Appendix.

The Minister of Public Works and the Commissioners.

[From the "New Zealand Herald," Wednesday, May 13, 1891]

The following memorandum has been received by the Hon. R. J. Seddon, in regard to a letter from the New Zealand Railway League respecting Mr. Vaile's railway system:—

New Zealand Government Railways, Head Office, Wellington, April 21, 1891. In re letter from New Zealand Railway Reform League to the Hon. the Premier, April 13, 1891: Memorandum for the Hon. the Minister of Public Works.—The subject of Vaile's Stage System has been dealt with rather fully in the correspondence and report contained in Parliamentary papers, D2, 1890, and D2A, 1890, in continuation; but, as much misapprehension about it prevails in the public mind, some recapitulation on this occasion may be advisable. It is very commonly supposed that Vaile's Stage System is like the Austrian and Hungarian zone systems recently introduced in Europe. The Auckland Railway Reform League so far understood the matter as to refer to the Hungarian Government having adopted the system proposed by the League. Mr. Vaile, however, holds that the Hungarian and Austrian zone systems are faulty and defective, and that but little financial improvement can be expected from them. According to the general statements advanced, the zone systems are entirely antagonistic to Vaile's Stage System. The former are intended to draw people to the cities and large towns. Mr. Vaile appears to regard the gregarious habit of mankind as an original vice, to be eradicated by his stage system, which is to have the opposite effect to the zone system, distributing people in the country instead of drawing them to the towns. An experiment to test the correctness of such views must necessarily extend over a great many years. Only a very vague outline of page 48 Mr. Vaile's plan of his stage system has ever been divulged by him. Mr. Vaile declined to supply the late Government with details of his scheme in 1888, and the Railway Commissioners were afterwards unsuccessful in their attempts to obtain them from the Railway Reform League, as a perusal of the Parliamentary papers referred to will show. There is then only the outline of the system given by Mr. Vaile to the Parliamentary Committee in 1886 to explain the system. According to this, the system consisted in dividing the railways into stages, depending for their length upon the density of population in the district, and making uniform charges per stage. The stages were to be about seven miles long in the vicinity of Auckland, and fifty miles long in the Waikato. By this system, a second-class passenger would be charged fourpence for a fifty-mile stage in the Waikato, but to travel fifty miles in the vicinity of Auckland, on the same basis of fourpence a stage, he might have to pay two shillings. Applying the system elsewhere, it was shown that a person travelling from Nukumaru to Wanganui would have to pay a shilling, while from Nukumaru to Patea, the same distance, he would only pay fourpence. It is a serious defect in the system that such fantastic results arise from it. It cannot be in the interests of settlement that it should be dearer to travel to Wanganui than to Patea; and there are no rational grounds advanced for making such extraordinary preferences. There is nothing in the system to recommend it, so far as is at present, disclosed. Mr. Vaile has made the system appear attractive to some persons by fixing the fares attached to it inordinately low—far too low, in our opinion, to pay the cost of the service rendered. We cannot expect to do our work as cheaply as in a country like Hungary, for instance, where there are seventeen millions of people on about the same area as New Zealand, and where the rates of wages are about a third or a fourth of what they are here. But even in such countries as Austria, and Hungary, such low fares as Mr. Vaile proposes have not been attempted. We beg to repeat our previously expressed opinion, that no further reduction in fares is at present necessary, and that, if lower fares are desired, they can conveniently be adopted without introducing any new system.—I am, etc., James McKerrow. Chief Commissioner Railways.

Copies of this letter have been supplied to the Auckland members of the House, and to Mr. Vaile.

On Tuesday morning Mr. S. Vaile interviewed the Hon. Mr. Seddon at the Ministers' Room. Customs Buildings, regarding the trial of his system on the railways.

Mr. Vaile read his reply as follows to the letter of Mr. McKerrow:—

My first feeling on reading the letter of the Chief Railway Commissioner of the 24th April last was one of profound astonishment that a gentleman of Mr. McKerrow's reputation for honesty page 49 and love of fair play, could be induced to sign his name to a document containing such gross misrepresentations of fact. I can only suppose he has done so in ignorance. Although the letter in question is signed by him it bears internal evidence of having being prepared by Mr. Maxwell, or at any rate by the same hand that prepared the former documents bearing his signature.

This letter is simply another attempt to mislead the Government and the public by misstating facts, raising side-issues, and seeking to make it appear that the Railway Reform League and myself have not known what we were asking for, and thus to avoid dealing with a great public question. However, events march on, and Parliament will soon be forced to deal with it, whether the Commissioners like it or not.

First let me remark that no petition has been sent from the Railway Reform League since the session of 1890. Several of the Auckland M.H.R.'s have signed a memorial to the Government asking them to make a reform in railway administration a part of their policy, and to cause a trial of the new system to be made. I presume it is to this that the letter refers.

