A SHAMELESS SQUEEZE

Observer, Volume XXIII, Issue 4, 11 October 1902, Page 2

A SHAMELESS SQUEEZE

The Midland Railway and that £150,000 Payment.

AFTER all that is known of the Midland Railway, its genesis and

progress, it is delightful to be told by the Pall Mall Gazette that " New Zealand's meagre and grudging concessions to debenture-holders and shareholders in connection with the Midland Railway in New Zealand may slightly impair the colony's credit, which is badly undermined by the attitude adopted towards the de-benture-holders." If giving the debenture - holders and shareholders £150,000 to which they were not entitled is grudging and meagre, then it would be interesting to know what the aforesaid debenture -holders expected. When the House authorised the line in 1884, it was on the direct assurance that it would cost the colony nothing, and that the Company would perform the work for the sole consideration of the land, which they duly received and disposed of to their own advantage, though it may be that they did not make such a good thing out of it as they expected. But this was a matter in which the colony was not concerned.

The 'dftatoriness displayed by the Cbmpariy; and the minor circumstance that they were handling-a bad bargain frojn the outset, were responsible for their losses. The fact that the Government were obliged to take over the concern, and the further fact that the railway is not yet and cannot be finished foT«ome considerable time, and also that it will not be of much use when it is finished, only serve to show that the Company miscalculated matters in general, and displayed a want of capacity which, 6n their own account alone, should disentitle them to a fraction of the colony's money, even if they had upon other grounds been able to make out a colourable case for compensation.

But this is precisely what they have not succeeded in establishing. When the claim was first made, the Premier very properly refused to recognise it, and he carried his point through the Arbitration Court, presided over by that eminent Canadian jurist, Mr Edward Blake, Q.C. It was shown then that the Company was making an unjust attempt to extract money from the Treasury, and nothing has since transpired that we know of to alter the circumstances or conditions of the case. The holders »of shares and debentures have, however, been unceasing in their manoeuvres to obtain that which did not and does not belong to them, and the Government have been weak enough to bow before clamour which was insolent as well as badly-grounded.

Last year, the members of the company were offered £130,000, but they had the coolness to decline a present because it wasn't big enough, and the Government have been weak enough to increase the amount in place of following the wise example of the Sybil, who would have lessened the value of her gift each time. It is, moreover, astounding to find the motion was carried by no less than forty-seven to eight. Only eight members were prepared to defend the colony's money from the political depredators. And it is worth special note that amongst the majority were many of those who have been crying, in season and out of season, that the national funds were exhausted, and that, instead of the boasted surplus, there was a serious deficit. Well, this is the sort of conduct to create deficits, at any rate, and how some of the Opposition members can after this oppose Sir Joseph Ward's bold finance it will be interesting to observe.

In our opinion, the whole transaction, as it affects the Midland Railway, is scandalous in the highest degree. This money has not been voted because New Zealand was either legally or morally liable to the debenture holders. On the contrary, no liability whatever exists. The actual reason for the payment is easily understood. New Zealand requires more loan money, and must borrow at once, and these debentureowners hold an advantage over us in so far that they are able to block our loans. It was solely for this reason, and not because of any real or imaginary liability, that this £150,000 was squeezed out of the colony.