No. 1.

By Samuel Vaile.

We complain, and not without cause, of commercial and financial depression, but few, very few, of us take the least trouble to search out the underlying evil that has brought this state of things about.

When a large commercial house fails, numerous smaller businesses must fail in consequence, and the larger the transactions of the house that fails first, the more widespread the disaster.

We most of us remember the consternation, disasters, and trouble that followed the failure of the Glasgow Bank. We have a mild example nearer home. Our local bank is not as prosperous as it used to be. No one able to judge doubts its ability to regain its former position; but in the meantime we feel the effects of shaken confidence.

What placed the Bank of New Zealand in its present position? Incapacity, or worse, on the part of its management and directors, say Mr. Buckley and others. I hold a totally different opinion, and believe that the Bank's difficulties have arisen chiefly from causes outside of itself and beyond its control. They arise from the failure of a still larger concern.

Those who have managed the affairs of the Bank have no doubt made serious mistakes, but these would not have been felt had not the value gone out of country lands to such an extent that the owners were compelled to abandon them to the Bank, and the Bank directors have been unable either to realise or utilise them. It was never thought that the Bank would have become the owner of these properties. This loss of value is due to maladministration of public affairs.

What is the chief business of any country? Is it not its public business, the administration of its Government; and are we not all convinced that for years past this has been a serious failure? And why has it been a failure? Simply because it has become a fashion with the leading men of ail classes to say that a business man ought not to take any part in politics, and thus public affairs have been allowed to drift into the hands of inferior men, and our merchants and others have gone on "minding their own business" till now they have very little business of any kind to mind.

If this country, or, indeed, any country, is ever to be really prosperous, its citizens must recognise the fact that, from the highest to the lowest, we all have public as well as business and private duties to perform, and that if we neglect public duties, private interests must necessarily suffer.

Of all the departments of our public business there is not one that exercises so great and immediate an influence for weal or woe as the department of working railways.

In it we have invested £15,000,000 of capital, or considerably over £24 per head for every man, woman, baby, imbecile, and gaolbird in the country. This, then, next to the whole public business, is the largest concern in the colony. It is purely a business department. Alongside of it the Bank of New Zealand is merely a baby. The Bank's capital is but £1,000,000; the railway capital is £15,000,000.

The Bank is not prosperous, and the country suffers in consequence. But what influence can this have compared with the failure of our railway department? I do not suppose there is an individual in the colony who has bestowed the least thought on the subject but what knows, and feels, that the administration of our railways is a complete, an absolute, and most contemptible failure.

The most ardent advocates of the present system cannot pretend that in any respect it has been a success. The one object has been to "get revenue," and here it has failed miserably. As a means for settling the country it is a still worse failure, while as regards the transportation of goods, and providing facilities for the travelling public, the whole colony loudly complains.

Price 2d.

All Profits go to the fluids of the Railway Reform League.

If, then, this great department is really a failure, it follows that the whole colony must suffer seriously.

In a small and thinly-populated country like this £15,000,000 is a vast sum of money to expend in any one direction; and if the object aimed at is not obtained, serious disaster must ensue.

No one can pretend to say that any one of the objects we had in view when we consented to burden ourselves with our vast public debt has been attained by the construction and administration of our railways.

What, then, is the cause of our failure? I believe there are two causes:

1st. The policy, or rather want of policy, pursued in the administration.

2nd. The want of capacity in the men we have placed at the head of the department.

As to the policy pursued, the only idea has been to use our railways as great tax-gathering machines, to make them get as much revenue as possible, without the least thought as to whether the system pursued could last, or the least regard for the wants and requirements of the country. Such a system must necessarily come to grief. It was only a question of time.

The miserable failure of the attempt to "get revenue" is due to the fact that no effort has been made to use our railways so as to meet the requirements of the country, and develop its resources. They have been worked not as though they were State property, but as though they were the private property of the railway managers, as indeed at the present moment they virtually, if not in fact, are.

We want a national railway system. We must put out of our minds the false idea that the first business of a railway is to directly make money; we must rather regard them as instruments for the creation of national wealth, by providing quick and easy transit facilities at the lowest possible charge, and on equitable terms. We must come to consider our railways as national highways, that are not to be used for the purpose of raising taxation.

