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[The following are the Despatches and Reports referred to yesterday in the Discussion on the first reading of the Adelaide City and Port Railway Bill.] Colonial Office, 23 rd November, 1850

Sir— l have to acknowledge your Despatches of the following numbers and dates, No. 43, 5th March, 1850; 44, 6th March ; and 75, 30th April — relative to the construction of a railway to connect the town of Adelaide with the sea ; the former two enclosing an Ordinance for effecting that object, and another for securing a guarantee to the Adelaide City and Port Railway Company, for a limited time for- Her   Majesty. 2. I have also been in correspondence with parties in this country representing the interests of the Company, who have complained of various provisions of the first Ordinance, respecting which, it is   unnecessary that I should address you at length, since I am now informed that the Company do not Intend to proceed with the work. 3. It appears from that Ordinance, clause 35, that in August next, unless five miles of the line shall previously have been constructed, the Ordinance itself will cease to be operative ; and the second   Ordinance, No. 4, will of course become inoperative also. Under these circumstances it appears to me unnecessary to advise Her Majesty either to confirm or disallow these Ordinances at present. 4. The points on which the Company has complained of the provisions introduced, are of a nature which it appears to me indispensable to leave to the decision of the Local Legislature ; and, although I may regret that the original promoters of a scheme of so much probable importance should not feel themselves able to carry this project into execution, and should have incurred much fruitless labour and expense, I am not pre pared to say that they are entitled, in my opinion, to any compensation in the event of the Local Government, or another company, resolving ultimately to proceed with the work. I can only say that, if expenditure actually incurred by them can be made available by others, it would not be unreasonable that an arrangement should be entered into between such parties and the original Company which might secure the latter some reimbursement. 5. I enclose, for your information and that of your Council, an extract of a report, which I have received from the Commissioiwn of Railways, on the subject of these Ordinances, Inasmuch m it hmih to aa tin its soggMttoai maybe of valuta th« LagtiUtn* wfcta ttw mO^mt is

gain taken up, although, as above stated, I have no positive directions i a give you relating to it- ? . .- - ? 4 6. I have no doubt of the correctness of the judgment which the Local 1 rovernment has formed as to the expediency of extending the railway, 1 rhenever made, to the North Arm, and hope that no opposition grounded 1 n private interests will be allowed to prevent it. ? Ihave, &c^ , GREY. 1 Jent-Govemor Sir Henry Young. , 'EXTRACT of a REPORT from the COMMISSIONERS of RAIL- '? WAYS, dated 12th November, 1850. ' In considering these papers, the attention of the Commissioners' has : teen principally directed to the questions on which a difference of ipinion has arisen between the Local Legislature and the promoters of he proposed undertaking, and the grounds on which the latter have ledined to proceed with the construction of the railway, in consequence -f certain provisions which were introduced into the Bill while under liscussion in the Legislative Council. ? 1 u In the letter of the Secretary of the Company, addressed to Mr. Elawes, in August, 1850, it is stated that the provisions of the Railway i.ct most objected to by the Company are those contained in sections 56 and 37, limiting the passenger fares or tolls. The maximum tolls illowed by section 36 (and which are explained by section 37 to include the use of carriages and engines) are 2d. a mile for first-class, ljd. for second class, and Id. for third class passengers. It is observed in the letter referred to, ' that these fares are considerably lower not only than the maximum fares, but than the fares actually charged on the leading English railways, although it is clear that from the absence in Australia )f coal producing coke fit for locomotive purposes, and also from the iigh price of mechanical labour in the colony, the working expenses nust, in proportion to the traffic, be far greater than in England.' ' Without venturing to express any decided opinion on these- matters )f local circumstances, respecting which the Commissioners have no means of forming a judgment, the Commissioners would observe that :here appears to them to be considerable weight in the remark made by the Governor of the colony, in his despatch of the 5th of March, 1850, to the effect that as the cost of railway legislation would be less, and the rorks and buildings of the railway would probably be of a less expen sive character in the colony than in the mother-country, the compara tive economy in these two branches of expenditure, combined with exemption from taxes and concessions of land, would more than coun terbalance the increased price of any fuel that it might be necessary to import The estimates of the receipts and expenditure laid before the