11

D.—2a

We have pointed out, in the earlier portions of this report, that the most marketable timber is to be found in the districts surrounding Greyrnouth, and the alluvial gold mines around that centre, or to the south, are of the most importance ; while the produce of the Brunnerton coal fields is of equal value, when considered as steam and gas coal, with that of the mines in the vicinity of Westport, and superior to that at .Reefton. Geographically, Brunnerton may be considered the centre of the West Coast. No engineering difficulties exist to prevent branch lines of railway being made southwards to Hokitika or northwards to Reefton when an increased population would make their construction expedient ; and from the facts that Westport possesses the best harbour, and from situation is better able to supply the Cook Strait and North Island coal requirements than any other place on the West Coast, we viewed the connecting of the Provincial District of Canterbury with Westport by railway as of secondary importance to either, and were able to eliminate that place from our consideration, and decided on Brunnerton as being the best place for the western terminus of the line. In doing so, we also had in mind that more available land for farming purposes is to be found in this vicinity than in any similar area, and therefore most likely to become ultimately the home of a settled country population. In considering the amount of traffic likely to be carried by the proposed railway, the Commissioners had great difficulty in arriving at a conclusion, so many factors had to be taken into calculation, with no sufficient data for placing much reliance on any of them. We found that during the grain season coal is brought from Newcastle at such low freights as to be nearly nominal, and this was likely to continue; that the mines on the East Coast are producing a coal which, although inferior to the Greymouth or Westport coals for gas or steam purposes, still is valuable for household, and of very fair quality for steam purposes ■ and, being necessarily cheaper by the cost of freight over a distance of a hundred miles, would probably compete with success against those higher-priced though intrinsically more valuable coals. Then arose the question whether freight by sea, when pushed by competition, will not submit, on such articles as timber and coal, to considerable reduction —in fact, to such a low rate as absolutely to prevent any but an inland trade for the railway; and also whether the ordinary channels of trade already in existence would not militate against the transference of trade to completely different sources. It is usually accepted as an axiom that land- cannot compete with water-carriage, and Mr. F. Back, Traffic Manager, told us that, for one hundred tons of merchandise carried from Lyttelton to Dunedin by railway, one thousand went by sea, and that the trade between Lyttelton and Timaru was also by sea, although Timaru is a risky harbour. But, though this may be correct where shipments are made direct from one port to another, we found, on examination, that there were many circumstances connected with the trade under consideration which would modify such an opinion. On the West Coast the harbours are all bad, the insurance and delays consequently considerable, and the coal and timber, being found inland, would have to be conveyed to the ports of shipment by railway, and on arrival by sea at Lyttelton would be subjected to landing and railway charges before reaching the consumers; and, as the terminal charges form a very considerable part of the tariff rate, the cost at both ends would almost, if not entirely, counterbalance any advantages possible from sea-carriage. This particularly applies to the timber trade, which would be commenced twenty miles along the line towards Canterbury. These particulars, however, cannot be taken into account in connection with the timber trade with the North Island, as evidence was given us that the use of totara and kauri would not be interfered with by the West Coast timber. On the whole, we came to the conclusion that a considerable portion of the timber would come by rail, but we cannot suppose that the timber so conveyed would lead to the exclusion of that coming from other sources of supply. In this and all other calculations we could be guided only by the tariff rates now in force on ..the New Zealand railways; but the General Manager, in his letter (attached) dated the 14th June, 1883, states— " The bulk of the traffic indicated—namely, coal, agricultural produce, sheep, and cattle —being carried at rates which are unremunerative or entail a loss, leads to the inference that, under conditions stated, the line, with the traffic indicated, would probably not pay." But any material increase in the tariff rates immediately places the railway at a disadvantage againsi the sea-carriage; on the other hand, unless tariff rates are fixed above actual cost of conveyance, no sound calculations can be arrived at, nor the profit to the community be fairly stated. The output of the coal mines in the Canterbury District, as received into trucks during: the year ending the 31st March, 1883, was 23,209 tons. This quantity is likely to increase ' rather than diminish, and would materially interfere with the amount to be carried from the

Traffic.

Freights.

Charges.

East Coaat coal.