On June, 4, 1922, the company addressed the Council, suggesting that, in view of the possibility of the decision of the special committee being against purchase, negotiations for the modification of the Agreement of 1905 should continue, and with this object a draft of a proposed new agreement, was sent to the Council, together with a tariff of proposed meter rates. This tariff was so drawn up as to afford the company an equity able return on capital expenditure, actual and anticipated, during the ensuing period of five years and as it is estimated, even if all consumers are supplied by meter, that the quantity of water pumped will by 1927 have risen over 12} thousand million gallons for the year, it is evident that considerable further extensions will be necessary. The Council was informed that if all consumers at present supplied at fixed rates could be supplied by meter by July 1, 1922, a sufficient revenue, it was estimated, would be produced by 4 tariff of 48 cents per 1,000 gallons for domestic purposes and for nondomestic purposes at a sliding scale of 48, 45, and 40 cents per 1,000 gallons on the same basis as at present, the charge for the supply for municipal purposes by meter and for the supply for public purposes from street hydrants for the first two years and thereafter in excess of the free allowance of one per cent of the quantity of water supplied remaining as at present at Tls. 1 per 5,000 gallons. As, however, it would take some two years to instal the necessary meters, it was necessary in order that the company should receive an adequate return on its capital, that the tariff should be somewhat higher during the first five years period. It must be remembered that, in asking for an increased tariff of water rates, the company also expressed its willingness to meet the Council's requirements in regard to the higher pressure of water and increased size of mains.
The special waterworks committee met on July 31, 1922; the members recorded the opinion that the water supply should be under municipal control and ownership and, subject always to financial considerations, recommended thai action should be taken by the Council at an carly date to exercise such control and ownership. The: Committee further placed on record its opinion that the differences between the company and the Council as disclosed by the data submitted to the committee were such that no really satisfactory settlement would be likely to eventuate were negotiations to this end continued.
A POINT OF DISAGREEMENT, Gentlemen, we do not agree with this latter expression of opinion. We have done everything in our power to bring about a meeting with members of the Council, io discuss these outstanding matters, but without avail. In our letter of February 27 last year, we stated that, had the directors had the opportunity of friendly discussion with the Council, they would have convinced it of their desire for the increased efficiency of the water supply and they considered that many of the proposals made in the Council's letter then under reply would have been omitted On August 10 the Council addressed the company, suggesting that valuable time would be saved if negotiations were entered into immediately with a view to formal exercise of the powers of purchase, if and so.soon as the ratepayers should so decide, and requesting the directors to submit for the Council's consideration a statement of the price at which they were prepared to sell the company's undertaking. Your directors have agreed to submit a price of which they will be prepared. to recommend the shareholders %o sell and a statement of this has just been completed, some delay having been necessitated by the great labour involved in valuing the company's plant, etc., and the desirability of obtaining expert opinion from Home.
I do not propose to go into the merits or demerits of municipal ownership of. the waterworks, but it is apparent that we cannot carry on under our existing agreement with the Council made so long ago as 1905. From_ the shareholders' point of view, therefore, purchase by the Municipality seems to us eminently desirable. From the consumers' point of view, I think it is only fair to emphasize the statement contained in our
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