If we were to make the same effort to "get revenue" out of our ordinary roads that we do to get it out of our railways, what would people think of our folly? And yet if the one thing is right, why is not the other? Compared with our railways, our ordinary roads are merely byways; the railroads are, or at any rate ought to be, our highways, the great channels through which commerce should flow.

If we would but reflect on the fact that everything in this world depends on the power to move—that without motion there cannot be any life, we should see how important it is to make our transit system as easy and free as possible.

Motion is just as necessary to commercial life as it is to animal or vegetable life. Arrest motion in either case, and death is the inevitable result. Why, then, do we allow the commerce of our country to be blocked by an additional charge for every mile its people or its products pass over?

It is in this false and pernicious system that we have the real cause not only of the failure of our railways, but also of nine-tenths of the commercial and social troubles the world suffers from.

The railway system of transit stands alone. There is no other, and there has been no other, where the charge is made by the mile. There is no other, and there has been no other, where it has been claimed that it is impossible to lay down an intelligible scale of charges.

I assert that the whole thing is an unutterable absurdity; and I say that it is just as easy to lay down a fixed, fair, and equitable tariff of railway charges as it is to fix one for postal and telegraphic charges. There is no honest reason whatever why the present complicated and fraudulent system should be kept up.

My contention, then, is: That the real cause of our commercial and financial troubles lies in the fact that we have so managed our national transit system as to ruin our great producing districts. We I have rendered it impossible for anyone to make a profit out of land situated at a distance from a large centre, and have thus completely destroyed its value, with the inevitable result, which we are all now feeling, that the value is fast going out of our cities, and their suburbs also.

By pursuing this insane policy we have rendered it impossible for the country to bear its fair snare of taxation, and have thrown that burden almost wholly on city and suburban property, a burden which it is found increasingly difficult to sustain.

I venture to say that the day is not far distant—it will come in a very few years—when curiosity-hunters will eagerly buy up copies of the present railway tariffs and regulations, and when they will be exhibited to the wondering gaze of thousands as monuments of commercial and financial imbecility.

As to the second cause of the failure of our railway system, let the following table speak:—

Nine Years' History of the New Zealand Railways.

Note.—Messrs. Maxwell and Hannay received their appointments as general manager and sub-manager in 1880.

During the period under review the population of the colony was increased 24 per cent.

These are the startling facts we have to face and deal with; and, if we are wise, we shall no longer put up with the trifling of the men who have brought our railways and the country to this pass.

Let it never be forgotten that the men who control our railways now are the same men who have controlled them all through this period. They are solely responsible for the policy pursued. It was not only within their power, but it teas their duty, to initiate any reforms they were able to make, but the results prove that they are thoroughly incompetent to deal with the question.

The sooner the ill-considered Act of 1887 is repealed and the Government resumes the direct control of the railways—which they never ought to have parted with—the better it will be for the country.

What is the use of any longer continuing a system which, year by year, shows increasingly worse results—a system which the more millions we invest in it, the less rate of interest we receive; a system that, after an increased expenditure of over £3,000,000, gives us a less passenger traffic by 150,500 than we had six years ago, when our population was much less; a system that gives us £50,000 less gross revenue than we had four years ago, and £18,350 less net revenue than we had seven years ago? Is it not time to pause and ask ourselves the question, Is there not something seriously wrong both with the system pursued and the men who administer it?

If our railways were owned by 10,000 of our New Zealand colonists instead of by the whole community, what a feeling of consternation a perusal of the above table would create. Is it possible that the effects can be less disastrous because the evil is more widely spread?

Auckland, December 14, 1889.

No. 2.

When it is proposed to reform any institutution the first step is to show the need for reform, and to show that the men in charge have failed in making it carry out the objects for which it was brought into existence.

I do not wish to "pile up the agony," or to bring unmerited odium on our Commissioners, but this question of railway administration has become a very serious matter to all of us, so serious that we cannot allow personal considerations to come in.

Messrs. Maxwell and Hannay have now had a ten years' trial, and the table given in my last shows where they have landed us. To that table I ought to have added another column showing the loss made yearly. I now append it. In former statements of loss I have calculated interest at per cent., but as the rate we now pay is somewhat reduced, in this instance I have taken it at 5 per cent. only.

It will be seen that in 1889 an apparent gain of £29,451 was made. I say apparent because it is easy to show that it is not real. This is how it has been done. The train service of the colony was reduced in this one year by 315,634 miles. This, at the cost of the train mile in 1888, 4s 8d, is equal to £73,647.

