The Southland Times. FRIDAY, APRIL 15, 1870.

Southland Times, Issue 1237, 15 April 1870, Page 2

The Southland Times. FRIDAY, APRIL 15, 1870.

One of the stock arguments, or assertions rather, of the advocates of reunion with Otago, was, and is, that public works ever had been, and would continue to be, better managed in that province than in this. Again, a great many of them cite the wisdom of the authorities at Dunedin, as exemplified in their haying eschewed such gigantic, costly, and, as they assert, premature, undertakings as railways, even on a limited scale, must necessarily be. /We, do not intend at present to re-enter upon the question of railways versus roads, Believing that the great majority of the. people have long since recognised the former as the best possible means of opening up and inducing the settlement of anew country, although a few, who lag behind the age in which they live, still give a preference to the latter. What we wish to point out now is, that Otago is just as anxious to build railways as ever Southland was, and, what must be more distasteful still to her admirers, is just as likely to involve herself in blunders and difficulties in their construction. Those who think that annexation to Otago will preclude the possibility of this district being subjected to further burdens of debt, incurred in reckless railway schemes, will be grievously disappointed if their favorite project is ever completed. They had better at once discard their opposition to such undertakings, and turn their energies and influence to profitable account in watching that, in the formation of future lines, public interests are not sacrificed to political purposes, or professional

cupidity. Assuming the probability of re-union being consummated, a case in point presents itself in connection with the projected Port Chalmers railway. Notwithstanding the Government of Otagp has , had the dearly-bought experience of Southland, as also of other places, to guide it, it would appear from the comments in the local papers that the preliminary arrangements for the line bave been conducted in 'a most unsatisfactory manner, and that the contract;' which has been entered into for the work is of the loosest description, vague and indefinite so far as the protection of the public is concerned, but explicit and stringent enough in what relates to the security of the contractors. Thos e gentlemen are not only to -construct theline, but to work it for a period, Government guaranteeing interest at 8 per cent, for fifteen years, on a sum not exceeding £70,000, and it is to this arrangement, or rather the manner of it, that most exception may perhaps be ! taken. Provision has been made that any surplus revenue beyond the reasonable expenses of the line: shall be considered as part of this percentage, the: Provincial Treasury being required only to make up the deficiency ; but it seems to be left entirely to the contractors to say whether any surplus ever ' exists or , : not. The position of the matter in thi s respect is very clearly and fully stated by the Witness, in a recent issue, from which, in consideration of the prospective interest we assume to have in the subject, we make the following somewhat lengthy extract. After stating . the details as to interest, and alluding to the duty of the Government to protect properly the public revenue, the writer says : — Properly speaking, no : audit is pro* g vided for at all. The agreement . states** that the contractors, "aser ; deducting out b of the income arising from the said rail- J way all reasonable expenses -payablethereout, and the cost of the maintenance of the said line," shall apply the clear surplus as already explained. But it is left entirely, to the contractors to say what are the reasonable expenses and what is the cost of maintenance. What items might be made to figure. .undec_ such a heading as that of reasonable expenses, especially in the absence of an official auditor, it. is not difficult to imagine. The contractors are required to submit a statement in writing of the receipts and expenditure for the current half-year, and at the same time to. notify the amount required from the Treasury ; they are also required to furnish, on request, proper statements, and accounts to enable the G-overnment to ascertain the. position of their affairs, and to produce^ their account books in verification. These conditions may appear stringent enough at first sight; but, as they are unaccompanied by any provision for the regular audit of accounts, they seem to us to be merely nominal. Practically, the audit rests entirely with the contract ors the msel yes . Under its usual system of routine, -the Government is not at all likely to trouble the contractors about the state of their affairs. A half-yearly statement of receipts and expenditure, to be furnished by the cdntractors, does not appear a very efficient means of guarding the public revenue. The Government appear to have overlooked a very essential feature in the, system of guaranteed interest, as it is i usually carried out^- Wherever that, system has been adopted for the purpo|^ of promoting the construction ofrailwayp^ we believe that provision has usually beei£ made for the repayment of the advances I made by Government. The terms of the^ arrangement are to this, effect : that the; profits of the railway, over -and above a certain point, are to be divided between the Government and the promoters of the undertaking, until the advances made by the former have been repaid. This is a common if not an invariable arrangement in North America and India. * * The Government accepts all the risks ; if the line should not prove a paying one it is bound to provide the full amount of interest ; it is not "unfair therefore ,to demand that, in the event of the line proving remunerative, a portion of the annual, profits should be set aside towards the repayment of the advances made to the promoters. The equity of such_ an a,rrangement, we believe, has never been called in question. The Government assists the speculator by guaranteeing him against risk, and consequently providing him with cheap capital ; it ettsures him a monopoly of the traffic, a n rid places no limit to his profits ; it not only gives him large grants of: land, but enables him to make easy terms with private owners ; and finally it Tenders him effectual assistance in "other directions, by means of its legislative powers. It makes these concessions for the sake of the prospective advantages which the construction of. the line offers to the country. But these concessions involve a drain upon the public revenue, which again may involve increased taxation. Therefore it is justified in requiring that, in the event of the railway realising*^ the anticipations of its promotersj/sa percentage of its profits should be devoted to the liquidation of advances made by the ~G6verrimentr Applying this principle to the case before us^we^ see no reason why a similar stipulation should not have been made on behalf of the province. ; Whether the Port Chalmers line will or will not be a profitable one, is a question that admits of some debate. The experience of similar lines in other parts of the world, from the Grand Trunk Eailway of Canada to the Melbourne and Geelong line, is not altogether in , its favor. Works requiring so large an j

expenditure in construction and maintenance as railways, are hot necessarily in a position to stand competition, whether by land or water ; and where the traffic happens to be small, and the population thin, the chances of success are still further reduced. This consideration, however, does not affect the principle we contend for in the slightest. "We dismiss this subject for the present by remarking that an agreement open to such objections as we have pointed out is it! obvious need of revision. The purely • technical as.pe.ct of^the case is beyond the domain of" the public critic. On that point it is enough to say that, as the agreement has not beeu submitted to a competent engineer, although it purports io embrace the specifications of the line, it is impossible to place confidence in it. In face of these objections, the Provincial Council can hardly undertake to legislate on the present basis. Before it can I endorse the agreement, ifc must insist upon the following modifications : in the vfirst place, that proper plans and specifications should be submitted to the Inspecting Engineer before the works are proceeded with ; and in the second, that ia thoroughly competent officer should be appointed to act in that capacity. Whether or not it will consent to the clauses illegally introduced into the ; agreement with reference to the security 'for interest, as well as to the very loose provisions for audit, is a matter of secondary importance. Questions affecting I;b.e revenue may be overlooked: but .the Council cannot and dare not overlook ia question affecting the safety of the public.