§ I am directed by Mr. Secretary Lyttelton to inform you that he has had under his consideration your letter of the 19th of January respecting the rates in force on the Gold Coast Government Railway, and to express his regret that the pressure of other work has prevented him from replying to it sooner. You refer in this letter to your previous letter, dated the 24th July last, in which it was calculated that the cost of transporting a complete 50-stamp mill plant 125 miles on the Gold Coast Railway would be £11,120, and attention was called to the Beira Junction and Mashonaland Railways, on which it was stated that the rates charged are 10d., 8d., and 6d. per ton per mile in the first, second, and third classes 1327 respectively, with an additional charge of 5s. per ton for any distance, and that machinery of all kinds is included in the third class. From this it appears that the cost of transporting a 50-stamp mill plant, weighing 1,038 tons, for 125 miles, would be £3,503 on the Beira, etc., Railways. But it is to be borne in mind that the gold mines served by these railways are much further from the coast than the Gold Coast mines. The distance from Beira to Salisbury is 375 miles, and from Beira to Bulawayo is 675 miles, and the cost of conveyance of the plant in question over these distances would be £9,991 and £17,775 respectively. These figures appear, no doubt, to be high when regarded by themselves; but, when the other expenses incidental to the establishment of a mill and the formation of a company to work it are taken into account, Mr. Lyttelton does not think that it can fairly be argued that the charges for the carriage of machinery are so high as to have any material effect upon the development of the mines.
§ With reference to the fourth paragraph of your letter, in which objection is taken to the clause in the agreement with the Ashanti Goldfields Corporation, under which Government goods and passengers are carried at rates fixed by the Government as covering the cost of conveyance, I am to inform you that it was necessary for the purposes of the agreement with the corporation to have an arrangement on this point, but that Mr. Lyttelton fails to see that other users of the railway have any ground of complaint, as they have no share in the risk undertaken in constructing the line. In the fifth paragraph of your letter attention is called to the question of the extent to which the expenditure of the Colonial Government for the transport of its officers and stores is affected by the railway, and it is contended that the bulk of the expenditure under the head of "transport" in previous years will be saved. I am to explain that, as will be seen on reference to Paragraph 12(pp.8–9) of the Gold Coast Annual Report for 1902, the cost of transport in 1901 was still largely charged to the heading "Ashanti Disturbances," and that accordingly the increase of £41,901 11s. 2d. to which you point in the vote for transport in 1902 as compared with 1901 is more apparent 1328 than real. It is estimated that £46,920 will be spent on transport in 1904, as compared with £66,120 actually spent in 1902, and with £60,000, the revised estimate for 1903. But all these sums contain large items for passages and other sea transport, and for the transport of stores by carriers, and this last item still amounts to £22,918 in the estimates for 1904. It must not be assumed, therefore, that the whole difference between the actual expenditure in 1902 and the estimated expenditure in 1904, which amounts to £19,200, is a saving due to the railway.