THE TASMANIAN RAILWAY.

New Zealand Mail, Issue 34, 16 September 1871, Page 11

THE TASMANIAN RAILWAY.

We have before us a copy of the contract, just entered into between the Government of Tasmania and the Main Line Bail way Company, for the construction, maintenance, and working of a single-line railway between Hobarfc Town and Launceston. The following are some of its principal provisions. The colony guarantees to the company interest at the rate of five per cent, upon the money actually expended for the construction of the line up to and not exceeding the sum of £650,000, during the four years of the period of construction, and for a period of thirty years from the opening of the entire line for traffic. A sum of £25,000 is to be allowed to cover all preliminary expenses, including the expenses of the formation of the company, the negotiation with the Governor, and all engineering and other expenses prior to the Ist January last. This item, it will be recollected, is referred to in Mr Vogel's report, and though itis not strictly cost of construction, it must bo owned that engineering and other other preliminary expenses are virtually as much as part of the cost of construction of a railway as is the cost of ballast and rails. If the profits do not exceed six per cent, these profits are to belong to the company, but, if six per cent, is exceeded, the colony is to receive onehalf of all excess; and should the profits of the railway, not, be it observed, of the company, exceed ten per cent., the Governor may cause a reduction of the fares to passengers, but so as not to reduce the profits below ten per cent. The maximum fare not to exceed 3d per mile for first class, and 2d per mile for second class passengers. Children, under three years, to be free of charge, and those between three and twelve to be taken at half the charge for adults. The maximum speed required is twenty-three miles an hour, and the minimum allowed ten miles. The gauge to be adopted is to be 3 ft. 6in. The minimum radius is four chains, the maximum gradient 1 in 40. The Government declined to consent to the stipulation, referred to by Mr Vogel, that any discount on shares should be put down to the cost of construction, and no doubt is felt that the company will sign the contract without insisting omthis condition.

The " Hobart Town Mercury," in referring to the contract, observes, " The colony is to be congratulated on the Ministry having resisted the attempt of the Company to exact better terms. Especially ought the Ministry to be congratulated on having secured so favorable terms as a 5 per cent, guarantee for a limited number of years. But these favorable terms have another and highly gratifying signification. They effectually refute the discredit which some would cast on our resources ; and show how high Tasmania stands in the commercial circles of the mother country. Few ventures can be floated at par, with but a 5 per cent, guarantee, and for only a limited period. If Tasmania had not shown a determination to live within its means, as well as to fulfil its obligations, Government would have had to pay a higher rate of interest, or to have consented to a discount on the capital of the company/' It strikes us that Tasmania has succeeded in contracting for the construction of a railway on the most favorable terms. If the railway at first OQly paid working expenses, all the interest the country would have to pay would not .exceed £32,500; but no doubt is felt that it will pay this interest, over and above its working expenses, provided ordinary diligence be used on the part of the Government in opening up the country by cross roads, as it is stipulated in the contract that the line shall pass as near as practicable the present centres of population. "Whether the expectations of Tasmania on this point will be realised, remains to be seen. The railways which have been constructed in New South Wales do not at present pay 3 per cent, over their working expenses. The case is rather better in Victoria, as the railways there return a profit of

nearly 34 per cent. The net revenue would be much larger had more economy been used in their formation, and it is expected will be much increased when the north-eastern line is completed. Still it is necessary to be borne in mind that the traffic on the railways there are not subjected to coastal competition, which will be the case with the Tasmanian railway, as well as with some of those it is proposed to construct in this colony. These facts possess more than ordinary interest just now to the people, Government, and Parliament of New Zealand. If a determination be shown by the colony, while it is being opened for settlement, to live within its means, the resolution may be accompanied by some such economic advantages as those referred to by our Tasmanian contemporary.