SELLING THE RAILWAYS.
One of the chief advantages of the system of triennial Parliaments is the frequency with ■which opportunity is afforded for the public discussion of questions affecting the public welfare. True, such questions are always more or less brought before the public by means of the Press, but it is only at such times as the present, when a general election presents the opportunity of taking a new departure, that they receive the attention which they deserve at the hands of the people atj large. At such times, of course, ib is daly to be expected that faddist theories as well as practical issues will be submitted, though on this occasion at anyrate the practical issues awaiting solution are so many and so large that the former class of questions might well stand over for a more convenient opportunity. Undoubtedly the most important question of the day is how best to promote bonajide settlement— the carrying on of the work of genuine colonisation; and next to this is that of reducing as much as possible the burden of taxation, and adjusting fairly the incidence of so much of that burden as cannot be removed altogether. Intimately connected with both these questions is that of railway administration, for properly managed the railways may be made to assist colonisation, and at the same time to aid m diminishing the pressure of taxation. But this can only be effected by keeping the control of the railway system m thet hands of fch» State. We observe that at least three of the candidates who are wooing the suffrages of the electors—among them Dr. Hodgkinson and the Rev. Mr Barclay—take an opposite view, and urge that the lines should be sold and the proceeds applied to the reduction of the public debt and the consequent annual burden of interest. The last--named gentleman, who recently deliverecl a political address at Waimate, m the course of his speech argued that the railways, which for a mileage of about 1800 miles had cost the Colony between 15 and 16 millions sterling could, with the freehold of the land connected with them, .be sold for £20,000,000. He said: "Could they be sold ? ask some. The answer was, yes. They bring m under Government management about 3 per cent. In private hands they could be made to pay 4—by-and-bye 5. Thousands of people m England are glad to invest money for 3 per cent of a return —and no more. In a speculation of this kind, they would be certain, at least after a short time, to derive much more. And what advantages would follow i We would save a loss of
nearly a quarter of a l. ..million—the difference of cost and working expenses! and what they earn. We "would save m addition a million of interest, equal to 5 per cent on selling price. It' would enable the country to do one of two most desirable things—either to reduce taxation to a minimum, or, by raising the same taxation for a few i years—say ten or twelve at the outside , —-to wipe away the remaining 17 millions. What a consummation devoutly to be wished ! " Thus, according to the rev. gentleman, the Colony | would he a million and a quarter per | annum better off by selling the milways. But his calculation is founded upon the mistaken assumption that one can keep the cake and eat it, too. For the cost to the Colony is now not the interest plus the deficit on the railway earnings, but the . deficit alone, that' is to say the interest minus the amount ,of the railway earnings. Retaining the railways we retain their earnings and these pay the interest, less a quarter of a million which has to be provided out of the consolidated revenue; selling the railways for 20 millions, we should have a million less to pay m interest, but we should have three-quarters of a million (the nett earnings of the lines) less revenue to pay. it with, so that instead of being a million and a quarter per annum to the good, we should be, on Mr Barclay's calculation, half; a million per annum better off. But that amount, it may rightly be argued, is surely large enough to be worth taking into account. Certainly it is. But m the first place, is it likely that British capitalists will give twenty millions for lines which cost from fifteen to sixteen, and probably require the expenditure of well on for a million within the next two or three years? If hot, and fifteen millions were the selling price, then it would reduce the half-million annual saving to a quarter of a million. And for that present relief the Colony would have parted with the enormous advaw tage which must some day (and we hqpe at no distant one) be derived from the immense increase of the nett earnings of the lines which will follow upon the extension of settlement and the increase of population, and which may one day of itself enable the taxation to be largely reduced. Besides which, if a private company or syndichte worked the lineß with the object of realising the ultimate five per cent, return to which Mr Barclay points ai a possibility, such a proprietary would have no special regard for the interests of the farmers f or of local industries, the only object being to squeeze out every possible penny of revenue. No; tempting as the prospect of present relief from taxation may be, we cannot regard the expedient of selling the railways as one which should be adopted by the Colony, except as a last resort and under pressure of dire necessity. ,
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SELLING THE RAILWAYS., Ashburton Guardian, Volume VII, Issue 2563, 6 November 1890
SELLING THE RAILWAYS. Ashburton Guardian, Volume VII, Issue 2563, 6 November 1890
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