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The Pamphlet Collection of Sir Robert Stout: Volume 72

Cost of Trying the Stage System

Cost of Trying the Stage System.

What would it cost to try the new system? is a question very often asked. The answer, of course, depends on how it is done. I have no hesitation in saying that if the trial is carried out honestly not only will there not be any loss, but that from the very first there will be a large profit.

My own opinion has always been that the change must first be applied to passenger traffic if loss of revenue is to be avoided, and for these reasons:—First: You must have producers before you can have products—goods; therefore the first care should be to enable your producer to get to and from his land. Second: A reduction in goods rates, unless there was page 55 a corresponding increase in production, must lead to loss of revenue. Third: In order to induce that increased production by a reduction in goods rates only; that reduction must be a very great one, and no matter how great it might be, it could not have any appreciable effect for a considerable time, so that in any case commencing with goods must mean loss of revenue for a considerable time, probably two years at least.

On the other hand, if the change is first made with passenger fares it will lead to an immediate increase of revenue, because the passengers are here on the spot, and ready to move almost any number of times if sufficient inducement is offered them. This has been proved to be the case in Hungary where the passenger revenue was at once doubled. There also they did not attempt to apply their "zone" system to goods traffic until they had tried it on passenger traffic for three years.

If, then, it was applied to passenger traffic on the Auckland lines, and run for a whole year, it would work out like this. It has been proved, as far as it is possible to prove anything from figures and theory, that under the stage system the average fare would be at least is.; under the present system last year it was 1s. 10¼d.; the total ordinary passenger revenue of this section being £36,590. Therefore, if the enormous reductions proposed did not lead to one extra passenger being carried the loss could not reach £18,300, while, if the increase only amounted to 50 per cent. instead of 200 per cent, as estimated, the loss would not reach £9,150, and against this there would be the great saving in working the simpler system.

I think we could do the same amount of work under the new system that is now done on the New Zealand Railways for at least from £100,000 to £150,000 per annum less than the present cost. The outside risk to the country would be a distant possibility of losing £10,000. I again say that from the first week there would be a large profit made.