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The Pamphlet Collection of Sir Robert Stout: Volume 61

Estimating the Cost and Probable Results

Estimating the Cost and Probable Results

of carrying passengers.

The average cost of hauling a train one mile in New Zealand, was in 1884-5, 4s. 9½ I believe there is no other country in the world, possessing 1,477 miles of railway, where the cost is so high.

page 14

A load of 80 tons, including the weight of rolling stock, would be only a very small train; it would, however, carry 300 passengers, and the cost of running it for 100 miles, would, at the present high average, be £23 19s. 2d.

My lowest proposed through fare for the 100 miles average of the two classes is 2s. 6d.; I, however, calculate that the station to station work will at least double this amount, and that each seat in a carriage will give an average product for every 100 miles of at least 5s.,—thus 300 seats would yield £75; but if we could only get the train two-thirds full, the yield would be only £50; if only half full, £37 10s.; which would still leave a profit of £13 10s. 10d. or over 56 per cent, on the working expenses; if only one-lhird full, £25, or a profit of £1 os. 10d.; and if but one-quarter full, 15s., or a loss of only £5 4s. 2d., instead of the £10 6s. 2d. we now lose. In the face of facts like these, I cannot see how the country could make a loss by accepting my proposals. There appears to be no possibility of direct loss, while the indirect gains must be enormous.

If in 1884-5 fares been reckoned as I propose, and if the seats occupied had only averaged 150 per 100 train miles, and each seat had earned but 3s. 6d. instead of the 5s. mentioned above, the result would have worked out as follows:—
Ordinary passenger fares £575,077
Other items of coaching, as per statement of 1884-5 51,998
Goods as per statement of 1584-5 645,086
Total Gross Revenue £1,272,161
Total Expenditure as per statement of 1884-5 £690,026
Estimated Net Revenue 582,135
Actual Net Revenue, 1884-5 355,686
Increase in favour of new plan £226,449

In 1884-5, the number of ordinary fares averaged 126, and the gross earnings from passengers £13 13s. per 100 train miles. It is worth while reflecting on the astounding fact that throughout the the year, so far as ordinary passengers were concerned, we, on an average, ran a whole train four (4) miles to carry five (5) fares.* The thing seems incredible, but it is true nevertheless.

For further proofs that passengers can be profitably carried at the proposed rates, I refer my readers to my reply to Mr. Maxwell's report, paragraph 29

* I think this is conclusive evidence that we could carry 10 fares for one we carry now, without extra charge, fur practically the trains run empty.

page 15

It may be well, however, to briefly recapitulate them here.

Mr. Maxwell's assertion is that "passengers could not be profitably carried for such long distances at such low fares."

In reply to this, I have selected for purposes of comparison the longest distance possible—from Waikare to the Bluff—436 miles. The present fares are first-class, £4 10s. 11d.; second-class, £3 os. 9d. Proposed fares, 18s. 6d. and 12s. 8d. respectively; average of the proposed fares, 15s. 7d.

In America, passengers are daily carried the same distance for 18s. 2d.

In India, nearly the whole passenger trade of the country is done at the rate of 9s. 6d. for 436 miles.

On the London Metropolitan, people are daily carried 16 miles for 2d., which equals 436 miles for 4s. 6½

On the Caledonian Railway, goods are carried at rates, which at weight for weight, irrespective of the weight of rolling stock, equal carrying a man 120 miles for one penny.

On our own New Zealand Railways, to carry 20 tons of passengers at the proposed fares, after making the most liberal allowance for the extra weight of rolling stock required, would yield £90 3s. more than 20 tons of the highest class of goods—class A.

Thus it is clear, either that passengers can be profitably carried on our railways at far lower rates than I propose, or that the highest class of goods traffic does not pay.

The rate charged for carrying goods of class A 100 miles is 49s. 4d., or within a very small fraction of 6d. per ton per mile; for 436 miles it would average 3d. per ton per mile. If this rate will not pay I should like to know what will.

In all the above examples, I have based the calculation on my average through fare only; and have taken no credit for the station to station work, which would certainly add from 30 to 50 per cent, to the return, and which would be all additional net profit.

When the Department assert that passengers cannot be carried at my fares without loss, they give the most convincing proof that they have never studied the subject

In carrying through the above argument, it will be seen that I have never based any calculation on the assumption that more than three fares would be taken where one is taken now, but page 16 I am certain that the inducement offered is so great that in a very short time they would be increased tenfold; this with the enormous expansion of general traffic that must follow would give us at least another million per annum of net railway revenue. It would not surprise me in the least to see this result attained in less than two years.

I am aware that this statement appears extravagant and ridiculous, but let it be borne in mind that all we require is two fares, for one we get now, in order to obtain a gain on the present result, consequently every additional fare up to at least seven fares, would be all net profit, for, if we had this number we could separate our passenger from our goods traffic, which would enable us to carry the seven for less than the one costs now.*

I wish to direct special attention to an essential feature in my plan; I refer to the system of reckoning fares by

* The wear and tear on a railway, is in proportion to the velocity at which weights are carried. The minimum of wear and tear comes in at about 6 miles per hour, and it increases rapidly as you increase the weight and speed. We run nearly all our trains "mixed," passengers and goods together. Thus we are carrying our heaviest weights at our highest velocities, and hence the great destruction of our lines and rolling stock. If we had seven times as many passengers, we could separate and carry them—the light weights at the high velocities; and the goods—the heavy weights—at low velocities, and thus carry seven fares at less cost than we can now carry one.