Financial Results.

At first sight it would appear that the immense reductions proposed meant financial ruin, and it is perhaps not to be wondered at that this was the ground first taken up by the officers of the department and their friends. Still they ought to have understood the principles involved; and viewed in the light of events, the statements they then made, and still cling to, are, to say the least, somewhat amusing.

My statement was, and is, that if only two passengers were obtained where one is under the present system, that then the railway revenue would be increased. This statement was fiercely contested. It was said that, as my fares were reduced in every stage, the laws of arithmetic were against me, and page 46 that therefore my statement could not be true. I replied that the explanation of the apparent anomaly was very easy, and consisted in the fact that the average passenger fare when the new system was proposed was is. 11 ½d., and that under my system it would not be less than one shilling. This the officers of the department would not allow.

In 1886 a Parliamentary committee, consisting of the Hon. Sir Harry Atkinson (ex-Premier), the Minister for Public Works, three ex-Ministers for Public Works, and five other well-known members of Parliament, were appointed to enquire into this matter. The financial portion of the question was very fully argued out, and will be found reported in N.Z. Parliamentary Paper I.—9,1886. I appeared before this committee, and conducted the case on my own side. The enquiry extended over nearly ten weeks, and ended in the committee reporting that the new system ought to be tried.

To test my statement that only two fares were required for one obtained now, Mr. A. C. Fife, the Accountant to the Railway Department, was ordered to prepare a table showing the actual bookings of passengers at various distances, with amounts of money they paid, and was further to say what number of passengers must have travelled under my system—supposing it to have been actually running—in order to have produced the same amount of revenue. This table will be found in full on page 89 of Parliamentary Paper I.—9, 1886. The total result is as follows:

These are not my figures, they are those of the Department, and they fully prove the soundness of my calculation, for twice 424,914 is 849,828, while I only require 817,454, giving me a surplus of 32,374 fares. It is now generally admitted that my finance is right, but the railway officials and their friends assert that the low fares proposed would not secure two fares where one is taken now. Well, it is all that is left for them to say. They have been fairly beaten on every other point, and this one cannot be absolutely settled until it is tried. The Hungarian experiment, that on the Whangarei- page 47 Kamo line, and the little trial now going on in Melbourne must prove to any unprejudiced mind that I shall be right in this particular also. I have not the slightest doubt that we should secure at least four or five for every one now, and this would mean an addition to our New Zealand net railway revenue of from £400,000 to £500,000 per annum.

The table quoted above reveals many interesting facts, and is worthy of careful study. It gives the number of travellers at various distances, with the amount of money they paid. Among other things, it shows that—

The total number of passengers that travelled on the Auckland lines during 1885-86 was 424,914, and the gross amount they paid was £39,909. Of this number 292,949 travelled distances of 10 miles and under, and paid £9,596. They represented the city population, and formed 68.8 per cent, of the whole; they, however, paid only 24 per cent, of the revenue.

Travellers of over 10 miles and not exceeding 50 miles numbered 107,202, and they paid £15,647. They represented the most favoured of the farmer class as regards railway rating, and formed 25.2 per cent, of the whole, but they paid 39.2 per cent, of the revenue.

The unfortunates who had to travel over 50 miles numbered only 24,762, and they had to pay £14,666. Thus only 5.8 per cent, of the travellers paid 36.7 per cent, of the whole revenue.

It must be remembered that all goods rates are levied on the same system. Is it any wonder that people crowd down upon the cities? Is it possible for them to do anything else? Can we ever settle the country and develop its resources under such a system?

I commend these facts to the consideration of my country friends. A great effort has been made lately to convince them that they will secure an advantage over the cities if they obtain cheap mileage rates for manures, produce, and stock. Can any such reductions redress the wrong pointed out?

The railways of the colony belong to the whole people. Why then should 292,949 colonists be able to reach their homes and transact their business for a payment of £9,596, while another 24,762, or say one-twelfth of the number, had to pay £14,666. I am not argning for the universal fare, but I say that a discrepancy like this is not only a grievous injustice, but, as a financial arrangement, is as silly and unsound as it possibly can be.

My readers in all other countries, with the exception of Hungary, will do well to remember that precisely the same state of things exists with them. My contention is, that it is owing to this grievous and unjust burden imposed on the country—the producing districts throughout the world—that we have so much commercial distress, so much social discord, so page 48 many and such frequently-recurring trade depressions. There will never be any real permanent progress until the railway transit system is reformed.

