MIDLAND RAILWAY.

Tuapeka Times, Volume XXVII, Issue 4256, 10 July 1895, Page 5

MIDLAND RAILWAY.

SPIRITED DEBATE IN THE HOUSE.

[Froji the Star s Parliamentary Reporter,]

WELLINGTON, July 3.

That a question of more than usual interest was before the House last evening was testified to by the crowded state of the galleries and the fact that there were not half a dozen members absent from their places. In moving the House into Committee of Supply upon the Governor's Message re the Midland Railway,

The Premier said that the Message was based on the best legal advice obtainable in the colony. He desired to take the House fully into his confidence as to what they were doing, as the House refused last session to make concessions to the company. What had occurred was in consequence of the compauy being unable to carry ou their part of the contract. Ihe Government had been twice told by a representative of the company that they could not carry on ; that their fluids were exhausted. On January 17 the contract expired, in consequence of the company failing to carry it out. The company then asked for au extension of time, but the Government asked what was the use of granting an extension of time to a company that was practically bankrupt. The company then endeavored to make out that the fault of the cause of their trouble lay with the Government. He called the attention of members to the fact that whilst the Government were being pressed in the colony between December 10 and December 19 for extension of time, the company at that time in England signed an agreement for arbitration. Had the Government not appointed an arbitrator, which they did under protest, the company's arbitrator would have arrived aud proceeded alone with the arbitration. The Government were therefore bound to appoint an arbitrator. He did not propose to go into the question of arbitration beyond this : to say that statements had been made in the local papers that were entirely devoid of foundation. So far as the Government were concerned in the question, they were willing to accept any of our judges. The Government then proposed to bring an action for damages for non-comple-tion of contract against the company, but under advice proceedings were stayed. They were advised to proceed under the Railways Construction and Land Act of ISSI, under section 123 of which power was given, in the event of any unreasonable delay or of failure of the company to complete the work, to the Governor to take possession of the railway. The company were given a remedy in the next section — to appeal ; but if they were to take the paragraphs in print as inspired, as he believed they could, the company were afraid to go to the law courts. To strengthen the action the Government had taken, they had authority under the Act within the expiration of twelve months to expend moneys on the railway and demand the company to repay those moneys, and if they failed to pay the money to give them notice that they would take the railway as Government property. It should be remembered that there were 5,000,000 acres of land locked up, and therefore it was the duty of the Government to quickly bring matters to a head. There was no foundation, he urged, for the statements of the company that the Government had interfered with the contract. With regard to land certificates, the company, according to their own statements, had taken up all the land certificates they could possibly exercise, and had earned thereon 25 to 35 per cent. The Premier also went on to show that large concessions in other directions had been made, and that the company had always wanted more. The Government had found 40 per cent, of the total amount which had been expended on the works, which was about £600,000. The company approached Lord Ripon, Secretary for the Colonies, and told him they feared coufiscatory legislation. They asked the Imperial Government to ..Lep in. This was a most unwarrantable and impertinent intrusion. The Company had gone further, and approached the Stock Exchange, asking them not to allow the colony's securities to be quoted on 'Change, a proposal which the Agent- General characterises as monstrous, and impossible lo succeed. He wished to impress on members that this was not a portion of a great loan policy. The Government must be repaid. In no way would this, action improve the position of debenture- holders. The line was the Government's de facto, aud they must be paid before the company could get it back.

The Hon. Captain Russell said they were as much in the dark now as before the Premier commenced. With such a hurried speech it was impossible to get a true bearing of the actual position, and he would ask the House as to the advisability of postponing the matter. This was truly a question affecting their national honor. The company had their side of the question, and the Premier had put the Government's side fairly before the House. The House, which was a party of laymen, should not be hurried into a decision. Few of them would be able that night to give a vote, in the Premier's words, " knowing what they did." He did not think the Premier had made it clear that the company were finessing for an extension of time. At the same time, as they signed an agreement to arbitrate, he thought that some reason should have been afforded as to why the colony did not proceed with arbitration. It seemed to have been the Government who interfered with arbitration, if they could rely on information in the Press, and he thought they should have some further information on this head. A most important point was as to whether the Government were within their legal rights in proceeding as they were doing. He had been talking with gentlemen of high legal ability, who were strongly of opinion that the Government were not within their rights. He reminded members that this was not entirely a question of spending £5,000. The Message provided for £5,000 " and other sums "; it also provided that the Governor might, if he thought fit, complete the railway. That meant completing it from Nelson to Reefton, and from Brunnerton to Springfield. He believed that if the House passed this resolution that night it would be committing the colony to a possible expenditure of two millions. A clause in the Act provided that before the line was gone on with the Government should have complete plans. The Premier had said that the Government had not complete plans, and the Act said that no railway should be constructed by the Government without a special Act. There might be legal doubts on these points, and he urged that the House should consider these matters before taking a step which might plunge the colony in dire confusion. It might be considered sharp practice for the Government, on the very day that the contract expired, to refuse an extension oi time in order to give members time to study and thoroughly consider the question. He moved that consideration of the question of the Midland Railway be deferred until after the next Public Works Statement.

