■E\n Chnaut derail). FRIDAY, SEPTEMBER 4, 1885.

Timaru Herald, Volume XLII, Issue 3413, 4 September 1885, Page 2

■E\n Chnaut derail). FRIDAY, SEPTEMBER 4, 1885.

The Mayor of Timaru, in bis statement to tbe Borough Council in regard to his visit to Wellington, said that he had ascertained that should the Council decide on purchasing the gas works they could borrow the money at 51 per cent. He added that he thought it only right the Council should have control of the gas works, and after remarking that it was too late to get a Bill passed this session for the purpose, suggested that perhaps the Company would sell out without pressure being brought to bear upon them to do so. In making these remarks there is no doubt His Worship touched upon a question of very great importance. It is not a matter that can be settled in five minutes, however, and certainly before embarking upon such a large undertaking the Borough ought to give it very serious consideration. It is quite true that under the Municipal Corporations Act the Council would have power to raise a special loan for the purpose of purchasing the existing gas works. The Act, however, gives them no power to compel the Gas Company to sell ; for this purpose it would be necessnry to get a special Act passed through the Legislature. Whether it would be possible to induce the Company to sell out voluntarily or not we are not able to say. Of one thing we feel quite certain. The shareholders know that they have got hold of what is commonly known as " a good thing," and if they sold at all it would only be at a price which would render it a very doubtful bargain for the Council. If they got power of compulsory purchase, it is also quite certain, so rigid is the regard of the Legislature for vested interests, that they would have to pay an exceedingly heavy price for the undertaking. They would have to give not only its full market value, as a commercial investment, but also a heavy sum by way of compensation on account of the compulsory nature of the sale. It is very possible that Parliament would not consent to the passing of the Bill at all, in which case, of course, the Council would be put to heavy expense without attaining the object aimed at. We do not know what is the present market price of shares in the Timaru Gas Company. The shareholders are disinclined to part with them, and they seldom, if ever, come into the market. As a general rule, however, shareholders in New Zealand Gas Companies are getting barely 8 per cent for their money. In the Wellington Company, which pays a dividend of 15 per cent, £10 shares are selling at £19 and £19 10s, thus reducing the annual interest on the investment toabout £7 18s. The Napier Gas Company declares a dividend of 10 per cent, and £10 shares are selling at £12 10s, so that the shareholders get 8 per cent for their money. It is evident, therefore, that by the time tbe Timaru Borough Council had paid the market value of the local works, together with compensation for compulsory sale, there would be very little margin, if any, between the returns they would get from the investment, and the interest they would have to pay on the loan. This, however, is not all. It does not at all follow that the City Council would get as much out of the works as the Company manages to do. The Directors of the latter have ample experience of the work to be done, and the keenest possible interest in getting as much profit as possible out of tho undertaking. The City Councillors, as a body, have no special experience of the kind, and as soon as some of them begin to acquire some knowledge of the work they might fail to be re-elected to the Council. They would have no special interest beyond that of any other ratepayer in the prosperity of the undertaking, and indeed it is very possible that they might sacrifice economy for the sake of obtaining popularity with their constituents. It is quite certain there would be strong pressure to obtain many more lamps if the Council made its own gas, and a constant clamor follower rates to private consumers would be raised, and the Corporation, in yielding to the popular demands, might soon find itself oa the wrong side of the ledger. In Dunedin the gasworks are in the hands of the Corporation, and in the past they have been about the worst managed in New Zealand. Whether there has been, any improvement since the reorganisation which the Corporation found itself compelled to make, we do not know. Until very recently, however, it was the constant remark of visitors that tho gas was worso than in any other town in the colony. We believe that it was also dearer to tho private consumer tbon in Wellington or Christchurch, where the gas works arc in the hands of companies. It will be found, we believe, that the use of gas is far more general

3Jiii? ihore popular in the two lastnamed, cities than in Dunedin. In >WelHpgton gas stoves are fast superseding'the ordinary cooking ranges; in Dunedin they are still comparatively rare in private houses. ~ While we Lave thus pointed out the difficulties in the way of the Corporation acquiring the gas works, and the objections to such a course, it mast not be understood that we would deprecate the discussion of the subject. Oa the contrary, we think the Council would do well to get all the information it can in the matter, and those members are to be commended who have taken up the task of seeing whether some means caunot be found of lessening the cost of street-lighting. The quality of the gas supplied by the Timarn Company is probably not to be beaten in New Zealand, and the management reflects the greatest credit on all concerned. There is no doubt, however, we think, that the charges both to the Council and to the general consumer are still too high, and ought to be reduced. The Council have done well in putting the question to a practical test by calling for alternative tenders for lighting the town by gas, kerosene, and electricity, and the Gas Company will do a graceful and popular act if it consents tc accept a reduction. From the information at present before the public, however, we are afraid that the purchase of the gas works by the Council would be merely stepping out of the frying-pan into the fire.