This table also shows how hopelessly at sea all the chief officers of the department were in the matter of finance. The question of financial success or otherwise depended on the answers to three questions:—1. Would two fares be taken for one taken now? 2. Would the average fare reach one shilling? 3. Would there be any great increase in the cost of carrying two passengers instead of one?

In 1885, Mr. Maxwell, General Manager, was ordered to report on my system.

His report forms Parliamentary Paper D—3, 1885. In it he states clearly and distinctly that my proposals, "if adopted, would involve an excessive increase in fares" for more than one-third of the journeys taken, and he seeks to establish his position by comparing a purely imaginary and fictitious season-ticket fare with my ordinary fares.

As regards ordinary fares, he as clearly states that "by far the larger proportion are for distances under ten miles, for which Mr. Vaile's proposals provide either increased fares or fares not very materially differing from those prevailing." He further states that to Onehunga I propose to charge is first-class and 8d. second, when I have never proposed any other fares for this distance than 6d. and 4d.: and he makes many other statements equally truthful.

This, then, is Mr. Maxwell's statement in support of their first contention.

Mr. Hannay, Sub-Manager, in the most unqualified manner stated (491A^*), "Twenty per cent, of passengers—that is, five miles and under—are not reduced"; and further on led the committee to believe that no reduction was made for "half of the passengers travelling now."

Mr. Grant stated (173) that up "to three miles our scale is under Mr. Vaile's; up to five miles I do not think there is so much advantage as would increase our traffic at all."

Mr. Hudson stated (335) "for the three-mile journey the fares would be somewhat more than they now are."

A reference to the table on page 86 will show that their own statement is that for distances of ten miles and under 292,949 people travelled and paid £9,596, and that I should require 468,120 fares to produce the same result.

What becomes of Mr. Maxwell's statement? If I make no reduction, but, as he states, increase the fares, how comes it that according to their own showing I require 175,171 more fares to make up the same amount of money?

For distances of five miles and under, Mr. Fife says 150,299 travelled, and that I should require 222,315. What becomes of Mr. Hannay's statement? Why do I require an extra 72,016 fares if no reduction is made?

For distances of three miles and under, Mr. Fife says 55,518 people travelled, and that I should require 66,880 to produce the same amount of revenue. What becomes of Messrs. Grant and Hudson's statements? Why do I want the extra 11,362?

How is it that these gentlemen were so completely astray? They had their own tariffs before them; they had my tariff; and on every line and to every station in the colony it showed a large reduction, except in one instance, and that showed no increase. [See pages 56 and 57.] Their statement was not correct in any one particular.

The first and second statements of the officers of the department, therefore, on the showing of their own accountant, completely fall to the ground.

As to my average fare, Messrs. Maxwell and Hannay alone gave evidence.

On page 21, paragraphs 27 to 29A, will be found an elaborate attempt on the part of Mr. Maxwell to prove that my average fare for ten miles and under could not be more than 4½; and for over ten miles, he says," it is most unlikely that so high an average as 1s. and 1½d. could be reached." He also deliberately makes this statement, "and in the country districts the average fare for fifty miles is only 4½d

Mr. Hannay stated (491 A) that the average rate for half of all the passengers travelling now "cannot be more than 5d.," and that "I do not think the average fare will be 1s."

Mr. Hannay further stated that the average fare for nine miles and under could not be more than 5d., and he did not think the general average could be 1s.

On my side I produced as evidence Messrs. W. Corners, R. W. Moody, T. D. Edmonds, all railway men of large experience. Their evidence was as follows:

Mr. W. Conyers (769, 770, 818, and in numerous other places), stated in the most positive manner (979) that "it (the average fare) cannot sink below 1s."

Mr. T. D. Edmonds also stated that the average could not be less than 1s. (1001, 1065, 1105, and in other answers).

Mr. R. W. Moody gave evidence to the same effect (1119, 1120, 1135, 1170).

Mr. James Stoddart, formerly of the Great Western, and in charge of the Swindon district, was too ill to attend committee, but he also signed a statement that my average fare could not sink below 1s.

Thus it will be seen that the table produced by the Accountant of the Railway Department showing actual results obtained in 1886 proves that my financial calculations were absolutely correct, and that I and my friends had arrived at sound conclusions, while the heads of the Department were most hopelessly astray.

The superiority of the new system as regards the important point of simplicity will be apparent from the following comparison: