DRUMMOND NOTES.

Otautau Standard and Wallace County Chronicle, Volume V, Issue V, 31 May 1905, Page 3

DRUMMOND NOTES.

(From Our Own Correspondent.)

THE RAILWAY PROJECT.

The Drurhmond railway project has as yet §iijnpjy got into its swadd-ling-bands/ 'Still,,. it is a project that recommends itself to mature consideration. :It is hatched on lines set forth by the memb.er for Wakatipu — Mr, Fraser— in the advice, he gave projectors pf the Qore-Wju'kaka' line. Briefly stated, the advice is this; — tyuder a Railway Construction Act of. 1903,. the Colonial Treasurer is empowered to issue iii 00 debentures bearing three per cent iulerest with; a currency of eight years, to an. amount representing the cost of con-;-struction. Drummond extentioll lapprehend would not cost less tha.u. £50,000, , and I shall adopt thrift figures, as a basis calculation. y^xt would be manifestly impossible: for. that sum to be provided by the district. Recognising that obstacle m the case of Gofe-Waikaka-, Mr Fraser suggested that a company be' formed to take up the Government debentures. Instead of shareholders, holding and paying £100 each, they pay., say, £10 upon each debenture,, an outside financial institution finding th£ remaining £go, a«4 holding the. debentures as? its'sgcqrjty. That bein,g sq, pf the : "loan (£'sa,qp:>), the financial institu-pn pays £4.5,000, and \yould receive interest on £5 coo more than* it lent, besides having the State security at tbe back of what it had advanced. Ih that case shareholders would be asked to pay £10 upon each debenture they take up, and on that £10 they would receive no. interest during the currency qf the debentures; the £10 would be returned minus any difference _\etween what thje Sitate pays' as interest and the financial institutions' charges a£ {hex gi^qf'eigh.t ygqrs, flae tqt'al dpduwtign frqm §ach£jo not exceeding £\ at the most. It will thus be seen the financial institution comes m between the shareholders and the government, shouldering £90 of every £100 of their liability, leaving them responsible for £10 per share only. The scheme works out very simply and emanating as it does from lan astute financier we may reckon upon its possibility from the^ fyian-. cial poiut of view. • 1 . . . f i 1 •>• .«- IVI