Legislative Council on the part of the Company, have been exa mined with some care in this office, and as far as the Commissioners are jnabled to draw a comparison between the probable expenses in the solony and in this country, the Commissioners are inclined to believe that the Legislative Council are justified in the riew taken by them as to the excess in the estimated expenses, and that to a proportionate extent there may be grounds for lie redaction made by the Legislative Council in the fares proposed by the Company. And although the Company are correct in stating that the passenger fares as reduced by the Committee are considerably lower than those at present charged on the leading English railways, the Commissioners at the same time think it right that the attention of Lord Grey should be called to the circumstance that they are still in excess of the average fares which, according to returns laid before Parliament, are at present charged (though not of the maximum luthorized) on several railways. The Cork and Bandon, the Blackwall. the West Cornwall (Hayle to Redruth), the Ulster, the Lancashire and Yorkshire, and the South-Eastern (North Kent), where the traffic par takes of a character not altogether dissimilar to that between the City ind Port of Adelaide, and that they are about the same as those on the Dublin and Kingston Railway. ' The promoters further object that the reduced scale ot fares and sharges inserted in the Act is not justified by the evidence given before the Committee on the Bill, and that the conclusions of the Committee were not founded, nor purport to be founded, upon evidence given before them, but upon certain estimates and reports which were Laid before them, containing statements which the Company's counsel bad no opportunity of sifting and exposing on cross-examination. 'The Commissioners are inclined to think that the promoters cannot at present insist on this objection to the sources whence the Committee derived the information on which their report is founded; since it appears from the printed minutes of the proceedings of the Council, that the Bill was recommended on the petition of the pro motets, for the express purpose of pointing out the errors in the tabular statements of estimated traffic and expenditure submitted to the Council; that the opportunity of doing so was in this manner afforded them, and their objections to the provisions of the Bill were considered seriatim. ' The Committee, however, do not profess to have been guided solely by evidence of the present state ot the traffic, as a basis for their calcu lations, but to proceed also upon the anticipations of the probable future advance In the prosperity of the colony, corresponding to its progress up to the present time. In their report (page 9, paragraph 20) they state, ' That the calculations proved before the Committee justify the anticipation that the expected revenue will be sufficient to support the annual charges, and still to allow profit to the projectors, notwith standing the reduction of tolls and charges recommended ; since the Committee takes into consideration that the probable receipts for pas sengers and goods traffic, based upon the state of the colony as regards population and wealth in three years, will be greatly in advance of any similar calculations founded upon present data, whilst the working expenses will not augment and appear to be over estimated.' ' On the other hand, the pnmoters, in the letter of August last al ready referred to, state that they think it highly imprudent to calculate upon the constant advancement of the colony at the recent rapid rate. ' Upon a subject of this kind the Commissioners can hardly pretend to do more than point out the different views entertained by the two parties, without attempting to express an opinion whether the Colonial Council may have been too sanguine, or the promoters too desponding in their prospects of the futnre conditions of the colony. They will, however, remark that there appears to be good reason in the observation of the promoters, that even if the population of the colony generally should continue to increase at the present rate, this circumstance would not necessarily afford ground for calculating upon a proportionate increase of the goods traffic at the Port of Adelaide; since the formation of ports in other parts of the colony, together with the extension of steam navi gation in the Gulfs, must tend greatly to prevent such a proportionate increase in the quantity of goods brought up to the City of Adelaide. ' On the other hand, it is to be considered that in these statements the parties do not appear to have given due weight to the increase of traffic which has generally been found to arise from the improved facili ties of communication afforded by railways, as compared with the excellent roads of this country, and which there is still greater reason to calculate upon in the present case, where the existing roads through the country traversed by the railway are described in the evidence given before the Committee as being very indifferent. ' Another clause objected to by the promoters is section 29, which provides that the Company shall be bound to convey the Military and Police, and the Public Mails, ' free of charge.' In their former report on this project, the Commissioners suggested, that if the land be granted by the Crown free of cost it might fairly be stipulated that that the Com pany should, in return, convey the mails without charge, and also that the charges for the conveyance of troops and police should not exceed the expense actually incurred for the purpose by the Company. 