielding point of view, do not compare favourably with those for last year. An examination of the traffic accounts proves that our increases are almost wholly derived from the conveyance of live stock and goods into town, whilst our passenger traffic does not exhibit a corresponding advance. Ourexpensis are increased by a variety of causes, some of which are likely to continue. To maintain the line and rolling stock in a fully efficient state, we have had to employ a larger number of men, in some cases at a higher rate of remuneration. During the labour strike we had to purchase coal at about double our ordinal contract price. A very slight collision at Johnsonville Station caused an expenditure of several hundred pounds. In addition to this un exceptionally heavy storm in Decemberlast caused a heavy slip on the railway line at Kaiwarra. To repair the damage thus occasioned and to provide a safeguard against a similar occurrence in the future, a considerable expenditure whs necessary, nearly the whole of which was included in the working expenses for the year, These two last items are responsible for a considerable portion of our increased expenditure, and I hope that we may not be called on for any similar expenditure this year. There is an item in our balance-sheet for this year to which it is perhaps necessary that I should offer an explanation. Under the heading “assets” appears “railway and rolling stock, L750.50S 18s 9J,” compared with L740.93G Is Sd, the figures forthe sam4 item last year, which shows an increase of Ly5221751d. Thii increase represents principally the value of additions made to our rolling stock during the year, consisting of four passeiurera cars imported from America, 32 traffic waggons purchased in the Colony, additions made to our rolling stock in our own workshop, and the cost of various buildings rendered necessary by increased traffic. Whilst we are

