expected them to
return 3 per cent. interest on the capital expended. In 1909 this
policy, however, was modified, 3.75 to 4 per cent. being then regarded as
a proper result, and this result was accomplished. Water power in New
Zealand is so abundant that the adoption of electricity for railway
working has been engaging the attention of the Government. Many, well
qualified to judge, were satisfied that it would prove more economical
than steam locomotion.

In both Australia and New Zealand, borrowing for railway construction had
been by means of general loans raised for all kinds of Government
expenditure. We came to the conclusion that if loans for reproductive
works, such as railways, had been segregated from others, it would have
helped the raising of capital, and probably secured easier terms.

The construction of railways in Canada has, in recent years, proceeded at
a rapid pace. We found that the mileage had doubled since the beginning
of the present century, due, to a large extent, to the construction of
two new Trans-Continental lines. The grain-growing districts of the
prairie provinces, south of latitude 54 degrees, are now covered with a
network of railways, and British Columbia has three through routes to
Eastern Canada.

The enterprise of the principal Canadian railway companies is remarkable.
They own and operate not only railways, but also hotels, ferry services,
grain elevators, lake and coast steamers, as well as Trans-Atlantic and
Trans-Pacific steamers. One company also has irrigation works, and ready-
made farms for settlers in the prairie provinces. But Canada lies so
near to us, and in the British Press its railways receive such constant
attention, that I need not descant further upon them.

In South Africa, with the exception of about 500 miles mainly in the Cape
Province, the railways are all Government owned, and are worked as one
unified system. The Act of Union (1909) prescribed that the railways and
the harbours (which are also Government owned and worked) were to be
administered on business principles, and that the total earnings should
not exceed the necessary expenditure for working and for interest on
capital. Whenever they did, reductions in the rates, or the provision of
greater facilities, were to restore the balance. This provision also had
the effect of preventing the imposition of taxation upon the community by
means of railway rates. The Act contained another practic