'The Commissioners understand that in the Colonial Railway Acts it has not been usual to require the Company to perform those services gratis. They think therefore that as far at least as relates to the con veyance of troops and police, the promoters have ground for objecting to the condition as bearing some hardship on this Company. ' The promoters also object to sections 43 and 44, relating to the revision of the tolls and the purchase of the railway by the Go vernment and repealing the provisions of the Railways Clanses Consoli dation Ordinance of 1847 with respect to those matters. It appears to the Commissioners that the Legislature in passing tho Consolidation Ordinances may be considered to have referred to the projectors of railway undertakings certain terms which they would be expected to conform to. And therefore, without meaning to say that it might not be expedient to modify these provisions with respect to future schemes, the Commissioners are of opinion that the promoters are justified in com plaining that these terms, on the faith of which the Company was formed, have been altered, after their scheme was submitted to the con sideration of the Legislative CounciL u With regard to the Act for guaranteeing to the Company a return of 5 per cent, on the capital, the promoters object that the amount of the guarantee is insufficient, representing that with the present prospects of the undertaking, as affected by the altered terms of the Railway Act, a guarantee of 5 per cent, only would not be sufficient to attract capital to the speculation. ' The question at issue with respect to this Act is therefore in effect the same as that alluded to above, -relative to the reduced scale of charges, and the observations already made on that point may therefore be referred to. ' The promoters have also objected to the limitation of 33 feet recommended in the report of the Committee, as the width of the bind to be granted for the railway. But the Commissioners think it unneces sary to enter into the discussion of thus point, since it is stated by the Lieutenant-Governor in his despatch of the 5th March, 1850, that this objection is now obviated by the Governor and Executive Council having power to concede such increase as may be required. ' On the whole the Commissioners, consider that there has been such an alteration in the provisions of the Bill, as originally proposed, as would justify the promoters in withdrawing from the undertaking, if on further consideration and after any further communication that may take place between them and Earl Grey, they should continue of the same opinion they at present express— that with the provisions that have been introduced into the Act, the undertaking could not be carried on so as to afford a reasonable profit to the Company. ' , ' There is also another question raised by the promoters in their letter of August, 1850, which seems to call for some remark. It appears from a letter dated 20th February, 1850, in the correspondence trans mitted in the Lieutenant-Governor 3 despatch of April 30th, 1850, that the Colonial Secretary informed the' Local Directors of the Company that the Local Legislature will probably come to a resolution recom mendatory of provision being made on the Estimates for 1851 of an amount sufficient to establish and maintain the line of railway contem plated by the Ordinance for the use of the public, with the tolls and charges fixed by the Ordinance in the event of the abandonment of the undertaking by the Company, or the disallowance of the Ordinance by Her Majesty. ' The promoters in their letter of August, 1850, represent the course proposed in the letter just referred to as ' unprecendented, they believe, in Her Majesty's dominions, and as highly unjust to the Company, inasmuch as it will be in effect despoiling them of their plans, the fruit of so much toil and expense.'* They, therefore, submit that no measure should be entertained for empowering the Government of South Australia or any party other than the Company to make the proposed railway without providing full compensation to this Company for their expenditure and labour. ' It appears, however, to the Commissioners that the Company are not entitled, in the case contemplated, to the compensation they ask for. The promoters were duly informed by Lord Grey, in the letter from Downing-street of the 24th July, 1848, that the conditions to be im posed on the Company must depend in a great measure upon the de cision of the local authorities in tho colony. In submitting their pro ject to the consideration of the Legislature of the colony, they incurred the risk of its rejection, it might be, in favour of a competing scheme, without compensation for their expenditure in preparing it. And in the present case, when they refuse the concession on the terms offered