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The Pamphlet Collection of Sir Robert Stout: Volume 68

Canterbury Industrial Association. — The N.Z. Railways. — Effects on Trade and Progress

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Canterbury Industrial Association.

The N.Z. Railways.

Effects on Trade and Progress.

I wish it to be understood that in this Leper I am not criticising the management of the railways. Anything I have to say is not so much against the management as against the policy on which the lines are managed and run. The regularity of the train services of the country, the efficiency of the employees, their loyalty to the service, their general courtesy to the public, and, above all, the singular immunity from serious accidents an our lines, all show that the management of the railways in New Zealand will bear favourable comparison with that of railways in other countries. Hence, my criticisms are not on the officers as men, but on the principles on which their work is carried out.

The subject is certainly an important one, as the railways command the internal trade of the Colony. They are the only available means of transport for the bulk of our trade, and were they closed the commerce of the Colony would be paralysed until new channels of communication were obtained. On March 31, 1889, there were 4326 hands employed on the railways. During the year just ended—March 31, 1890—the gross tonnage carried was 2,073,000 tons, 406,000 parcels, 1,069,000 cattle and sheep, and 3,376,000 passengers, besides 12,300 season tickets issued, the gross revenue obtained being £1,095,000. You will thus see that next to the Government itself, the railway system is far and away the largest "concern" in the Colony.

Bearing these facts in mind, one would naturally expect that the management of the lines would be subject to keenest scrutiny on the part of the Legislature. Yet, as a matter of fact, with the exception of a question now and again asked by some hon member, and usually "foggily" answered by the Minister, the matter of railway management has of late years hardly ever been brought before Parliament. With the exception of the Committee appointed in 1886 to report on the "Vaile system," and the discussion on that system which took place in 1887 on the present House assembling, I can remember no general and comprehensive discussion of late years on the railway tariff. The House has wrangled for days over the construction of a small line, or some new piece of railway, whilst the vast interests to the trade of the Colony involved in the lines already opened have been ignored.

Only one result could be expected from this. The lines have become more and more "a one-man concern," until, a year or two ago, they were regarded almost as completely the property of Mr J. P. Maxwell, the General Manager, as if he had been Jay Gould, or Vanderbilt, or some other American railway king.

It is true that in 1888 the present Government appointed a Board of Railway Commissioners, and thus the despotism of Mr Maxwell is now shared by him with Messrs M'Kerrow and Han nay, Mr M'Kerrow being an ornamental figurehead, no doubt; but the fact that under the Commissioners there has been no improvement in the principles of management, no concessions to the producer, no' increased assistance to the industries of the Colony, justifies me in saying that the page 2 management is exactly the same as it always was, with these important differences: That Messrs M'Kerrow, Maxwell, and Hannay have all received substantial increases to their previous salaries, whilst, what is much more important, the right of the Colonists through their representatives, to object to the management, to reverse the policy on which the lines are run, and to kick out of office a Government on its railway policy has been sacrificed, and we are now bound hand and foot to the Commissioners, who have absolute power, in the words of the Act, as to the "management, working, and maintenance of all Government railways in New Zealand." The appointment of a Board so constituted was entirely unexpected by the country. The only valid argument for the Colonists parting with their right to say how the lines were to be managed was this:—It was said, "If we can get a good man for £2500 per year from Home he will improve matters, but he will not come without be has a free hand." Therefore the appointment of the Commissioners was agreed to; but when the curtain rose, behold the familiar faces of Messrs Maxwell and Hannay bobbed up serenely, with Mr M'Kerrow, another Civil Servant, as a buffer! What the Colony wanted, and what it expected, was the appointment of a first-class railway expert from Home, one railway man in the Colony, and a really good commercial man an the third member of the Board, who would have brought business capacity, business knowledge, business tact, and a thorough acquaintance with the resources, industries, and trade of the Colony to bear on railway management. As it is, we have parted with the tight of fixing the principles of management, and have secured no perceptible alteration, and but little improvement. The number of trains have been reduced in some parts of the Colony, and slight reductions in cost of working have been made; whilst finally, being unable to lower the wages of the employees owing to their combination and the pressure of public opinion, the Commissioners have adopted the miserable expedient of largely employing boy labour in the workshops. These appear to be the sum total of the benefits (?) the Colony has received under the Board of Commissioners.