Mr. McKerrow states that the Railway Reform League have said that the "Hungarian Government has adopted the system proposed by this League." The letter from which this is quoted was written by the late secretary of the League, and all he ever intended to say was that the Hungarian Government had abolished mileage rating, and adopted a stage system, with fares similar to those I have proposed. The League has never asked for a trial of the Hungarian or Austrian systems; the Commissioners are therefore only beating the wind in talking about them.

What the League has very distinctly asked for is a trial of the system the Parliamentary Committee of 1886 spent ten weeks in investigating and then reported that it ought to be tried.

Mr. McKerrow then goes on to say, "Mr. Vaile, however, holds that the Hungarian and Austrian zone systems are faulty and defective, and that little financial improvement can be expected from them."

It is quite true that I have spoken of these systems as defective and utterly unsuited to our requirements, but so far from saying that the Hungarian system would give "but little financial improvement," when the first news of its adoption reached Auckland, in a letter I published in the "New Zealand Herald," of the 20th July, 1889, I wrote as follows:—"As to the financial outcome, for some years, probably many, it will be a great success, but owing to the concentration in one centre it will gradually wear itself out, and a better stage system will take its place."

Most of the prominent railway men of Europe and America predicted that the Hungarian system would end in disastrous financial failure. The result has shown that the railway men knew nothing about it.

Next follows another misrepresentation as to the effects I expect to result from the adoption of my system. In my letter of the 6th June, 1886, addressed to the chairman of the Investigating Committee, these are set out as follows:—

From this statement I have never moved.

We next come to (this assertion: "Only a very vague outline of Mr. Vaile's plan of his stage system has ever been divulged by him." Is it possible that Mr. McKerraw can be serious? Does he wish the New Zealand public to believe that the Hon. Major Atkinson, ex-Premier, the then Minister of Public Works, three ex-Ministers of Public Works, and five other well-known M.H.R.'s spent nearly ten weeks of valuable time, and some hundreds of pounds of the public money in investigating "only a very vague outline," and then reported that, "bearing in mind its great importance," that in their opinion "a trial should be given to the system." I am surprised that Mr. McKerrow could be induced to append his name to such a ridiculous and discourteous statement.

The fact is, my system is so exceedingly simple that the Commissioners cannot believe it to be a system at all. They forget that all good systems are simple. Among other absurd things they have asked of me is a request that I should make every detail of the present complicated "no-system" fit in with the details of the new system, which was very much like asking me to make ten hands fit into one five-fingered glove.

All the information, and much more, has been given to the Commissioners that was given to Mr. W. Conyers' late commission of South Island railways, and he gave evidence before the Committee that he saw no difficulty in applying the new system, and that he could do it in a very few months. What was sufficient for his guidance ought to be sufficient for them, always supposing that as railway men they are his equals, which, however, appears to be somewhat doubtful.

Mr. McKerrow's next paragraph is an attempt to revive the old charge that the new system is unfair and unequal in its operation. The system is precisely the same in every district, but the Commissioners will not allow any system to be fair when the charge is not made by the mile, which is just what I and those who are with me object to.

He then says: "There is nothing in the system to recommend it." This is the Commissioners' opinion. It does not suit them; but tens of thousands of New Zealand colonists and nearly every local governing body in the colony think otherwise, and have petitioned Parliament that it may be tried.

Next comes a repetition of the statement made in their report, presented Yo Parliament in 1890. "Hut even in such countries as Austria and Hungary such low fares as Mr. Vaile proposes has not been attempted." If Mr. McKerrow does not know this statement to be absolutely devoid of truth then he ought to know it; for months ago, in reply to one of his supporters, I wrote that I was prepared to produce the actual tickets used in Hungary, which would show that their lowest fares are less than a third of my lowest.

In Hungary a man can often travel distances up to ten or more miles for five farthings (1¼d), and he can go a mile further than the whole distance from Culverden to the Bluff, 456 miles, for 3s 11d (three shillings and elevenpence). I have never proposed less than 4d for eight) miles, or 12s 8d for the long distance.

Mr. McKerrow's last paragraph shows that the Commissioners persistently ignore the fact that what the public demands is not merely "lower fares," but) a thorough and complete change of system as regards the transit of both passengers and goods. And it says clearly and distinctly that the public shall not obtain the desired change of policy if he and the other Commissioners can by any means retain their present cherished "no-system," which gives them power to do just as they please 'with the trade and commerce of the country. And this is what they have done during the two years they have had uncontrolled charge.

Mr. McKerrow and his fellow Commissioners have made loud professions of reducing rates; their own figures which I give above prove that instead of lowering they have steadily increased the rates till they are now 25 per cent, above what they were when they took charge.

The fact is, the Commissioners have only maintained the present miserable revenue by reducing train services, working the rolling stock to death, raising charges generally, and imposing the most unjust differential rates.

Mr. Vaile said the only question remaining was whether two people would travel where one travelled now. He believed that four would travel where one travelled now.

Mr. Seddon replied that later on in the history of the colony that would be so, but at present it was very problematical. At the present time the colony had not enough population for that; later on, when we had the population. Mr. Vaile would be right.