by the Legislative Council, it appears to the Commissioners that there is even less ground for setting up a claim to compensation, on the plea that the position they abandon may be taken possession of by the Government ' The policy of taking this railway into the hands of Government is a question on which the Commissioners think it unnecssary to enlarge, as they have reason to believe that the subject has already engaged his Lordship's attention. According to the system hitherto adopted in this country, and as far as the Commissioners are aware, in the Colonies like wise, the construction of railways has been left entirely to private enter prise. But there are circumstances affecting such undertakings in the colonies which may render this system less advisable than in the mother country. The capital being wholly, or at any rate the greater part, furnished by English capitalists, with whom the effect of control over the undertaking must consequently remain, a colonial railway is subject to the disadvantage of being under the management of persons residing at a distance, and having probably no other connection with the colony. The practical details of the management will unavoidably be entrusted to local agents, without any immediate supervision on the part of their principals; and the general control will be exposed to error owing to the want of personal knowledge of the exigencies of the locality. On the other hand, the construction of railways in a colony, carried on immediately under the directions of the Local Government, would, there is reason to think, form a most important instrument in promoting the general improvement of the colony. The power of laying out on a com prehensive plan the main lines of communication through the colony, of opening the access to particular districts, in such order as may be most conducive to the interests of the colony generally, and of determining the position of the stations, and consequently the sites of future towns and villages, is, it is evident, a power which could be employed with much greater effect, and more extensive influence, in a newly-settled colony than in the mother-country, where the railway is merely the hut step in the social progress, and accommodates itself necessarily to centres of traffic and masses of population that already exist.' Office of the Commissioners of Railway, Whitehall, 4th February, 1851. Sir, — I am directed by the Commissioners of Railways to acknowledge the receipt of your letter of the 30th January, referring to previous cor- respondence with this department relative to the width of the gauge which it might be most desirable to adopt generally in laying down rail-

ways in Australia; and transmitting a copy of a despatch from the   governor of New South Wales, reporting the preference by himself and his Executive Council to the gauge of 5 feet 3 inches, prescribed by the 9th and 10th Victoria, cap. 57, for Railways in Ireland, over the narrow gauge adopted on English lines.         I am to inform you that, in compliance with the wish of Earl Grey the Commissioners have again taken this subject into their consideration, and more particularly the statement in the Report of the Engineer   of the proposed railway, that there is little want in the colony of materials   or workmen suited for the manufacture of railway stock, and   under these circumstances the Commissioners do not attach such   importance to the selection of the narrow gauge as to consider that it would be desirable still to press its adoption on the Government of New South Wales. I have intimated to Sir Charles Fitz Roy any concurrence in the adoption of that which he proposes. I have sanctioned this change of plan on the conviction derived from your despatches, that the notice which Sir Charles Fitz Roy reports that he had conveyed to you of his intended application for the modifi- cation would reach you in sufficient time to prevent any inconvenience arising from the adoption of conflicting arrangements in the two colonies.     I have, &c., &c., GREY. Lieutenant-Governor Sir Henry Young. "Downing-street, 14th February, 1851.   "Sir— With reference to my despatch No. 21, of the 30th June, 1848, relative to the expediency of adopting one uniform gauge for railroads in the several colonies on the continent of Australia, in anti- cipation of the possible junction of the various lines at a more remote period, I have to acquaint you that I have received a despatch from the Governor of New South Wales, bearing date the 12th July, 1850, in which he reports that for various reasons which he explains, founded on local circumstances, he and his Executive Council had concurred in giving a decided preference to the gauge of five feet three inches prescribed by the 9 and 10 Vic., cap. 57, for railroads in Ireland over the narrow guage adopted for the English lines. "I referred that despatch for the consideration of the Railway Com-   missioners, and I transmit a copy of their report for your information, as the Commissioners have reported that they do not attach such importance as to consider that it will be desirable still to press its adoption on the Local Government "J. W. SIMMONS, Captain Royal Engineers. "To H. Merivale, Esq., &c., &c."