In their last report the Commissioners claim a net profit of £350,570, and they say—"This on a capital cost of £13,472,837 on 1,777 miles of railway, gives a return of £2 12s per cent." No doubt this is true. But in stating the cost of the lines at £13,472,837 they take only the amount spent on the opened lines. Besides this, there is a further sum of £1,402,350 on the unopened lines; so that in the Public Works Statement, 1889, (Table No. 2), the total expenditure and liabilities on railways is put down at £14,946,265. There are two other items to consider. (1) The railways have absorbed half of the £26,000,000 spent on immigration and public works, and are therefore fairly chargeable with half the cost of raising the loans (£1,021,472); and (2) half the departmental expenditure (£329,611). If we add, therefore, half the sums named (which amounts to £675,541), to the total cost of the railways, we have a grand total of £15,621,806, and the railway revenue on this last year was £2 5s per cent, not £2 12s.

There is one other matter, viz., the Commissioners claim credit for reducing expenditure last year by £40,283. No doubt the returns show this result, but how was it done? In 1887-8 the trains ran 2,944,786 miles. In 1888-9, with 19 miles more railway open, they ran only 2,796,007 or 148,779 miles less. Now, if you will remember that the expenditure per train mile last year was 55.54 pence, or say 4s 7½d, this will at once account for a reduction of over £34,000 out of the £40,000 the Commissioners say they saved, leaving the actual reduction of expenses at £6000! That is to say, the reduction of expenditure was secured by cutting off services—not appreciably by better management. No doubt some districts have been disgracefully over-served by the railways in the past, but there is a vast difference between lessening the actual expenditure and reducing the amount of the work done. If the Commissioners followed the same course to its fullest extent they might secure still greater reductions by reducing the railway services of the country; but they would not be accorded that credit they might expect for their achievement.

And this brings me to the interesting question, How have the railways affected the trade and progress of the country? Has that increase of settlement and population taken place in the Colony which an page 3 expenditure of some £16,000,000 on railways, entailing payment of some £640,000 per annum was expected to produce? Above all, have we succeeded by our railways in pushing back our population into the interior, and settling the distant lands? In other words, accepting Sir Robert Stout's dictum that every million borrowed increases the taxation by £40,000 per annum, have we got good value for the £290,000 annually paid by the Colony for the indirect benefits of our railway system, after allowing the Commissioners credit for a profit of £350,000 on the railways? The general opinion of the country is that all these questions must be answered decidedly in the negative; that the railways have not been the success they were expected to be from a Colonising and industry-promoting point of view; and the reason is not far to seek. It is this:—The lines have always been, and are still, managed by men who have no real acquaintance with practical busing, who have no sympathy with the struggling farmer or settler, who are unacquainted with the industries of the Colony, and whose chief desire has apparently been, and is, to squeeze the last penny possible out of the pockets of the users of the lines, in order that their own reputation as railway experts may be enhanced.

Now, it must be remembered that, when the railways were inaugurated, several large industries then in existence were seriously crippled. The private carrying trade, which gave employment to the horse-breeder, the farrier, the waggon-builder, the farmer and grain-seller, was wiped out and with it many of those who depended on it. In some cases, river steamers were driven off, specially low rates being made (most unfairly made, I think) in order to crush the river boats, thus closing up some of the finest natural highways of the country. True, the railway employs four thousand three hundred men, but the industries I have mentioned employed at least an equal number, and consequently we had a right to expect that by reducing freights and fares to a minimum the country would get the maximum of direct and indirect benefit from what it has had to pay so dearly for, not only in the crippling of its industries, but also in the shape of direct taxation.

Well, gentlemen, I have no intention of taking up your time by following this subject out in all its ramifications. Allow me to say that the result of some years' careful observation, and having lived in districts directly affected by the railways, is this: That as the railways are run now they are of little or no benefit to the Colony, so far as lands situated at any considerable distance from the sea coast are concerned; and I unhesitatingly affirm that if we are to people our distant lands, if we are to settle a population and offer inducements to them to farm an area which lies beyond the fringe around our ports, we must go in for a radical reform of our railway tariff. We must not only alter our present policy. We must reverse it. Instead of making the production of revenue from our railways the first and chief consideration, we must make it subordinate to that of offering inducements to people to go and settle on and farm the unoccupied parts of the Colony contiguous to and affected by the railway lines.

If the railways were properly managed, in a young and fertile country like this, with so much unoccupied and unsettled territory, there should be a steady increase of our railway revenue. Every year should see an increase in the number of passengers, the produce and the merchandise carried. With the natural increase of our population, independent altogether of the increase of the mileage open for traffic, there should be a development of the railway revenue. But what is the fact?

