THE GAS QUESTION.

Star (Christchurch), Issue 6312, 9 August 1888, Page 4

THE GAS QUESTION.

Meeting of Citizens. The Council's Proposals Approved. There was an overflowing meeting at tho Oddfel,low3 J "Hall la3t night to consider the proposals of the City Council to raise a loan of -....0,000 for gasworks. Councillor C. P. Hulbert was voted to the ..chair, the Mayor being- absent in Melbourne. Captain Garsia having raised tho point ac to the legality of tbe meeting, and the Chairman having decided that it was not necessary to discuss tho point, called on Councillor C. M. Gray to move a resolution; Councillor Cray, who was received with prolonged applause, moved— -"That this meeting^ endorses the action of the City Council in its proposal to construct a gasworks for the "City of Chriatchurch, and pledges itself to vote for the same at a poll, to be taken on Thursday, August IG."" He said that some time ago ho had thought, aa an individual, of taking action in the Council in the matter, but had spoken on the subject with other Councillors, who thought it would be useless to attempt to deal with the question. Some few months ago, however, there had been an election, in which a ratepayer, who held a prominent public position, was elected to the Council. Tho position of the Gas Company came prominently forward on that occasion, and on account of their endeavour to gain a Beat on the Council, he (Councillor Gray) thought it was tiino to bring forward the motion in the Council, which he had. For yeara past many public Companies bad either paid no dividends or reduced them, and even the Bank of Now Zealand had had to pass a dividend. Eonts, profits, and wages liacl gone down, bub the price of ga3 in Chriatchurch seemed always to keep up. (Applause.) The Gas Company had had a career of uninterrupted progress, which had culminated in producing a business more profitable than any gold mine in New Zealand. (Applause.) Commencing in 1864 with a capital of _810,000, their business had gone en increasing till, in 1887,- the consumption of gas was 70,CQ0,Q00 cubic feofc. They were enabled at the start to pay 7i per cent. Their dividends, which wero then 8-£ per cent, roqo to 12 per cent, then to IG per cent. For thirteen yeara they had paid l(j per cent dividends, in addition to the large Eums which had been paid into various fnnds or had disappeared in some mysterious ni*.nnar. (Applause). Their total profits had been about _5184,000. Here he would like to say that these figures had been drawn up by a public accountant of this city, and might bo accepted as correct. The Company had paid in dividends nearly ___150,000, had carried _525.000 to reserve fnnd, and to insurance aud depreciation fond something over JS9COO. He understood that the reserve fund had been divided among the shareholders a few years ago. DuriDg the last three years, years cf depression, tbe profits of the Company hs»d amounted to -£50.000, out of whioh _248,000 had been paid in dividends. Tho Directors had never had ib in their hearts to reduce the price o_ gas without pressure being brougnt to bear. Some few years ago an attempt had been made to Btart a new Company, but, he understood, some of the large consumers had been induced by special terms—m other words, had been bribed — to withdraw their support from it. The principal reason of tho Council's present action was tho cavalier manner in which the Company bad treated the Council's application of Nov. 29, for a reduction in the price. In congequenco of that, estimates had been obtained for lighting the city by electricity, and in order that the Council might not be thrown back into the arms ofthe Gas Company, in the event of that failiug, he had bronght forward the motion wbich hnd resulted in the present meeting. He considered that had the Gas Company, when they sent their cavalier letter to the Council, said instead, that tbey would reduce the price to 7s Cd, there would have beon nothing heard of the present agitation. But they had not, and the Council now knew that gas could be sold at G_ per 1000 ft in Christchurch, and yield a profit of 59 per cent on the cost of production. The meeting would net be surprised to learn that the Council did not intend to give up thia project ia recognition of the small cops that had been thrown out lately ly the Gas Company. (Loud Applause.) Several gentlemen very largely interested in the Company, had told him that they were very much opposed to the conservative action of their