The New Zealand Times (PUBLISHED DAILY). SATURDAY, DECEMBER 27, 1879.

New Zealand Times, Volume XXXIV, Issue 5848, 27 December 1879, Page 2

The New Zealand Times (PUBLISHED DAILY). SATURDAY, DECEMBER 27, 1879.

oA shout time ago we alluded, to the return that had been prepared in accordance with the request which was made by the Auckland Four. It was pointed out that the outcome of the comparison which had been made upon the basis originally agreed upon between the parties concerned would prove disappointing to the Auckland people, who had confidently anticipated that there would be a large balance in their favor when the expenditure out of loan was compared with the Consolidated Revenue derived from their districts during the term under consideration. A further examination of the return discloses many other interesting facts, some of which deserve more than a passing notice. It is now generally admitted that loan expenditure ought to be conducted upon commercial principles, that generally speaking those railways which will pay the best ought to be constructed first, and have the best claim to be first constructed. A certain equality of division of loan money among the several Provincial Districts may be fairly demanded for all lines which may be reasonably expected to repay interest on capital as well as working expenses. It is not contended that these are the only considerations which should bo taken into account. It is unquestionably perfectly sound policy to push railways through large blocks of fertile agricultural country, which, without a railway, would be inaccessible and unrateable. It is certain that it may bo equally sound policy to form railways through disturbed Maori districts, if leave to do so can be obtained, because the barriers of isolation are broken down, and the future power of resistance by the Maoris would thereby be lessened ; but these are comparatively exceptional cases, and serve to prove the general rule, that the formation of railways, which are not likely to pay interest on cost, and also working expenses, are to be avoided. It will be seen from the return to which wo have alluded above that the North Island railways have proved far less productive than those of our Southern neighbors. We have compiled the following table, showing the total expenditure out of loans upon railways in the four chief provinces up to June 30th, 1879, the amount of receipts in excess of working expenses during the year ending June 30th, 1879, and the percentage of net receipts in proportion to expenditure ;

In considering the facts set forth in the above table, it is necessary to bear in mind the fact that Otago and Canterbury practically reap the benefit of an expenditure of £1,144,000 on railways constructed by the provinces before the Public Works policy was adopted. Inasmuch as the two provinces are mutually dependent on onej another for the commercial success of the lines already made, we prefer to consider them jointly. We believe that no fair comparison can be instituted without including £1,144,000 expended upon provincial lines, as an integral portion of the capital invested in railways. The account would then stand thus:

Assuming for the moment that the remunerativeness of railway expenditure is the real test of success, and ought to be the first consideration, it would appear that the colony as a whole has no right to complain if the lion’s share of the loan money is spent down South. The North Island may agitate for the completion of trunk lines, in order to open up the country, and remove the native difficulty; but judging by the past the investments have not otherwise proved directly profitable. It has been repeatedly urged, and Mr. Oliver has revived the idea, that the districts opened up by railways should be separately rated to make good any loss incurred by the railways made within their boundaries. The theory is a taking one, but it is thoroughly impracticable. In the North Island there have been, and will be, railways made without any reference to the feelings or desires of the ratepayers concerned. Numerous railways have been undertaken in the past which would certainly have met with but scant support, if the ratepayers had been first given to understand that they would be called upon to make good any loss arising through the returns being insufficient to cover interest on capital and working expenses. Some railways have been entered upon simply as works of colonial importance, which will ultimately pass for miles through unsettled land or Maori country. It would, therefore, be absurd to expect the few settlers at either end of such lines to make good any losses which might accrue. Many of these railways cannot possibly bo so far completed as to be fairly termed trunk lines for many years to come, and in the meanwhile the loss which will be entailed ought certainly to be borne by the whole community, and not by any section of it. It is perfectly clear that at the present time hardly any of the New Zealand railways are worked so as to leave a direct profit. The indirect profits, however, must be very great; the chief industrial exports of the colony are wool and grain, and the cost of placing these staple products in the market has been very largely diminished by the saving in the cost of transport effected by the railways. It has been freely stated in the House of late that the Public Works policy has proved a failure ; this we by no means admit. But it cannot be denied that recent experience has shown that neither Ministers nor members can be trusted to decide what new works ought to be undertaken. Some sort of outside pro. fessional tribunal is much needed, whoso duty it would be to decide whether a railway line is likely to be remunerative or not. A board of works of some sort could easily be appointed, which would

be free to digest and profit by the teachings of experience, and would not be fettered and hampered on all sides by political considerations which cannot be ignored by a Ministry, or even by a party without endangering their existence. The necessity for the exercise of great cars in entering upon new works is distinctly evidenced by the tables which we have quoted. It is exceedingly doubtful whether any Ministry could insist upon rigid careful economy and yet live.

— Total railway Expenditure out of Loan up to June 30. 1879. Receipts during year ending June 30,1S79. Percentage of Net Receipts, £ £ Auckland 987,000 11,000 1*11 "Wellington .. 1,251,000 20,000 1*59 Canterbury .. 1,517,000 91,000 5*59 Otago.. 2,600,000 76,000 2*92

— Total Kail'way Expenditure up to June SO, 1879 Net Receipts 1879. Percentage of Profit. Canterbury £ £ i £ and Otago.. 5,261,0C3 157,000 317 Wellington .. 1,251.000 20.000 1*59 Auckland .. 987,000 11,000 in