The revenue in 1884-5, with exactly 300 miles less of line open, was over £48,000 more than in 1888-9! In 1882-3, with only 1358 miles of line, we carried 150,000 more passengers than we did in 1888-9 with 1777 miles open! A few figures will show how fully my argument is borne out.

Year. Miles Revenue. Tonnage, Pas'n'g'rs.
Open. £ No.
1883-4 1396 961,304 1.700,040 3,272,644
1884-5 1477 1,045,712 1,749,856 3,232,886
1885-6 1613 1,047,419 1,823,767 3,362,266
1886-7 1727 998,768 1,747,754 3,426,403
1887-8 1758 994,843 1,735,762 3,451,850
1888-9 1777 997,615 1,920,431 3,132,803

This table shows that with 381 miles more open in 1888 9 than in 1883-4, the lines earned only £36,311 more; the increased tonnage of goods, stock, &c., carried was only 220,000 tons; whilst the passengers carried were 139,841 more in 1883-4, and 319,047 more in 1887-8 than they were in 1888-9.

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But now I will ask you to notice a table which sets out more fully the details of the traffic and revenue.

Table showing Live Stock, Goods, &c., carried, and Revenue earned, for the years 1885-6—1888-9, and 1889-90.

1885-6. 1886-7. 1887-8. 1888-9. 1889-90. Horses ... ... No. 9,518 9,165 9,301 8,378 9,358 Dogs ... ... No. 22,668 21,598 21,128 19,971 21,209 Dray a ... ... No. 660 597 592 547 678 Cattle ... ... No. 31,107 35.544 30,562 27,580 29,684 Calves ... ... No 2,527 1.891 2,204 1,837 2,016 Sheep ... ... No. 781,470 856,431 857,397 842,840 985,336 Pigs ... ... No. 40,558 48,151 50,046 47,126 51,359 Total Live Stock No. 859,322 912,614 940,801 919,939 1,069,253 Chaff ... ... tons 14,985 22,110 22,190 24,335 37,900 Wool ... ... tons 74,777 82,963 84,147 78,202 91,213 Firewood ... tons 80,280 73,040 65,860 67,045 77,454 Timber ... ... tons 202,571 175,581 158,023 160,399 172,813 Grain ... ... tons 413,846 315,253 358,021 447,027 498,198 Merchandise ... tons 368,224 329,227 347,379 356,732 399,258 Minerals ... tons 669,080 719,578 700,140 786,689 797,117 Total Goods ... tons 1,823,766 1,747,751 1,735,761 1,920,431 2,073,955 Grand Total Tonnage 1,856,732 1,783,524 1,770,637 1,951,126 ... Passengers ... £ 316,895 339,255 334,925 305,631 ... Goods ... ... £ 622,810 581,350 579,359 610 488 ... Miscellaneous ... £ 16,731 11,892 14,610 15,662 ... Total Revenue ... £ 1,017,418 998,788 991,843 997,615 1,095,569

You will observe that this table shows disastrous results for the four years ending March 31, 1889. During that period the number of horses, dogs, drays, cattle, calves and pigs carried, all showed a steady decrease, whilst the wool carried fell off 6000 tons (or 30,000 bales) in 1888-9, as compared with the previous year. On the Napier, Wellington, Wanganui and Hurunui-Bluff lines the decrease represented 38,790 bales, and it is certain the decrease would have been much larger, but that the Port Hills absolutely prevent wool being carted to Lyttelton. Hence the amount stated does not represent the cash value of the loss of trade to the railway. In the same year there was a drop of 36,000 in the number of sheep carried along the Hurunui-Bluff lines. During the four years ending March 31, 1889, firewood decreased 13,000 tons, timber 42,000 tons, and general merchandise 12,000 tons. The revenue from passengers dropped £41,000, the goods traffic £12,000, and the miscellaneous receipts £1100, so that the actual falling off in revenue in 1888-9 (with 1777 miles of line open) was over £50,000, compared with 1885-6 (with 1613 miles open). In 1888-9 the coal and grain traffic increased in the aggregate 175,000 tons, or the falling off in revenue would have been much more marked. Such are the results of the four years ending March 31, 1889, and though these were years of exceptional depression, yet so disastrous a reduction in the traffic proves that our railway system does not (as a State system should) meet and minimise the effects of that depression to the public. High freights accentuate the depression of trade, because low prices and a small demand nearly always go together. When prices are good low freights are not of so much importance, whereas when prices are low every fraction of reduction in cost of production or transit represents so much benefit to the people. Hence, I claim that the railways did nothing to assist the removal of the depression, but rather made it heavier by the higher proportion the cost of transit bore to the value of the articles and the ability of the public to pay. Of course, such a terrible state of things as I have shown could not last. The Colony touched bed-rock in 1888-9, and with the improvement in prices, the development of our coal measures, the increase in the grain trade, and the growth of the frozen meat trade—all of which have grown not because of, but in spite of, the railway policy—the trade of the Colony has begun to revive. This, aided by the passenger traffic caused by the Dunedin Exhibition, has caused the railway returns for the year just expired to show a most gratifying increase, the revenue being, as doubtless you are aware, £152,000 more than last year's, although even then it is only £48,000 more than in 1885-6. I think, however, the facts I have given show that the railways are not carrying out their proper function as colonising agencies; that they are not assisting the Colonists to meet the waves of depression we must expect from time to time; that they are not assisting the industries or developing the resources of the Colony to that extent we have a right to expect, considering the vast capital invested in them, and the fact that, as State railways, they are supposed to be run for the benefit page 5 of the people at large. When we consider the exceptional natural gifts of New Zealand—the fertility of the soil, the geniality of the climate, and the extent and variety of its resources—we have a right to expect that the railway lines would carry a steadily increasing quantity of its raw and manufactured products; instead of which we find that in almost every department of its trade, as compared with 1885-6, the railways were doing less in 1888-9.

