D.—2

XV

those of their competitors, such equalization taking account of (a) adequate payment for the use of roads, to put them on a parity with the Railways' selfprovided and maintained permanent-way ; (b) assessment of the value of developmental services now rendered by the Railways, and adjustment of national finance in relation thereto ; (c) such regulations regarding fares, time-tables, and routes as will prove most economically efficient. The question of safeguarding the enormous capital cost of the national transport system requires the .gravest consideration, and after carefully weighing the whole of the circumstances surrounding the Dominion's transport problem I have come to the conclusion that if we are to secure for the country a continuation of the liberal developmental and protective policy that has been so valuable in the past, it will be necessary to inaugurate transport control through a properly constituted Ministry of Transport. Particulars regarding the setting-up of an investigating body to go thoroughly into these and similar questions is, however, more fully dealt with elsewhere in the Statement. The Future op the Railway System. In view of the capital investment, approaching £60,000,000, already made by New Zealand in regard to her railway system, and the capital commitments, in the vicinity of £15,000,000, for the completion of new lines now under construction and improvements to existing tracks, it must be recognized that a great responsibility rests upon the Government in relation to the future of transport within this Dominion. The present position is serious, so serious that the public have only two alternatives to look forward to, viz., — (1) To carry on in accordance with the existing practice, with the certainty of closing certain services. (2) To initiate an intelligent amalgamation of transport interests which will make it possible to give continuous reliable service and cheaper freights. The second course having been decided upon, the following questions arise : How is transport likely to develop during the coming decade, and what can be done to its development in directions best suited to the Dominion's requirements ? Dealing first with the latter question, its correct solution is of such vital importance, affecting, as it does, the welfare of the whole country, that I am considering the advisability of fully investigating the general field of transportation in the Dominion. The information available at present is not sufficient for the accurate statement of definite economic conclusions. For instance, while the amount paid annually in railway tares, freights, and services—now amounting to over £8,000,000 —is common knowledge, other costs of transport are not so fully realized. Such charges as those incurred for road and coastal steamer fares and freights, and for interest on road-construction, may be mentioned. The investigating, authority would require to go into the whole question thoroughly, both in relation to the economic effect of transport as now carried on, and also in regard to improvements which could be made possible by a better inter-relation of transport effort to reduce overlapping, and cheapen for the people of the Dominion their overall transport costs. The programme of works now under way for roads and railways is taking shape in accordance with a carefully prearranged and comprehensive design. If this were stopped, or even retarded, it would occasion much loss in capital return and transport efficiency. The whole work, therefore, requires the closest attention from the Government as the programme develops, in order that the full benefits obtainable from a perfected transportation system may accrue to the country. I believe that a broad and forward-looking policy is necessary not merely with a view to the transport position as it will exist one to two years hence, but keeping in mind the conditions likely to obtain eight or ten years from now, when the bulk of the work in railway and road construction upon which we are at present engaged will have been completed.