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The Pamphlet Collection of Sir Robert Stout: Volume 68

No. 8. — Financial Results, Continued

page 11

No. 8.

Financial Results, Continued.

In order that my readers may be able to clearly comprehend what follows, I reproduce the table which appears on page 89 of Parliamentary paper 1-9. A perusal of it in connection with the remarks that follow, will show how completely the committee was misled by the evidence of Messrs. Maxwell, Hannay, Grant, and Hudson.

Distances. Total No. of Passengers carried at Government Fares. Total Revenue. Number of Pass, liners computed to give the same Revenue at Mr. Vaile's Fares. The Increases I require for the various distances are as follows:— Equal Nos. of each Class. Two 1st class to one 2nd. £ s. d. Not exceeding 3 miles .. .. 55,518½ 1,215 12 1 59,588 55,860 3 miles and under, 1-14th of a fare Over 3 and not exceeding 5 miles .. 94,781 2,801 17 5 130,100 121,975 3 to 5 miles, ? of a fare Over 5 and not exceeding 7 miles .. 96,604½ 3,435 2 0 157,176 147,356 5 to 7 miles, 3-5th of a fare Over 7 and not exceeding 10 miles 46,045½ 2,144 4 3 60,012 56,259 7 to 10 miles, ? of a fare Total .. .. .. .. 292,949½ 9,596 15 9 406,876 381,450 Over 10 and not exceeding 30 miles 75,562½ 8,324 10 10 194,445 182,292 10 to 30 miles, 1½ fares Over 30 and not exceeding 50 miles 31,640 7,322 17 6 81.842 76,731 30 to 50 miles, 1½ fares Over 50 miles .. .. .. .. 24,762 14,665 13 1 134,291 125,900 50 miles and upwards, 4½ fares Gross total .. .. .. 424,914 39,909 17 2 817,454 766,373 Accountant's Office, Wellington. A. C. Fife, Accountant.

New Zealand Railways.

Summary of Passengers carried on the Auckland Section, under different Stages (Helensville to Morrinsville), for the Twelve Months ended 31st March, 1886. The column Is added by Mr. Vaile. This Calculation is based on equal numbers of each class.

Most, if not all of the committee were of opinion that under the new system at least an equal number of each class would be carried, and many of them thought there would be two first-class to one second. For this reason they ordered the production of the above table.

Those who wish to follow the whole argument can do so by referring to the above-mentioned Parliamentary paper.

The railway officials argued that my system could not prove a financial success because they said:—
1.That for the distances the bulk of the people travelled over, ten miles and under, I proposed to increase not decrease the fares.
2.That, for this reason, it was impossible that I could secure two fares where one is taken now.
3.That my average faro could not possibly reach one shilling, and consequently that two fares for one would not give the required result.
4.That, no matter what the inducements given, people would not travel.
5.That carrying two passengers for one would vastly increase the working expenses.

In 1885 Mr. Maxwell was ordered to report on my system.

His report forms Parliamentary paper D-3, 1885. In it he states clearly and distinctly that my proposals, "if adopted, would involve an excessive increase in fares" for more than one-third of the journeys taken, and he seeks to establish his position by comparing a purely imaginary and fictitious season-ticket fare with my ordinary fares.

As regards ordinary fares, he as clearly states that "by far the larger proportion are for distances under ten miles, for which Mr. Vaile's proposals provide either increased fares, or fares not very materially differing from those prevailing." He further states that to Onehunga I propose to charge 1s first-class and 8d second, when I have never proposed any other fares for this distance than fid and 4d, and he makes many other statements equally truthful.

This, then, is Mr. Maxwell's statement in support of their first contention.

Mr. Hannay, in the most unqualified manner, stated (491a), "Twenty percent, of passengers, that is, five miles and under, are not reduced," and further on led the committee to believe that no reduction was made for "half of the passengers travelling note."

Mr. Grant stated (173) that "up to three miles our scale is under Mr. Vaile's, up to five miles I do not think there is so much advantage as would increase our traffic at all."

page 12

Mr. Hudson stated (335) "for the three mile journey the fares would be somewhat more than they now are."

A reference to the table on (86) will show that their own statement is that for distances of 10 miles and under 292,949 people travelled and paid £9596, and that I should require 468,120 fares to produce the same result.

What becomes of Mr. Maxwell's statement? If I make no reduction, but as he states increase the fares, how comes it that according to their own showing I require 175,171 more fares to make up the same amount of money?

For distances of five miles and under Mr. Fife says 150,299 travelled and that I should require 222,315. What becomes of Mr. Hannay's statement? Why do I require an extra 72,016 fares if no reduction is made?