In order to emphasize this part of my argument, I will give the revenue per mile of railway open for five years:—
Number of miles Revenue per
Year. open. mile.
1884-5 1477 700
1885-6 1613 649
1886-7 1727 578
1887-8 1758 570
1888-9 1777 562
1889-90 1809 605

And now, having shown the evil results of the present system, I will endeavour to point out the remedy which I think should be applied.

And first of all, next to having practical common sense and business capacity brought to bear on the management of the lines, I think we should cease to make the payment of interest on the cost of construction the primary idea of our railway policy. A railway capitalist looks for interest on his capital. The general improvement of trade is nothing to him, except in so far as it brings grist to his mill. But the State is in a different position. The State secures indirect benefits from public works by the enhancement of the value of its lands, the increase of its stamp duties, its Customs duties, and its other sources of revenue, none of which reach the pocket of a mere capitalist, who builds a railway line as an investment. The State secures its return in another shape altogether, viz., in the increased prosperity of its people, and the development of its resources. That was the original idea of our public works system, and the sooner we go back to it the better. A railway is merely a road, with two lines of metal along it, and the State finds the haulage power instead of leaving the individuals using it to do so. That, I believe, is the proper light to regard the matter in, and as we do not look for interest on the three and a half millions spent on roads, on the half million spent on water-races on gold-fields, on the one and three-quarter millions spent on public buildings, or on the two and a quarter millions spent on immigration, so I maintain if we wish the Colony to prosper, we must cease to regard the railways as taxing machines in order to provide interest, and look to the benefits they can be made to confer as colonising agencies as their first and primary function. Had the people of Canterbury looked for interest on the money would they have spent £340,000 in piercing the Port Hills, or £316,000 on the main lines traversing the Province? Not a bit of it. They took a wider view, and saw that without these bold and enterprising steps their lands would lie idle and their Province remain little better than a huge sheep-walk. If we are to get the Colony as a whole out of the Slough of Despond it is in, we must lay aside the question of interest on cost of construction, and gauge the success of our railway system rather by the tons of stuff they carry and the people they settle on our lands than by the percentage they pay. The second step in reform should be to simplify the railway tariff. The present tariff comprises some fifty-seven pages of closely-printed matter, and is nearly as elaborate as a Hebrew dictionary or Cruden's Concordance, and decidedly much more complicated. I have been told that when a railway officer receives a new tariff he has to will up and sign a printed form in which he says, "Received copy of circular dated" so and so, "which I have read and understand!" Well, if he understands it he is smarter than most of the public, though what would happen if a railway officer had the temerity to say he did not understand the tariff, one can only imagine. That the tariff is unduly weighted, is full of crudities and absurdities, and is largely a repetition of the tariffs of other countries whose traffic is vastly larger than our own, and whose trade is entirely different from ours, will be apparent to all who have come in contact with it. When I tell you there are tariffs for "apple blight mixture," for "banners," for "juniper berries," for "bills of exchange and other securities," for "cash," for "coin," for "valuable documents," for "artificial flowers," for "fog-signals," for "lace, packed," for "maps," for "money," for page 6 "racecourse stalls," for "silver coin," for "surveyors' pegs," for "title deeds," for "trinkets," for "writings," and, finally, for "hobby horses "—and even these are carried at "owner's risk: Class A "—you will see I have not misdescribed it. Instead of having a tariff comprising nearly one thousand items of classification, the tariff might be divided into a dozen or so comprehensive and self-evident divisions, these principles being kept in view: First, that all the actual necessaries of life which are produced in the Colony, or are admitted at a minimum duty because they are necessaries, should be carried as low as possible; second, that all articles admitted into the Colony duty free, or at a low rate, in order to assist the industries of the country, should receive further aid by being carried at a minimum rate; and third, that all the natural products of the Colony, and all those industries which our people are endeavouring to establish, should receive every possible encouragement in the way of cheap freights, not only of the raw material, but also of the manufactured article after it leaves the factory, in order to wipe out the imported article. In other words, I maintain that our Customs tariff and our railway tariff should go hand in hand, and that it is no use