JOHN DUTHIE.'

3

I.—lc.

Mr. Taylor: What was the maximum value of the shares? Mr. Duthie: There had been transactions at £1 2s. 6d. and £1 ss. on the paid-up shares of £1. Upon the expressed determination of the Government to place one or two steamers of their own on the lake the shares collapsed. There was then one transaction at 12s. 6d., but generally the shares were unsaleable. The company's plant was in good working-order. They had just put new boilers into one of their steamers, and their boats were all put into good general repair before the end of 1902. All that the company then realised was 14s. 3d. per share. The crux of the whole matter was that they were not free agents in the bargain that was made. The fact that the Government had intimated their intention of going into the inland trade, which had been built up by the company, and to put their steamers into competition with those of the company, simply meant ruin to the shareholders. A steamer cannot be put on one's back and carried to another lake or to the ocean, so obviously it meant ruin to the company if the Government went into competition with it. As a result a panic set in, and the shareholders urged the directors to accept the offer made. It was a case where a fair value should have been fixed on the steamers and plant by impartial valuers. No extravagant price would have been expected in such a case, because it occurred through the ordinary exigencies of life; but a third party could have fixed a price for the property in the same manner as is done in the case of a private individual, and the Government might fairly have been expected to take this course. But in this case an arbitrary prica was fixed, and the company under the circumstances were compelled to accept it. The Government, I understand by the report, admit that there was a threat to procure new steamers; that is not denied, and therefore the position is a very simple one. I will ask Captain Wing to give evidence as to the position of the company, and Dr. Douglas will also make a statement. Captain Wing examined. (No. 2.) 1. Mr. Duthie.] The Lake Wakatipu Shipping Company (Limited) was re-formed in 1899? — Yes. 2. On the re-formation your plant, I believe, was valued b}' a professional man? —Yes. 3. By whom? —By Mr. Cable, of Messrs. Morgan and Cable, shipbuilders and foundrymen, of Port Chalmers. 4. The capital of the new company was £30,000, I understand ?—lt was £35,000, with £30,000 paid up. 5. In purchasing the plant from the old company, I understand £5,000 was given for goodwill?— Yes. 6. The goodwill was partly justified by the fact that the net earnings for the previous four years were £12,671, so that the company was in a sound financial position? —Yes. 7. You have Mr. Cable's valuation in a report? —Yes. 8. Be so kind as to read it. I understand he valued the three steamers at £13,300? —Yes. Mr. Cable reports: "As requested, 1 proceeded to Lake Wakatipu and inspected the three steamers belonging to the Wakatipu Steam Navigation Company, and found each one in the following condition : S.s. ' Mountaineer ' : The hull of this vessel is of iron, decks of kauri; the internal fittings are well got up, and everything has been well looked after, and will last for many years, with the exception of the boiler, which will want renewing in about two years, at a cost of about £650. I value the steamer as she now stands at £7,250. S.s. ' Ben Lomond ': Is an iron vessel, and in good going-order in every respect. There are no alterations or repairs required on her, the boiler being good for another two 3-ears. I estimate her worth £3,550. S.s. ' Antrim ': Her hull is made of wood, and is in grand order. The machinery and decks have practically been renewed within the last two years. The boiler I consider good for twenty years, and the value of steamer £2,500. In conclusion, I may add that the steamers appear to have been taken great care of, and that added to the superior quality of the water in Lake Wakatipu, the hulls, both outside and in, are in as good condition now as the day they were launched. The machinery has also been weli attended to, and is now in first-class working-order. —John Cable." 9. Then, the total value of the steamers he estimates at £13,300? —Yes. 10. Besides the steamers, you take the land, buildings, wharves, &c, at Queenstown, at a value of £I,6oo?—Yes. 11. Then, you hold stores, a slip for the steamers, winches, and other plant, valued at £I,2oo?—Yes. 12. And at Frankton you had land, buildings, wharves, crane, tram-lines, &c, valued at £I,4oo?—Yes. 13. Altogether this makes about £17,500, which is the amount you paid when taking these things over from the old company? —Yes. 14. You paid £5,000 for goodwill on taking it over as a going concern? —Yes. 15. And you also took over bank-deposit receipts and book debts amounting altogether to £7,soo?—Yes. '16. That is how the £30,000 was made up?— Yes. 17. In 1903, the year the Government took over the steamers, I understand you had effected considerable repairs to them, including the putting-in of a new boiler on the "Mountaineer"?— Yes. 18. These steamers stood in the balance-sheet at £15,000? —That was our value, but with the depreciation they stood in our balance-sheet at £14,003. We always wrote them down. 19. But until you wrote them down they stood at £15,900? —Yes. -20. Then, the wharves and buildings at Queenstown stood at £1,600? —Yes. 21. Your ship's stores, wharf-piles, slip, winches, and other gear stood at £2,100? —Yes; many of these things were pretty well new.