Mr. Vaile, in reply to a further question by Mr. Seddon, explained his course in first applying his system to the passenger traffic. He went on to say that if the recommendations of the Parliamentary Committee—that his system should be tried—were given effect to, he would be able to prove that he was right. He was not insensible of what his position would be if the system were tried and failed. He had asked nothing for himself. He repeated to the present Government the offer that he had made to previous Governments: that if he were placed in the position to do so, he would apply the system to the Auckland lines, working out the whole thing as it regarded passengers, goods, and parcels, in six months, he believed, and he was prepared to go and hand over the lines in working order. All he asked for that was that his expenses should be paid during the time.

Mr. Seddon said he thought Parliament would be very chary in interfering with the Railway Commissioners as the law at present stood. He had always had very grave doubts as to whether Parliament was wise in handing over the control of the railways to Commissioners; and, after what Mr. Vaile had shown him that day, and from what he knew himself, it was unquestionably, so far, not a success, but it might be that in the end it would come right.

Mr. Vaile: It cannot come right.

Mr. Seddon: Well, they say it will; and as they have been appointed for a certain time, Parliament do not think it would be fair to interfere with them, or to hamper them, until that time has expired. Mr. Seddon went on to say that he thought the country was very much indebted to Mr. Vaile for the trouble page 53 he had taken in this matter. The Commissioners, in answer to objections, said, "There you are: when the Government were working the lines, 2 per cent, was all there was to show; now we get 3 per cent.

Mr. Vaile: They get it by raising the rates.

Mr. Seddon: They say they have not raised the rates.

Mr. Vaile: I say, "There are your own figures, gentlemen."

Mr. Seddon remarked that the raising of the rates meant an increase of taxation.

Mr. Vaile: Yes, and a very gross form of taxation.

Mr. Seddon went on to say that the people did not know it, and the press did not know it. He pointed out that there was another question which Mr. Vaile had not gone into, and perhaps it had not come under his cognisance, and that was, that the railways and the plant had been going back.

Mr. Vaile: I know that.

Mr. Seddon: At the end of the term, taking the plant as we gave it, and taking the extra charge—

Mr. Vaile: It will take a million to set us right.

Mr. Seddon, continuing, said that the working of the railway system now was much more expensive than was originally intended. The Railway Commissioners recently sent an order home for four new boilers, though such boilers could be made in the colony. His attention having been called to this in Christchurch, he asked the Commissioners why they had not made inquiries in the colony from private firms without sending the order home, and whether or not the work could not be done as well by tender here as by open order sent home. They replied that they had not the necessary shop accommodation, and could not have got the work done within the time allowed. He then asked them how many boilermakers they had discharged, and whether the men employed worked full time. The reply of the Commissioners was that they did not think they were called upon to answer those queries. This meant that they did not think they were called upon to reply to a question by the Minister of Public Works. The members of Parliament looked upon the Minister as the political head of the railway system, but if the Minister was not to know the number of men employed, and the capacity of the shops, and yet a demand was made upon the colony to provide additional accommodation, it showed clearly the position. Parliament had no control; the thing had been handed over bodily to the Commissioners, and that must be accepted as the situation. Therefore, in all cases, he would have to inform members of Parliament when they asked for information that they must apply direct to the Commissioners. He would not take any responsibility in the matter. Though the Commissioners had refused to give him the information he asked for, he had obtained it from another source, thoroughly reliable, and thus found that there were facilities at the boiler-making shops at Addington for page 54 carrying out this kind of work. The latest and most improved appliances were there, and the accommodation that the Commissioners had complained of wanting must exist there, because there were no boilers in the fitting-shop. The person who had supplied this information had expressed the opinion that the Commissioners had perpetrated a gross injustice in sending home for boilers whilst they had in the colony the necessary plant and skill for such work, and whilst there were many boiler makers out of work, and said that he felt sure that the country would be pleased if there were a change. Mr. Seddon, proceeding, said that one firm in Christchurch had manufactured six locomotives, boilers and all. Therefore, whilst the necessary plant was in the colony, the Commissioners had sent home the orders, though there were boilermakers in Auckland, Dunedin, Christchurch, and Wellington walking about with their hands in their pockets. He thought the position of the Government in this matter should be known. It was, of course, reasonable that the Commissioners should not be interfered with so far as the employment of men was concerned, but it did seem to him strange that the Commissioners, without consulting Parliament or anybody else, could send home orders for works, and then ask the colony for a large sum of money to pay for them. It was a question on which the public should judge. He had no responsibility in the matter, and it was not right that any blame should attach to him.

Mr. Vaile said he thought the Act appointing the Commissioners would have to be repealed.

Mr. Seddon replied that the more they talked about repealing the Act the more it would make people say that the Commissioners were being hampered. He said nothing about interfering; he said the proper course was to let the Commissioners finish the time allotted to them by Parliament, and let the results be then seem.