giving a concession to a man to enable him to start an industry with one hand and taking it away with the other. That would be like a doctor who ordered a sickly infant to be fed with beef tea, and other nourishing food, but insisted on a drop or two of croton oil being mixed with each meal to prevent his patient growing strong too fast! At present, instead of the railway and Customs tariffs working harmoniously, they are in many cases in direct conflict. For example, we allow almonds, arsenic, arrowroot, bookbinders' materials, borax, druggists' bottles, brush woodware, carriage shafts, churns, books, and a number of other things all in duty free, and directly they are put on the railway lines they are charged the maximum rate. But time would fail me to work through all the devious eccentricities of the tariff. All that I can do is to emphasize the principles I have laid down by urging that the two tariffs should work together, not only to lighten the cost of living, but also to assist the development of our industries. Whilst we are professing to encourage the manufacture of machinery of all kinds, including ploughs, threshers, reapers and binders, presses or flour dressers, directly they are put on the railways they are rated as Class B, and have to pay the second highest rate. Then, again, take the case of one or two special industries. The fruit trade and its cognate industries of jam manufacture and fruit preserving, are among the most important of our growing industries. Every possible encouragement should be given to them; and there is every reason to expect that from the diversity of our climate, we ought in a few years to be able to take a foremost place in the world's markets with fruit and jam. We charge a duty of 2d per lb on the imported articles, but the local manufacturer has to pay a duty of ½d per lb on his sugar, whilst it travels along the railways as Class B, and his jam is classed as A, unless he sends a consignment of at least half a ton direct from his factory, in which case it is carried as Class B. Cheese is similarly treated, as no concession is made to the local article unless it is sent direct from the factory in lots of one ton each. I confess that I should like to see all articles made in the Colony carried at half the price of the imported article, the simple condition being that it should be marked, "Made in New Zealand," the consignor being liable to pains and penalties, as well as forfeiture of the goods, if he acted dishonestly in the matter. Confectionery, preserved milk, pickles, preserves, and numbers of other articles made in the Colony all come within the category of what I have urged. But I must hasten on. There is one matter, however, I must remark on, and that is Colonial cement. This is an industry it is most desirable to encourage, and with this view a special rate is made, it being put into Class N, rate and a half, but in no case to exceed Class D, under which the English cement is carried. Now, the rate for the English cement from the ship's side at Lyttelton to the consignee's store at Christchurch is 6s 10d per ton; that being Class D, 5s 9d, and 1s 1d cartage added. The Colonial cement is carried in quantities of not less than four tons at rate and a-half, Class N, which amounts to 5s 3d per ton. But, coming under Class N. a haulage charge of 1s per ton is made at Lyttelton, which brings it up to 6s 3d, landed at Christchurch station. But page 7 being in Class N also, the railway does not deliver the stuff to the consignee. He has to pay the contractor 1s 1d extra for cartage, and thus it costs him 7s 4d per ton for Colonial cement, as against 6s 10d for English. For a long time my informant actually paid the 7s 4d, but one day luckily discovered that he could not be compelled to pay more than Class D. He, therefore, exercised his right, and insisted on the railway taking off the special concession in favour of Colonial cement, which had cost him 6d per ton more than if he had had the English article! It Is needless to say he has lost faith in the beneficent assistance of local industries by the railway. And whilst on this matter, I would urge that these concessions should not only be made more real, but should extend beyond the mere transit of the stuff from the factory. The minimum quantities are all too high—very few use four tons of cement on one job—whilst the concession in freight, if made real, should not only be extended to the transit from the manufacturer to the merchant, but also to the transit from the merchant to the person using it. In fact, as I have already said, the marking of it as of New Zealand manufacture should be quite enough to secure special cheapness of freight for any article wherever it travels on the railways. But it is not only in the complexity of the tariff and its heaviness that the trader is hit by the railway. There are often other charges added on, and amongst the most burdensome of these are the loading and unloading charges. Perhaps the worst of these relates to timber. At one time men contracted at Lyttelton to unload timber from the ship into the trucks at 1½d per 100ft. The railway, however, insisted on doing this work, and charges 3d for it, being exactly 100 per cent more than the market value of the work.