Directors, and had thoy been able to shelve the Directors for a quartet of an hour, would have given reasonable terms. A reduction of ls 3d, and afterwards of lOd was not going to satisfy the Council, who had put their hands to the plough and were not going to turn back. (Applause.) Had they bought the gasworks ten years ago they would now be getting their gas much cheaper, and would havo made a profit, which would have gone towards reducing the rates. Councillor Gray here read from the Melbourne Argus to show that in consequence of the Melhourne Corporation nob having taken advantage of the statutory price fixed in 1882 for the sale of the gasworks they had lost a profit of JBIOO,OOO a year for six years. The last half-yearly balance-sheet of the Melbourne Gas Company showed a profit of _5109,000, and that _£55,000 had been paid in dividends, _520,000 carried to reserve fund, and the balance carried forward. The price of gas in Melbourne was now 5s Cd per 1000 ft, and it bad been decided to reduce it to 53 4d, He also quoted the examples j of Berlin and Dunedin as showing the j profits derived from Municipal gasworks. Taking into consideration these facta, 1 the City Council had, almost unanimously, ' decided to recommend the ratepayers to ! sanction the erection of gasworks at a co3t j not exceeding _£50,000. Not being an expert, it was not within his province to j refer to the items of the estimate of tho j cost of the works. It wa3 calculated, I however, that the works proposed would be sufficient to supply Christchurch with gas for several years to come. It was calculated that they would have to provide j for a maximum output of 200.000 ft psr j twenty -four hours. Gasworks, he would remind them, could always be enlarged. Those of the Christchuroh Company had | been added to year by year. Parts of the plant whioh had become obsolete had ] been replaced by those of more modern j pattern. He had been assured that the j mains in certain places had been taken up no less than three times, and replaced by larger ones. Tho Council would benefit by tbe experience of the Gas Company. ' (Applause.) Labour and material being j cbeap, they would be able to have tho '■ latest improved plant, and the latest knowledge on the subject, and pay les3 for them than tho Gas Company had. As men of business, they should look at the question, " Will it pay ? " As they wero doubtless aware, a canvass had been made of the gas consumers in tho city, except, of course, the shareholders of the Gag Company, in order to ascertain tho amount of support likely to be accorded to the Council. The rosulb waa tbat only abont half-a-dozen refusals had been inefc with. (Applause.) Those who had signed tho guarantee represented a consumption of about 30,000,000 ft per annum. It was estimated that the reduced prico would cause a further consumption of another 10,000,000ffe. The cost of production would be about 4a per 1000 ft. The Council; found tbat the net co3t o£

producing gas in various parts of tho j Colony did not vary much. In Dunedin j the cost was 4s 9£d, but tho sale of coke, j tar, &c, brought it down to 3s Bd. The i cost of 30,000,000 ft at 4a would be _£GOOO. The Council anticipated being able to get the money at 4_,- per cent. He had been assured that it was nob possible to get it at that rate, unless they paid a large sum to the Bank for thoir assistance in floating tbe loan, but he had been agreeably surprised whon a gentleman representing a large monetary institution sent for him, and said that the institution he represented would be prepared to lend tbe .850,000 at 4*,- per cent. (Applause.) They need nob be troubled on the score of not being able to raise the money, especially as the tendency of interest was to come down. Tho interest and sinking fund would be _£2485 per annum. Added to thia they would have to charge three hundred and eighty-one stroet lamps at _£4 a lamp, which would como to -51524. They had paid the Gas Company a good deal more than that in the past. They had paid over £7 a year, ! then _£G 10s, then _E6, then _£5 10s ; but since tho present agitation they had received a very meek and mild letter saying that the Gas Company were going to charge _£5 for each lamp without any contract being made. The total expenditure would be -£10,009. The receipts would be _£9000 for gas supplied to the public; .