The Proposed Purchase of Gas Works by The Rushden & Higham Ferrers Councils
Further Figures Come to Light
A 'Burning' Question

Town's meetings were held at Rushden and at Higham Ferrers on Tuesday evening, convened by the local authorities of two towns, to consider in an informal way the proposal that the Rushden Urban Council and the Higham Ferrers Town Council should purchase the gas undertaking. It will be seen that a supplemental report on the financial aspect of the question has been prepared, and this is more favourable to the proposal that the local authorities should purchase than was the report which was presented to the Council's a fortnight ago.

The Meeting at Rushden

The town's meeting at Rushden was held in the Public-hall. Mr. J. Claridge (chairman of the Urban Council) presided, and he was supported by Messrs. F. Knight (vice-chairman), Paul Cave, G. H. Skinner, G. Miller, W. H. Wilkins, G. Denton, J. Spencer, H. Brawne, B. Mortimer, T. Swindall, and G. Fountain (members of the Council), and G. S. Mason (clerk.) Unfortunately the attendance of ratepayers was limited.

The Chairman explained that the Councils of Rushden and Higham Ferrers thought the present was an opportune time to consider the advisability or otherwise of purchasing the gas undertaking. The

Rushden and Higham Gas Co.

had thought it necessary to promote a Bill in Parliament which would give the shareholders powers they did not at present possess. The two Councils had met together and unanimously resolved that it was most desirable that the gas undertaking should be in the hands of the local authorities, and then, of course, the question of finance had to be considered. A committee was formed for that purpose and presented a report showing that the gas works would cost £60,000 including new mains, a new gas holder at £6,000, purchase money and working capital. The committee's report staggered a great number of people. Since then it had been considered advisable to ask the committee to make another report and to go into the question of the consumption of gas and the profits made during the past four or five years. From these supplemental statistics, compiled from the Gas Company's reports and balance sheets, it appeared that the progress of the Company had been very rapid. In 1894, the sale of gas was:- Seventeen million cubic feet; in 1895, twenty millions; in 1896, twenty-eight millions; in 1897, thirty-four millions; in 1898, thirty-eight millions; and although, the figures for the current year were not available it was stated that owing to the large number of cookers and slot meters introduced the increased sale of gas was very considerable. He (Mr. Claridge) would not be surprised if the consumption of gas during the present year reached a total of 50 million cubic feet. The price of gas during the five years had been reduced from 3s 6d for gas engines and 4s for ordinary lighting to 2s 11d and 3s 5d respectively, with 2d per 1,000 discount. During the same period, the capital had been increased from £10,000 to £20,000. The interest on borrowed capital had averaged £546 per annum, and

The Profits

including this interest, which was £1,104 for 1894; £1,601 for 1895; £2,125 for 1896; £2,074 for 1897; and £2,470 for 1898. The dividend, which was five per cent in 1894, had increased one per cent in each year, that for 1898 being nine per cent. So that the prospects were much more favourable than when the first report was issued. (Hear, hear.) There was a great deal to be said on both sides. Gas might be superseded. (Hear, hear.) Then, a great deal of money would have to be spent in Rushden on the water supply. He hoped all sides of the question would be debated.

Mr. G. Denton moved:-

"That in the opinion of this meeting it is desirable that the gas undertaking should be in the hands of the local authorities, and that, providing terms of purchase could be arranged on the basis of payment to the shareholders of £10 per share, the Councils of the two towns be requested to take steps to promote the Bill in Parliament for this purpose."

He said that gas, being a public necessity and being necessarily a monopoly, it was generally better in the hands of the local authorities than in the hands of a private company. The difficulty came in the application of this general principle. When the matter was before the town of Rushden seven years ago the cost of purchase would have been small, and in his opinion

The Wise Course

then would have been for the town to buy. (Hear, hear.) With a little forethought and a little faith in the growth of the town a valuable property might have been secured. They missed the opportunity then and the value of the property had increased. The consumption of gas was increasing at a great rate. They would have to pay practically £15,000 more than if they had bought the works seven years ago. The Gas Co., were entitled to credit for the way they had managed the undertaking. In his opinion the shareholders had been taking too large an interest on their money. (Hear, hear.) If the town allowed the gas undertaking to remain in the hands of the Company the directors would pursue the same policy as in the past and would work the concern in the interests of the shareholders. In a few years' time they would find, in a large town like

Rushden - Which Was Not Played Out -

that the gas undertaking would still increase in value. Seeing there was a probability of a great revenue from it, he was prepared to advise the purchase of the undertaking. Of course, gas might be superseded, but the chances were against a change like that coming rapidly and quickly. In fact, they would find that to-day gas stock was among the best investments. He believed the gas undertaking would be of increasing value.

Mr. G. Miller seconded the motion. He thought all these matters should come in the hand of the public authority.

Mr. C. Barker: At a reasonable price. (Hear, hear.)