Sir R. Stout, in the course of his speech, said he did not think it would be proper to discuss the legal aspect of the question. He would only say this : that he thought the Government did right in taking possession of the line. This was not a question now as between the Midland Railway and the Government. The sole question was that the Government wished to begin the construction of a railway that would

cost two millions. He would not think it proper to deal with a question of such magnitude in a Bill which the Legislative Council could not amend. Such a subject should have been dealt with by special Bill. Anyone who voted on this motion bound himself to vote for the entire construction of the line by the Government. This matter had not been brought before the House in a proper way. It was brought down one evening by Message, and next sitting day the House was asked to plunge the Government of the country into an expenditure of two millions without any discussion whatever. They should have weeks to discuss such a motion. He wanted members to know that they were committing themselves, not simply to £5,000, but to £2,000,000. It wns throwing dust in their eyes to say with one breath that the company were insolvent and then to say that the colony would get this £5,000 paid back by the company.— (The Premier: What about the deben-ture-holders?) It was absurd to talk about getting the money from the debentureholders. There was no power to force it from them or to threaten them to complete the contract. There could be no clouding of the issue that the House and the colony would be bound to construct the line, what ever it cost. The colony had not made up its mind to construct this line. It was not fair and honest to bind the colony to such an extravagant expenditure as it mie;ht be. He thought, therefore, that they should vote for the amendment to take time.

The Premier said that before the colony could be committed to an expenditure of two millions to construct the line there must be a Loan Bill. It was bunkum and clap-trap and throwing dust in their eyes to say that they were committing themselves to such an expenditure. The Government had been advised to take the steps they had taken and that now proposed. It was optional with the Government to complete the line, . and it was optional with the House to vote either £5.000 or £50. The House was in full command of the purse strings. Last session he bad severed his connection with the Nelson peeple by saying that the line must stop at Motupiko, and there would be one of the lion, gentleman's two millions. Sir Robert Stout in 1893 had said that it was better to borrow three millions and complete the line. They must not forget that the debenture-holders were gentlemen who had spent three-quarters of a million of money, and it was reasonable to expect that they would come to the rescue of the company. If they did not do so in fifteen months from May last there was an end to the Midland Railway Company, and the Government were freed. If they wanted further litigation, extending over years, they should procrastinate. If they wanted a settlement of the difficulty they should stand to the position they had taken up on the best legal advice obtainable in the colony. If they allowed the matter to drift they did not know where the end would be. He would be very sorry for it. Members would be bound no further than the £5,000, which might be refunded either by the company or by the debentureholders, who would prefer to pay it rather than lose the line. To postpone the matter would be giving way to log-rolling of the worst description. It meant asking that the Otago Central, the North Island Trunk, and other railways should be pitted as against this work. It was not a matter of local but of national importance that the Government should take the course they were now doing.

Sir Robert Stout said that the Premier, with his usual fairness, in quoting from his (Sir Robert's) speech in 1893, had failed to complete the sentence. What he said was : " It would be far better to borrow £3,000,000 if necessary to make the line" — here the Premier stopped — " than to give back £1,000,000 to the company and have to buy the line afterwards."

Dr Newman said he had opposed the construction of this line from its inception, because he thought it would land the colony in a mess. He favored referring the matter to the Public Accounts Committee for investigation. The arbitration and law case should be finished before they were asked to spend any more on the line. As it was, they did not know whether they were going to spend this money on private or public property. He agreed with the Premier that the appeal of the company to Lord Ripon aud to the Stock Exchange was insolent. Mr Guinness likened this contract to any other contract. Power was always given to take possession and to carry on the work. The Act of 1884 was a special Act authorising the construction of the line, and they wsre well within their rights in making this expenditure of £5,000. He said that the Governor, "if he thought fit," could complete the line, but that did not bind them to the completion of the line.

