T. S. WESTON.]

175

D.—4.

out of the concern. Irr the second place, the Railway Department is not tho solo Department in the Dominion in which the State has an interest. After all, the railways, though they may have done much for the Dominion, depend for their prosperity upon the elevelerpnrcnt of the whole Derminion, and unless the whole Dominion develops—each part to its fullest extent and looking over a cycle of years- the Railway Department will not flourish. Moreover, as we; see on the Continent, water' service is always recognized as cheaper for heavy traffic than the railways, and em the Continent erf Europe, notably in Germany, the canal and river system has never been sacrificed to the convenience or prosperity of the railways ; and even in England, where the great canal system built up in the 'after end of the eighteenth century has suffered in consequence erf the development of the private railway systems, even now regret is being expressed with regard ter that sacrifice, and an effort : s being made to revive that old caral system. As to the value, there are four bases on which this wharf can be valued. There is, first, its earning-power as suggested by the Railway Department; there is, second, its actual original cost of construction ; third, its present value, allowing for deterioration ; and, fourth, the book value at which it weruld appear in the books of the Railway Department, after allowing ferr cost of maintenance and repairs and interest crn cost erf construction, the surplus profits from that wharf being devoted ter a reserve fund for the capital originally invested in it. Now, with regard to the earning basis, that I would submit relics serlely upem the fact that under the Railways Act there is no limit placed upem the discretion of the Railway Department to impose what wharfages it likes. It could legally impose ss. if it likes ; but I submit, in view of the provisions erf the Harbour's Act, sectiems 165 and 166, all, revenues derived from a harbour, whether from wharfages, harberur revenue, err harberur dues and pilertages, have all to go back and be employed in the improvement of the; harbour for shipping purposes. As far as I know there is no provision ter that effect in the English Acts. If we have regard to the principle laid down as governing Harbour Boareis, then erf course the basis of this enormous price asked by the Railway Department falls away at once. Now, with regard to the actual cost of construction, the only evidence, we have beferre us points ter the fact that that 500 ft. erf wharves or quays really cerst the Department about £3,000. We have Anderson's contract of about 160 ft. or 170 ft., which was let at £800, which works out at about £5 per foot. Wo have: ncr evidence with regard to the original jetty put up. Then we have Saunders's oerntract; and, looking to the evidence erf Mr. Hennessy and one's own knowledge of the price of timber in those- days, and allowing ferr the fact that we have evidence that a better wharf could be built to-day of hardwood for £10 a foot, I consider that an estimate working erut at a little less than £3,000 is a fair estimate erf what that wharf must have cost. As pointed out by Mr. Williams, there is the: question erf reclamation. Of course, that railway-statiem was really built for railway purposes. At that time Foxton was the terminus of the railway system erf the west coast erf the North Island and required a big railway-statiem, and looking to the figures given us by Mr. McVilly and other officials of the Department with regard ter station alterations at Levin, £15,000 docs not seem, tiro much to pay for a station which then, in the opinion of the Railway Department, was likely to be: used for many years as a terminal station. So I submit that, if anything, little of the cost of the reclamation should be debited to the quays. Of course, we are asking for part erf that reclamation —namely, ferr the site em. which Levin and Cer.'s warehouse is situated. We have; some: evielence as to the value put upon that part of the land. We have evidence to the effect that £50 is considered to give a fair return ferr the capital invested. Capitalizing that would give tho value of that laird as £1,500, ser what we are asking ferr is land valued at £1,500 and a wharf estimated at «Jk3,000. That is £4,500. Of. course, we, would require a proper right erf access from the roadways of Foxton to that wharf and to the: goods-shed, because it weruld be; useless for' us ter have the wharf and Levin's site witherut some; access from tho road. Then, with regard ter the presemt value erf the wharves, there is no dispute aberut that. Our- engineers estimated it, one at £3,500 and another at £3,700, and the Railway Department accepted that valuation. But I submit that is not the proper basis in a matter like this on which the value sheruld be determined. It; is ncr gererd establishing a Harbour Board burdened with de;bt. This Harbour Board has an important function to perform to the district, and if the port is to be developed it means that the district will have to put their hands into their own pockets to develop it. If you look at the extraordinary figures supplied by the Railway Department- figures which we;ro never supplied ter us until at Ferxtern — we arrive at an extraordinary position. I have worked out the Department's <rwn figures to see what capital they have now accumulated erut of excess over revenue and expenses which, they have received from Foxton since 1901. When elealing with this question I would like to point out to the Commission that prior to 1901, ferr three years prior, the tertal income derived from wharfages was very little less than that derived in 1901, so that one can assume that the rret profit made: in 1901 was praotie:ally the same as that made" in 1.900, 1899, and 1898. We have- no record of the profit made prim- to 1901, but in answer to questions from tho bench Mr. McVilly admitted that the Railway Department had landed a quantity of Gervernment goods arrd they had derived benefits in that way. I have taken the difference between the receipts and expenditure in connection with the wharfages sherwn by the Railway Department orr which they base their claim for the goodwill. Then I have allowed them interest at 3J per cent, on £8,000, which I give them in as being the capital cost erf the wharves and of any reclamation required in connectiem with the wharf. Ido not for one minute admit that represents anything like what this railway wharf cost, even inolueling the reclamation, but I have taken that for the purprrse erf computing those: figures. Taking it at 3|- per cent., the percentage allowed by the Railway Department in. their accounts, we havo to add on in each year the. amount of expenditure: for that year, £280. After adding that £280 to the expenditure I havo taken the difference and capitalizeel it at 3| per cent., and I fine), that after allowing ferr the loss made in three years when there was a big capital expenditure erut of profits, and after alhrwing for oompounel interest ferr the loss, as I have allowed for profits, I find the: Department has received up to the 31st March, 1916, the sum of £12,401 18s. 4d.