E.—l

VII

Even if this were not so, I should not in any case advocate excessively high rates : it will take time to develop a true system of tariffs adapted to our circumstances. Our efforts must necessarily be tentative, must be carefully made, and constantly watched; but railway rates that are only designed to bring in 5 per cent, on cost surely cannot be considered high if competing modes of conveyance permit their adoption. We need not despair, I believe, Sir, of ultimately attaining a good result. We have covered the country with these stimulating and civilizing agencies : in their neighbourhood settlement will extend, population and industries will increase, and then our railways will become, if we desire it, aids to our revenue, instead of sources of temporary embarrassment. At present, however, there is a feeling of great disappointment at the result exhibited by their yearly balance-sheet, and amongst other remedies it has been proposed to sell the railways. No doubt, Sir, if we could find a purchaser for them at cost price, such a course might seem to present an easy solution of the difficulty. It is a suggestion that might have been expected, and has at least one merit —that of exceeding simplicity. Given a system of railways worked at a loss :to end the loss—sell the railways. Nevertheless, I fear, Sir, the proffered solution will not help us much. For it is clear that no company would buy our lines, except at a price calculated to yield at least the current rate of interest, which at present may he stated at from 7to 10 per cent. These are the rates given for money advanced on freehold security, subject to little risk, and requiring from the owner scarcely any personal attention; while railway investments are exposed to dangers of various kinds, such as floods, heavy payments for accidental injuries, depression of trade, and so on. If, therefore, we seek to sell our railways, which are now paying only 2-^ per cent, interest, we shall have to accept for them a sum representing only a portion of their cost. Probably we should have to face a loss of millions of money, and certainly we should still be liable for the payment of the whole of the interest as at present; while we should abandon all chance of retrieving our position by improved management, and forfeit for the railway system the advantages of increased population and growing industries. If the colony were to sell the railways to a private firm, what would that firm do to insure a profit ? It may be answered in general terms "It would manage better." Well, Sir, I admit that the management is capable of improvement. I concede that the Government will probably never be able to manage so well as a private firm might; but no private firm is likely to engage in such a gigantic undertaking, and gross mismanagement by large public companies is a state of things with which we are not entirely unacquainted. Of course a railway company would try to charge higher rates for carriage, but why cannot we ourselves do that ? Why should we submit to a heavy loss of capital to begin with, and then to the payment of extreme rates as well ? Another and not the least objection to the proposal is, that a company occupying such a position would be a great power in the State, whose influence would probably not always be wielded in the interests of the people. I feel quite sure, Sir, that it will never be necessary to accept this alternative, for I believe that careful and intelligent management, and the natural growth of traffic, will yet make our railways commercially successful. Sir, the House will remember that, at the end of last session, the Government expressed their opinion that the character of the various lines of railway in course of construction had not been sufficiently examined before their adoption; that, in the prospect of an insufficiency of funds to complete them, they ought to be reconsidered; that we announced our intention of advising the appointment of a Royal Commission "to make a fuller and more complete investigation of the cost and economical value of the works commenced and proposed than it would be possible for the Government to complete before the next session of Parliament." His Excellency the Governor accordingly commissioned five gentlemen from different parts of the colony to make the inquiry. The Commissioners promptly entered on their duties, and, after taking evidence in nearly every district in which