Early Provincial Railways.

Railway construction was commenced as early as 1850 in both New South Wales and Victoria.

In New Zealand, a railway to connect Christchurch with Lyttelton was mooted as far back as 1851. A battle of routes, however, occurred; and, when that was settled at long last, the Provincial Government's legislation called for validating General Government legislation, and that in turn had to await the Royal Assent. With all these delays it was 1860 before the Railway was commenced. In the ensuing years the Canterbury Province enjoyed so great a secondary prosperity as a result of the Otago gold rushes—then at their height—that it was able to write £50,000 off the £300,000 loan while the works were still in progress. The first, section from Christchurch to Heathcote (constructed by plant brought up the Heathcote River) was opened on 1st December, 1863, and the final section (including the 129 chain Lyttelton Tunnel) exactly four years later. The Christchurch-Selwyn line (commenced in May 1865) was also completed in 1867.

Many of the other provinces had grandiose schemes for railway construction. As early as 1862 the General Government had found it necessary to point out to the Marlborough Provincial Government that an ordinary revenue of £1,700 and a precarious land revenue of about £28,000 annually, scarcely justified the raising of at least a £60,000 loan for the purpose of building a Picton-Blenheim railway. In 1865 an Act was passed authorising the construction of this railway by private enterprise, but that project lapsed.

Even in Nelson, where the Provincial Government deservedly enjoyed a reputation for caution, the Provincial Council, in 1863, requested the Superintendent to apply for permission to borrow £300,000 for a railway to the South. The Nelson and Cobden Railway Act was passed in 1868, but here, again, it was found impossible to satisfy English capitalists as to the agricultural potentialities of the districts through which the line would pass en route from Nelson to Grey mouth.

In 1863 the necessities of the Maori wars (and in particular the need for prompt access to the Waikato River) led to the projection by the Auckland Provincial Government of the Auckland-Drury Railway (22 miles) with a branch to Onehunga.

As early as 1863 Southland, too, had sanctioned a quarter of a million loan for jetties, a Bluff-Invercargill Railway and an Invercargill-Winton “tramway” (i.e., a railway with wooden rails). After a temporary suspension of construction in 1864 owing to a shortage of funds, the Bluff line was completed on the 5th February, 1867, and the Winton project four years later.

By the end of 1863 provincial debentures had become unsaleable, except at a heavy premium as compared with General Government debentures. The Central Ministry recognised something would have to be done, and announced that any province wishing to borrow for railways and other purposes should first set aside portion of its waste lands sufficient for the ultimate paying off of the loan.

Eventually the Consolidated Loan Act, 1867, was passed; which required all future loans for provincial purposes to be raised through the General Government and charged on the Consolidated Fund. As far as possible General Government loans were to be substituted for existing provincial loans; and in the future no loans at all were to be raised by Provincial Governments.

General Government action was certainly called for, as the organisation of the provinces was showing itself incapable of dealing with the railway construction problem. The failure of Otago to secure the co-operation of Canterbury in constructing a road bridge over the Waitaki River showed how difficult it was to carry out necessary work when more than one province was affected. There was also no comprehensive plan for the whole Colony on major issues; and Canterbury had adopted a 5 ft. 3 ins. gauge for its railway, while Auckland, Nelson and Otago were working on a 4 ft. 81/2 ins. gauge.