I think I have now said enough to answer the query, "Are the New Zealand railways aiding the development of the industries of the Colony?" Yet, harassing as is the railway tariff on the trader and industrial man, it reserves its severest blows for the settler—the farmer—the man who has to bear on his shoulders the whole fabric; for it is a truism that all wealth comes from the soil. Mr Stead has lately advocated the influx of capitalist farmers, and asked the country to support him in proposing that special concessions shall be given to such. My opinion is that the reason New Zealand does not enjoy a steady inflow of population is not the lack of the special inducements Mr Stead proposes—for they are mere bagatelles after all—but rather because the farmers already in the country are not really prosperous. Despite our heavy grain yield, and the higher value of our sheep and other stock, as compared with the other countries of the world, which Mr Stead proved a few years ago in a paper which commanded much attention, it is an unfortunate fact that the New Zealand farmer's life has not been a happy one of late years j and whatever may be said of the effect of dear money, low prices, and heavy rents, rates and taxes, I maintain that heavy railway charges lie more heavily on the farmer, and more directly on him, than anything else I have named. In the matter of low prices he is affected only by the universal value, but the railway charge is a fixed amount, which must be paid before his goods are delivered, and if Indian or American wheat is carried a hundred miles for what it costs him for every ten miles, then he is handicapped to that extent. The men who control the means of transit control the trade of a country; and I would go so far as to say that not only should the freight on our railways be reduced to a minimum, but also our ocean-steam services and mail subsidies should be so distributed as to secure a minimum of freight for our producers in reaching the ports of disposal for their products. I mention this to show how the trade is commanded by holding the means of transit. Now, I will take a farmer under Mr Stead's scheme, and I will suppose he takes up three hundred acres of land sixty miles from Lyttelton. Let us see what he would have to pay the railway. The passenger fares for himself and his family (second class) would be 8s 4d each. His luggage would cost him 30s 8d per ton; the post and rails for his fences and his firewood would cost him 39s 4d per truck of six tons; the timber for his house would cost him 2s 6d per 100ft (and if he built a decent house this item alone would amount to £25); the iron to roof his house and the cement to pave his yard would both cost him 19s 11d per ton, whilst his paper-hangings, the marble mantelpiece for his drawing-room, and his furniture would page 8 cost him 36s 2d per ton; his buggy would cost him 26s 8d; and his doors, windows, and nails would cost 26s 2d per ton; the coal for his fires would cost 8s 4d, even if he bought it from the local supplier. In fact, I may safely assert that if one of Mr Stead's settlers took up 300 acres of virgin land, and put his family on it, he would have paid the State over £100 in railway freights and fares by the time he could begin to farm his land. But I will now suppose he has got his 300 acres into working order, and that he has become a New Zealand farmer. Let us see now how, having bled him to the last possible extent as a "new chum," the State proceeds to treat him as a producer. I pass over the fact that all the machinery, the waggons, the harness, the seed he uses are charged for, as I have already shown, at excessive rates. Let us suppose he has had a good harvest, and we shall get this result:—
Cost of Transit of Produce to Lyttelton—60 miles.
£ s. d.
Wheat—84 tons (150 acres at 22 bushels) 42 0 0
Oats—54 tons (100 acres at 30 bubhels) 27 0 0
Hay—8 trucks pressed 15 0 0
Potatoes—54 tons (12½ acres at 4½tons) 27 0 0
Chaff—50 tons 23 0 0
£131 0 0

In this I have not considered freight on live stock, pigs, or butter, cheese, fruit, hides, sheepskins, honey, hoofs, onions, or many other articles which an enterprising farmer might consider desirable additions to agriculture, and which in my opinion, should be more generally valued by our farmers than they are, who, I think, often too exclusively confine themselves to grain and sheep-raising. This by the way. These items, if included, would probably raise the total up to £150—at any rate that amount will certainly be reached if we include the cost of "railway-carried goods consumed by the family in the course of the year, and his occasional fares to town. Thus, you will see the freight costs nearly 10s per acre, and I put it to any body of men whether that sum is not excessive, and whether it does not stand in the way of men going into the country as settlers.

