776 EEPORT— 1886. 



half an hour iu the length of the shift. This additional half-hour represented an 

 increase in the hours of lahour of 8"3 per cent., hut the corresponding increase in 

 production was only 5'1 per cent. It was therefore extremely doubtful whether 

 an economic advantage would result from an extension of the hours of hewers. 



5. EemarJcs on the Principles applicable to Colonial Loans and Finance. 



By Hyde Clarke. 



The author dealt with the development of our colonies and India by the 

 application of credit in the shape of loans for the construction of railways, 

 irrigation, and other public works. He stated that in order to equip itself a new 

 country must begin in debt, and that this condition is not, as it has been made by 

 some, necessarily a cause of reproach to the colonies. The borrowed moneys have 

 in most cases been applied to the provision of railways and works producing an 

 equivalent revenue. Thus in the end the debt, as in the case of New South Wales, 

 becomes a property. He objected to indiscriminate application of debt totals, 

 debt per head, taxation per head, &c., as fallacies and real abuses of statistical 

 methods. He maintained that the comparisons must be equal, and that a debt 

 incurred for public works cannot be set off as equal to a debt incurred for 

 deficits and war, or with a case of the railways being formed by joint-stock 

 capital. He pointed out the confusion between capital and current expendi- 

 ture, which had embarrassed the financiers of India and injured the develop- 

 ment of the empire. This, he said, was partly caused by the neglect of a 

 national balance-sheet at home showing the capital stock of the nation. Approxi- 

 mations to such a cadastre were to be found in the Domesday Book of 1086, and 

 the census of the United States, showing the resources of each State. The agri- 

 cultural returns are an approximation to this. The first requisite of a colony, as 

 of all countries, is means of transit and transport iu the shape of railways such as 

 can compete with other districts in the conveyance of goods to market. It is in 

 this way alone the wilderness can be made a fertile and a productive land. Rail- 

 way material, not being of local supply, can only be obtained from abroad and from 

 borrowed means. With regard to such cases he took that of New South Wales 

 according to the budget of July 1886. A debt of 30,000,000^. had been, or was 

 being, contracted, and of this 2o,000,000Z. had been applied to railways, besides 

 what has been applied to other work and what remains to be applied to railways. 

 The net railway revenue for the year amounted to 1,000,000/., equivalent to 4^ 

 per cent. (4'48) on the loan monej-s, and leaving a small surplus of profit, after 

 payment of working expenses and interest as loans. The debt of New South 

 Wales per head was only for public works, while the home debt of England is 

 wholly um-epresented by assets. Mr. Clarke then considered the market price of 

 colonial securities, which was high for the old 6 and 5 per cent, loans, and has 

 enabled these to be replaced by 4 per cent, loans, the Government of New South 

 Wales having lately placed five millions at 3^ per cent., a rate towards which 

 colonial securities are approximating. In the case of New South Wales the saving 

 in interest gives the colony a further power of borrowing and of creating assets 

 without increasing the fund for interest. Mr. Clarke showed also that English 

 figures were fallacious as a standard for the cost per mile and rate of earnings. 

 English railways are trunk lines, and many are suburban lines with heavy pay- 

 ments for land, for tunnels, and underground lines, and with large stations, more 

 engines, carriages, waggons, rolling stock and appliances than on the light colonial 

 lines with land free. Where a line is constructed by the State, as it has supple- 

 mental resources from increase of taxation, it can even afford to make a loss in its 

 railway charges for pubUc purposes. He then referred to the low price of rails, 

 steel, and iron caused by the inventions of Bessemer, Siemens, &c., and the 

 advantages thereby conferred on the colonies, which can now obtain their extensions 

 at reduced rates of cost. At the same time he pointed out that this low price of 

 material had opened up all the land in the world capable of producing wheat, 

 maize, sugar, and coffee, and given cheap steel ship ocean freights. The increased 



