11

P.—4

I see no reason to change the outward rate of passage-money which I gave in the case of a postal »teamer, and I take it accordingly at £15; as regards homeward passage, perhaps it should be put at not more than £20. 2. Hates of Hr eight. I have said that, after allowing space for 200 steerage passengers, there would be room, in the class of ship lam contemplating, for about 4,200 tons of cargo outward. Now it is not very easy to predict with any certainty the rates of freight that could be obtained for this. On the one hand, we know that the ventures which were made by the New Zealand Shipping Company in the " Durham " and " Staadt Haarlem " were certainly not encouraging, and that for a good deal of the cargo they had to take sailing rates each way. On the other hand, I think those instances cannot be taken as a permanent guide for many reasons; and I am told by shippers that with a regular monthly steamer they would engage freight at very full rates for all fine goods. The details I shall give under this head in a subsequent section will enable you to form a fair judgment, and will, at any rate, check my own estimates. For my present purpose lam satisfied to take, out of the 4,200 tons I have supposed for the outward voyage, 1,200 at 205., 2,000 at from 20s. to 505., and 1,000 at from 60s. to 905., according to the season and the fine-goods freight offering at the time of sailing. On the homeward voyage lam not calculating that a mercantile steamer would obtain freight at all in excess of sailing rates. Ships of the class I am now contemplating would be able to take 3,000 tons measurement of greasy wool (equal to 1,500 tons weight at 80 feet to the ton), and about 2,200 tons of washed wool (equal to about 700 tons weight at 120 feet to the ton) : and, as I think it certain that neither by postal nor mercantile steamer would woolgrowers be willing, except in the case of steamers timed to arrive for a particular wool series, to pay an extra id. per pound for their wool, I am only putting the rate down at f-d. for greasy and fd. for washed. With regard to a cargo of grain, I am assuming that the ships would carry quite 4,000 tons (weight) of wheat; and I am willing to estimate that growers would pay no more than 40s. a ton instead of 455., averaging over all years, including exceptional seasons of low freight such as I have referred to above. During one season, it is true, the New Zealand Shipping Company's vessels were taking wheat as low as 265., but that was a rare case, and for the last two years the sailing-ship rate has hardly ever been under 455.; so that 40s. is sure to be safe as an average. 3. Total Earnings of the Ship. Taking, then, the freight and passage-money earned by the mercantile steamer out and home, and deducting from these earnings the charges (including cost of victualling passengers), it is clear that the total revenue earned over the thirteen voyages, at the rates I have named, would come to a very large sum, even with' freight of wheat at 405., and without any additional -|d. on the wool in the case of steamers sailing at dates to let them get home in time for a particular wool series ; while I cannot think of any permanent reduction there could be in other freights, which would decrease the receipts to a really serious extent. At any rate, at the prices I have put down, I feel confident that the total revenue of the year would not be less than £285,000. IV. Besitlts of the Teae's Wobk. Now if you bring together, as in the case of the postal steamers, the figures of working cost and revenue for a mercantile line, it will be at once seen that, instead of a deficiency over the transactions of the year, there is a large surplus. In round numbers I estimate that this surplus may be put down at not less than £85,000 over the thirteen voyages of the year, provided no serious falling off takes place in the above-mentioned rates for freight and passage-money, and on the supposition that the ships are all full up with passengers and cargo both out and home. Such figures would enable an ample sum to be set apart for boiler fund and depreciation, periodical overhaul, and management; but would not leave much dividend on the capital employed. Taking the cost of the ships at the lowest estimate of £100,000 each, a boiler and depreciation fund of 10 per cent, would take up £50,000 of the year's profits. I do not think much saving could be made in cost of administration, so I keep this at the same £10,000 as Mr. Galbraith estimated in 1878, and as I have myself estimated just now for postal steam. Interest at 5 per cent, on £200.000 of debenture-capital would take up another £10,000. Deducting these sums, which together amount to £70,000, from the credit balance on the year's transactions, there would still be left about £15,000 for the shareholders. In order, however, to put the calculation in a safer light for contractors, I will take the cost of the ships at £110,000, which is certainly an outside estimate. In that case the cost of the five ships would be £550,000, instead of half a million ; the £50,000 I have allowed from the year's earnings for boiler fund and depreciation would give a little over 9 per cent, instead of 10, and then it would not require a subsidy of much more than £10,000 a year, added to the profit on the thirteen voyages, to let the shareholders get a dividend of 7| per cent, on their share-capital of £350,000. I think that if such a result were seen to rest on sound calculations the money for the purpose would be forthcoming : for if a number of capitalists, willing to invest in steam, could feel fairly sure of 7| per cent, to-day, when the population of New Zealand is not much over half a million, they would know very well that whoever was first to occupy the ground would not see many years pass by before the increase of the people, and the growing volume of trade, must largely add to the earnings of the line : and that they would not only have a present monopoly of profit, but secure the undivided enjoyment of any larger returns, until in the fulness of time, as happened to the P. and O. in Australia, there should be room for some rival resolved to seize a share. CHECKS ON THE PRECEDING STATEMENTS. I need hardly point out that the estimates and calculations contained in the preceding sectiona are intended to give you, in a connected form, the results at which I have myself arrived, after a laborious investigation extending over many months, during which I have utilized information from every qualified person who was willing to give it to me. Some of this information, as was naturally to