This is a very wonderful way of making money, or "saving," as our Commissioners call it. It has, however, the advantage of being extremely simple and easy, and of not requiring much brain power. The revenue by some means or other must be made to show an increase; therefore, cut off train services to the extent of £73,000, in order that £29,000 may be "saved." By this process, all we require to do is to shut up the lines, and so save the whole expenditure.

It appears to me that the real problem is, how to increase our train mileage, and make profitable use of our railways, not how to shut them up. At an immense expense we have acquired a very useful and powerful machine, and in the name of common sense let us make some good use of it, and not allow it to rust to pieces.

Here is a curious instance of an effort to make railways pay. It seems that until within the last few days the various newspaper proprietors have had the privilege of sending their papers to country agents and customers free of charge, they in return doing a certain amount of the advertising of the department also free of charge.

Our Commissioners, however, must "get revenue," and in their wild efforts to accomplish this object they have conceived the brilliant idea of charging one halfpenny for each loose newspaper passing over the lines, and a somewhat smaller sum if sent in parcels.

Now I wonder what they expect to make out of this. In the first place, they will have to pay for their advertisements; and in the next, seeing that the charge by post is the same as by rail, the chances are that nearly all the papers will be sent by post.

This is another instance of how our Commissioners "kill the goose." Newspapers are certainly a powerful agency in the promotion of trade, and anything that tends to limit their circulation must, to a certain extent, retard the development of railway traffic.

Judge by what standard we may the administration of our railways seems to me to be a miserable failure. Compared with the United Kingdom they stand thus:—New Zealand, one mile of railway to every 349 inhabitants. United Kingdom, one mile of railway to every 1766 inhabitants. New Zealand tons moved, 3 per inhabitant; United Kingdom tons moved, 7 per inhabitant; New Zealand journeys made, 5 per inhabitant; United Kingdom journeys made, 21 per inhabitant. This is exclusive of season ticket business, which in England is enormous.

I am very far from believing the English system of railway administration to be good; I consider the policy that governs it to be as bad as it can be, and I merely give the above figures to show that under the same system, with much greater transit facilities in proportion to population, and with a more wealthy people to operate upon, we do an infinitely less proportionate trade.

It appears to me that under these circumstances there must be something very wrong with our administrators.

The natural use of railways is to distribute population and wealth, but the selfish and unprincipled way in which they have always been administered has led to exactly the opposite result, and they have been made to concentrate population into the great cities, and wealth into the hands of a few families.

In the neighbouring colony of Victoria the railways are under the control of a well-known English railway expert, and this is what is taking place there.

From this it will be seen that two years ago (the latest figures obtainable) over 40 per cent of the total population of Victoria was concentrated in Melbourne alone. It will also be seen that during the last 27 years the population of country towns and districts has declined from 74.11 per cent, of the whole to 39 87 per cent. It will further be seen that this decline is not only continuous, but is going on with ever accelerating speed. Where will it end?

It is only those who have devoted considerable time and study to the subject who can form any idea of the commercial and social trouble that must shortly ensue if this state of things is to continue.

I have used the Victorian statistics because they illustrate what is going on close at hand, and I would draw particular attention to this fact. The railways of that colony were handed over to the Commissioners on the first of February, 1884, and the policy of converging everything on the capital was more fully brought into force, and the command went forth to work the railways on "commercial principles."

For the decade from 1861 to 1871, the proportion of increase of population in the capital to population in the country and country towns was 2.98 percent.; for the next decade, 1871 to 1881, the increase was 3.94. During the next two years the increase was .37, and during the next five years, 1883 to 1888, it was 6.95 per cent.

During this five years the Commissioners have held sway for four and a-half years, and pursued their concentration policy, with the result that the proportion of population in the capital has increased by 6.95 per cent., whereas, under the previous administration, it took 22 years to increase it 7.29 per cent. Dearly has Victoria paid for the temporary increase in her railway revenue. I say temporary advisedly; it will not continue unless the system is altered.

More than two years ago I published the following sentence:—"Melbourne is now enjoying the result of the absorption of her country districts. She rejoices; her turn will come—come more swiftly than she expects." Are not my words coming true?

What is going on in Victoria is going on here, going on in England, America, everywhere where railways are working on this pernicious principle.

