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BARRY AND CADOXTON LOCAL BOARD BILL. REPORT OF THE PARLIAMENTARY COMMITTEE. i. "M" 4 The following report from the Committee which considered this Bill has been submitted to the House of Commons :— That the Bill tfives no powers relating1 to police or sanitary regulations. Tha.t the Bill does not give any powers which might have been obtained by means of bye-laws made subject to the restric- tions of general Acts already existing. That the Bill does not assign a period for the re-payment of any loan exceeding the term of 60 years, or any period disproportionate to the objects of the loan. That the Bill does not give borrowing powers for any purposes for which such powers alre dy exist or may be obtained under general Act- without subjecting the exercise of the powers under the Bill to approval from time to time by the proper Government department. That THE BORROWING POWERS GIVEN BY THE BILL, the purposes for which the loans are authorised and the periods assigned for re-payment, appear in Appendix A. That a report from the Local Government Board relative to the Bill was referred to the Committee, and the manner ia which the reoommendations in that report have been dealt with is set down in Appendix B. That there are ao other circumstances of which, in the opinion •f the Committee, it is desirable that the House should be informed." APPENDIX A. Amount p Period assigned authorised. for re-pa m*ut. Such sum as maylCosts of Act. 10 years, be required. Do. do. JFor the purchase 40 years. of the gas under- taking of ill Barry and Car' •*•••• doxton Gas ancjj Water. Go. "Do. do. For the purchase 50 years. of the water undertaking of the Barry and Cadoxton Gas and Water Co. i&uch Sum cr isums For working capi- Such term and as may be from tal for the gas upon such con- time to time undertaking ditions as the sanctioned by and water un- Loeal Govern- the Loeal Gov- dertaking re- merit Board er»»«nt .Board, spectiveiy, and may prescribe, for auditions and alterations to the gasworks and waterworks ,L- respectively. APPENDIX B. Short description of Manner in which reeom- Clause. mendation dealt with. Company to sell their I A new clause inserted, COR- **dertaking. firming an agreement for purchase of undertaking I by the Local Board. Application of company's Recommendation adopted Actt to Local Board. and clause amended ac- cordingly. Power to purchase lands A new clause inserted as by agreement. suggested. Regulations of company Recomaiendationsadopted continued. and clause amended. Bye-laws, etc. Clause etruck out. Payment off of money Recommendation adopted borrowed. I and clause amended ac- cordingly. Periad for discharge of I Recommendations adopted Iwrrowed moneys. I so far as the committee considered expedient under the circumstances and clause amended ac- cordingly. iLecal Board to keep separ- > ate accounts of gas and water undertakings. Recommendations adop- Application of gas re- ted and clauses amended venues. f accordingly. A« to deficiency in re- j MiptB. j Audit of accounts. J Audit of accounts. J The committee further reported :—;i That they had examined the allegations contained in the preamble of the Bill, and had amended the same so as to make it consistent with the provisions of the Bill as passed by the Committee, and found the same ae amended to be true, and had gone .,throug-h the Bill and made amendments there- IiiilRto," We feel sure that the following article which appeared in the Western Mail of Friday will be of interest to our readers.—ED. S. W.S. THE CARDIFF GAS BLUNDER, WHAT THE WORKS WOULD COST ON THE BARRY BASIS. As the Barry and Cadoxton Local Board, more -alive to the interests of the ratepayers they repre- sent than the Corporation of Cardiff, have entered into tui agreement to take over the gas and water \works in their district, it will be interesting to :ascertain the value of the Cardiff Gasworks on the basis for purchase which has been adopted at Barry. The figure at which the works are to be 'transferred by the Barry and Cadoxton Gas and Water Company to the Local Board is £169.000, and the basis adopted by Mr. Oxley, a professional export engaged by the Board, in arriving at the value of the works was as follows The maximum dividend which the Company could earn upon its present capital was £6,224 a year. This figure, if the purchase extended over the customary -period of 23 years, would represent £143.152. The total maximum retrospective dividends amounted inthegrost to £19,214, of which X6,650 had been paid, so that there would be a deficiency of £ 12,564. The present value of this sum was equal to f 6,973 total, £ 150.125, to which must be added 10 per cent, for e xmp ilsory purchase— £ 15,021— making a total of £ 165,137. Added to this would be Parliamentary and other expenses, £ 3,000; re- muneration of directors, £ 3,000 debentures remaining, £ 17,000; grand total, £ 188,13-7. To earn the maximum dividend, however, there must be an additional expenditure on the part of the "Company of £ 20,000 the present value of which was £ 17.262. This, deducted from the grand total ,;named, would leave Y-,170,875, being the price .which Mr. Oxley calculated the arbitrator would ,award, but the Local Board succeeded in arriving at an agreement by which they will take over the works at £ 1,875.less than the valuation. Taking the last half-yearly balance-sheet of the Cardiff Gas Company, and adopting the same principle, the figures will workout as follows :— £ Set profit for half-year ended December 31, 1892, £ 11,126, making the net annual profit 22.252 Which, multiplied by the number of years 23 Gives 511,796 Add 10 per cent. for compulsory purchase. 51,179 Temporary loans 62,002 Parliamentary expenses 3,000 „ Remuneration of directors 3,000 Total. i. 630,977 Amount agreed to be paid by sub-committee 505,000 125,977 Deduct new capital 27,429 Leaving in excess of the agreed sum 93,548 It will be seen from the above table that, on the basis accepted by the Barry and Cadoxton Local Board, the Corporation of Cardiff would have to pay £630,977 for the gasworks at the present time. The amount which the sub-committee recom- mended the Corporation to pay in 1890 was £ 505,000, and they knew at the time that this sum would be accepted. After making allowance for the £ 27,429 which the company have since ex- pended on the works, it will be seen that the rate- payers of Cardiff have, through the blindness of Mr. W. J. Trounce and his followers, lost close upon £ 100,000. There is, however, another point to consider. The Barry and Cadoxton Local Board have to make up the past dividends of the company to the maximum of 10 per cent., which will absorb £ 12,564; and, further, the calculation is made upon a prospective return of 10 per cent. to the investor, although the dividends hitherto paid have only been at the rate of 5 per cent. In. the case of the Cardiff Gasworks, en the other hand, the money which formed the basis of the agreement z, was actually earned, and the Corporation were not called upon to speculate upon a propective in- crease of profits, which might not take place for years. In taking the actual net earnings of the Cardiff Gas Company as against the probable in- crease in the Barry and Cadoxton Gas and Water Company's profits, we have put the case in a way which not one of those who opposed the purchase three years ago can reasonably object to. The ratepayers of Cardiff had no arrears of dividends to pay neither could there be no possible doubt about the net earnings being maintained. Had the Barry and Cadoxton Gas and Water Company been actually earning the maximum dividend it is pretty certain that THE LOCAL BOARD WOULD NOT HAVE BEEN ABLE TO PUKCHASE THE WORKS at the figure now agreed upon. Another basis would have been taken, which, if applied to the Cardiff Gas Company's property, would show a very much heavier loss to the town than £ 98,548. Looked at from any point of view, it is clearly apparent that in refusing to adopt the recom- mendation of their sub-committee in 1890 the Corporation of Cardiff committed one of the gravest blunders which have ever been laid in their charge. -n_-

LOCAL FINANCE.

THE POOR RATE WILL REMAIN.

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