Mr Allen said he believed that if they passed this resolution they were much nearer to a large loan than if they rejected it. The last speaker would be satisfied with nothing less than the completion of this line from the Coast to Springfield. There was no reason why they should not defer this matter until the Works Statement was before them, and this he believed would be the most advisable course. Supposing they did complete the line they would gain nothing, for it was doubtful if the line would pay more than working exoenses.

Mr G. W. Russell spoke with no uncertain sound. He declared that he was supporting the Government as a Canterbury member on the clear and distinct understanding that this line would be completed right through. — (Opposition cheers.) Canterbury would not be satisfied unless this line was gone on with with reasonable speed such as was consistent with the finances of the colony, and it must be pushed on to completion. He asked for a clear and distinct statement as to the Government's intentions with regard to this line.

Mr Earxsiiaw said it was evident that £5,000, or even £25,000, would be of very little utility, and the Government in asking the lesser amount were feeling their way for a huge borrowing proposal, which would either be submitted next session or to the new Parliament in 1897.

The Minister of Education said that the principal opposition to the resolution came from members who were always opposed to the line. The chief attack on the Government and Premier was that £5,000 was being asked for to ensure the making of the Midland line. He wished it were so, as he was anxious to have that line constructed. There was every prospect that the Government would get a return of that money, and on that ground it would be a good investment. The Government wished to spend £5,000 in order to get some of those millions of acres that were at present locked up for ten years, and that being the case he thought every member of the House could vote for the resolution. They were not in a position now to take those lands, but if they stepped in and took possession of the line they could do so. The Government had the strongest possible opinion that this could not improve the position of the debentureholders in the least, and there was no fear that in stepping in now the Government would improve their position at all. He denied that he had voted against the North Island and Eketahuna-Woodville Railways, and said he had consistently supported both lines. He asked why the Government should b i asked to bring in a special Bill to enable them to spend this £5,000 when a loan had already been authorised by statute ? It was a childish argument to urge- that because

£5,000 was asked for it meant the expenditure of £1,900,000 further, and Sir R. Stout should be the last man to lead an attack on the Midland line, which was authorised when he was Premier of the colony. Mr Button thought the Government had acted rightly in taking possession of the line. It was a bold stroke, but he thought it was justified. He should be pleased to be able to support the Government on this resolution, and he might do so later on, but he considered a little delay was advisable. If he thought the expenditure of this £5,000 committed the colony to the completion of the line he should oppose it most strenuously. Mr Montgomery believed the Midland Railway would never be a success, no matter whether completed by the Government or by a company. He did not know how members could reconcile their election pledges as to non-borrowing if they sanctioned proposals of this kind. He should vote against the resolution and also the amendment.

Mr G. W. Russell, by way of personal explanation, said he had no desire in what he said to bring about a large borrowing policy. Mr Bell wished to call the attention of members to the serious position in which the Government were placing them by this resolution. They were told the debentureholders were not improved in position by the £5,000, but he asserted that the Privy Council decided that debenture-holders had a prior right to a railway which was their property, given to them as a first charge, and given to them by statute. The Premier and Minister of Education had declared that this £5,000 had nothing to do with the completion of the line, but he (Mr Bell) asserted that the money was meant to go towards the work of completion. Either the Government were going to spend the £5,000 in a perfectly futile way or as a beginning of a large expenditure on this line. The proposal of the Government was simply a bribe to members because the country would not stand a big loan.

Mr Graham held that they had no right to let this railway stand idle, or to allow their lands to be locked up, and the Government were taking their present action to enable them to take this land and open it for settlement.

Mr Fraser said that the passing of the vote of £5,00 C would be placing this railway in a different position from that which it ever occupied before, as it was always understood that the railway should be constructed by land grants, and not by money votes. The question was whether the House was going year after year to vote sums of money to carry on this railwa}', and he thought the manner in which Mr Bell had demonstrated that debenture-holders would have a first charge should convince any unprejudiced person on that point. He should support the amendment.

Mr R. M'Kenzie thought if they got this railway put on the same footing as other railway lines they would be doing good for the colony.

Mr Crowtuer thought that the position of the debenture-holders should have been defined by the Government before bringing forward this proposal. It seemed to him to mean a big loan to finish all their railways.

