§ I am directed by Mr. Secretary Lyttelton to inform you that he has had under his consideration your letter of the 24th of July last relating to the rates for the carriage of goods on the Gold Coast Government Railway. With regard to the rate for the carriage of machinery, which is specially referred to in your letter, I am to observe that the rate is certainly high as compared with the rates charged in many other parts of the world, but that it does not appear to Mr. Lyttelton to be higher than the circumstances require. The Government of the Gold Coast was pressed to make the line on the ground that the mines could not be developed without it. It was represented that the cost of transport by carriers was enormous; that even the light machinery which could be so transported was subject to delay and damage and the loss of essential parts, and that the heavy plant necessary for working 1326 the mines at a profit could not be got up at all unless a railway were made. The construction of this line was accordingly undertaken by the Gold Coast Government, with the approval of the Secretary of State, in preference to one which had been contemplated for the purpose of developing the existing trade in palm oil and other products of the soil, and which was strongly advocated by the Manchester Chamber of Commerce; and the heaviest machinery required can now be conveyed up country, whilst the cost of conveyance from the coast to Tarqualt which was formerly from £25 to £40 a ton, has been reduced to £5 a ton. But, in securing this saving to the mining industry, the Gold Coast Government has had to impose upon the Colony all the risk involved, except in so far as it is protected by the guarantee of the Ashanti Goldfields Corporation, and in fixing the rates it is bound to have regard not merely to the interests of the mining industry, but to those of the Colony as a whole. There is no reason to think that the rates are prohibitive or likely to hinder the development of the mines, and, until the permanent traffic on the line, not the temporary rush of traffic due to the installation of the mines, gives net receipts sufficient to cover the working expenses and debt charges, it is not possible to hold out any expectation that rates will be reduced unless it should appear that the reduction would have the effect of attracting more traffic and so increasing the net receipts.