The Railways maintain an open door for all classes of traffic, while providing, in the case of passengers, fares regulated to some extent in the interests of national development, and in the case of freight, distinctive rates for similar weights based largely on the capacity of the respective commodities to bear the rate charged. Because this practice is of such long standing and has come to be regarded as in the nature of things, rather than as a definitely objective and fully conditioned policy, the full value of the national service performed by the Railways is liable to be overlooked.

I wish, therefore, to draw pointed attention to one or two facts bearing on the situation as it stands at present, with special reference to the conditions under which competitive road carriers have been able to operate.

Passengers.

The Department has had no effective competition in passenger traffic over long distances. For intermediate distances competition has been vigorous because of certain advantages possessed by the smaller unit in the matter of point-to-point traffic. In suburban traffic the Department has provided extremely low rates for the transport of workers and season-ticket holders, thus relieving congestion in the cities and making possible much suburban settlement through the provision of lower rates than could be introduced by any other form of transport. In both intermediate and suburban types of traffic, road competitors have left the bulk traffic, such as that developing at excursion periods or at peak hours in suburban areas, to be carried at the cheap rates by the railways, but have intercepted the more remunerative traffic. In this they have been aided by heavy public expenditure upon roads which has reduced the operating costs of such competitors. The cheapness of railway suburban transport is indicated by the fact that the average amount received by the Department for each suburban passenger journey is slightly less than 2 3/4d. As the suburban areas extend twenty miles or more from the principal cities, the cheapness of this service is manifest.

Freight.

The average charge for carrying a ton of freight one mile by rail is only 2.38 pence. If this were taken as a basis for calculating rates, one ton of goods would cost the owner 19/10 for transporting a distance of 100 miles. Lime for manuring farm lands is actually carried free to the farmer for a limited mileage. Other farm products or requirements carried 100 miles for less than the general average of 19/10 per ton are such goods as firewood, etc., at 9/3 per ton, chaff, hay, etc., at 12/2 per ton, wheat fertilisers, etc., at 14/10 per ton, and New Zealand coal at 13/7 or 15/8 per ton (according to class).

Patronage Urged.

From the foregoing it will be clear that both suburban dwellers and the farming community have been well served in the matter of rates for transport by rail, and as such rates are only tenable if the supplementary or higher-rated traffic is given to the Railways, I would earnestly urge this view upon those who most directly benefit from the present arrangement of the Railway tariff.

General Manager.