on the subject of additions to railway and rolling stock, I will taice this opportunity of informing you that during the ensuing year a very considerable sum will be necessary to enable us to supply tho demands of our engineer for additional locomotives and more rolling stock. By the last outgoing San Francisco mail we ordered from the Baldwin Company, New York, two locomotives of a type adapted to the requirements of our increasing traffic, and the best mode of obtaining additional rolling stock must engage the attention of the Board at an early date. The completion and opening of the line between Napier and Palmerston must necessarily be a subject of congratulation to ns all. Passengers can now arrive at Napier from Wellington in a single day. Regarded from a colonial point of view, this work is of the greatest importance, as it affects the railway communication of the North Island. The inhabitant of Wellington and the shareholders in this Company may especially hope for great benefit from it. It puts tho great sheep-producing district of Hawkes Hay into immediate communication with the Port of Wellington, and largely increased traffic may be expected as tho result. It is also likely materially to aid the settlement of land in the North Island. During last year an act of Parliament was passed to amend the Railway Construction and Land Act, 1881. This, you will remember, is the Act under which our railway has been constructed. The effect of this new legislation is to enable any company formed under the old Act to take additional land for the purposes of their undertaking, on his Excellency the Governor being satisfied that such taking is necessary or desirable. It can only be done in accordance with the provisions of the Public Works Act. This will enable the Company to acquire land for the enlargement of their stations where necessary, and to effect other needful improvements. lam sorry to be obliged to reiterate what I have said on previous occasions with regard tc our land claims, and with respect to the heavy taxation under which we labour. Onr just claim to land of the value of L 29,805, which has not been allotted tons, still remains as itwa\ No attempt has been made to satisfy it. The justice of the Company’s claim has been admitted by individual Ministers, but no attempt has been made by Government to remedy tho evil. Even if no Govarnment land is available for allocation to the Company, Parliament should be requested to grant the fair compensation due under the circumstances. The taxation that we pay is excessive. During the past year we paid for property tax alone tho cum of L3GS9 17a Sd, being an increase of L 49 2a Si on the amount which we paid the previous year. Our paid-up capital, as you are aware, is L 170,000, so that the property tax represents a charge of L2 3s 5d per cent on our paid-up capital. We have to pay this tax on LCSO,OOO borrowed on debentures in England, and can get no relief in respect of it. What neems fair is the coarse suggested by me on a former occasion, viz., that_ the Company should be assessed on the market value of its shares, as is the case with the mining companies at the present time. No one would complain of that. But to assess us as is now done, on five times the market value, or thereabouts, of our shares, is a piece of cruel injustice. In addition to this tax we have during the past year paid for rates to local bodies, the sum of L 2470 16s sd. In other words, the pro-perty-tax and local rates, have, during the year, cost us altogether LGIGO 14s Id. or a sum which would of itself have been sufficient to pay a dividend of 1,3 12s 5Jd percent. These rates by local bodies are in almost every case raised for the purpose of making and repairing roads, and the Company not only does not in any case use the roads, but actually relieves them from a large amount of traffic and c msequent deterioration. Moreover, the principle on which the local rates are levied is vicious, In each district we are not rated on the va'ue of tlie land, and of any buildings or rails upon it, as we contend that we should be, bub we are rated on the railway mileage in each district as part of a large undertaking and going concern. This subject was brought before l.’arlUment in the year 1839, and a Select Committee reported that in their opinion the matter should receive the c msideration of the Government. The same Committee also reported that the capital of the Company should be assessed for property-tax purposes at its market value. No attempt has yet been made in Parliament to deal with either of these questions. We can only hope that the justice of our case will meet early recognition. I turn now to another point. During the p-wt year the Directors have made an important change in the conduct of the Company’s business in England. As you are aware, the affairs of the Company in London were managed by a board of gentlemen who were men of high financial standing, and who were in receipt of large fees from the Company. No doubt the arrangement was u wise at the time it was made, as the Company was then large borrower- in thoLmdon market. Times have, however, changed. The railway is completed and the Company has ; ceased to borrow. It therefore seemed expedient to the Directors that a change should be made, and that the London business of the Company should be conducted in a more economical manner. This has been achieved by abolishing the London Board altogether and appointing in their place three gentlemen of position and ability as Home agents of the Company. The result is that a material saving , has been effected, and we have every reason to believe that the business of the Company in London is conducted with as great efficiency as at any former time. I may mention that Mr J. E. Nathan, formerly chairman of the Company, is one of the three gentlemen referred to as Home agents. Before concluding, I desire to say a few words as to our staff. During the last year, which has in some respects been an unusually trying one, we have received the loyal support oif all our officers. It U to their exertions that we are mainly indebted for the tuccosa that has attended us. Directors pan only supervise—it is tiie officers and employes of the Company who have to do the work, and faithfully they have done it. More particularly our secretary and general manager, Mr James Wallace. His duties at limes have been of an arduous character. To onr engineer and traffic manager, IffrJ. E. Fulton, we are also largely indebted. The thanks of the shareholders are due to both these gentlemen for their successful conduct of the Company’s business during the year. Now, if there is any matter X have not touched upon X will be most happy to give any further information. Meanwhile, as a matter of form, I wifi move the adoption of the report and balance-sheet. (Applause.) Mr W, H. Levin seconded the motion, and in doing so he said he thought he could claim to be one of the sponsors of the Company, both in Parliamert and on the Board of Directors. The present occasion one that marked a distinct era in history of the Company, as it was the first meeting at which a dividend fiad been declared, and he was sure this would be glad tidings of great joy to both the shareholders in England and in this Colony. He bad never for a moment had any doubt that the ultimata result of the Company would not alone be the enormous advancement of the city of Wellington and the surrounding districts, as well as to the Colony as a whole, but that it would in due time yield a well merited reward, to tho shareholders. He most heartily congratulated the Directors on being able to approach the shareholders with a dividend. Immense credit was due to the Directors, and, if he might be allowed to say so, special credit to the Chairman. (Hear, hear.) He knew how assiduous the Directors, especially tho Chairman, had been in their efforts during the past aud preceding years. The Chairman had touched upon the general aspect of the balance sheet, but there

was one or two points that he (Mr Levin) would like to remark upon. First, as to the immense sum of money they had to pay for local and property tax. It caemed to him that the Company was launched into the world under the charter of of the Parliament of N'ew Zealand with the admission, expressed and implied, that it was to do a great colonial service, h'ut immediately that charter was given there seined to be a determination on the part of Parliament, with the assistance of the local bodies, to pick the bones of the Company as dry as they possibly could. It was a marvel to him that they had been able to retain alive the skeleton of the Company for so many years, and that at last the Company was clothed with a little flesh to call its own. Unquestionably they had the right to say tkat if they had not been unjustly and treated, they had certainly been dealt with in a manner the reverse of generous. _ Then as to the other point—as to the ansatisfied claim in respect of the lap! to which the Company was entitled b/ every seme of justice and right. They were told that the highest Court of Justice was that of Parliament, and year after year they had applied to Ministers and Parliament to do them an act of abstract justice, but they had met refusal after refusal, not on the grounds of the merits of the claim, but broadly speaking, because they had had enough. Now’, this was not the treatment that a Company like this expected to have in fulfilment of a deliberate bargain—a bargain which, so far as the Company was concerned, had been carried out to the very letter. In reply to Mr C. T, Richardson, the Chairman said that the claim (amounting to 1.650) of |Mr Higgineon had been) settled. (Hear, hear), A reasonable time was allowed to lapse to enable the gentlemen who had dissented at the last annual meetingi but as no meeting was

