At the present moment there are two systems of Railway Administration actively at work in the world, and there are four under discussion.

Of the two actively at work, the English System was the universal system up to the 1st of August, 1889, when the Hungarian Zone System came into force in that country, just five years and seven months after I had placed the Stage System before the New Zealand public.

The English System,

or rather no-system, with its many defects and injustices, is too well known to require any comment from me. Those who wish to know what a powerful engine for oppression and robbery it is, have only to study the British Royal Commissions and the Hepburn and other Commissions of America. Indeed, they need not go out of this country; for a short time ago, when £75,000 was expended in the reduction of goods rates, £57,000 of this went to Canterbury and Otago, and the whole of the Auckland Province only obtained £2,700.

The Zone System.

This is said to be an adaptation of our Stage System. So far, this system has given good financial results; but it appears to me that the social effects have been anything but good. During the time it has been running, the population of Budapest has increased over 50 per cent. When the population of a country becomes piled up in a few centres, not only is a bad social state produced, but railway revenue must also suffer. It may be remembered that before the Hungarians commenced to work the Zone System, I pointed out that this state of things would arise in that country. (See N.Z. Herald, 20th July, 1889.)

The four systems under discussion are the Postal System, Free Railway Travel, the Stage System, and the Distance Scale.

The Postal System, or Universal Fare.

Of the proposed systems of railway administration, probably the Postal System commends itself to more people than any other. It is so natural to say: See what an immense amount of good: has been done by making universal rates for letters, papers, and parcels—why not do the same with passenger fares and goods I rates? For many reasons. The Post and the Railway are so dissimilar that they never can be worked on the same plan. What people require in the shape of mail service can be, and to a large extent is, carried out by men on foot. Railway service can only be carried on by means of the iron road, and ponderous rolling stock. The man on foot with his letter can penetrate anywhere. The steam engine can only go where the rail is constructed. A ton of half-ounce letters would pay,£298 14s. 4d. when delivered. How many tons are there carried on a railway that could pay such a price?

In the postal service the average weight of the package to be delivered is so small that it was easy to fix the charge so low as to be within the reach of everybody. With the railway, on the contrary, the average weight is so large that we could not fix the average charge low enough to prevent all the short distance traffic from being wiped out of existence For instance, in this country the average passenger fare is 1s. 8d. Suppose we took this down to one-half, and the goods rate, which is 6s. 8d., also to one-half, say 10d. and 3s. 4d. respectively, could the short distance traffic be maintained?

It is quite certain that under the Postal or Universal Fare System, the average charge would have to be fixed so low that it would be necessary to maintain the railways out of general taxation, instead of being both constructed and maintained out of revenue, as I contend they can be. The increased burden of taxation the Postal System would entail would be so heavy, and its incidence so unequal, that no community would put up with it. If those owning property or residing near railways were to have their transit services provided for them practically free, what is to become of those owners and residents who have no railways in their districts? They would have to provide for their own transit services, and consequently their property would sink in value, and their districts become depopulated. Under this system it is quite certain that railways could not be made to pay their working expenses, probably not one-fourth of them.

The social effects of the present "no-system "have been bad, very bad—those of the Postal System would be far worse. It must of necessity mean far greater concentration in the cities. If people or goods could go for the same price anywhere, would not most people live in the cities? Most certainly, very few women page 23 and children would reside in the country. It would simply mean greater concentration of people, of opportunities, of wealth.

Free Railway Travel.

All the objections that apply to the Postal System apply with still greater force to free travel. Under it we should soon set up the worst form of absentee landlordism. If people could travel everywhere for nothing, how little inducement there would be for owners to reside on their farms! Soon nearly all these would fall into the hands of managers, while their owners and families would reside in the towns. When we remember the numerous advantages the town has over the country in matters of house-keeping, education, social intercourse, amusements, etc., how could we expect the women and children to reside on the farms when they could go to them, or send goods to them, whenever they liked, for nothing? The inevitable result must be great separation of husbands and wives, which is an immense social evil, and much greater concentration of population in the cities, out of which our greatest social evils arise.

Again, what would be the effect on industrial enterprise and the development of the country? At first sight this appears easy. People say, naturally enough: why, if you can go or send to any point for nothing, it must assist development. Quite so, if you could do this, but all it would mean is that you could send to any point within districts where railways were constructed, and every other district would be practically shut up, and those residing in them would have to pay their full share of the taxation which provided means of transit for their more fortunate neigh-bours. Those outside districts would of course demand railways, but if railways are not to produce any revenue, where is the money to construct and work them to come from? It is not likely that the districts already served, and which must contain nearly the whole of the population, would tax themselves for this purpose.

