MORE LIGHT ON THE GOODWILL QUESTION.

Stratford Evening Post, Volume XXXII, Issue 46, 19 February 1912, Page 5

MORE LIGHT ON THE GOODWILL QUESTION.

(To the Editor “Stratford Rost.”) Sir,—lf Mr. Henry Wilson has done nothing else, he has shown by his letter in your Saturday’s issue very clearly that he, like the party he is allied to, lacks those qualities that are so essential to progressive public men. Men who cannot look backward farther than yesterday or forward further than to-morrow are not the men to guide the destinies of a town situated as Stratford is, in the centre of the most flourishing districts in this Dominion. If Mr. Wilson will take a retrospective view of the working of this concern, ho will sec that the company’s profits are increasing every year. Had he made enquiries fie would have found that the increase of revenue for the six months ending October 31st, 1911, was £220 more than the previous six months, which practically means that much increased profit to the company, and it does not require a prophet to see that, with the growth of tins town and the increased energy that it will require to work the electric motors that will be installed as soon as the new machinery is ready, tliat the profits will be very much larger, and chat at the end of seven and a half years this company will probably bo a little too powerful for the ratepayer to do just what they would like to do with it. Here I would just like to say that as soon as the now machinery is ready, if the company still continues, there will be a loss of revenue to the borough of something like one hundred pounds per annum from water power that they are supplying motors at present. Mr. Wilson says that the goodwill of a business should not be regarded as capital. Granted, so far as a private party is concerned, but not so with a public body which has borrowed money for a period, extending over forty years, and which, as we have done, has treated a sinking fund to pay off that debt. Now, if we adopt Mr. Wilson’s suggestion, and pay off the £4OOO goodwill out of the earnings at che end of seven and a half years, our indebtedness would nob lie £14,000, but £IO,OOO, and interest would only then have to bo paid on that amount, which would increase the profits by about two hundred pounds per annum. But seeing that we are going to make a profit of 5) per cent, after paying interest and sinking fund, it will not pay the borough, to do that. We are paying 4iJ- per cent, for the money, and we are earning 10;, per cent.," leaving us a profit of 51- per cent. Mr. Wilson has based his figures on the concern as working at present. Well, I will __ discuss the question on that basis. Now, the company’s profit for the last year was £539. Multiply that by 7i, and you have £4042 10s. Evefi that would pay us well, because we could have all the additional lights we required for tne proper lighting of the town without any extra expense. But this is the position,; The company’s profits are £539; add to that the amount they are paying that the 1 borough would not have to pay—hank interest £196, income tax £42, clerk and office rent £IOO, a total of £338, to ho added to £539, making a total of £877. Multi- ' ply that by seven and a half and you have a total for sevep and a half years of £6572 10s, clearly showing I that on tne present working that dtiriingj the, seven and ( a half years the •borough could make £2572 10s, less interest on £4ooo;'it‘ principal paid off as earned, £533 10s, a net profit of £2039. I apologise for taking up so much space in your '‘valuable paper, hut I think this question of so much • importance that the ratepayers should have the facts, and not be misled.—l am, etc., J. MASTERS. Stratford, February 19, 1912.