At 12.30 a.m. the adjournment of the debate was moved till 2.30 p.m. Sir R. Stout protested on the ground that the Standing Orders were never set aside excepting on want- of -confidence motions and financial debates.

The Premier said that he did not intend to deprive private members of their rights, and Friday would be set apart for consideration of their business. The House rose at 12.40 a.m. WELLINGTON, July 4.

The Orders of the Day were called on almost immediately the House met yesterday, and the debate on the Midland Railway question was resumed. The result, however, was a foregone conclusion, and little interest attached to the discussion. A large number of members, however, felt called on to express the reasons for their votes. Shortly after five o'clock the weary reiteration had terminated, and those houorable gentlemen who had been loitering in the lobbies trooped into the Chamber as the tinkle of the division bell was heard. The following is the division list : —

Against the Amendment (40).— Messrs Bud do, Buick, Cadnian, Carnell, Carroll, Collins, Crowther, Flatman, Graham, Guinness, Hall-Jones, Hogg, Houston, Joyce, Larnach, Mackintosh, M'Gowan, Maslin, J. M'Kenzie, R. M'Kenzie, M'Lachlau, M'Nab, Meredith, Millar, Mills, Montgomery, Morrison, O'Regan, Parata, Pirani, G. W. Russell, Saunders, Seddon, E. M. Smith. G. J. Smith, Steward Tanner, Thompson, Willis. For the Amendment (19).— Messrs Allen, Bell, Button, Carncross, Duncan, Earnshaw, Fraser, Hall, G. Hutchison, W. Hutchison, J. W. Kelly, Lang, ftlassey, Mitchelson, Pinkerton, W. K. Russell, Stout, Te Ao, Wilson.

Pairs. Against the amendment : Messrs Stevens, Ward, Wi Pere, Lawry, Kelly, and Reeves. For the amendment : Dr Newman, Messrs Green, Hone Heke, T. Mackenzie, Buchanan, and Duthie.

When the main question was proposed to be submitted Mr G. Hutchison, in a highly dramatic style, stated that the cause of the arbitration proceedings not being closed was the action of the Premier. He unhesitatingly declared that it was to the interest of the Premier that those proceedings should be hung up, as it enabled him to tide over another session before his connection with and his treatment of the company couli be known far and wide. If the award were given against the colony it would be chargeable entirely, if not altogether, to the action of one man — to the action of the Premier, who, throughout this long and difficult business, had shown a vindictive hostility to the company. — (Mr Seddon : " Oh," and laughter.) A few months more would show whether he (Mr Hutchison) was right or wrong. He denied that the company were bankrupt, as both the Premier and the Leader of the Opposition had assumed. The small capital of £250,000 was only the beginning of the company. Should the award of the arbitrators be to the effect that there had been no wilful neglect or default on the part of the company in the prosecution of the line, the whole fabric on which the Government had acted fell to the ground. He (Mr Hutchison) was not now giving his own opinion, but the opinion obtained from the highest authorities in England. The action of the Government in seizing the railway had given a right to the debenture-holders to take proceedings in the English law courts. That was the position, and it was a very serious one. He did not think that much harm had been done as yet, but if the colony proceeded to take in hand the construction of this railway it would alter its position, and take a step that it would be impossible to retrace. The company and the debenture-holders contended that if the colony entered upon this work they were bound to complete it. He asked members of the House, as business men, whether they would take the step of expending a few pounds in a matter when the expenditure of that money would probably land them in heavy litigation. Would it not be far better not to spend those few pounds ; then the position would be safer, and it would be wiser and better not to run the risk, which in this case was very great. Speaking as a representative of one of the constituencies of the colony, and apart from any connection he may have had with the company, he asked the House not to take a step which, in his opinion, must shortly stultify the colony. The Minister of Lands delivered himself of a spirited defence of his chief and a tirade against the company and their " paid advocate." He warned the House that it must take statement?: of the last speaker with

great caution, because the member for Patea was the legal counsel for the company in the colony in the arbitration, and had been advising the company in their various proceedings. Knowing perfectly all that had transpired in relation to the company, he had no hesitation in denying the statements of the member for Patea, who he charged with misleading the House. The cause of the delay over this Midland Railway arbitration had really been due to the lawyers, and not to the Premier. The company were not prepared with their evidence, and therefore desired delay.

The motion to go into Supply was then put and carried by 39 to 25, when the House went into committee.