£1905, present coatof lamps saved ; making a total of .610,905, leaving a creditbalance of nearly J. 900. He believed that many of the ga3 consumers would have forgiven tho Company a good deal if tbey had not charged rent for motors. The Company said that thi3 was tho custom elsewhere, but it was not done in several places. To his mind it would bs as reasonable for a grocer to charge his customers for the use of the scales be weighed their tea and sugar on. He had heard of cases in which consumers had paid the value of their meters four times over. The Council had made provision in th eir estimate for the purchase of a certain number of meters, for whicb they did not intend to charge rent. (Applause.) This would save _S7OO a year to the consumers. If they added to that _£700 the difference between 6s and 8s 4c! . it wouki show a saving to their pocket 3 of .€4200, A great deal had been made out of the objection that .£"30,000 was not enough to complete the works. He found that the Christchurch Gas Company bad been in existence up to 18S0 befora their capital was .£50,000. Iv tbat year it was _£ 18,000, and the. Company bad a plant which produced over 40,000,000 feet a year. If £48,000 could produce 40,000,000 feet in a year, surely .£50,000, more advantageously expended, would suffice to produce 80,000,000 feet. (Applause.) It had also been urged that it waa useless to try to compete with a powerful Company, which, perhaps, would reduce the x'rice of gas muck lower in order fo defeat the Council, but ho did not think there was much in that objection. He had been informed thab the la3b reduction had been carried by only a Email majority of the Directors, several of whom wero not in favour of reducing the price to 1s Gd, fcelievisg that tho Council was ouly playing a game of " bluff." It would rest with the ratepayers to record their vet, s and to say whether or not thoy approved of tho scheme. lfc waa necessary for every ratepayer to record his vote, for, according to the Act, the Council would have to obtain a majority of tbe ratepayers on tbe roll, therefore all who did not vote virtually voted against the proposal. It bad been said that tho Council could not make a gasworks pay, but this wks rather a haphazard statement. He had never come across an instance of a Corporation nob being able to make a gasworks pay. Ha would remind tbem thab the question was one which affected their pockets.' They had been told that extra rates would have to be levied if the proposal were adopted. "Well, some yeai*3 ago ho opposed a loan of .£25,000, which was wanted, not for earning money, but for the purpose of saving money, because he felt sure thab tbe citizens would have to pay an additional rato to provide for the interest on it. To hia surprise ancl gratification it had not been found necessary to collect a rate for that purpose, and was it not reasonable to suppose that it would not be necessary to collect a rate to pay the interest on an expenditure especially calculated to earn money ? He had just been reminded that ib would not be necessary to strike a rate at all. The security would be the gasworks themselves. He would like them to consider what ib had cost tho Christchurch Gas Company to produce their ga3. In 1880, when the porcentageof expenditure to fcherevenue of the Company was 51, and the prica of gas 12s 4d per 1000 ft, the cost of production was Gs 4d per 1000 ft. In 1881, the percentage of expenditure to revenue w&3 49, tbe price of gas lis Bd, and the coSt of production 53 9d. In 1882, the price was lis Bd, and the cost of production 4s 7d. In 1383, the price wa3 lis Bd, and the cost of production 5s d-.d. In 1884, the price was 10s, and the cost of production 4s oljd. In 1885, tbe price ws3 103, and the cost of production d-3 4-_-d. In ISSG, the price was 10s, and the co3t of production 4s 6sd. In 1887, the average price of gas waa 9_s 2d per lOOOf fc, and the coafc of production 4a xhd. No wonder the Company had been ableto declare such dividends, when, in somo instances, they had made as much as 6s per 1000 ft profit. It mighb be asked bow the Council could produce gas at 4s when it cost the Company 43 lid. Tho lattor figure, ib mnst be remembertd, was tho gros3 cost, and included Directors' fees, ofiice expenses, &c. Ib was nob likely that tho Council would even have a Chairman of Directors at _£100 a year, ancl their oflice expenses would also be much less. Tliora would be neither office rent nor Property tax to pay. Therefore it might well be assumed that the Council could make gas at a cost of 4s per lOOOIt. (Applause.) He had great pleasure in proposing the motion, and trusted thab the ratepayers would support it heartily. (Loud and prolonged applause.) Councillor Manning seconded tbe motion, and read tbe following statement .