THE ADMINISTRATION OF SIR HENRY BARKLY 93 



term of years. The Governor's sensible recommendations were 

 referred to a special committee for consideration, and on the 21st 

 of May that body submitted an interim report in which they ex- 

 pressed an opinion that the leading lines of railway ought to be 

 under the control of the Government to avoid the evils resulting 

 from the construction of competing lines. They thoroughly en- 

 dorsed the reservation of contiguous lands for redemption purposes, 

 and they recommended the immediate survey of a line from Mel- 

 bourne to Castlemaine, with a view to its eventual extension to 

 the Murray, and a line from Geelong to Ballaarat with subsequent 

 extension westward. The report is silent upon the business pro- 

 position to lease the lines. Two years and a half elapsed before 

 these recommendations began to show promise of fulfilment by the 

 completion of arrangements for borrowing the money to give effect 

 to them. Throughout the long period of discussion, the intention 

 of repaying such loans within a denned period, and from specific 

 sources, seems to have been repeatedly advanced as a justification 

 for incurring what was then regarded as a very onerous liability. 

 In October, 1857, when the Kailway Loan Bill was before the 

 Legislative Council, a committee of that House reported that before 

 they could sanction incurring so large a debt as 8,000,000, they 

 required to be satisfied that principal and interest would be 

 liquidated without pressing too heavily on the general revenue. 

 They said that all witnesses examined on this point had declared 

 that the returns should leave a clear net profit of at least 10 per 

 cent, on the outlay. They recommended that whatever the profit 

 was, it should be strictly reserved for redemption purposes, and 

 to prevent any misappropriation, the surplus so shown should be 

 applied to the repurchase of railway debentures at the end of each 

 year. 



Had these wisely conservative considerations prevailed, the fin- 

 ancial position of Victoria would have been very different to-day. 

 There is no doubt that a State is fully justified in borrowing money 

 for works that materially help the development of the country, and 

 especially, as in railways and roads, that add a large market value 

 to its property. When, as in Victoria, the State was the owner of 

 the bulk of the property to be so enhanced hi value, the first fruits 



