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of those who have never been engaged in an audit of way-bills must be allowed less weight, because they have no means of judging whether the check by the receiving station is sufficient it is simply accepted as being so. But where the way-bills are subject to an independent audit, it is found that many errors require correction which had escaped the notice of the receiving station. Again, unless there is some overriding authority, different interpretations of the tariff would inevitably be adopted in different parts of the system, and the charges would not be uniform. No tariff can be so accurately drawn as not to leave points in which doubt arises. Where the case is thought sufficiently clear, the Audit decides, but where a legitimate difference of opinion exists, the matter is settled by consultation between the Audit and the General Manager, or, if necessary, by the Minister. Whether, therefore, by press copies, or by the original way-bills, there are so many advantages attaching to an audit of the way-bills, amongst which not the least is the constant collection of small under-charges which would otherwise be lost, that I should regret any decision to abandon it. As between the originals and press copies, it must not be forgotten that the latter come direct from the sending station by every mail, concurrently with the despatch of the goods, thus enabling the audit to be kept very closely up to the transactions, whilst the originals would, come from the sending station after some considerable delay, and the audit would be probably a month behindhand. The value of an audit is so much increased by its following close on the transactions, that further consideration should I think be given before the press-copy way-bills, however objectionable on other grounds, are abandoned. Amongst the accounts published by the Commissioner of Railways is one deserving of special attention. It is an account of " the railways in account with " the Consolidated Fund." One of the most important facts which it is desirable that Parliament and the colony generally should know, is what the railways are costing the country annually, and have cost it on the whole. The cost of construction has been paid for by those who have taken up the loans, but the cost to the colony is the sum annually raised by taxation to make up the deficit of the railway revenue. Such an account, if debited with the whole of the money issued from the Treasury on the Working Railways Account, and with the interest paid on so much of the loans as have been spent in construction, and credited with the railway receipts paid into the Treasury, and the value of the stores in hand, would leave a resulting balance of the amount actually paid by taxation of the community for the convenience of a railway system. It should not be inferred that this balance is a measure of positive loss to the community. To determine the latter, elements must be introduced into the calculation of which no accurate computation can be made , as, for example, the saving by cheapness of carriage, and the gain by the increase of production in districts which, but for the facilities afforded by the railways, would have remained for a long time unoccupied. But the form of account proposed would enable Parliament to determine, in any proposal for opening new lines, to what extent the general taxation must be increased, and whether the incidental advantages to be gained were such as to justify the additional burden. The Victorian account shows the account with the Consolidated Eund in one total from the beginning, and in one sum for the whole railway system. It maybe questioned whether it would not be of greater utility in this colony, if distributed amongst the several sections, at least into those which are not in railway connection with one another. After inspecting the accounts of the Australian railway systems, I am unable to say that any change of importance is necessary in the system in force in this colony. It is quite as effective, and in some respects simpler than most of those in other colonies. In some important features I was prepared to submit alterations in the 14—A. 4