Mr. Miller considered £10 per share a reasonable price because they would fetch £10 in the open market. All those authorities which had gas works under their own management had most estimable advantages. Birmingham, for instance, had

No Improvement Rate

to pay, the cost of improvements being paid entirely from the profits of the gas undertaking.

The Chairman invited debate.

Answering Mr. Wm. Wright, the Chairman said the directors of the Gas Co., had fixed no price.

Mr. F. Darlow: Have the Council had a valuer?

The Chairman: No.

Mr. Darlow: The town ought to know the value before they decide upon purchase.

Replying to Mr. J. Jones, the Chairman said that if the £60,000 were borrowed at 3½ per cent it would require £2,800 a year interest and it was also assumed that the profits might equal that amount. At £2,800 a year it would take 40 years to pay off principal and interest.

Mr. C. Barker: We may not live 40 years. If you can prove that I am

Going To Live 40 Years

I will go in for the purchase. (Laughter.)

No one in the hall being prepared with such a guarantee.

Mr. J. Spencer supported the motion and said that for years he has favoured the municipalization of gas, water, &c. In almost every town where such undertakings were in the hands of the local authorities the rates has been reduced and the public has received a boon. It was a great mistake the town did not purchase the gas works some years ago, and he felt confident that, if they neglected to purchase now, in five or ten years' time they would see they had made a blunder equal to that of seven years ago. The growth of the gas works had been enormous, and, after the supplementary figures given by the chairman and after ascertaining from the directors that this year the growth had been fully maintained, he had no hesitation in saying that the gas works would be

A Most Profitable Investment

for the town. The increase this year was 30 per cent! Not only would the purchase benefit posterity but he believed it would benefit those present. It would not be long before profit would accrue to the town. If the local authorities bought the works he thought there should be a standard price for gas and that half the profits should go to the reduction in price and half to improvements in the town. (Hear, hear.) Thus both consumer and ratepayer would benefit. Inasmuch as most of the directors were members of the local authorities they would still have their advice and experience if the towns took over the works. He did not think the electric light would seriously affect gas in the near future, and as the shareholders of the Gas Co., were quite willing to take that risk he did not see why the townspeople should not. (Hear, hear.)

Mr. T. Burton: Would the Urban council pledge itself that the rates shall not be increased if these works are bought?

The Chairman said they could not make a pledge of that sort.

Answering Mr. Vann, the Rev. M. E. Parkin, and Mr. Hobbs, the Chairman said the Bill now before Parliament only applied to gas and did not give the Company power to supply

Electric Light

The town would have power to put down electric lighting, the cost of which had not been ascertained.

Mr. C. Barker: I believe electric light could be supplied at half the cost of the purchase price of the gas works.

Mr. T. Swindall explained that the new Bill would only give the Company power to apply for powers for electric lighting.

Mr. Denton, referring to the value of the shares, said that if they put the matter in the hand of an arbitrator he did not think they would get the shares at less than £10 each, besides which they would have to pay the cost of the arbitration, so that £10 was a fair price.

Mr. Vann asked if it would be absolutely necessary for the Gas Company to go on with their Bill providing the town decided to purchase the works. If the Gas Company dropped the Bill a great deal of expense might be saved. He was sorry the town'€s meeting was not called three months ago, for more than that time had passed since it was said the matter would be put before the ratepayers.

Why Had The Shares Gone Up

so rapidly during the last few months, because when this matter first came forward it was said the shares were worth £7 10s each. If the Bill were thrown out, what would be the value of the shares then? Without that Bill there was no monopoly, and the town could lay down gas works, and looking at these facts would they fix the value of the shares at £10?

The Chairman said that if the Gas Company stopped the Bill now there would be little saving. He was not aware that the shares had gone up recently. Two years ago shares fetched £10 10s. There was no probability of the Bill being thrown out.

Mr. J. T. Colson: If this meeting carries the proposition, will it be necessary for a poll to take place?

The Chairman: This is an informal town's meeting. If we decide to proceed, a proper town'€s meeting will be held and then anyone can demand a poll.

Mr. B. Vorley: What position would Rushden be in suppose Higham refuse?

The Chairman: It would make no difference.

Mr. Denton's motion was lost, only about seven voting for it and 20 against. The majority did not vote.

Rushden Urban Council

At the meeting of the Council on Wednesday the Chairman (Mr. J. Claridge) reported the result of the town’s meeting at Rushden.

Mr. Miller: Does that finally dispose of the question?

The Chairman: No, it is open to raise it at any time within three years of the passing of the Bill.

Mr. Swindall said he was very sorry a vote was taken at the meeting on Tuesday, for there were many who had not made up their minds. If they had earlier been in possession of the supplementary financial report that would have influenced them a great deal. If they had another town'€s meeting they would have

A Different Opinion

expressed.

The Chairman said that anyone could re-open the question and a town'€s meeting could be called after which a poll could be demanded. A poll would be the only satisfactory expression of opinion.

