East and West Coast and Nelson Railway.

An Act was passed last year to enable a contract to be made for the above railway. The following were the chief conditions of the contract to be offered:—

Crown land to the value of 50 per cent, of the cost of the railway was to be given to the contractors, such cost for the purposes of selection being estimated at £2,500,000. The value of the land to be ascertained by arbitration, and to be reckoned upon its estimated market value immediately prior to the date of the contract, and without reference to any prospective value; but no land to be taken to be worth less than 10s. per acre. The line to be divided into thirty-five sections, and upon completion of each section a proportionate part of the land grant to be thereupon selected and granted to the selectors. The railway to be made within ten years, and afterwards to be maintained and worked. Government to have the power of purchasing at any time after expiration of ten years from its completion at cost price, less allowance for depreciation.

New Zealand Governments really are very liberal to banks and to big companies. Considering that the value of the Crown lands to be chosen would probably be about doubled by the making of the railway, to give 50 per cent, of the cost of the railway in land estimated at its value, without reference to any prospective value, might be about equal to paying the contractors the full cost of the railway. To divide the railway into thirty-five sections, and upon completion of each section to hand over a proportionate part of the land grant to the contractors, would be to provide them with money to pay for it as they wanted it. And, after all these concessions, the Government was to have the right of purchasing the railway at any time after ten years from its completion. The people of New Zealand were thus to pay half the cost of the railway, but all the profits of the railway and the railway itself were to belong to the contractor. But even these good things were not sufficient for the London contractors and financiers. Like Oliver Twist and the daughters of the horse-leech, they wanted more.

—(See Hansard, vol. li. p. 107.)

As however half the cost of the railway would have been paid by the people of New Zealand, in land, to the value of that amount, (and of a much greater prospective value!) Messrs. Meiggs were really asking a guarantee of more than 5 per cent, upon their own share! But the great evil of the transaction would have been that instead of the railway adding to the revenue of the Government, its annual profits would have page 17 been so much tribute paid by the people of New Zealand to the London money-lenders and stock-jobbers. Mr. Fell, in his Delegates Report, (see Lyttelton Limes, November 2nd, 1885) says, From estimates based upon the report of a Royal Commission in 1883, and the opinion of the General Manager of the New Zealand Railways, the annual receipts of the line from the time of its completion, and which will certainly be largely increased with the growth of settlement, will amount to, £180,000. After deducting 60 per cent, which allowance is based upon the returns of the working expenses of New Zealand lines, this will give a net revenue of £72,000 per annum, or about 2¾ per cent, on the estimated cost of the line, exclusive of any receipts from the grants of land which will be made as the railway progresses."

Now if land can be "coined into money," as is done in Philadelphia; or if land worth money can be regarded as capital, in the same way that the Nominal Capital belonging to, or entrusted to the banks and invested in debentures and shares is considered as money, why should not the land which was offered to Meiggs and Sons be considered as capital also? All the money that is required is the use of a little of the gold which a State Bank should get from the other banks in exchange for State Bank notes. The remaining capital required to pay for the East and West Coast and Nelson Railway is the land convertible as the railway is made, in its 35 sections, into 35 payments in gold. Besides as the money is spent, the railway is made. And the railway is capital which would soon return an increasing revenue. A National Bank might with much better reason give a cash credit of a million pounds Stirling to the East and West Coast and Nelson Railway, or to the North Island Main Line, than to give the banks the right of issuing a million of pounds, nominal value of notes. In the former cases the Government would hold property convertible into gold with which to repay itself, in the latter, it permits the banks to impose upon the people a circulation for which neither the Government or people hold any security whatever!

From a letter of Mr. J. M. Twomey's, previously referred to, the writer learns that Mr. White, of Balcairn, has taken the initiative in forming a National Bank League. The writer would suggest that the members of the East and West Coast and Nelson Railway League should all become members of the National Bank League!