THE ENGLISH TELEGRAPH LINES. (Observer june D 13th.)

Otago Witness, Issue 928, 11 September 1869, Page 11

THE ENGLISH TELEGRAPH LINES. (Observer june D 13th.)

Tho Chancollor of the Exchwjuor stated, in reply to a question pnt* fow days sinoe in the Homo of Coinmoun, that the Government had completed tho wholo of its enquiries as to iho amount to bo paid for the parohaso of tho plant and businets of tho tolegraph companion, and would vory shortly finish tho enquiries respecting tho purohaso of tho interest of tho railways in tho tolftßrapba worked by thorn. It Las sinco boon officially mado known what is tho amount to bo piiil to somo of thoso companion. Tho sum appeal's a large on*, but it is founded on an estimate win oh Parliament, after duo rtoliboration, sanctioned last year— that of SO years' purchase of tho not profit* of tho nndort >ktngi: and it must bo recollected that if tho purchase monoy is largo in amount, it is duo to tho foofc tha* the profits of the oompuiM

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to be purehaswi'are tiroporfaonnUy large. .a^pfro^ierty yield* irig 5 per* c«ni;: s woiiM rfepireaent considerably more thaatlxe purchase on the same terms of a property paying say 3 per cent., but the bargain 1 Would He equally advantageous to the 'purchaser.'" It is Understood that the sum to be paid for one of the eompanies~Heuter's Telegraph Company -is L.726,000, but this company held a concession for 30 years for telegrapilicpiessagesthrough theNordeney Cable, the transmission of which yielded ft 'net profit to them of some L 30.000 a-year. ' They had aIBO entered into arrangements with the IndoEuropean Telegraph Company, which would have yielded at least LBOOO a-year of net profit. | the whole of the business has been conditionally purchased by the Government at somewhat l&s than 20 year's' pxirchase, or a total of L 726 ,00 0. When the. ,A ot to enable the Government to obtain possession of the telegraphs was J under discussion last session, it was objected by some persons that the proposal to give 20 years' purchase was an extravagant offer. Had the Government merely proposed .the purchase of the goodwill of a trade, we could understand that the offer of 20 years' purchase of the net profits would be an extravagant one: Bat the circumstances of the telegraph companies and ordinary traders are widely different. An ordinary trader or professional man can, if bought up at one place, resume His business or profession in another.' In the case of the telegraph companies, however, the 'Government will in future enjoy a complete monopoly of the telegraphs of the country, and J those in whose hands the business and profits' are now placed musr seek some other form of investment, and perhaps less remunerative business. In ordinary cases, too, the vendor of a trade retains the plant on which he has expended capital, or disposes of it at a valuation. The telegraph companies, on the other hand, give over to the Government the whole of their plant and stock-in-trade for the sum fixed on, the 20 years' valuation of the net profits. In the case of the Elect rio and International Telegraph Company, the sum to be given will, it is understood, be a trifle under 1/3,000,000, the sum demanded by, the company being about L3, 500,(100. In this case, however, the net profits of the company are about 15 per cent., and 20 years' purchase of the capital paying this profit would refund very nearly the amount claimed. But over and above the profit realised the company have expended more than one million upon plant. A large portion of this has been improfitably laid out, no doubt ; patent rights have been purchased at large prices which have yielded no return to the company. Bat even with all this unprofitable outlay, incident to the commencement and carrying on of the business for which the company was established, this million or so of capital is represented by plant which at the pr sent momentis really worth the whole of the money expended. The large appropriations which have been made out of revenue were to keep the poles and wires and apparatus in perfect order, for unless in good condition, the plant is useless for the purposes of the company. All this plant, therefore— representing, say L 1,000,000 of capital and revenue— is handed over to the Government for the sum calculated upon, 20 years' purchase of the net profits. Another very important point to be borne in mind is that the business of the company has inoreased so greatly c\at the net profits were L 15.000 wore in the past than in the previous year, the .-s.icertainod profits of which were to form the basis of the calculation as to the juirehaeemoney. The 20 years' puroh<so of the net profits of the company includes Ll,ooo,oooasthe value of the plant to be handed over to the Government, and a buoincsß rapidly increasing, and which during the last twelvemonths has yielded LI 5, 000 more than in the preceding year. Add to this that the vendors must, by the very nature of the transaction, give up for all time the privilege which they sow possess of oonducting the the telegraphic business of the country, and which yields thorn a not revenae of LlO per cent, on the capital ; deduct the valne of the plant handed over, and it will be seen that the Government will obtain possession of the telegr&pha of the country for something like cwht or ten years' purchase of the net profits. This Is a bargaiu most advantageous to the country, and when fairly and fully explain od wo are certain that it will meot with no reaaoua' lo opposition.

It has been BAid that tho Bum to be paid by tho Government will bo very greatly in excess of the oetimate originally made, and that at least L.10,000,000 will bo required for the purchaoo of the wholo of tho tolo* graph oompanios. Wo haro reason to bclievo that this account is Tory greatly exapgorated and that tho total amount will not much, if at all, oxoood Jfcho estimates given by tho Post Office beforo tho ooromittoo of last year. The wholo amount required will oertninly not exceed aevon millions, and will probably bo nearer six than seven millions.

Undor the heading of •• Street* of Gold " an Auckland contemporary relates that oonsidarablo exottomont prevailed in Bhortland ■onto days ago from the foot that gold w»i discovored in tbo »and which foini tho pathwny in front of Messrs Harrison and Co.'t establishment in follon street. A crowd •oon collected, and dishfts wero brought into requisition. Soveral fliio prospects wuro wwhod, tho gold boing of » coamo lUky oh»raotto\ It appoara tho stuff tli*t furiui tho pathway wm brought from the Karalta owe*. Tho Town Board mwit liav« viowod with jonitftrnation their footpath* being pefMNff And tho traffio impadod by gold«