* — " It may bs asked, Is the Council justified in their present action ? I think I can show yoa that they are, and in order to do so I will place before you a few facta. In 1850 the price of gas in Christcburcb was 12s 4d per 1000 ft. In 1881 tho price was lis Sd. This continued till September, 18S3, when it was reduced to 9s 7d. In Invercargill in August, ISS2, the price was 10s, against lis Sd here. In I June, 188G, tbe price in InvercargiU was ] 83 4d, against 10a hero. In 1887 the price ! in Invercargill was 7s 6d, against 9s 7d in Christchurch, and meters were not charged j for there. It must bo recollected that this j great difference is shown in a town only one-third of the size of Christchurch with a consumption of 15,000,000ffc, against 40,000,000fb to 45,000,000 ft in Christchurch. In Nelson, in 18S0, the prico was 10s, against the price of 12s 4d in Christchurch. In 1835, the price in Nelson was 9s 2d, against 10_* here, and no rent for meters. This ia also in a town where the population is less than half of that of Christchurch, and tho consumption of gas also less than half thab of Christchurch, and gas for cooking purposes was supplied at 03 lOd. In Dunedin, in 18SO, the price was 10s, against 12s 4d here. In 1884 the prico was 9s, against 103 per thousand in Christchurch. The price in Dunedin in 1887 was 7s Gd, against 9s 7d in Cbristchurch, and for motive power, cooking, &c, 63 3d. Notwithstanding all these towns have been charging lower prices than prevail in Christchurch, they all show a large balance to tho good, viz. *. — Invercargill shows a profit of JE3OOO, Nelson over i.BOOO, and Dunediu has expended upon additions, extensions, &c, out of revenue no lees a sum than _£55,680 153 Gd, and at the present timo tbere is an amount of _527,787 12s' 2d standing to the credit of profit and loss account, -£10,000 i of which, I have reason to believe, \733 ' realised iv the last twelve months. I \ think theso facts show undeniably that j the Council has good reason to be dissatis--1 ficd, and thereforo they are, I consider, perfectly justified in requiring to be placed ■ in a much better position than they are at '; present. j Councillor J. L. Scolfc said that ho had [ been of tho same opinion as other Councillors, that if the Gas Company had como ' down six mon.fchs.ago with their reduction,

to 7s Gd, no more would havo been heard about tho question. (Hear, hear, aud " No, no.") He would like to point out thit this was a question not only for t'ao gas consumers but for all the ratepayers, for the ratepayers had to pay for tho gas used for the s treet lamps at all events. (Applause.) The various Corporations in New Zealand owning gasworks had been asked two questions. Tho first was: — Have the ratepayers ever been called upon to make up any deficit? Every Corporation had answered " No." The second was : — Has there been a deficit for any year since the j gasworks have been in the hand 3of the j Council? All had answered "No." There was every probability, nay, almost 3 i certainty, that the rates would bo re- ; duced by the profits which would accrue. ! In order to support the estimate of the I Council as to the probable cost of the works, ho would read a report of the City Surveyor made to the Special Lighting Committee of the Council. It was as follows : — "As some doubts have been expressed with regard to the correctness of my estimate of cost of construction of gasworks for Christchurch, and the prico at which the gas can be manufactured, it may be considered necessary tbat I should more fully explain on what data my previous report on this question was founded. In accordance with instructions from the Special Lightning Committee, I sought and obtained valuablo information from gas engineers and other experts (which information has already been before the Committee), and also from my personal observation at Dunedin and Caversham gasworks, and from the latest snd best works on gas engineering, and the published estimates of cost of the erection of such works on the most modern principles, I have arrived at the conclusion after most careful investigation that gasworks capable of supplying Christchurch with forty (40) million cubic feet of gas per annum can be erected for the sum of _537,000. The particulars of this estimate is already in the hands of the Committee. In the above sum is embraced the entire reticulation of the city with 27\ miles of mains, varying in size from 18in in diameter to Sin in diameter, gas-holders, retort-house, condenser, scrubber, tar tank, governor, exhaust.r aud engine, purifiers, ' manager's house, offices and workshops, and 2000 meter-* and services. This sum is exclusive of land, of which several suitable sections are undor offer to the Council at prices ranging from .