After the closest study, I fail to discover any good thing in either the Postal System or Free Transit as applied to Railways.

The Stage System.

This system differs totally from every other system either in existence or suggested. It is the only system in which the location of population is taken into account. The only thing in common with it and the Zone System is that they are both of them Stage Systems. It differs from all these systems also in the fact that it is meant to, and must act, as a distributing and not as a centralizing influence, as all other systems do. This was the main object I had in view when designing it. When working among and studying the condition of the poor of London and page 24 Manchester, I was much impressed with the great evils produced by the overcrowding of the great cities. I saw clearly enough that most of the evil could be got rid of, if a large proportion of our workers could have even only a small plot of land about them, but how to effect this I could not then see, nor did I then know that our railways were responsible for nearly the whole of the mischief.

When, however, I came to study the railway system, a new light dawned, I saw that the system of charging "tolls" of so much per mile acted as regards compelling people to live within a certain area precisely the same as if a toll bar were actually erected at every mile, and I set to work to remove these toll bars;; for I was convinced that it was these that are responsible for the overcrowding, and that the overcrowding is responsible for the poverty.

As I write, a letter from Earl Grey lies before me. In it he says: "The great problem of modem civilization is how to distribute our town population over the country." This is true, and this is the problem I have set myself to solve, with what success time will show Personally I have no fear of the result. As regards these young countries I do not expect it to reduce our larger cities; this is not necessary; but I do expect it to prevent their too rapid growth. Our chief cities are all seaport towns, through which the trade and commerce of the country must flow, and I expect the Stage System to have such an effect in settling the country and developing its resources and trade that our seaport towns must also share in the general prosperity, and grow much beyond their present size. All we want is for things to be in something like just proportion.

Another reason why the present system piles the population up in the great cities is that the rating for passengers and goods is all made permanently in their favour and against the country. I propose to make the rating temporarily in favour of the country. Perhaps I shall best explain the difference between the two systems by the aid of the following diagrams.

Present System.

In nearly every country except New Zealand (and they would have put it in force here if they had dared) where this system prevails, it is the custom to charge for 15 miles round the great cities one-half the rate per mile for passenger fares that is charged for the same distance starting from any point in the country. The excuse for doing this is that it develops the suburban traffic, 15 miles being called the suburban area. Take New South Wales as an example, and it works out thus:—

The rates quoted are for second class return fares, and it should be remembered that in going to or from the country, or for travelling in the country, the fare is charged at the rate of one penny and five-hundredths per mile for the whole distance. No allowance is made for the lesser rate round the city. New South Wales favours the country more than most places, but it will be seen that even there the rate charged for travelling in the country is just about double the rate charged near town. This is what acts as a perpetual incubus on the country districts. Not only does it bar the development of the country, and inflict a cruel injustice on our farmers and producers, but it destroys railway revenue by slowly but surely decreasing the average distance people and goods travel, by destroying large numbers of small trading centres, and thus reducing the average rates paid. This, I hold, is the real reason why railways as a rule pay such miserable dividends. If conducted on sound principles, railway business ought to be the most profitable business in the world.

How all this would be changed under the Stage System, the following diagram will explain:—

A comparison of these two diagrams will show that the principle of rating is exactly the reverse. In the present system the lowest rate per mile is charged at the city end of the lines, and this is a permanent protection given to the great cities. It has been done ever since railways were first constructed, and the effect undoubtedly has been to mass up the population and wealth in these cities.

Under the Stage System this would be reversed. It will be seen that the lowest rates per mile are charged in the most thinly populated country districts, but it must be remembered that this is merely a temporary protection given to these sparsely populated localities. As their population became more dense, the length of their stages would be proportionately shortened, and thus the rate per mile gradually increased, until ultimately it would be the same all over the country.^*

Another distinctive and most valuable feature of the Stage System is its extreme simplicity. Anyone able to understand the Postal Guide could easily interpret the whole tariff, both for goods and passengers. There would be but four classes for goods, and one additional for dangerous goods. There would also be only four different classes of ordinary passenger tickets, instead of the page 26 many thousands there are now. These, as also stamps for parcels, would be procurable anywhere where postage stamps are sold. I rely on this simplicity of the system almost as much as its cheapness to help the development of railway traffic.

