THE RAILWAY QUESTION.

Southland Times, Issue 943, 1 May 1868, Page 6

THE RAILWAY QUESTION.

(From the Southland Times, April 20) The prospect of the early completion of the Oreti Railway, in whatever light viewed, is one which cannot fail to be satisfactorily regarded. The advantage to the Province — looking at the matter as one of present benefit — only in the field opened by it for labor, and the consequent attraction to population, is very considerable. It is, however, in the permanent influence which the work — as a reproductive one — will have on the future of the Province that we are most concerned. That this will be very great, none who have paid much attention to the subject will be disposed to deny or question. The various debates which have taken place on the subject, enlisting all the argument of the Province, and bringing to bear upon the matter the practical deductions of those best qualified to arrive at a conclusion, have settled the point of the desirability and absolute necessity of the work. The correspondence recently published, between His Honor the Superintendent of Southland, and the Colonial Secretary, on this subject, will have been read with interest, as evincing the deep interest his Honor has taken in the completion of the work, and as also showing the readiness of the General Government to assist. The somewhat lengthy correspondence has resulted in an important concession to the Province, by means of which we are able to pay for the work in money, instead of in land, as originally contemplated. The advantage of such a course need not be argued, it being self-evident. Whether the view taken by the General Government as to the legal effect of the propositions submitted by his Honor, for the purchase of land in the name of the Oreti Eailway Trustees be correct or not, may be doubted. However this may be, it has proved in the long run, much better for ourselves that the legal difficulty has been started, inasmuch as the arrangement by which the interest on the Southland Debt up to the end of 1868, is to be capitalised, is preferrable to obtaining the money by overdraft at the Bank. Reference to a para graph in Mr Richmond's letter of 19th March, will show, however, that the difficulty, such, as it was, was not started •with the view merely to raise an objection. The General Government, as the really responsible party, is properly anxious ■with- respect to any alienation of the land, and particularly so, because such alienation diminishes future means, and the effect which the proposed vesting in trustees of 60,000 acres of land would have, if by any uuforseen casualty the work could not be completed for the contemplated sum, would be materially to add to our difficulties, and lessen the prospect of speedy release. Mr Richmond says : — " The completion of a practical arrangement for carrying out the Oreti Railway will, your Honor has on several occasions stated, give a great impetus to land sales. The Government agree that this will probably be the result. As a further consequence, the contribution of the land fund towards the extinction of the debt will be materialiy diminished ; for as under present arrangements the land, fund is only charged in any case with interest and a small sinking fund, the rapid alienation of the land will in all probability bring that contribution to an end before the repayment of the debt shall have been provided for. Should this be the case it may easily happen that the rest of the colony may have to bear a considerable part of the local burden. To provide against such a contingency the Government are of opinion that concurrently with the concession of the point asked by your Honor, the Provincial Government should agree to the Appropriation of one fifth part of the land fund for investment as an additional provision for meeting the local liability. On this condition the Government will readily assent to waive all further application for interest , up to the end of the current year, and will issue debentures for a sufficient amonnt to cover debt and interest to that date. — The Province may now congratulate itself upon having the work so long looked for definitely arranged ; and further, on the fact that the completion of the Railway will, under the present circumstances, be effected as advantageously and economically as is possible. In substituting the cash payment system for payment in land several difficulties are obviated, all of which tend to produce dissatisfaction, and, without a doubt, materially to increase cost. In the payment by land with free selection the objection arises that such a course occasions a system of " spotting," and even in this case, where the very best land is selected, it does not necessarily follow that to the contractor it represents its Governmental value of £1 per acre. Most assuredly it does not unless at the same time the public creditor may have at his elbow a purchaser standing ready for the land jwhich he has just selected ; and why, with, cash in his hands, any person should need the intervention of a

third "party between himself as buyer and the Crown as settlers cannot be understood, except on the principle that profits made on the contract completed would justify the selector in submitting to a loss upon the nominal price of his land. If there bp no free selection, but the contractor is compelled to take in payment for his work any block of land specially allotted for that purpose, the public in that case must suffer to a still greater degree. On the assumption that the lands selected and allotted for the purpose of payment for work are, either from their position or quality, the most valuable of the Provincial lands, by the operation of the contracting system it follows that we do not obtain full value for them. If, on the other hand, the land be only second or third rate, the value it will assume in the eyes of a contractor becomes depressed in a still greater ratio. In the settlement of this question, which has been arrived at, His Honor, by his management of the correspondence and general conduct of the business, as well as by its satisfactory conclusion, has ' assuredly done for Southland the best that it was possible to do.