£IBOO to _£3000, making up a total of, say, _£ 10,000 for the cost of tho whole work, which would leave _£10.C00 for extensions, contingencies, and working capital generally. As gas engineering is a specialty, I felt it incumbent on me to geo my catimatea verified, and corroborated from independent sources, and in order to obtain the necessary information from experts, I applied to the following gentlemen, viz. : — Mr E. Dobson, Civil Engineer, of Christchurch, who has had experience in gai engineering and purchase oil plant. He says : — ' I have gone through your gasworks estimate, comparing your figures with the k_-.t prices I have received from Home, and consider they ere quite -sufficient for the execution of the work. I should estimate the cost of a gasworks for Christchurch, mounting fifty retorts and supplying 40,000,000 of cubic feet per annum, at _£25,000, including a liberal allowance for service meters and contingencies. Reticulation' for 27 miles 32 chains, ranging from ISm to 3in pipes, estimated weight 1305 tons, including all necsssary syphons, boxes, valves, valve corners, _tc, .212,500, that is — Gas plant and buildings, _£25,000 ; reticulation, _£12,500. Total _G37,£00. This is exclusive of purchase, draining, and fencing of the site.' I also placed myself in correspondence with a Gas Engineer and expert, who is at present engaged in the construction of 1 gasworks iv New Zoaland, and represents i a large firm of Hydraulic and Gas Engineers in England. I submitted to him a plan of Christchurch, and furnished him with all other necessary information to enable him to arrive at a satisfactory conclusion as to gasworks for the city, and he has forwarded to me the following reply *. — ' I have gone very carefully into the cost of a gasworks capable of producing 40,000,000 cubic feet of gas per annum, and such a works could be built ready for work, and, say twentyeight miles of mains laid, for about ! _£35,1G7, to which ycu must add the cost of ! land, say four acres, bringing the total cost ,up to about .£40,000. In estimating the cost, I have allowed for a greater output than forty million, so that it would be some time before any additions would be required owing to increased business. It would also include all the latest improvements for the manufacture, purification, and distribution of tho gas. I havo also gone carefully into tho annual working cost of such a works, and enclose an approximate balance-sheet, which would leave you a credit of JE1614 on the year's working, providing the gas was sold at Gs per 1000 cubic feet.* This estimate and balance-sheet has also been before the Lighting Committee. The Engineer of the Corporation Gasworks in Dunedin (from whom I obtained very valuable information), a gentleman that was brought from Home specially to manage those work**, also reports to me with a very full estimate, to the effect that the works proposed for Christchurch could be erected for less than the sum named — _£50,000— although he has estimated for more elaborate buildings than myself and other experts who have reported on the subject. I have also consulted Mr Lightfoot, who has acted a3 Engineer and Manager of the Corporation Gasworks of Nelson for the last fourteen yoars, and he reports to me a3 follows: — That, in his opinion, a gasworks to supply Christchurch, including the entire reticulation of the city and all necessary buildings and plant, capable of considerable extension at a slight coat, could bo erected complete for _£35,330. This sum, of course, not including cost of site. In his report, speaking of the cost of manufacture, and the price at which gas could bo sold, be asserts that Gs per 1000 cubic feet would even be high for the large consumers of Christchurch if gasworks were under the control of the Corporation, with only low interest ou capital to be provided for. I have also gone carefully into the question of the expense of manufacture of gas, snd I find that it costs in Dunedin 4s 9M por 1000 ft, but if you deduct