Monday, 22nd August.

Otago Witness, Issue 1555, 27 August 1881, Page 12

Monday, 22nd August.

RAILWAYS CONSTRUCTION AND LAND HILL,

The Hon. Mr HALL moved the second reading. Ho said that a total of 1287 miles of railways had been completed in the Colony. What remained to be done was to complete the main through lines. The railways already made paid 3J per cent., which was a strong inducement to get these gaps filled up. They had aleo been a means of opening out many important branches of industrial pursuit. Agricultural development had been promoted to an extent that would not otherwise have been the case. Tho time had now arrived when the area of available agricultural land would have to be extended, and that could only be done on advantageous terras by extending the means of communication. There were three ways in which that could be done. 'I he first was by doing as they had hitherto doneGovernment to borrow the money and make the lines. He did not mean to say that they were not to borrow more money, but that course would not meot all the requirements of the case at present. Another method was by guaranteeing interest to companies undertaking the work. That was objectionable, us it tended to extravagance both in making and management, and for that reason they did not think this system desirable. Then again, as against both of these methods was the fact that they were debarred from going to the money market for a given time. The third mode was the one proposed in the bill. It had been largely resorted to in America, and some large lines had been completed, arid were still being undertaken, on this principle. In Canada twenty-five millions acres of land had recently been devoted for this purpose. In New Zealand, land was more plentiful than meney ; and when they gave land they knew exactly the extent of their liability. By giving land they became no poorer, and if the work was a success they were a great deal richer. By making the land that would still remain more accessible, it became more valuable than the whole area was before. Then it brought foreign capital into the Colony, and would give commercial men at Home a more direct interest in the welfare of the Colony. By that meanß an additional colonising agency would be established at Home, and that was, to nis mind, a very great desideratum. In America that was found to be the case. The companies at Home circulated their prospectuses and resorfcvd to other means for making the Colony known that it would not be dignified for Government to do. Then thn system would check the construction of mire poli'ical railways. Those compa ies would not invest their money for political p .rposes, but would do so on a purely commercial basis. The present was a most favourable time, as there was a large amount of capital seeking investment. These were the > easons which weighed with the Government in bringing down the poposils in the bill In r< f erring to the provi&ions of the bill, he pointed out that it proposed to leave the final adoption of the contract to the House. Contracts of this kind, the Government deemed, were too important to admit of their final disposal being left wholly in the hands of the Ministry of the day. The borrowing powers and other provisions from existing Acts were inserte.l in tho bill itself in order that companies might be enabled to have the whole scheme before them, and all their powers and privileges embodied in the one measure. The lands to be dealt with were to be as much as possible situated along the line of railway, the limits being within 15 miles on each side of the line. In America the limit waß 20 miles. There was also power asked for to deal with lines already partly made. It was asked to hand over the work so accomplished to any company willing to undertake and carry out their completion. There was no provision in the bill that the land should be settled, but it would be the duty of the Government to see that a stipulation of that kind was made in any contract entered into. He commented at length on clause 90, pointing out that 30 per cent, of the cost of the line in land meant at the valuation made before the line was constructed. The land would be greatly enhanced in value, and Government thought such enhanced value would be quite a sufficient inducement for undertaking the work. He recited the other provisions, stating that in Committee Governmtnt would be prepared to accept any reasonable amendment. It had been suggested to him since the bill had been framed that it would be wise to allow landowners alonx any proposed railway to rate themselves for payment of interest. There could, he thought, be no objection to that proposal, and in Committee a, suggestion of the kind would secure consideration.

