The Star.

Hawera & Normanby Star, Volume IX, Issue 1589, 31 March 1887, Page 2

The Star.

LEASING THE RAILWAYS. «.

(published daily.) THURSDAY, MARCH 31, 1887.

Mb. Tbavers, the well-known barrister of Wellington, who is a candidate for the Te Aro sea 1 , has raised the question i>i" the advissibioness at leasing the railways. It is not a new proposal. That is to say, it has been discussed previously. Among others who have suggested it is Mr. Ormond, and, if we mistake not, Sir Julius Vogel once dropped a hint in the same direction. And now Mr. Travers has brought it up again, and the subject bids fair to be fully discussed. No doubt the proximate cause of the renewal of the suggestion is the com-

parisou being- made, especially in VPeWiiigbon, bebtv^en the results ol the Manawatu Company's management and that of the Government. There is no doubt tLat the company have given the Government and the colony a lesson in the art of railway construction, which may be accepted as one advantageous set off to the disadvantageous bargain, so far as the colony is concerned, made by the Hall "Government ; for the railway not only yields a nett return to the company never experienced by the Government in respect of any of its lines, but it is also a railway which it ia a pleasure to travel on. On th& Government lines there is very great discomfort to put up with, and, instead of the railways yielding a nett return sufficient to pay interest on cost of construction, the taxpayers have to find £325,000 a year towards paying interest. The Wellington Post has an article which clearly points out tho great advantages of this proposal if it could be carried out, and puts the matter so clearly that we make no apology for quoting a long extract. Our contemporary says :—: — " If the railways could be let for, say, 14 ytars, on terms which would guarantee the interest, the credit of the colony would be greatly raised, for their cost represents nearly onehalf the public debt. Of course security would have to be taken that at the end of the lease the lines and rolling stock would be left in an equally good condition as at present. If all our lines could be let on such terms, there would be no difficulty in raising whatever move money may be required to complete lines now partially formed, or to make new ones ■where required. We do not >uppos: that it would be possible, nor would it bo wise, to let all the lines to one syndicate or company, They would have to be let in sections. The Auckland, Wellington, Napier, Canterbury, Otago and Southland, and Nelson and Mariborough lines might all by let separately, with conditions as to interchange of traffic where tho lines join. It would be de&irablo to have some competition in management. The competition of: the WellingtonManawatu Company has already given the Government Railway Department some ' wrinkles,' and led to improvement in their management. That the public would benefit by the lines being under private administration cannot, we think,- bo doubted. The companies would have to earn their rent. They could not fall back on their shareholders as easily or quie:ly as the Government can fall back un the taxpayers. The rent could only be earned by efficient administration, encouraging and developing the traffic on the lines. The officers of each company would have a much wider discretion than can possibly be allowed to Government officers. They would be guided wholly and solely by business considerations, and would be free from political influence. When freight was offered them by arrangement, they would only have to consider whether it would pay to take it, not what some other place would say if they charged less than another company elsewhere had charged for similar freight. The companies would have to consult the public convenience in order to get a return for their money. The Government is under no such obligation. If the lines do not earn interest, the money comes out of the general taxation. At present the railway authorities are absolutely unable to make concessions in particular cases where concessions is necessary to compete with other means of conveyance of profitable freight." " Instances of this kind are of daily occurreuGe The Government is com!,elled to act on ji hinl and fast rule. A company exercises discretion, and, as all business men have to do, makes the best bargain it can where opposition or competition is threatened. It seems to us that the Government might very properly during the ensuing session make an experiment in the direction of leasing the railways It might, for instance, arrange to lease the Auckland and Foxton-Ncw Plymouth lines. The Auckland people appear to believe in Vaile's much talked of system of tariff. Why should they not be a)soired to try it if they like, at their own expense? Jf the Government would lease the Auckland lines for, say, 14 years, Mr. Yaile might possibly manasre to raise a local company which would take the lines, and try his system upon them. If the Fox-ton-New Plymouth line were opened to lease, the Wellington-Manawatu Company might possibly sec its way to extend ii J s operations, so as to acquire control of the through traffic from "Wellington. The Foxton-N"ew Plymouth line at present earns very little indeed in excess of its working expenses, the latter absorbing some 9319 per cent, of the earnings, while its earnings per mile, £343, 17s 6d, is

the lowest in the colony. • We take the figures given in the last gazetted returns. The cost of the line is £1,368,230, so that the rental would be in round numhers £62,000 a year. As the railway at the present rate is only earning some £6000 a year towards this, it must be apparrent what an immense relief it would be to the public purse if this line could be let at a rental euqal to the interest on its cost." Of course, this is a very pleasant picture, but there are two terrible " ifs " in the way of its realisation. In the &csb y\ace it would he a very difficult task to so bind a company down that the colony would be secure from depreciation of the rolling stock. That in itself is a very great difficulty. We know of a colony where such bitter disputes have arisen upon a cognate matter that the dispute not only lasted for many years and is still unsettled but was introduced into the Stock Exchange in order to injure the colony's credit. Another "if " is in respect of Iho willingness of any persons to givu any such sums as those suggested in the article we have quoted. Still the subject is of immense importance, and should there be a way of getting over the first " if," and should a reasonable rent be procurable, the proposal might very wc4l be tried on some length. We do not think we should object to the local line being made a subject for the experiment.