The Otago Witness DUNEDIN, SATURDAY, SEPT. 9.

Otago Witness, Issue 1032, 9 September 1871, Page 12

The Otago Witness

DUNEDIN, SATURDAY, SEPT. 9.

The Colonial Treasurer has addressed a letter to the Premier in which he I summarises the results of his visit to America and England. From the letter, i the text of which we publish, it will be seen that the principal objects that engaged his attention while in those countries were the Californian Mail Contract, the negotiation of a portion of the loan authorised last session, and the agreement with Messrs Brogdex and Soxs for the construction of railways and the introduction of immigrants. Read by itself, the explanation made by the Colonial Treasurer regarding the contract he concluded with Mr W. H. Webb is insufficient, but read in conjunction with the papers upon the subject which were recently laid before the Assembly, a flood of light is at 'once I thrown upon a matter which for several months past has been involved in mystery. In concluding this contract, Mr Yogel committed the colony to the annual payment of £50,000, stating as his reason for doing so that he had every reason to believe that the Australian Colonies i would contribute towards the line, leaving New Zealand to pay only a comparatively small amount. It has been rumoured, however, that since the inauguration of the service the Governments of those colonies were requested to subsidise the line, and that they refused. This report received confirmation when it became known that a line of steamers had commenced Ito run regularly between Sydney and San Francisco via Fiji, under subsidy from the Governments of New South Wales and Queensland. The correspondence just published, however, settles the matter, as not only do we learn that the different colonies declined to subsidise a line calling at New Zealand, but we find that before

the Colonial Treasurer left for America he was aware that the Governments of the two colonies above mentioned would, have nothing to do with the service, And yet Ik 1 pledged the colony to the yearly payment of an enormous sub= sidy upon the grounds that it would be materially reduced by the contribvu tions which would be received from the other colonies, knowing that, so far from there being a reasonable prospect of our neighbours subsidising the line, the colonies chiefly interested in the establishment of a mail service by way of San Francisco, had distinctly refused to support a service such as he had arranged. Writing, however, to, the Premier since his return, we find the Colonial Treasurer is by no means abashed, oven when the culpable nature of his bungling is made known, as we find that he lins the audacity to conclude a paragraph with the following sentence • ' T find it difficult sufficiently to con* gratulate the Government upon the favourable contract which has been concluded.'

Mr Vogel has entered into two agreements with Messrs Brogden and Soxs, the well-known railway contractors, the Government having the option of adopting either or both of them. It I is common to both agreements that the Government are to select the lines, and have them surveyed and divided into sections of about ten miles each, The prime cost of construction is to be arranged or settled by arbitration, and the contractors have to complete the works in accordance with the plans and •specifications provided by the Governmerit engineer, receiving from the Go. vernment as profit five per cent, upon the prime cost. The contractors are to find the money to pay for the construe tion of the railways, and for the purchase of the necessary plant. As regards the latter, they are to receive as profit five per cent, on the cost. Under the first agreement the contractors are to undertake the construction of railways in New Zealand during the next eight years, to cost .£4,000,000. The interest on capital employed during the construction of a railway and in providing plant, is to be added to the settled cost. Perhaps the most important feature of this agreement is the provision by which the Government are to grant to the contractors land at the rate of three-quarters of an acre per £1 of the cost of the railways and plant. Onefifth of the land only, however, need be suitable for settlement. The Government are required to }ay from the opening of any railway until the expiration of 40 years, or until the purchase thereof, 5£ per cent, on the total cost of such railway ; and it is provided that the Government are to jnu-chase the railways at the expiration of 4-0 years, and may purchase at any time during that period, on giving twelve months' notice to the contractors of their intention to do so. It is further provided that the Government are to furnish a third of the capital required as part payment to the contractors of the purchase moneys. It is part of this agreement, also that the contractors are to land 10,000 European immigrants in the colony within ten years from the commencement of the railways; the Government to pay ten pounds for each immigrant in ten yearly instalments of one pound. The second agreement is evidently intended as a temporary arrangement to allow the construction lof railways by the contractors to be at once proceeded with. The contractors ai-e to provide railways and plant to cost £500,000. The money is to be provided by the contractors, and the Government are to pay 5* per cent, on all sums deposited with the Colonial Treasurer or expended on plant. When a railway is completed it is to be leased to the contractors at a nominal rental, but the Government may purchase at any time within twenty years from the completion of the line. The Government are to guarantee the con-ti-actors 5£ per cent, upon their outlay for 3o years from the commencement of the railways, or until they are purchased. These are the leading features of the two agreements, which the Assembly will shortly l>e called to decide upon. The first is open to many

objections, and appears to be a Very favourable one to the contractors. The free grant of some three million acres of land, together wit!) the guarantee of a reasonable rate of interest on the money expended by the contractors, "will cause the Assembly to pause before assenting to any such arrangement. Should the Legislature refuse to entertain. Agreement No. 1, the acceptance of the second agreement will be forced xipon it whether it is liked or not.