Sir GEORGE GREY took it that if the bill was given effect to, the whole future of the Colony was to be changtd. It meant that they were to ostablish a community of tenants under foreign landlords. The greatness of a nation was the pledging of the national credit, and the creating of a national debt for useful public works. As they grew in strength and population their debt should increase in proportion. He quoted from a speech addressed by himself to the Cape of Good Hope Legihlature in 1856 when introducing a scheme of public works. The mistake they were miking was in not allowing local bodies to borrow to the full extent of their ability for public works. He contended that it was their duty to raise by borrowing such money as was necessary to complete their public works, and a great portion of this could be raised in the Colony. According to the Premier's own showing-, they had only about a fourth of the work to do in order to complete their through trunk lines. The Premier had also stated three means within their reach for completing that work, but there were others. One error ran through tho whole of the Premier's remarks. On the first head he assumed that the money must be borrowed outside the Colony. He (tho speaker) contended that a large proportion of the money could be raised within the Colony. The Premier objected to the guarantee system on the score of encou aging extravagance ; but he was satisfied if the guaiantee was moderate it would be an inducement towards economy. There was still a fourth method the Primier had not touched on at all. It had already been proposed by himself when in office. It was that the land should bo sold and the c )st of construction paid out of that. The land was not to be sold until the lineß were fl ished, or partly finished. Had that plan, proposed by his Government been carried out, much of the distress and stagnation which had prevailed would have been prevented, and resulted in settling a large population on the land, who would have found employment on the.»e works in the meantime. He objepted to the proposals made because no analogy existed between thiß plape and the United Spates. There they had had large tracts of country, which did not exist here. All great writers on the subjeot objected to this mode 9f conitnieWns pu b]ip works, and said it ww tj>e

greatest curse which had befallen America ; and although Canada had lately gone into the method, that was no reason they should fall into a similar course. The Premier had told them that in disposing of the land in this way they nude themselves no poorer. He said that in giving the land in that way, they would make their population beggars. These companies would sell the land at enormous profits, at a price people could not afford to pay, as they would be held by absentee proprietors, who cared little for the Clony provided they got a large revenue to spend at Home He also denied the statement of the Premier that if the system as P">P°sed was a success the Colony would be enriched. They would no doubt establish a colonising agency at Home, but what would its objects >be? They would be either to sell the land at enormous prices m England, or else they would send out immigrants as tenant-farmers, paying rents to landlords who enjoyed themselves and their rents at Home. They would simply interest themselves to the extent _of interfering with their legislation and getting the Imperial authorities to interfere with their internal affairs if they conceived these were injuring their interests in the Colony. Then, again, he said that every one of these railways would be political railways. For all he knew, there might be many persons in that House even now who were to get valuable appointments from companies about to take up these railways, and outside Parliament there might be many sucli influences at work, especially in regard to the elections. The proposed system would, he believed, be initiating the grossest system of corruption that had ever been attempted in New Zealand. If abundance of capital was seeking for investment, why not go into the market themselves and complete theso woiks. They weie only restricted from borrowing till the end of next year -meantime they could go on at a very trifling cost and complete the surveys. He had thought the question out clearly, and these were the conclusions at which he had arrived.

