Gore-Waikaka Railway.

Southland Times, Issue 19551, 4 May 1905, Page 2

Gore-Waikaka Railway.

MR FRASER’S SCHEME OUTLINED.

SATISFACTORY DETAILS.

A meeting attended ixy 20 local X'esidi*ts and distinct farmers was held at Gore on Saturday for ,the purpose of conferring with Ah’ W. Fraser, M.H.R., in regard to a scheme for raising money to provide for tho, construction of the Gore-Waikaka railway. The object.of the meeting was to hear from Mi' Fraser the precise; details of his scheme, so that full particulars can be laid before the meeting to be held in Gore shortly. Mr Fraser explained that tho scheme had been put into practice by the Waihi Mining Company, who found £70,04)0 ox' £lOO,000, with which the Government constructed the railway from Paeroa to Waihi, the co'.xnpany receiving Government debentures in return. The Minister of Public Works had assured Mr Fraser that if any othex- locality would do the same; tho necessary autnorising bill would be passed through Parliament. He assumed, that the line to Waikoka (about 12 miles) would ■ not cost more than £50,000. A company would have to be formed and registered with 500 shares of £lOO each. The reason why the capital tLlould be £50,000 was because the Government would not contract with a company that could not show it was going to raise the whole amount required. Each shareholilex' would paid up £lO, leaving £9O pei' share to be borrowed. Fox- every £lOO of capital the company would receive a Government debenture fox' £loo', bearing 4 pox' cent, interest, and having a currency of eight years. Ho knew of financial institutions tlxat

would take up these debentures greedily, because they would yield £4 9s percent, interest.. If lie could get a financial institution to lend the money at 4J pox' cent, tho shareholders would lose absolutely . nothing. The liability of each shareholder was limited to £lO. It hail

been asked if -that was so why not make the shares of £lO instead of £lOO. They must remember they were dealing with the Government, whicji wanted £lOO for each £lOO debenture. Each shareholder paid his £lO, got his £9O from the financial institution, received a £lOO debentr -e from the Government, and handed it to the lender of the £9O as security for the loato. At the end of eight years the Government redeemed its debentures. 'The shareholders received £lOO. From ttuis they took) their own £lO/ and handed £9O over to the lender. He advised them not to make any agreement with the Government until they had made their arrangements with the financial institution. The only other liability outside of the £lO was \the small expense of floating and registering the company and engaging a Secretary to keep ttib books. Not more than £lOO or £l5O would required for this, spread over the eight years. It was of course possible that they might have to pay 5 per cent.' instead of 4$ per cent, to the financial institution. In that case shareholders would have to make up the difference of i per cent., which would mean 10s per share for eight years, or £4 in all. That was the only possible loss any shareholder could sutler, and the stand-

ing out of the use of ibis £lO for eight years. In January last he could have got £-4'0,000 at 4$ per cent, easily. There was no question about getting the money.' When - e returned to Wellington he would endeavour to obtain the Government’s sanction to the scheme as soon as the company was incorporated and all the shares taken up. He had negotiated with the Minister of Public Works and there was n>> reason why the Caibinet and Parliament should not sanction the proposal and enable the work to be gone on with at once.

In answer to Mr McLay, Mr Fraser said that the agreement should | set forth that the work should be . completed as speedily as possible. There was nothing to hinder the line being finished in a year. He would arrange to finance the scheme if tho people in the district did their part 1 by taking up the shares. In answer to another question, Mr Fraser said that lie wjould arrange the financing, and would charge no, commission. He would be sufficiently rewarded by the thought that he was helping, his constituents.

Tn answer to the chainman (Mr T. Green), Mr Fraser said that if the Waikaka line were -extended to Roxburgh, via Moo. Flat, there would be two parallel lines, which the Government would never sanction. If it'Were to tap Moa Flat at all, there should be a diversion from Heriot. Ho felt sure that Mr McNab would help them. The Chairman said that they were very much indebted to Mr Fraser for the trouble he had taken in the matter, and after his explanation anyone would bo very dense who did not understand the scheme.