For distances of three miles and under, Mr. Fife says 55,518 people travelled, and that I should require 66,880 to produce the same amount of revenue. What becomes of Messrs. Grant and Hudson's statements? Why do I want the extra 11,362?

Were all these men supremely ignorant of the business of their own department, or did they combine to deceive and mislead the committee? They had their own tarriffs before them; they had my tariff; and on every line and to every station in the colony it showed a large reduction except in one instance, and that showed no increase. [See pages 56 and 57.] Their statement was not true in any one particular.

The first and second statements of the officers of the department, therefore, on the showing of their own accountant, completely fall to the ground.

My readers will please bear in mind that the above argument necessarily refers to the table on page 86. What follows refers to the table which is reprinted above.

We now have to consider their third statement, that the average fare under the proposed system could not reach one shilling. This they were determined to convince the committee of, if they possibly could. They had all the information before them: the information without which Mr. Maxwell told me I could not calculate correctly. They then ought to have been able to ascertain my average fare to the greatest nicety, but this is what they did:

On page 21, paragraphs 27 to 29a, will be found an elaborate attempt on the part of Mr. Maxwell to prove that my average fare for 10 miles and under could not be more than 4½d, and for over ten miles, he says, "it is most unlikely that so high an average as Is and 1½d could be reached." He also deliberately makes this statement, "and in the country districts the average fare for 50 miles if only 4½d."

When Mr. Maxwell made this assertion, not only had he my printed papers before him, but for days he had listened to the most searching inquiry as to this average fare. It is not therefore possible for me to believe that such a gross misstatement could have been made in error.

Mr. Hannay stated (491a) that the average rate for half of all the passengers travelling now "cannot be more than 5d," and that "I do not think the average fare will be Is."

Messrs. Grant and Hudson were not examined as to my average fare.

As the whole question of the financial result of the application of the new system depends on what would be the average fare under it, it is important to note that on the one side we have Mr. Maxwell's statement.

1.That the average fare for distances of 10 miles and under could not be more than 4½d.
2.That for all distances of over 10 miles it was "most unlikely" that it could average as high as 1s 1½d.
3.That in the country districts it would only average 4½d for 50 miles.

Mr. Hannay stated that the average fare for nine miles and under could not be more than 5d, and he did not think the general average could be one shilling.

These wild statements of two of our Commissioners were totally unsupported by evidence, of any sort or kind.

On the other side, we have the evidence of Mr. W. Conyers (769, 770, 818, and in numerous other places), who stated in the most positive manner (979) that "it (the average fare) cannot sink below 1s."

Mr. T. D. Edmonds also stated that the average could not be less than 1s, 1001, 1065, 1105, and in other answers.

Mr. R W. Moody gave evidence to the same effect, 1119, 1120, 1135, 1170.

Mr. James Stoddart, formerly of the Great Western, and in charge of the Swindon district, was too ill to attend committee, but he also signed a statement that my average fare could not sink below 1s.

My own statement with reference to the average fare was—
1.That the general average could not be less than 1s.
2.That the average for seven miles and under would not be less than 5d. [Page 58, paragraphs 28-30.]
3.That the average fare for the eight to ten miles distances could not sink below 8d. [Page 58, paragraphs 28 30.]

This is what Mr. A. C. Fife, their own accountant, has, in the table given above, proved to be the actual facts.

1.That the general average fare in 1886, based on the average distance then traveiled (13 miles only) would be eleven pence three farthings (11¾d).page 13
2.That the average fare tor all distances not exceeding seven miles would be 5.15d.
3.That the average for seven to ten mile distances would be 8.57d.
4.That the average for all distances of ten miles and under would be 5.66d.
5.That the average fare for all distances over 10 miles would be 1s 5¾d.

Thus, it will be seen that, with the most meagre information at command, I safely and correctly estimated all these average fares, while the estimates of Messrs. Maxwell and Hannay were so wild and absurd, as to be absolutely childish, and this, too, in spite of the fact, as Mr. Maxwell told me, that they had access to the records, and I could not get to see them.

I claim that the facts quoted above, and the results of their management, as shown by the table given in my first article, prove, that Messrs. Maxwell and Hannay are utterly incompetent to deal with any question of railway finance.

The fourth statement of the officers was that reduction of fares would not induce people to travel, at any rate to the extent of doubling the traffic.

All the gentlemen who supported me gave evidence that the increase would be at least 200 per cent.

The result of the Hungarian experiment shows that they and I were right. The reduction of fares in Hungary is not nearly so great as that proposed here, but the increase of their passenger traffic is 160 per cent.

This is another instance of Messrs. Maxwell's and Hannay's inability to correctly estimate results.

