Dining the brief discussion that followed the reading of this paper, the question was raised, Whether it was right to charge interest on sums expended on lines still under construction? I replied that prior to the appointment of the Railway Commissioners it was both law and custom to do so, and I believe that law is still in existence. Someone disputed this, but a reference to Hansard of 3rd September, 1885, will prove that I am right. The then Minister had not charged interest on lines under construction. I pointed this out, and as a consequence he had to ask leave "to lay on the table an amended statement of the profit obtained," etc., and said that the error "has been pointed out to me through the press by Mr. Vaile, of Auckland." This should be conclusive.

In India the practice is to charge the railways revenue account not only with interest on the amount expended on lines open, and under construction, but also on the unexpended balances of all sums appropriated for railway purposes. (See Indian Railway Report for 1900, Part I., page 5.

My paper is comparative, and, of course, I could not show the relative position of profit in this, and former periods, except by taking the account in the same manner throughout. Had my object been to make out a case against the present Ministry, I could have done much more. For instance:—

Prior to 1896 all the numerous host of Government official were carried free, so were the mails, and all the material used in railway construction or other Government work. Now, these are all charged for as ordinary traffic, and this very elastic item goes to swell the railway dividend. In 1895 they estimated these services at £38,500; since then they have not condescended to tell us what they consider them worth—I suspect the amount would surprise us.

There is another railway account that wants looking into, and that is "Refunds." Its precise nature I have not succeeded in finding out, but I understand it is for sums returned page 12 to users when they have been overcharged, and for rebates given to large users, "Special Kates for Quantities." In other words, differential rates to the wealthy.

In 1895 these amounted to £92,092. In 1896, to £91,298.

In 1897, to £98,245. In 1898, to £98,889; In 1889, to £95,946. In 1900, to £115,107. In 1901, to £123,159.

The rapid rise in the last two years is noticeable. It would be interesting to know to whom these "refunds" have been made. Ought not our railway accounts to be strictly investigated?

The position I take up is this: Our railways are owned by a company, the shareholders being the community, and the directors the Ministry and the general manager and sub-manager. The "Railways Statement" is the annual report and balance sheet of these directors, and I say in this report the accounts have been so manipulated as to lead the shareholders to believe that their investment is yearly paying them an increasing dividend, when the said directors must be aware that the dividend is year by year rapidly decreasing.

Special Note.—The above paper is printed word for word, as I read it before the Congress, which received and thanked me for it. Every figure in it is taken from the public records, and I am prepared to stand by them, as also by the facts stated, and conclusions drawn.

The proceedings of this Congress, and the papers read before it, are now—per favour of the Premier—being printed by the Government Printer. Pressure has been put upon me to alter my paper so as to make it reflect less strongly on the Government. This I have absolutely declined to do.

As I have been threatened that the edition in the hands of the Government Printer will be "cut down and altered in a manner you will not like," it is necessary, that I should state, that the above is the edition for which I am responsible, and that I have had no hand whatever in any alterations that may be made in the one issuing from the Government press.