I quote the following from a letter by Mr S. Vaile:—

"A farm of 300 acres, half in crop and half in grass, would, in manures and other things taken to the farm, and in crops, dairy produce, and live stock taken off it, require to transport at least 175 tons per annum.

"Mr Maxwell, in his report to the House, states that the average distance goods are transported in New Zealand is twenty-five miles, and the average charge paid is 6s 10d per ton, consequently he says the average charge per mile is a small fraction over 3¼d.

"This is the result showing the annual transit charges such a farm would have to pay if placed at the following distances from the market:—


7—£16 11s 11d

14—£33 3s 10d

21—£49 153 9d

30—£71 2s 6d

80—£189 13s 4d

130—£308 4s 2d

"A glance at the above figures will show how utterly impossible it is for the men at eighty and one hundred and thirty miles distances to compete with those at seven and fourteen miles. No difference in the price of land could make up for the extra transit charge. This it is that has taken the value out of country lands, for land has no value unless it can be occupied and profitably worked.

"I shall be told that the difference between £65 and £308 is so great that the country could never stand the loss. My reply is, that the £308 is the price demanded from the unfortunate settler, but never obtained, because no man could possibly pay it, and we have here the secret why our trains run empty and the country remains unoccupied."

But some friendly critic will say, "O, they don't grow potatoes as far away as sixty miles!" Well, why not? Is it not because the freight to port stands in the way and leaves the producer no margin? This strikes me as the greatest blot on our railway system—that whereas they were meant to encourage population to settle at a distance from the port, by heavy freights and charges they force the population to settle as nearly as possible round the centres, because high freights limit the number of articles a farmer can produce to advantage; and the result is that only high valued crops like grain and wool are grown. In fact, the railways, page 9 which were meant to act as a centrifugal force, in spreading our population out, act centripetally in compressing it as near the ports as possible to save freight. And it is manifest that men will crowd near ports if the freight on potatoes (for example) is only 2s 6d per ton, instead of going where it is 10s, as on a five-ton crop this means a saving of; 37s 6d per acre alone. The proof of what I say is found in a remark in the Canterbury Corn Exchange report for last Friday, as follows:—"Potatoes—Derwents, 35s at country stations within a radius of twelve miles," that being apparently the point at which the freight affects the trade. If you consider that there are many districts, like the Waikato in the North Inland, which are 100 miles from a port, you will see how heavily handicapped many of the producing industries are.

Now, to overcome these barriers to the settlement and development of the interior which the railways now interpose, I beg to suggest, not only that there should be very large reductions in the freights, but also that we should abolish the mileage basis, and adjust our charges on a system of stages, under which we should carry stuff (especially the products of the Colony) any distance within a certain radius for the same amount—that is to say, we might fix our charges on stages of ten or twenty miles, and have the same charge whether the stuff were carried the whole or only a part of the stage. This is the principle on which Mr Vaile, of Auckland, bases his proposals, and I consider it a perfectly sound one. Allow me to quote a few lines from the Lyttelton Times of April 3:—; "The system of 'zonal' railway tickets in Austria is showing astonishing results, and producing quite a sensation. In four months—August to November—the number of passengers has nearly tripled. During four months of 1888 the number of railway tickets issued was 1,616,000, while in the corresponding period of last year 4,300,000 were issued. The tickets are available within a certain radius or zone. No one had dared to hope for such a happy result; yet, notwithstanding a radical lowering of rates, the receipts have increased from 3,188,000 florins to 3,784,000 florins. This is an increase of 600,000 florins, when a great falling off in the receipts was expected on all hands. No doubt this experiment of the Hungarian Government will make a little noise in Europe; or, indeed, all over the world." Some such scheme as that, if applied to the freight of the products of the Colony, would certainly stimulate the industries and help the farmers. The impetus which would be given to the production of articles now only grown within certain limited areas near to the ports, would greatly increase our export trade; but it would do more than this—it would stimulate the internal trade of the Colony to an extent we can hardly conceive, by setting districts moving which are now lying undeveloped. I maintain that, instead of the railways being so managed as to scrape the last possible penny out of the pocket of the producer, our policy should be to leave every farthing we can in the pockets of the people. Instead of asking, what can we put on the charges, the query should be, what can we take off? And it should ever be borne in mind, that the greatest attraction any country can offer to outsiders is the prosperity of its inhabitants. Under the reign of borrowed money, we have been looking for prosperity from without ourselves. Let us now take a new departure, and try to create prosperity within ourselves. It will rapidly work outwards, and streams of unassisted and unaided immigrants would flock to our shores, attracted: by the magnetic power of our prosperity. Indeed, some day we may find it desirable to have a railway tariff which shall rise or fall with the market, so that in years when there are bad crops, or when prices are below a certain minimum, the railway tariff may be adjusted accordingly.