Mr RICHARDSON said the alternative scheme mentioned by the previous speaker failed, because the money could not be got to go on with it. At the Thames Sir G. Grey had told his constituents that a proposal of this kind would be made, and he blamed him if he was not satisfied with iD for not having brought up his alternaitve proposal, and joined issue on it with the proposal of the Government. Th*t would have been a wiser course than the one he had now proposed following. In estimating the percentage p4d by the rai ways, he reminded them that in many instances they had, so to speak, preceded settlement, and in others they had good roads to compete with. Such being the case, they could not only look upon the return as being good, but also as giving good promise of what would yet be the case. He could see no reason why they should not put these companies on the same footing for constructing these works as tho Government was on. Having once concluded an agreement on a prudent basis, such a one as would be passed by that House, he could not see why any further security Bhould bo required. He also pointed out that the lands as provided for in section 77 should be set aside when the survey was made, otherwise speculators were liable to get the lands for their own purposes. He hoped the rating clause alluded to by the Premier would bo introduced, and he counselled them, while protecting the public interest carefully, they should also be careful to make the conditions imposed on the company as light as possible ; otherwise he felt it was just possible there would be a great deal of trouble in getting companies to take up these proposals. Mr BASTINGS urged the necessity of completing the main trunk lines, even if some of the railways already made were to be sold to raise the money required. He believed a syndicate could be formed to buy them. As for the present bill, he was certain there would never be a mile of i ail way made under it. The bill was a blunder, and never could be made to work. He pointed out that the land was not to be the property of the company until after the work was completed. That meant that the company would have no security to offer in raising money to undertake the work. Then, again, the delay incurred by bringing the matter before Parliament would leave things so uncer tain that no company could possibly get money. The technical difficulties of the District Railways Act, which had been the great drawback to it, were reproduced here in their very worst formß. The bill could not possibly be made into a practicable measure. It ought to have been framed by a committee of men who had had experience of the defects of the District Railways Act—not by theorists and lawyers. |He suggested that it should be referred to a committee of the men indicated. Mr GISBORNE would support the bill, expressing his Strong belief in its principle. He considered that the principle, if carried out, would not only secure for them their railways, but it would be the means of greatly enhancing the value of the public estate. He quoted from the United States Act on the subject to show that it was absolutely necessary to provide for the settlement of the land, and not allow it to be held by the company for merely speculative purposes. Criticising the various schemes for construction mentioned by previous speakers, he said the one before them was the only one which had the merit of not requiring them to borrow money in order to provide for current expenditure in one way or another. The great question they had to keep in view was as to wheth r these lines were to be completed now or bo indefinitely postponed. If they got them completed by companies, a great step would be gained in the right direction. Mr MACANDREW wondered at the hallucination which seemed to exist that this bill was not one to borrow money. If the Colony did not propose to borrow the companies would, and the practical effect would be the same. The bill was an excellent specimen of the way " how not to do it." He was certain it would be a dead letter. He would never be a party to borrowing another penny outside the Colony for public works. They could not bear the drain of interest. This now amounted to £400 a day. To complete the present railways would cost £6,000,000, and it was proposed to give away £2,000,000 worth of land, which was really equivalent to money. That was paying too dear for their whistle. The country wanted railways, and they offered it that bill—a bill that would never construct a railway. It was giving a stone where bread was required. If the policy of 1878 had been carried out, the policy alluded to by Sir George Grey, he believed they would now have admitted it to be the correct policy. Mr LEVIN said the life of the Colony depended upon the completion of these works; consequently they must either go into the money market and raise fresh loans, or else resort to some -uch scheme as this. He admitted the bill had defects, but he believed it could be brought out of Committee a good workable measure. He thought clauses 13 and 14 were too stringent; and then the House might leave the Government to complete agreements, under wise and prudent restrictions, without the delay incidental to the proposed reference of contracts for the approval of the House. He also objected to clause 85, as to the valuation of the land by the Surveyor-general. The company, he thought, ought to have some say in that question. The 30 per cent, of cost might, under certain circumstances, be increased, and clause 90 should have tho first subsection struck out, 'I he fact of £50,000 having been subscribed for one of the works proposed showed how well tho bill would operate in raisins: money within the Colony itself for publip works. With certain m< diflcations he was convinced the bill would successfully accomplish the object aimed at. Mr OLIVER supported the bill, and affirmed the principle of settling the waste lands by means of companies at Home havm;; direct personal interest in the welfare and progress of the Colony. Ho acquiesced in the Premier's views regarding the most approved method for constructing such works, arguing that the case of India proved that the guarantee system was a complete failure, despite the objections by Mr Macandrew to the contrary. He reminded them that when that gentleman was Minister for Public Works he proposed that these works ahciuW be carried on at the rate of £2,000,000 per an^um. To carry out such a proposal the Colony fluwt have gone into the money market. He ajso, reminded them of the Tapanui railway job. prompted b^ Mr Macandrew, and which was carried on on the principle of land being appropriated. Therefore, he said, if it was objoctod to otherwise, why not allow the Wellington* West Coast, Canterbury Interior, and Otago Ceptj-al lines to be gone on with under this bill, antj allow its general application to stand over ? He argued that the reservation of mineral country was «n improper one, and contended that the difficulty could be got over by a reservation that minei al«< subsequently discovered should pay a royalty. Altogether he thought the bill could be made a good workable meature. Mr MOSS thought the bill was of no use bo far as the No th Island wa3 concormd Under these circumstances the proipecta and progress would be com fined to the South Isiand. They had plemy "f Maoii land in the North, but he knew of \ory little Crown land He i houlri like to bee a. statement ot the Crown lands, so ai 'O asce.tain where the railways were likely to be made, Ileateo objected to the bill insomuch as a large company would stand a \ory fair chance of becoming much stronger than tbe G -vernment, and in that case instead of Government keepii g the company iv check, the conpsny would be able to keep the Government in check He did nob think any large sum of money could be got in the Colony, and he asked them to consider what that meant. It meant an enormous 4rain upon the

