D.—l

XVIII

Saving in Interest. A saving in first cost means also a saving in interest. The General Manager of the Tasmanian Railways has illustrated this point very well in connection with the Tasmanian light railway, thus:— The cost of the line, including surveys, construction, and equipment, is, approximately, £2,000 per mile. In further justification of the adoption of the class of line I have described this evening, I may say that we are constructing and equipping nearly twenty miles of railway at a cost of about £40,000, and it is doubtful if a line of our ordinary or 3 ft. 6 in. gauge could be constructed through the same country at a cost of £10,000 per mile, or, say, £200,000. The interest at 3J per cent, on £40,000 is £1,400 per annum ; the interest on £200,000 (which would be the cost of a 3 ft. 6 in. gauge line) at 3| per cent, would be £7,000 per annum : showing a saving in interest in favour of the 2 ft. gauge line of £5,600 per annum. This difference in interest on the cost of the two lines at compound interest would in less than seven years be more than the total outlay in constructing and equipping the 2 ft. gauge railway. In other words, by constructing the line on the principles we have adopted, its total cost is defrayed by what would be the interest on a 3 ft. 6 in. gauge line during the first seven years of its existence. Saving in Cost of Maintenance. The cost of working and maintaining a narrow-gauge railway is also less than in the case of broad-gauge lines. In Mr. Mackay's book " Light Railways," which honourable members will find in the library, the cost of maintenance of lines of three different gauges in India is given as follows : — 5 ft. 6 in. 3 ft. 3 in. 2 ft. 6 in. £ I. d. & s. d. £ a. d. Per train-mile ... ... 0 0 8 0 0 6-3 0 0 5-9 Per mile ... ... ... 137 0 0 67 0 0 41 0 0 The Standing Committee on Railways in Victoria, in its report for 1895, quotes a letter to the London Times, written by Mr. Everard R. Calthrop, late assistant locomotive superintendent on the Great Indian Peninsula Railway, from which the following is an extract : — The next and most important result which the table makes clear is that the 2 ft. 6 in. gauge, running through poor districts, with a passenger-traffic of less than one-fourth that of the standard gauge, and with goods-traffic only one-twentieth that of the standard gauge—producing together an average revenue of only Rs. 98 (equal to £5 Bs.) per mile per week—is not merely able to survive but can actually show a greater percentage of net profits on total capital outlay than the standard gauge, running through the pick of the country and backed by all its volume of arterial traffic. This is a remarkable result, but it is an incontestable fact, and one which it behoves the India Office and English financiers to note and lay to heart. The traffic to be carried in any district through which it is contemplated to build a new railway is the same whether the proposed line is carried out on the 2 ft. 6 in. or the standard gauge; but it is shown that the amount of capital over which profits are to be spread may make all the difference between bankruptcy and perdition on the one hand and success and vigorous development on the other. To insist, regardless alike of natural conditions and of the aspect of any project from the commercial and business standpoint, as many would-be advisers of the Government of India do, that every line in India should be built on the standard gauge or not at all, is proved to be mere madness. The facts set forth in the foregoing table show, further, that the principle underlying the question of gauge is that a railway, like any other machine, is, comparatively speaking, economical only when working at its full power ; and in the recognition of this principle lies the whole art and mystery of the financial success which has attended the working of narrow-gauge feeder-lines in India, in districts where a standard gauge would not only starve, but would lose money to the end of the chapter. Further on in the same report the Committee, on a review of the whole question, states that "Nearly all the witnesses are at one on the point that if you have a large volume of traffic the broad gauge can deal with it at a lower cost than the narrow gauge; but, looking at the traffic on our branches, as shown in the returns furnished by the department, it will be seen that the gauge is equal to a very much larger load per train than is forthcoming. The evidence obtained is, in the opinion of the Committee, conclusive that a small traffic, such as will be available on most future branch lines, can be dealt with more economically with the narrow gauge, properly managed, than with the broad gauge. The statement of Sir Alexander Rendel, Consulting Engineer to the Government of India, has already been quoted, that the costs of transport ' per ton and per passenger mile ' are materially higher on the Bombay-Baroda broad gauge than on the Eajputana narrow gauge, although the latter is worked under great disadvantages as compared with the former. The returns for the whole of the Indian railways for 1890, sent to the Committee, show that the maintenance