B.—No. 2.

What we as Colonial legislators require to be assured upon is this : Supposing that, from various centres of population and of settlement, we allow local action, with the approval and assistance of the Colonial Government, to give life to a number of railway enterprises, all (within each Island) designed for an ultimate junction, is there reason to fear that the combined operations will ■ prove too much for the Colony. So long as we know that, if necessary, the Colony may take the whole thing into its hands, we are safe in adopting that eventuality -—in considering what may be the possible consequences. We want to know what may be the worst, the most burdensome, effects of the adoption of a railway policy. I am going to put before you a conjectural sketch of what might be the position, supposing the Colony sooner or later took the whole matter into its charge, or that it remained partly a Colonial and partly a Provincial matter. It does not signify that, in the meanwhile, the whole large result is built up little by little by the action of the General and Provincial governing bodies conjointly; nor does it signify whether the joint action continues, or in course of time becomes wholly or in part suspended. I want to trace aggregate results. I suppose that some 1,500 or 1,600 miles of railway will require to be constructed, and that this can be effected at a cost of £7,500,000, together with two and a half millions acres of land, and that in addition about £1,000,000 will be required to carry out the other proposals lam making. I leave on one side the cost of Immigration, because, as I have before remarked, that expenditure will be essentially and immediately reproductive. Suppose that this money is expended at the rate of £850,000 a year for ten years. It matters not, for the purpose of our inquiry, whether the money is procured by direct borrowing, by the security of a guarantee, or by the aid of payments in land, in excess of the two and a half millions of acres, which I have assumed to be part of the construction money. We suppose that, during ten years, eight and a half millions arc expended, and that the rate of interest is 5-J per cent. The following table will represent the yearly payments : —■ Interest, 12 months on Interest, 6 months on Total Interest. Ist year ... ... ... £850,000 £23,375 2nd year ... ... £850,000 £850,000 £70,125 3rd year ... ... £850,000 £850,000 £110,875 4th year ... ... £850,000 £850,000 £163,625 sth year ... ... £850,000 £850,000 £210,375 6th year ... ... £850,000 £850,000 £257,125 7th year ... ... £850,000 £850,000 £303,875 Bth year ... ... £850,000 £850,000 £350,625 9th year ... ... £850,000 £850,000 £397,375 10th year ... ... £850,000 £850,000 £444,125 On the other side, merely as conjecture recollect, let us see to what desperate lengths this might drive the Colony. Is it extravagant to suppose that, in one way and another, six million acres of land will be devoted to railway purposes ? Two and a half millions, we assume, will be directly employed in the way of payments, the other three and a half millions would be available in reduction of the capital cost or the yearly interest. Some of this three and a half million of acres will be sold, some be let, some will remain in pastoral occupation until, in course of time, it has acquired position value. Is it unreasonable to estimate that, from all sources, of sale, letting, and licenses, during the ten years, such sums as the following will result, say — Ist year, £5,000, 6th year, £55,000, 2nd year, £10,000, 7th year, £70,000, 3rd year, £20,000, Bth year, £90,000, 4th year, £30,000, 9th year, £110,000, sth year, £40,000, 10th year, £130,000. Is it unreasonable to suppose that at the end of the third year, a sum of £10,000 will be the result over and above working expenses, from the railways opened up to that time, by the expenditure of the two and a half millions, which our calculation supposes to be expended, and that the return will be from the 4th year, £20,000, 7th year, £100,000, sth year, £50,000, Bth year, £150,000, 6th year, £75,000, 9th year, £200,000, and the 10th year, £250,000.

Ultimate security for the Colony.

Estimate of financial effect of proposals.

Proceeds of land taken ;

Receipts from Kailways ;

16

FINANCIAL STATEMENT.