B.—No. 3.

1. A Railway from the present terminus in Christchurch to Timaru, a distance of 100 miles, and including1 bridges over the Rakaia and Rungitata. 2. A Railway from the same terminus, northward to the Kowai, the northern boundary of the Canterbury Plain, ii distance of about 25 n.iles. 3. Impoitant Harbour Works in Lyttilton anc 1 Timaru, for remedying the delay and expense which at present attends the landing and shipment of goods at these places. The land required for the Railway has been reserved from sale, excepting for a distance of about six ir.iles on the Southern and eighteen nv.les on the Northern Line. Acting upon the advice of Mr. N. T. I);>gne, an Engineer of considerable eminence, the Canterbury < ■overiiment estimates the cost of the Railways at an aveiage of £B,COO per mile for the Southern Line, including the large bridges, and £10 (CO for the Northern Line. The total expenditure on ihe v hole of the above woiks, and on the completion of the Lyttelton Railway, if es-imaitd at £1,400.000. Such expenditure would be spread over a period of at. least six years No considerable sum vcm 1(1 be required f"r six months from the present time. Assuming that a capital of £1.400,000 is raised at a charge of 6 per cent, interest and 1 per cent. Sinking Fund, ibe annual charge when the whole sum has been expended will be £98,000. Of coarse, t.'.e whole of this sum will not have to be provided for until the works are completed. IV. L'etvrns from the Railways and Harbour Work*. 1. The returns fmm the Harbour Works will consist of dock and wharfage charges. It is hardly practicable to form any accurate estimate of their t-xact amount. 2. The iM urns from the railways, though less uncertain, must alco to a great extent be conjectural only. One source of income, however, can be arrived ai with tolerable certainty, viz , the produce to be convened fiorr. and sunpli< sto the sheep and cattle stations. The value of wool exported from Canterbury in I^6l was £1 iin.OOO ; in 18(>3 it had increased to £340.000. The number of bales shipped last peftson wire 18 363. In tTiree years from this time they will be at lea^t 30,00!). On the completion of the railways, the whole of tie « oo] of the Province will be conveyed by it, and, at a very large reduction on the present rotes of carriage, will yield £'23.000. The return loads to the stations throughout ihe year are generally taken at an equal amount, but in the present estimate they are assumed to yield only £17.000—making a total for station traffic of £40,000. By the time the railways are co i plrted and the whole amount of interpst and Sinking Fund has become payable, the whole export will largely exceed that above stated. Tins is provided, therefore — By two-fifihs of the Land Revenue £70,000 „ Returns for station traffic ... ... ... ... ... ... ... 40,000 £110,000 To meet a charge for interest and Sinking Fund, £98,000. This will leave the whole of the Passenger Traffic and the conveyance of Stock, Agricultural Produce, and other goods, in fact the whole of the poods traffic of the Province excepting that from the stations, as well as the returns from the Harbour Works, t<> be charged merely with the working expenses. It seems almost beyond question that, even were the cost of the whole of the contemplated works charged against the traflic which will exist in tbree years, t! c provision proposed to be made for their cost would be more than sufficient. It is assumed that the traffic of the Province ten years hei;ce will make the contemplated woiks entirely self-supporting. It should be borne in mind that the Canterbury Railways will be constructed under circumstances most favorable to piofit. 1. The co^t of acquiring land will be almost nominal, 2. The cost of construction, owing to the perfectly level character of the country to be traversed, will be small. 3. Owing to the same circumstance, the cost of working will be low. The engines to be employed will be very light, and consequently t c wear and tear of the line will he small. 4. Lyttilton being the shipping poit for Canterbury, and for a considerable portion of Nelson, the whole of ibe exportable produce of that tract of country, and nearly the whole of its imports, must pass over the Railway. 5. The mow profitable part of the line, viz., that within 25 miles on each side of Christchurch, will be undertaken first. V. The Present Application of the Provincial Government of Canterbury. Notwithstanding the evident advantages to be derived from the works above-mentioned, and the great- necessity which exists for them, the Provincial Government finds itself unable to undertake them, because iis Debentures, in common with those of the other Provinces of New Zealand, have become next to unsaleable in the London market. The concurrent testimony of the Agent, of the Province and other friends in London, and of information received from time to time through the various Banks, proves that the circumstance is owing not so much to a temporary scarcity of money as to the unsatisfactory nature of the security which alone tie New Zealand Proxinces can offer to tl eir creditors, and to the refusal of the Committee of the Stock Exchange to allow Provincial loans to b? quoted there. In the case of the Lvttelton and Christchurch Railway loan, two-thirds of which undertaking may be said to be completed, the iJnion Bank of Australia has been unable to Bell an)1 Debentures

25

PROVINCIAL LOANS.