convened the Directors considered they were justified in laying the amount. Mr T. K. Macdonald said in reference to the question of ths property and local taxation, that the Company should not cease in its efforts to get justice. He quite agreed with all the remarks that had been made upon this point. It did seem a monstrous thing that onefifth of the capital of the Company should have been paid in taxes. It had been truly observed that individual Ministers at various times had expressed their belief that the Company was improperly treated. Now he took it that all they had to do was to put the facts fairly before Parliament and they would get relief. His own impression was that the facts had not been fairly put before the Hou*e in what be regarded as a proper manner. He believed that Parliament was prepared to do justice so fur as the Company was concerned. They had this advantage—that the new Parliament was a new Parliament so far as the great bulk of its members were concerned, and those members would come to the conHiderationJjof this question with an unprejudiced mind. He felt that if the Company put the facts of the case fairly before those members they would do it justice. He was very familiar wi ji the history of tho land business, and he could not understand why the Company had not been more active in enforcing a clear and distinct understanding when the charter was first given. [M H. D. Bell: What step do your recommend ?] It was quite clear that all the subterfuges of individual Ministers should not avail when the Company has the right to an absolute demand for 30,000 acres of land which it ought to have received at tho beginning. It had come to tho knowledge of the Directors that the land was in existence, and ought to have been given. They knew that the statement that there was not enough land for allocation, and that it could not be given, was inaccurate. They had now got a Liberal Government in power. They had tried to get justice out of a Conservative Government—(A Shareholder: Who took the land? A Liberal Government). If the Liberal Ministry had taken the land in the beginning it was a Conservative Government that declined to do justice to the Company. He thought that every effort should be made" by the Directors daring the next session to place the whole facts before the new Parliament. (Hear, hear.) They saw that one of the Ministers who hail been orating on the West Coast had said that the property tax was to be done away with, so that stumbling-block would be out of the path. He urged that they should leave no atone unturned in demanding justice, and he believed they would get it.

The Chairman assured Mr Macdonald that every effort would be made to induce Parliament to do the Company justice. He took it from Mr Macdonald’s remarks that Parliament would not only be ready to give the Company the land in question, but would also recompense them for the property and local taxes they had paid. (Laughter.) They would certainly make a demand for full recompense. The motion for the adoption of the report and balance-sheat was then put and carried unanimously. The Chairman moved that a dividend of 3J per cent be paid on the paid up capital of the Company.

Mr E. W. Mills seconded the motion, ami hoped that in future years the Company would be in a position to declare a larger dividend. The resolution was put and carried. On the motion of Air K. B. Brown, seconded by Air E. W, Mills, Messrs J, Kirkcaldie, and C. Pharazyn directors, and on the motion of Mr Levin, seconded by Mr J, M, Richardson, Air David Anderson was elected a Director in place of Mr J. E. Nathan, who is acting as one of the Home agents of the Company, Mr Kirkcaldie returned thanks ok behalf of himself and Mr Pharazyn for their re-election, MrD, Anderson also returned thanks. Messrs T. K. Macdonald and H. Kember were re-elected auditors at the same remuneration as before. Mr J. Dransfield moved that a hearty vote of thanks be awarded to the Directors for the efficient mariner in which they had carried out their duties. Mr C. F. Richardson seconded the motion, which was curried unanimously. The Chairman, on behalf of the Board of Directors, duly acknowledged the compliment. Ho said they had every reason to believe that daring the coming year their revenue would bo very much increased, not only from the land but the traffic. When ho informed them

that during March their receipts, as compared with the corresponding mouth of last year, showed an advance of LBOO without adding any account of the railway traffic from Napier, he thought they might look forward for a greatly improved balance-sheet next year. Mr M cdonald returned thanks on behalf of himself and Mr Kember for their re-election as

auditors. If he might hazard a prophecy, by this time next year there would be no need of directors or auditors. He was afraid that their work and labours would end before very long, for it he were a judge of the signs of the times the country would take over the railway. Mr J. AX. Richardson moved a vote of thanks to the officers of the Company for their services.

Air Brown seconded the motion, which waa carried unanimously. Mr J. Wallace, on behalf of the staff, re-

turned his sincere thanks. What had been clone in the past by the staff, they would endeavour to do in the future whatever time they were connected with the Company. A vote of thanks to the Chairman brought the meeting to a close.