country to meet the annual charge on loans. There were large districts where the Public Works scheme did not apply, and he was afraid that the [bill would only aggravate the evil. He desired to see some special provision made in the interests of these * districts. He would for these reasons oppose the motion for the second reading, but he did so reluctantly, as he looked on the bill as one of importance for some places. Mr COLLINS supported the bill. He believed it was the only chance there was for railways being provided for some parts of the Colony otherwise neglected. At all events it would prevent one part of the Colony being charged for railways made in another. Mr DX LAUTOUR reminded them that the three railways specially alluded to were lines a Royal Com- ■ mission had reported should not be made at all. The , inducement a company would have would be the grant made out of the public estate. The argument ' that one district would not be made to pay for railways in another was utterly fallacious. The land was to be appropriated for the purpose of construction, and then the lines were to be undertaken by companies, and of course, if they did not pay,' they would . revert back to the State. In that case the system of one district paying for railw ays in another would be aggravated in its worst possible form. He believed ; that the true policy would be to refrain from further borrowing until the works already constructed showed a margin sufficient to justify resumption of these works. Mr REID supported the motion, but regretted the bill had come at such a late period of the session. He did not think there was sufficient time to consider it fully, and he would not be sorry to see it held over till next session. ... Mr LEVESTAM would vote against the second reading. Under the Public Works policy as originally' pr ipounded a main trunk line was to be made through the North and South Islands. If that were done he would support the bill, but until it was done he could not do so. . .. . „ Mr SEDDON objected to the bill, arguing that the proposal was altogether at variance with the policy > enunciated by the Government last session The proposal was one which would suit some districts, bus^ others— for instance, the West Coast-it would notsutt^ at all He pointed out that, while the iostensible object of the bi 1 was that the lines to be formed should act as feeder-lines, the Wellington- West Coast line would direct the traffic at present going by the Government lines on to the projected company's line. He also pointed out that the reference to Parliament . would entail a delay of 12 months before anything, practical could be done, and by the time the Colonjfc would be free to go into the money market on ivj* own account. In that case it would be better for the Colony to carry out the original policy, and complete, ■ at all events, the main trunk lines. This was a departure from the Public Works policy, and as such it ' was a fitting subject on which to go to the country. ' . < Mr J. T> FISHER contended that the question, had been already before the country, and that they were in a position to decide upon it. Had a policy of this kind been inaugurated 10 years ago, it would have been much better for the Colony. Mr SHEPHARD objected to the principle of the bill as antagonistic to the spirit of the Public Works' policy. The bill itself was an extravagant measure, proposing as it did to give a bonus to induce companies to undertake the work which it was the duty of the State to do. He hoped and believed the bill would not pass.

Mr GIBBS also opposed the bill. Mr WESTON spoke in favour of the proposals made by Mr Bastings that the bill should be referred to a committee of practical men to put it into shape. He strongly urged the neces.-ity for passing the bill. The Hon. Mr HALL replied. He could not agree with all the objections stated to the bill. It was not to be expected that the proposal to deal with railway works on a new principle would meet with favour in all parts of the Colony. He would be prepared in Committee to accept amicable amendments, and before proposing to commit the bill, would carefully consider the proposal to refer it to a Select Com>> mittee. The House divided-ayes, 31 ; noes, 6. The bill was read a second time, and ordered to be* committed to-morrow. The House rose at 1.20 a.m.