We have now to consider the

Distance Scale,

which Sir Joseph Ward proposes to adopt. So far as I am aware, the late Mr. Charles Waring was the first to propose this plan, in his work on the "State Purchase of Railways," a copy of which he was good enough to send to me. I could not see how he was to reduce the idea to practical working, and wrote to him for an explanation Unfortunately, he died before my letter reached home. What is proposed is this (again taking second-class passenger fares to illustrate):

This is going from the City to the Country Districts, but going to the City from the Country, or for travelling in the country, this is how it would work:

I fail to see that this gives any relief to the country districts. It certainly does not, as appears at first sight, give the country any advantage over the city. It is simply another differential rating in favour of the great cities—one more inducement to "visit the capital." I await with some interest the issue of the new fare-table. This Distance Scale is one of those things which appear so eminently just and easy on the face, but will not bear close looking into.

My Protest.

In the most emphatic manner I enter my protest against the Stage System being put in force as regards every branch of traffic at one and, the same time. I have always objected to this. It is not fair to the system. It is not fair to the various districts of the Colony. No one having any knowledge of the subject and wishing to act fairly could have suggested so doing. This proposition was made by the Department, which in the strongest manner has from first to last insisted on this course being adopted.

To anybody able to deal with this subject, it must be quite clear that their object was if possible to create a loss, and by stirring up local jealousies, to delay a trial taking place. The only safe and fair way is to apply it in the manner I have indicated in my remarks on the speech of the Hon. Sir Joseph Ward.

My Appeal.

I desire to convey my sincere and heartfelt thanks to those Hon. members of the House who have given me such powerful support. I feel deeply grateful to them, and I venture to express the hope that in next session many other members will be found voting with them. I direct their earnest attention to the fact that, during the last three years, the loss on our railways has risen from £348,995 to £1,007,095. That is to say, it has nearly trebled in this short time. Surely we need a change. For now twenty years I have striven earnestly to reform our railway administration. So far without any good result. No doubt my work has had some influence in reducing railway charges, but that is far from being all that is wanted. Nothing will affect any real good that does not afford substantial help to the thinly populated districts, and I earnestly appeal to the members of Parliament and to my fellow citizens generally not to allow this, the great distinctive feature of the new system, to be tampered with.

I am well aware that, if it falls into the hands of the Department, every effort will be made to alter it in this respect, and that is the reason why I am so anxious for it to be tried while I am here to watch over it.

My contention is, and always has been, that by means of the Stage System the railway revenue can be enormously increased. I place that increase at not less than one and a quarter million (£1,250,000) per annum. (See Parliamentary Paper, D—7, pp. 4 to 7.)

It has always seemed to me an absolute absurdity to suppose that a virtual monopoly of the inland carrying trade of a country cannot be made to pay a reasonable rate of interest on the capital cost of the plant employed There must be, and is, something wrong in the business policy pursued. The fault is that the present system gives no real encouragement to settlement in the far country, as the diagram given above will show.

We now have the Railways Minister's express statement, twice made, that the new system will enormously increase the railway traffic, and that to such an extent that we could not find rolling stock to cope with it. What more do we want? What more could I say in favour of the new system? Its warmest advocates could not possibly say more than this. Where is this page 28 enormous expansion of railway traffic to come from? It can only come from a development of the trade, commerce, resources, and by no means the least blessing, the social intercourse of the country. The Minister also says everybody wants it tried. Why, then, should it not be tried? Surely the more men we can keep employed building rolling stock the better.

Anyone who wants to know what a railway conducted on sound principles can do for a country has only to read some of the recent books on Siberia, and notice the extraordinary development that has taken place in that country since the introduction of the Stage System. There you can travel thousands of miles at the rate of a shilling per hundred miles—just the rate that I proposed here twenty years ago. It is true that that is my first-class fare, while it is their third; but it must be remembered that in Russia you can travel thousands of miles at that rate (and experience shows that it pays well), while here you could rarely travel one hundred. In Siberia, too, their railways cost about £10,000 per mile more than ours have cost.

By means of this railway, nearly 19,000,000 acres of land have been occupied. In 1899 they exported 144,000 lbs. of butter; two years later they exported 1,080,000 lbs. And this progress has been made in a country where only 3 per cent, of the people can read and write!

What would have been the position of this country if the Stage System had been introduced here as it ought to have been 15 or 18 years ago? A million of money expended now would not advertise it as well as that would have done; to say nothing of the otherwise great development that must have taken place. Knowing as I do how much the country has lost through the want of knowledge or selfishness of our railway officials, is it any wonder that I resent their action?

In conclusion, let me say that no one can be so conscious as I am of having committed many errors in the method of carrying out this agitation. Still, my task has not been an easy one, and I have done my best. Let me hope others will do theirs.