Present fares. Proposed fares. Station to Staion. 1st. 2nd. 1st, 2nd. Class. Class. Class Class. Auckland Lines: s. d. s. d. s. d. s. Kaukapakapa to Te Kuiti .. .. .. 35 5 23 8 5 6 3 8 Kaukapakapa to Auck- and .. .. .. 9 2 6 2 2 6 1 8 Auckland to Penrose .. 1 0 0 9 0 6 0 4 Auckland to Manurewa .. 3 2 2 1 1 0 0 8 Auckland to Drury .. 4 7 3 1 1 6 1 0 Auckland to Pukekohe .. 6 3 4 2 2 0 1 4 Auckland to Frankton .. 17 11 10 2 6 1 8 Auckland to Te Kuiti .. 26 17 6 3 0 2 0 Hurunui-Bluff Lines: Waikari to Bluff .. .. 90 11 60 9 18 6 12 8 Waikari to Rangiora .. 6 3 4 2 1 0 0 8 Waikari to Christchurch 10 5 7 0 2 6 1 8 Christchurch to Rolles ton Junction .. .. 2 11 2 0 1 0 0 8 Christchurch to Bank- side .. .. .. 6 6 4 4 2 0 1 4 Christchurch to Trmarn 20 10 13 11 3 6 2 8 Christchurch to Oamaru 31 8 21 2 6 6 4 8 Christchurch to Dunedin 47 11 32 0 11 0 7 8 Dunedin to Grey town .. 3 2 1 1 0 0 8 Dunedin to Kaitangata .. 11 7 7 9 2 0 1 4 Dunedin to Wairuna .. 16 3 10 10 2 6 1 8

Table of Some of the Present and Proposed Fares.

Is it possible to doubt that a man would travel twice at the proposed fares for once he travels now, or that he would take a wife, child, or friend with him when now he goes alone, or would he give his family a pleasure or health trip twice instead of once?

Their fifth statement was that to carry two fares instead of one would greatly increase the cost of working the lines. Not to weary the reader I will merely refer to Mr. Hannay's evidence.

He was very positive in his evidence (515 to 518) that to double the passenger traffic on the Hurunui-Bluff line would add £55,000 per annum to the working expenses. Afterwards, under cross-examination, he stated that on this line the average number of passengers carried per carriage was seven (7) only (603—606). These carriages are each capable of seating from 30 to 40 passengers. So much for Mr. Hannay's evidence on this point.

Messrs. Conyers, S tod dart, Moody, and Edmonds, on the other hand, distinctly state that carrying three—not two—passengers for one now carried would not "perceptibly increase the working expenses. The result of the Hungarian experiment again proves them to be right, for the Hungarian Minister of Commerce says that by the adoption of the stage system, and the reduction of rates, he has added 3,000,000 of florins to the revenue at no extra expense whatever.

Mr. Charles Waring also, speaking of the English trains, says they often run "with only 100 tons of load when they could just as easily carry 300 tons at no extra cast."

I claim that the above-mentioned facts, which cannot be disputed, prove one of two things—either Messrs. Maxwell and Hannay must be the most incompetent pair that ever had charge of a railway system or they must have wilfully and designedly misled the committee.

To recapitulate: The officers of the Department all stated that for certain distances I proposed to increase the fares, while I professed to reduce them.

The table compiled by their own accountant conclusively proves that not one of them—to put it mildly—gave correct evidence in this respect. The printed tariffs of 1886 and the table of fares on (56 and 57) prove Mr. Fife's statement to be the true one.

With reference to the average fare under the new system, which as regards finance is the most important point; we have on the one side Messrs Maxwell and Hannay's ridiculous assertions unsupported by evidence of any kind. On the other we have the evidence of four trained railway men, my own statement, and, best of all, the indisputable evidence of Mr. A. C. Fife's table, which proves that my friends and I were right, and that Messrs. Maxwell and Hannay were as far out in their calculation page 14 as it was well possible for any two schoolboys to have been.

Thus we see that on the one hand we have two men, whose own accountant has proved them to be wrong in every one of their statements, who say that the adoption of my system will entail severe loss on the revenue; while, on the other hand, we have five men whom Messrs. Maxwell and Hannay's own accountant has proved have made accurate and safe calculations in every respect, who say that the adoption of my system would add at least £200,000 per annum to the net railway revenue.

Whose advice ought to be taken in this matter?

Auckland, April 9, 1890.

P.S.—In this and my previous article I have made statements reflecting very seriously on the integrity or the professional ability of two of our Railway Commissioners. These gentlemen have lately thought proper to expend some of the public money in printing and distributing some very useless papers with reference to the Hungarian system. I challenge them to publish a paper refuting my statements, if they are able to do so.