THE PUBLISHED DAILY. SATURDAY, APRIL 1, 1871.

Grey River Argus, Volume X, Issue 836, 1 April 1871, Page 2

THE Grey River Argus. PUBLISHED DAILY. SATURDAY, APRIL 1, 1871.

It will be remembered tLat one of the special features of "The Public Works Act, 1870," is the provision empowering the Government to -construct railways by payments wholly or- partially in land. This principle was also adopted by the Provincial Government of Nelson, in their proposed Nelson and Cobden Railway, and the County Council of Westland has accepted it as an easy means of obtaining the construction of roads. In the General Government scheme, the amount of land authorised to be alunated inpayment of railway contracts is limited to two and a-half millions, and it may be given either as payment for th« constructionjof railways, or, in particular cases, as bonus to persons constructing and working the lines themselves. In Westlaud, the authority to give payment in land is limited to £5000 per annum, but in neither case is any restriction placed upon the propor tion of land to be paid frr any one work. As the matter now stands, the General Government could alienate the whole two and a-half millions of acres in respect of one railway, and the County Council might similarly exhaust its annual land payment upon one contract. This system of payment in land has been most extensively carried out in the United States of America ; but there it has assumed mainly the character of a direct bonus to railway contractors. The great Pacific railroad is an instance in point, several millions of acres of land being granted to the proprietors in blocks, alternately with others retained by the Government. No doubt the enormous extension of the railway system in America is due a good deal to

the liberality of the Government in this respect, and the example of our cousins has generally been quoted as an encouragement for the Colony to do the same. It has been urged by many reflective men that the land paying policy in a Colony like New Zealand, where the area of cultivable land is limited, is likely to prove dangerous to the interests of settlement, if carried to too great an extent. It may seem an easy plan when money is scarce to obtain public works by the mere alienation of land, which may temporarily be of little immediate value. Bu|^ it is not difficult to discover how a too liberal indulgence in this system may prove inimical to the public interest, aud beneficial only to speculators. In many instances in America these effects are being felt. In some of the States where the bulk of the valuable available land has been granted to railway proprietors, "the settlers are compelled to pay an enormous increase on the normal price or go elsewhere. From recent returns issued by the United States authorities, it appears that no less than. 174,735,524 acres of the public domain have been granted to railway companies as bonuses. This enormous area has, of course, been given in the immediate vicinity of the railways, and as land at a distance from railway communication labors uuder great disadvantages, the railway companies have made large profit, in addition to the profits from the railroadsthemselves. Astherestill remains no less than 1,760,000,000 acres in the possession of the Government one would think that the extent of land given to railway companies could not occasion any feeling of distrust ; but we find that the land office has issued an elaborate paper upon the subject, and recommends that the system of large grants of land to railway contractors should be discontinued/ The grounds for this conclusion are twofold — first, that it is unnecessary as the legitimate profits of the railways themselves, when constructed where they are really required aro amply sufficient ; and, second, that it would already take 250 years for the companies to dispose of the lands they now hold at the present rate of sale, and that the land grant system tends to encourage undue costliness in the price of railway construction, and foster- useless speculation. For the information of our readers we publish portions of articles on this subject from the New York Journal of Commerce and the Nation, two authorities' on the question. The Journal of Commerce, commenting upon the paper is3iied by the Land Office says :— " The railway system of the United States and ita prospective extension constitute the subject of an elaborate paper. The landed endowments of our trans-continental lines receive especial ventilation, and cessation of this policy is strongly urged, as it is no longer necessary to the completion of the work. The singular fact is developed that the working of the trans-continental lines results in a profit of fifty per cent, upon the gross receipts, mostly from local traffic, which seems to indicate that railway enterprise will hereafter find in local traffic its most effective scope of action." Its contemporary the Nation referring to the same subject remarks as follows : — " But if the sale of these lands, in spite of the efforts of the companies, is extremely slow, and promises to extend through centuries, and to be accompanied by serious and continued expense, the question naturally arises, Why are these colossal corporations incessantly clamoring for more ? If, in the first place, there is such urgent need for these roads, why can they not be built without Government aid ? And if there is no such urgent need for them, what induces so many men of wealth to spend year after year of time, and many thousands of dollars in money, in order to obtain these land grants, and build these roads that are not wanted ? The truth is, that in modern railroad build* ing the need, of the road is the least consideration that enters the mind of the parties engaged in building it. The sole incentive to railroad building nowadays is the enormous profits made upon building contracts, which, by a strange perversion of moral sen- 1 ment, have come to be looked upon as legitimate and proper. Railroads are built exclusively for the profits made in building them, and these profits simply consist of the difference between the amount that the road really costs to build and the amount that the' public can be persuaded it is worth and can be iuduced to invest in its securities. It is evident that the profit depends mainly upon the amount of securities the public can be induced to buy, and this again depends mainly upon the guarantees which the companies can offer for their payment. Now, so long as the public continues to entertain the prevailing opiuion of the present and prospective value of the Government lands, so long will they continue to buy bonds secured by mortgages upon these lands, and just so long will huge companies try to get the lands to mortgage for the purpose. "The fact is, that the grants of public lands are sought for the sole purpose of raising money upon them by -nortgage, to be employed in the building of roads for which there is no real demand, but from the building of which the grantees expect to derive enormous profits. How long the public will continue to have faith in jbh.e value of these lands, when they once begin to understand the extreme difficulty and delay attending their sale, is a question for private investors to consider. The question of interest to the general public is, how long they will permit the patrimony of the people of the United States to be used as a bait, by means of which the money of the country is withdrawn from beneficial industry, aud' invested in unprofitable enterprises from which corrupt individuals derive extravagant gains ?"

Our object in printing the preceding article is to affori our readers an opportunity of seeing the unfavorable side of the picture as presented in America, and as this Colony is asked to commit itself to an enormous railway scheme in which land payment figures as a prominent feature, the information may be of value. We shall at another time refer more particularly to the bearings of tho question as road-making in Westlaud.