♦ (From the Southland Times, April 24.) In the correspondence recently published between His Honor the Superintendent of Southland and the Colonial Secretary, relative to the completion of the Northern Eailway, it will be remembered that the plan proposed by His Honor, as the solution of the difficulty in the way of payment for the same in cash, was the capitalising the interest on the debt of Southland to the end of the present year. In other words, His Honor proposed the issue of debentures for the debt principal and interest to the end of 1868. In order to arrive at a conclusion as to the effect of this proposal, it is necessary to understand the position of New Zealand securities in the English share market, and thus to ascertain the probability of floating debentures at a price proportionate to their true value. Feanklin's advice not to pay " too dear for the whistle " has not lost its force, and the advantage of present cash may be purchased too dearly. The latest reports of the London Stock Exchange indicate that such is not likely to be the case. With money in the London market at If- or 1-^ per cent it is no matter of surprise that securities promising 5f to 6 per cent should be sought after, and consequently advance in value. The report of February 24th shows that the market in Colonial Government securities has been well maintained during the previous month, and closing quotations give a uniform advance in price. The scarcity of investments, coupled with the plentiful supply of money lead to the reasonable inference that ere long colonial securities must go yet higher. The advance during the month on New Zealand stocks ranges from •§• to 1 per cent, and closing prices contrasted with those of six months back, furnish an advance of nearly 2 per cent. Provincial securities during the same period give an equally satisfactory result, and having attracted attention will find their way into the daily list, and thus additional prominence will lead to an ncrease of business, and the disfavor with which this class of securities has been looked upon, will gradually die out. In estimating the value of provincial securities, investers, as a matter of business, are influenced by the advanced position and prospects o.f the province needing the loan, and hence it is needless to argue on the presumption that the completion of twenty miles additional of railroad into the interior of the province will have its effect on the price of debentures. That by the construction of railroads, in the course of events, the country will be opened up and resources developed, and thus directly and indirectly the material prosperity of the province be advanced, follows as a natural consequence ; and this is all that an invester in securities regards in the matter. This is in point of fact the practical view to be taken of it, and in a new country the desirability of the construction of a line of railway, must be regarded apart from the question as to whether or no it will yield a present return. The policy which condemns an enterprise whch fairly promises such important results as the completion of the Northern line may be expected to produce, because it will not immediately pay interest on capital and leave a profit, is, to say the least of it, very short-sighted. Supposing it can be shown, as may be shown in this instance, that the want of cheap and speedy transit to the capital and out ports has limited agricultural operations and prevented the bringiug into cultivation large portions of linJ — aprima facie case has then been made out for the construction of a railroad. In the commencement of a new enterprise, many circumstances may arise which may seem for a time to render doubtful a success which careful reasoning on sound premises has predicted as certain. Present convenience has arighttobecon-

sidered, but; when in addition to this, the prospect of future good is reasonably clear, hesitation as to the course to be pursued ought not to be entertained, especially when the means of accomplishment are at command. The trade with the Lake belongs — distance and facility of communication by comparison between this Province and Otago, being taken into account — to Southland, and suchis the advantage of our position, that even with the bad roads, and the consequently high cartage, we have been able to secure a considerable portion of this trade, but with a completed railway we shall without doubt secure the whole. To reproduce the arguments which have been so frequently urged as to the necessity and advantages of this line is now needless and particularly,because the subject under discussion does not relate to the construction of a new line of railway but to the completion of one long since decided upon, and upon which the outlay now required to complete is but a small portion of the total cost and may further be regarded as an outlay required to prevent the absolute waste of the large sum already expended. As is frequently the the case in new countries we have undoubtdly made some mistakes and our experiments have been some of them costly. This is an evil, however, not confined to new countries, as is illustrated even in England, now overspread with a net- work of railways constructed in many instances at a cost, the bare mention of which is frightful. Yet from the difference of gauge existing, the country does not derive the full amount of benefit from the railway system which the enormous outlay seems suflicient to have secured. In the completion of the Northern line the only matter to be considered now is to have tLe work done as cheaply as is consistent with doing it effectually. Engineering difficulties to trouble and perplex cannot now arise, for such as they were, they have been already overcome. In the present aspect of matters, to neglect or refuse to complete a work of which so much is done, would be sheer folly. The long delay since the construction of the line — although up to the present, disastrous — will now exercise a beneficial influence. Eesults achieved on the various lines constructed through the world, by the aid of mechanical science, have been to cheapen the cost of permanent way, and more absolutely to ensure personal safety. The " true elements of railway success," and all bearing upon the subject of locomotion by railways, are now so perfectly understood and acted upon, as that the cost of construction as well as the adaptation of plant to the successful working of the line, is reduced to a degree that by comparison with the cost of railways constructed and worked ten years since, may be regarded as small indeed. In the belief that every earnest well-wisher to the prosperity of the Province of Southland will rejoice at the speedy completion of the Northern Line we hail the prospect of the introduction of the means by which that prosperity is to be achieved. The present is not a question of the relative advantages of railroads or common roads, nor of the preference in the expenditure of public money, which should be giyen to one or other of them. The setting apart in the first instance of 60,000 acres of land, and the subrequent concession to capitalize the interest of our debt, have both been specially for the completion of the Northern line to Winton. To attempt to divert the funds set apart for this object would be such a breach of the recognized conditions with the G-eneral Government, as would imperil, if not absolutely destroy, the prospect of our obtaining any assistance whatever. [Since the above was written the Council has met, and after a long debate the compleHon of the Northern Line has been decided on.]