Mr. Knight said that the town's meeting showed total indifference on the part of the town altogether.

The Chairman: Yes, with regard both to the number attending the meeting and those who voted.

Mr. Knight said the last financial statement was simplicity itself. He was sorry the town had been so lukewarm in the matter. Most growing towns had taken over these matters, and those who did so in years gone by were now receiving the benefit. There was

No Doubt Rushden Would Benefit

from taking over the gas works. They were losing an opportunity now which they would never have again. He was only surprised that the far-seeing people of Rushden did not recognize the fact and take up the concern. There did not appear to him to be any risk about it.

Mr. Skinner said the town's meeting would tend to air the question.

Mr. Spencer said the real facts did not get before the town until the meeting on Tuesday and then only a small proportion of the town's people were present. He did not think this matter was going to be shelved very long. He thought the majority of the people of Rushden would before long give their opinion in favour of the purchase of the gas works by the town.

The Meeting at Higham Ferrers

The Mayor (Mr. Owen Parker) presided and there were also present:- Ald. Spong, Ald. Patenall, Councillors Palmer, Perkins, Wymam, W. H. Gadsby, J. W. Higgins, J. H. Johnson, Brazier, Wheatley, S. Pack, and H. H. Gadsby, and Messrs. R. Chown, A. Underwood, F. Felce, F. Parker, F. H. Parker, J. Batchelor, J. Brown, R. Thompson, J. Smith, A. Martin, G. Beeson, Linnett, E. Jones, W. Webb, W. Lovell, Bird, W. Beaver, etc.

The Mayor said they were there to consider one of the most momentous financial questions that had come before them in recent years that was - "whether the time had arrived when two towns should become possessors of the gas works themselves." If the local authorities became the possessors of the gas works it would necessitate

An Outlay of £60,000

This amount would have to be raised upon the works themselves and upon the security of the rates. The cost of the repayments of principal and interest would be £2,800 a year. They had to consider how far the acquiring would be profitable to raise the amount which should enable them to meet this annual payment of £2,800. The progress of the company had been almost uninterruptedly successful, and last year the profits were £2,400. If they took over the works, and incurred an annual liability of £2,800, a profit which had not yet been reached, would they be able to so manage the works as to get the same amount of profit out of the works as the private company did, without interfering with the interest, firstly of the consumers, and secondly, of the ratepayers? In the report the committee pointed out there was a danger of local authorities not being able to run the concern as economically as a private company. All the expenditures made by the private company were debited to their capital account. These could not be debited by the local authority if the cost were estimated at the beginning of the year. If they did not borrow the money, it would have to be paid out of the revenue account. He had no right to suggest that the local authorities would not be able to make those profits if the work was properly carried out. If they got over that difficulty, what would be the position of Higham? Higham had about one-eighth of the population of Rushden and one-fifth of the rateable value. Therefore their share of the profits would be one-fifth and their share of the burden would also be one-fifth. In the case of Rushden becoming bankrupt, Higham would be responsible and

If Higham Became Bankrupt

Rushden would be responsible. What would be the effect of this outlay upon the future? They were constantly requiring loans for municipal work, and the larger the amount they were responsible for, the greater would be their difficulty of obtaining other sums, and the greater would be the amount to be paid off. Then there was the question of the stability of gas as an illuminate.

Councillor Palmer moved:-

That whilst approving the principal that it is wise whenever possible to retain, among other things, the supply of gas in hands of the local authorities this meeting of ratepayers is of opinion that the time is inopportune for the purpose in part by this local authority of the gas works at Rushden.

He said that there was a period some time ago when they could have acquired the works very cheaply but that opportunity had been neglected and he did not see paying

£10 For An Original £5 Share

Councillor Pack seconded.

Mr. G. Bird asked if there was a clause in the Act to prevent any other company from providing other powers of light.

The Mayor answered in the affirmative.

Mr. Smith wanted to know if the company had the

Exclusive Right to Supply Electricity

The Mayor: No.

Councillor Johnson said there was a clause allowing the company to apply for power.

Councillor Higgins said the deficiency, if any, would have to be made up out of the rates. If they had to pay a little more for gas it would be better than hampering themselves with loans.

Councillor Perkins said he was astonished at the figures. He favoured the resolution. He thought it would be

Much Better to Wait

till a few more balance-sheets had been issued.

Ald Patenall said he had favoured the purchase, but the more he looked into it the less he liked the idea. As long as they were able to procure gas so cheaply, where was the need to purchase?

Mr. Gadsby asked what effect it would have upon the authorities it they took the works over if private persons made their own gas. He thought they should leave well alone.

Councillor Brazier asked their position if Rushden was unanimous in purchasing.

The Mayor said that no doubt Rushden would supply Higham, but he would have some advice to give the town if that happened.

The resolution was carried unanimously.

A vote of thanks proposed by Mr. Johnson and seconded by Mr. Pack was given to the Mayor for presiding.