I will now refer to two or three objections to low railway freights which may be urged:—
(1)It is said that our freights are as low as those of other countries, and, as a matter of fact, there is not a great deal of difference between our freights and those of Victoria and New South Wales; but it must be remembered that we are an exporting country, that those are likely to be in the not distant future our principal markets, and that our I produce has not only to be charged with, freight to the port of shipment and wharfage, but that it has to pay a hostile Customs tariff (in Victoria at any rate, and; probably soon in New South Wales), wharfage there also, cartage to the store, and finally transport to the customer. If, page 10 on the other hand, it is sent Home it has a 16,000-mile journey, and then it has to compete against American wheat, backed up by extremely low railage charges to the port of shipment, and a five or seven days' journey to the United Kingdom, or against Indian wheat assisted by minimum railway freights, and cultivated at a cost for labour against which our farmers cannot compete. Hence our policy as a country must be to encourage our export trade by giving the producer every concession we can on our lines. But even in other countries the shrinkage of prices in agricultural produce is compelling the question of freights to be faced. The Alta California (San Francisco) of April 5, contains the following:—"Experience has opened a school in some of the prairie States, and while the lessons taught therein are difficult, they are being learned with pain under the raw hide of necessity. States have properly the power to affect by legislation and by administrative action the rates of transportation. The great agricultural staples produced in such volumes by Iowa, Nebraska and Kansas must go to the seaboard for export abroad in search of a market. Their prices have fallen until the value of real estate has almost collapsed. The shrinkage in the resources of the farmers in some sections has compelled them to burn their corn for fuel because they can't sell it for a price that will enable them to buy coal. In Iowa the attempt to equalise income and outgo to the farmer by reducing transportation rates is just being made. The new rates give a railroad 60cents for hauling a reaper and mower fifty miles; for 100lb of butter fifty miles, 13cents; for carrying a horse, usually occupying a whole car, fifty miles, 1dol 50cents; a piano, 400lb, fifty miles, 80cents; and so on through the list of crops and articles. These rates are enforced also as 'joint rates,' where the freight has to be transferred from one road to another, including an extra handling." This extract shows how the people of Iowa treat the question of freight, and as competition becomes keener and new regions are devoted to producing food, those countries which can shift their products from the producer to the consumer at the least cost will be most prosperous. The others will be driven out of the race, and will either continue in a state of depression, or will be compelled to turn to other industries. Hence I ask you to dismiss altogether from your minds any question as to the freights in other Colonies, and to deal with this matter entirely from the point of view of what will enhance our own trade and secure our own prosperity.
(2)A second objection is that if a system of cheap freights were adopted, it would merely put so much into the pockets of the landed proprietors; that the producer would not be at all benefited, as the landlord would get all the profit. Well, am thankful to say landlordism has not so strong a grip of this country as that objection implies. Taking the three Counties of Selwyn, Ashley, and Ashburton, I find that out of 5463 holdings over one acre in extent, 3240 are freehold, 1462 rented, and the remaining 761 are partly freehold and partly rented. By far the largest proportion of rented holdings is in Selwyn, where the contiguity to Christchurch and the accessibility to market give land an excessive rental value as compared with more distant parts. Ashley has two and a-half freehold holdings to one rented, and Ashburton has over three. If the same proportion obtains throughout the Colony, viz., about three freehold to one rented holding, the reductions I propose would be a great assistance to the producers.
(3)But a third objection is this. People say—"We paid a high price for our land because we were near a port. If you lower freights for long distances, other lands will be as valuable as ours, and you must give us compensation!" This is a plausible objection, no doubt. I wonder whether these gentlemen, who complain so much of others being benefited by low railway fares, were anxious to put their hands in their pockets and pay the State any of the unearned increment given to their lands by the expenditure of fifteen millions on railways. Exactly the same argument is used by a certain class regarding the State lands. They say—"We paid £10 per acre for our lands; why should the State raise up competition against us by giving land away?" The answer is very simple—"The greatest good of the greatest number" must rule, and the interests of the few must be made to stand aside where the welfare of the Colony is at stake. Not only so, but it is very doubtful if the lowering.