All over the world the value is rapidly leaving country lands. For a while the value of city and suburban land is increased abnormally, and then the value goes out of that also, as to a large extent it has already done here.

In studying out the railway problem, two facts have very forcibly impressed themselves on my mind, and seem to me to be of great significance. The first is that the value of land, more especially country land, is seriously depreciated almost everywhere. The second is, that as a rule the profit on working railways is becoming less and less every year.

Land is far and away the greatest and most valuable interest in the world, and next to that I suppose come railways, which have cost four thousand three hundred millions of pounds (£4,300,000,000).

We cannot doubt the fact that these two vast interests are year by year becoming less and less profitable. Is there not a great field for thought here? What is the underlying evil?

It cannot be pretended that either the land or railways are in themselves an evil. The fault must be in the way we make use of them. Fortunately we are impotent to do the land itself much injury, but we can, and we have done much mischief in the way we handle and deal with its products and producers.

Railways are the greatest transit system in the world. They enjoy a virtual monopoly of land transit, and yet it is only with the greatest difficulty that they can be made to pay a small rate of interest.

Next to the railways as a transit system, comes the mercantile navy of the world, but as a rule this pays well. Why? Mainly because the system of charging freights and fares is a sensible one. The charge is made per journey. If ship owners' regulated their charges at so much per mile passed over, how much long distance traffic would they get?

It is population that gives value to land, and so long as we pursue a railway policy that continuously drains the population from our producing districts, and piles it up in the great cities, so long shall we not only suffer commercially and socially, but our railway working must continue to become less and less profitable. No scheming of experts, no charging halfpennies on newspapers, no giving differential rates here and there, will alter this.

Nothing but a complete, a thorough and radical change in the whole system will ever give us any real relief.

My contention is that the prosperity of any country or any district will be and is in proportion to its transit facilities. It must not be assumed that because a country has railways that therefore it has transit facilities. That does not necessarily follow. It is true the instrument is there, but if it is not used there can be no result. Here we have the instrument, a more than fairly good one, but we play a very small and miserable tune upon it.

Our present policy is to levy the highest possible tax on the transit of the people and the products of the country. Could we by any possibility levy taxation in a worse direction? Could we by any possibility devise a more direct plan of arresting the commercial and social development of the country? Surely we ought to be able to find some better plan of raising revenue.

The question may, however, be very fairly asked, Is it necessary to continue to work our railways at a loss? 1 answer that it is not, and I emphatically assert that if our railways were worked intelligently in the interests of the whole people that our passenger fares could be reduced to about one-fifth of the present charge and goods rates to less than half and our railroads yet to be made to pay greatly better than they do now.

I say this deliberately and with a full knowledge of what I am saying, and I claim that I have given repeated proof that I have an intelligent knowledge of what can and what can not be done in railway working.

To me it seems an absurdity be suppose that a monopoly of the inland carrying trade of this country cannot be made to pay, and at the same time be made to meet the requirements of the people. The plain truth is this, that under the present no-system our railways do not provide for the wants of more than a fourth of the population, and that is the reason why they do not pay, either directly or indirectly.

It is now a year since we gave our railways away to the Commissioners. Can anybody tell of any benefit we have derived from that silly transaction? Is anybody better pleased with their administration Has there been the change of policy that was expected? Has there been any improvement?

My contention is that the railroads of any country are but its roads, its main roads, its great highways, and I maintain that it is one of the first duties of any Government to keep the direct control of the great lines of intercommunication, and not give them away in fee simple to three men to deal with exactly as they please, and without any responsibility whatever to anybody as to how they may use or abuse them.

For the Commissioner craze, which arose in Victoria and spread to this and other colonies, Australasia will yet pay dearly. In justice to Victoria, it must be said that there is nothing in common between their Act and ours; theirs contains some admirable provisions, ours is simply a helpless, contemptible abandonment of everything.

Let me repeat what I have many times said before. They that rule the roads must and do ride the trade and commerce of the country, they hold it in their hands with an iron grip. This is power that should only be held by the Government.

If, instead of creating the Railway Commission, the Government had set up a Commission, and had handed over to it the control of the Post Office Savings Banks, the Government Life Insurance, the Public Trust Office, &c., a real service would have been rendered to the country, for there is no doubt that the ease with which the funds of these institutions have been made available has led be much of the extravagant expenditure of the past.