C—3a

10

Furthermore, timber which yields revenue to the local bodies may not come over the roads at all, but may be brought to the centre of distribution by tram-line or water carriage, whilst in other districts timber yielding no revenue to local bodies, on account of the circumstances mentioned above, may be transported over county roads. The whole system, therefore, is based on a wrong foundation. If any particular industry is causing extraordinary damage to public highways, the burden of making good that damage should be a charge on the industry and not a charge on public revenues, and in providing State aid for the repair of roads each case requires careful consideration on its merits after ascertaining to what extent private interests should be called upon to contribute. Section 139 of the Public Works Act authorizes the making of by-laws regulating heavy traffic on roads, and for the fixing of charges. From the evidence tendered ha regard to this matter it would appear that local bodies in many cases are not availing themselves of these powers to the fullest extent. Instances have been cited where roads hitherto in good repair have been cut to pieces by heavy traffic, particularly in connection with timber, while those responsible have escaped the costs, leaving the burden to be borne by the local ratepayers. There is a tendency on the part of some local bodies to regard the revenue from State timbersales as the source from which funds should come to make good this damage, but in my opinion the expense should be borne by the industry as part of the cost of production. The control of public roads is vested in the local authorities, a trust which should be jealously guarded in the public interests, and the utmost vigilance is necessary to prevent operators and transport contractors from escaping the costs of repairing damage brought about by their operations. Frequent reference has been made to the difficulties arising in connection with the application of heavy traffic by-laws, and I would therefore suggest that if the powers under the Act are considered to be defective or insufficient, then the local bodies should confer and submit proposals to the Government for amending legislation. The advent of the motor-vehicle is proving a serious problem so far as concerns road maintenance, and if this mode of transport in respect of timber is to be brought into serious competition with transport by tram-line, then the sooner the whole question is reviewed the better. It may not be out of place to mention that the diversion of timber traffic from the road to the tram-line should, in my opinion, be encouraged, and to bring the tram-line to its fullest utility value the question of introducing measures to create important lines " common carriers " for goods wherever possible is a subject which is deserving of serious consideration. Valuable suggestions in regard to this question will be found in the evidence submitted by the State Forest Service and the Public Works Department, and I would suggest that the matter be taken up by these Departments as early as possible. The question of better roads in country districts is a matter of vital importance as having a direct effect on the paramount industry of New Zealand—viz., farming —and the efforts of local bodies to provide better ways for internal communication are deserving of every encouragement and assistance which lies within the power of the General Government. At the same time, however, I cannot see any logical reason why State timber-sales should be singled out as a special source of revenue for the upkeep of county roads. My recommendations in regard to this phase of the matter are that the present system of handing over a portion of the timber revenues to local bodies should be wholly abolished by legislation, and that for the future State aid for roads and other works should be by way of direct grant out of the Consolidated Fund or Public Works Fund, as the case may require. It has been argued that State forest lands are in the main non-revenue producing so far as local rates are concerned, and in this respect are in a better position than private forests, where rates are payable on both the land and timber values. This argument applies to all unalienated Crown property. When millingtimber on Crown forests is sold the licensee is liable for rates on the timber, and if he pays a rental for the land he is liable for rates on the value of the land also. To even up the position, however, the area of unalienated State land, including

Heavy traffic should bo taxed.

Heavy-traffic by-laws.

Tram-lines should be encouraged. Common carrior.

Why tax timber sales for upkeep of roads ?

Abolition of present system, and substitute proposed.

Local rates on timber.

Suggested alteration to basis of annual rato subsidy.