PUBLIC RECORD OFFICE
Reference :-
C.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
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24. Observing Mr. Stanhope's remark, that "the conditions under which the con- sulting engineer considers the departmental system of construction might be adopted are precisely those which it has usually been found impossible to fulfil," I turned with some eagerness to Sir C. H. Gregory's letter to ascertain what those conditions were. They are twó: 1st, that The works should be carried out under "the direction of an engineer of practical railway experience, well acquainted with "all the conditions of work on the ground, such as Mr. Waring"; 2nd, that "He "should have the same latitude of action allowed him which would be granted by a large contractor in England to his chief agent in Ceylon." As Mr. Waring's services are available, and as the stipulation respecting reasonable freedom of action is one dictated by common sense, I can see nothing impracticable, or indeed difficult, in the
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fulfilment of these conditions.
25. Mr. Stanhope's doubt, whether the rates for goods traffic could be lowered so much as is contemplated by the Commission, is not altogether intelligible to me. There is no question of lowering or altering the existing tariff. The rates on which the Commissioners base their calculations are those which now are, and since January 1st, 1886, have been, in force on the whole line, and under which its revenue has, on the whole, decidedly improved.
26. The uncertainty expressed as to the accuracy of the estimates of anticipated traffic involves a more serious doubt. It has been already explained that these estimates are based on a supposed continuance of the existing amount of traffic, and that this course was a perfectly rational and moderate one. They took no account of the indications of revival in the coffee industry, but assumed that it would remain at its present amount, a modest assumption fully justified, because, should it unfortunately prove too sanguine, it was felt to be certain that any deficiency would be more than made up for by the increased export of tea, of which also no account was taken in the calculations based as they were, as I have before remarked, on the presumed con- tinuance of the existing amount of traffic only. That the decision to take no account of the improvement in the yield of coffee showed a sober and cautious spirit, will be admitted when it is remembered that not only has the improvement in this district been progressive, but that the crops of 1886 were nearly equal to those of 1878; while that some confidence may not unnaturally be felt in the rapid increase of tea traffic, the following returns will show :-
The exports of tea from Ceylon were in-
1881 1882 1883
Ib.
·
348,573 697,268 1,805,768
1884 1885 1886
lb.
2,392,972
4,372,721
7,849,888
January and February 1886, 793,321 lb. January and February 1887, 1,518,890 lb.
27. It is surely impossible to deny the present expansion of the tea industry, or that, in the absence of causes as yet unforeseen, that expansion will continue. It may, of course, be urged that this industry, like the coffee industry, may be suddenly arrested by some scourge similar to the Hemeleia vastatrix. No doubt this is possible, but it will be equally so at any future period. No reason drawn from the experience of tea cultivation in China, Assam, or elsewhere, leads us to anticipate such a visitation. If it comes, it will come unexpectedly, and the chance of its appearance may be as powerfully appealed to as a deterrent from action 10 years hence as it is now, indeed, in some respects, more powerfully, for the longer any cultivation has been carried on, the more susceptible does the plant cultivated seem to be to disease.
28. It was pointed out by the Commission in its report that a large part of the tea traffic referred to hypothetically, and merely as a possible substitute for any failure in the coffee orops was, though so referred to, in no sense speculative or conjectural," but depended solely on the arrival at maturity of tea already planted during the last few years. Mr. Stanhope acknowledges that there is "some reason to hope" this may be the case, but considers it too soon to depend on it being so.
Viewed in the light of the above figures, his successor will, I hope, show more confidence in the future.
29. The 16th paragraph of Mr. Stanhope's Despatch must, I fear, have been penned with some haste. Had he paused for a moment to consider the full import of the sentence, it would have been impossible for him to have failed to perceive that the argument it contains is one altogether fallacious."
It may often pay the proprietors of a line of railway to extend that line, so as to catch new traffic, when it would not pay a new company, (receiving payment only on account of the traffic passing over that extension itself) to construct it.
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This may be most shortly demonstrated by an algebraical formula :—
Let a revenue received for transit of goods over extension alone.
b= revenue received for transit over old line of goods brought to it by extension. <= expenses of maintenance, and running expenses on extension. y=cost of new plant, workshops, &c. essential to a new company.
Then, if the extension is in the same hands as the old line, the profits will be (a + b) - 20. *
But if otherwise, and the extension is an independent concern, the profits will only be a- (x + y).
It is therefore quite clear that the outlay in constructing such an extension, which might in the first case be a wise expenditure, might in the second case be a piece of foolish extravagance. I cannot conceive that any body of men would be found willing to associate themselves with the object of making a railway, the sole purpose of which was to supply new traffic to another line. profit from the extension, and would, at the same time, incur far heavier expenses in Such a company would receive far less its management than the proprietors of the existing line would do.
The fact of capitalists being reluctant to embark on such an undertaking could afford no proof whatever that the extension would really be unremunerative as an adjunct to an existing line.
30. Much speculation has been excited by the fact that Mr. Stanhope's Despatch contains no reference to the construction of a line on any gauge between that of the existing line and the narrow-gauge Darjeeling Line, which has been pronounced unfit for the work which would be required of it in the centre of Ceylon, A line upon a metre gauge has been advocated as a compromise, but not, I think, by those who have examined the question most closely; and I apprehend that the reasons why no reference was made to such a scheme in Mr. Stanhope's Despatch were that Her Majesty's Government shares my own impression that the saving effected in actual construction would be too small to counterbalance the inconvenience attendant on a break of gauge, and the cost, for a short line, of rolling stock, &c., of entirely new pattern.
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31. It is, I apprehend, the view of Her Majesty's Government that the railway should be some day continued on its present gauge (a supposition which gains strength from the fact that Mr. Waring has been directed to complete detailed plans of the proposed extension), but that, to use Mr. Stanhope's words, "a few more years'
experience will be required to form a safe judgment in the matter." object which we have in view is to shorten this period of experience, and to show that The great with great benefit to the Colony, and without appreciable risk of financial failure, a work may be now undertaken, without which the line to Nanu-oya is incomplete, and without an early prospect of the completion of which the present Nanu-oya line never would have been, and never ought to have been, constructed.
32. It is, I should hope, almost unnecessary for me to add that it is most distasteful to me to find myself thus engaged in a species of controversy with Her Majesty's Government, and that I should greatly prefer a silent acquiescence in the decision of the Secretary of State. But when, as in this case, reasons are assigned for the conclusion adopted which appear not only to myself, but to every member of my Executive Council, (including the Lieutenant Governor, who, as a comparative stranger, is certainly biased by no local influences or pre-conceived opinions), to be such as could not have possibly been urged had the true facts of the case been fully before the Secretary of State for the Colonies, it appears to me that I should fail in my duty if, while very deeply regretting any obscurity of diction on my part which may have caused the failure of my previous attempts to explain the actual state of affairs to your predecessors, I were to refrain from laying before you a plain statement of the misconceptions which appear to have existed. It is, as it seems to me, a duty I owe to you and to Her Majesty's Government on the one hand, and to this Colony and its Government on the other. It would be to do Government were I to admit a doubt that the obligation of this duty upon me will be an injustice to Her Majesty's fully acknowledged, or were I not to cherish a hope that where, as is here the case, the sole object of the Secretary of State is to adopt that course which shall most conduce to the advantage and advancement of the Colony, there will be no indisposition on his part to modify conclusions the basis of which has, on full investigation, been shown to be defective.
I have, &c. (Signed) A. GORDON,
The Right Hon. Sir H. T. Holland, Bart., M.P., G.O.M.G.
Governor.
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