what is realised from tho sale of coke and tar the net cost of manufacture is 33 SJd per 10001't. The above price is arrived at after allowing for all possible contingent expenses, Buch as coals, purifying material, maintenance of works and mains, salaries, wages of workmen, rent of office, rates, &c. In conclusion, I beg to thank all those gentlemen who have so courteously assisted me in obtaining sufficient information to enable me to form my estimate." Certain of the shareholders of the Gas Company had been very anxious to get hold of these figures, perhaps in order to pick holes in them. Well, now they had thorn, and were at liberty to pick as many holes in them a3 they pleased. It would be seen that the Council had gone very carefully into the question, and bad got their information from the bestsources available. Thero were loud calls for Councillor Eeese, who, on coming forward, was received with applause and groan 3. He said that in the Council he moved for a Committee to approach the Gas Company to endeavour to ascertain whether a reduction could be obtained in the price of gas, or, failing that, whether an offer could not be made for the sale of the Company's works to the Council. He had acted aa he had done because he thought that the Council had not approached the Company in a businesslike manner. He had failed to obtain a seconder for hig proposition, but he still held the came views. (Uproar.) Ho would point out ibat no estimates had been received from any Corporation which was supplying gas in opposition to a Company. (Uproar.) He belioved that the present movement wa3 solely in the interest of the targe gas consumers, who had not the businesslike courage to come forward and form a Company themselves. Ho contended that it was not possible for the Council to supply ga3 at a profit in competition with such a wealthy Company. (No, no.) He would like to see the City unite with St Albans, tiydenham, Linwood, and the other suburbs, and, by their aid, purchase the gas works, and co obtain, a monopoly of the gas. Instead- o£-4oing

this, the Council was virtually encouraging the suburbs to erect gasworks of their ovm, and thus divide, instead of uniting them. He -would p.int out that estimates of public -worirs were generally exceeded. Profeosional men frequently gave underestimates of works in order that these worts might be taken in hand. (Uproar.) He was not a friend of the Gas Company, but was opposed to their Directors politically. (Uproar.) A great deal had been Baid about some of the shareholders of the G2B Company being absentees. (Uproar.) It must be ; remembered also that thera were widows and orphans. [Here the noise among tho audience became so great that Mr Reese was unable to make himself heard.] The Chairman succeeded in restoring order after a few moments, and asked if the meeting wished to hear Mr Eeese. A considerable number of those present called out "No," others shouted "Yes," but Mr Eeoso was unable to obtain a hearing till Mr C. M. Gray eamo forward and begged tho meeting, as a favour to himself, to give Mr Eesse a hearing. i Councillor Eeeae then concluded his remarks by saying that there were several widows and orphans who had money invested in tho Gas Company, and were dependent on it for a livelihood. He thought that, while the absentee shareholders were -worthy of condemnation, the widows and orphans should receive consideration. Mr H. Thomson said that it appeared to him that tho proper thing would have been for the Directors of tlio Company to have approached tho Council if they wished to sell the works. (Hear, hear.) Mr Eeese, however, Eeemed to think otherwise, and he (Mr Thomson) was very much amused thereby. (Hear.) There seemed to be a general feeling that it was desirable for Corporations to own gasworks. (Hear, hear.) Tho Directors of the Christchurch Gas Company seemed to havo thought that the agitation was not in earnest, but it was tor the City Council and the ratepayers to show tliem that it really was iv earnest. (Applause.) Councillor Gray having replied shortly to Councillor Eeese, ancl pointed outthat there was nothing to prevent the Gas Company from raising the price of gas if the proposals of the Council were not adopted. The motion was put aud carried almost unanimously, only six hands being held up against it. A vote of thanks to the Acting Mayor for his impartial action in the chair ws3 then moved by Mr Gray, and carried by acclamation, and tho proceedings terminated.