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The Pamphlet Collection of Sir Robert Stout: Volume 72

No. 1

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No. 1.

[Note.—I have been asked by many people who take a deep interest in the railway question to publish in condensed and consecutive form the whole argument on the railway problem, which has hitherto only appeared in scattered letters and papers. This I propose to do in it series of articles, of which the following a the first. Those who will take the trouble to peruse them will, I hope, obtain a clear view of the whole question as it affects New Zealand.]

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 hank is not as prosperous as it used to be. So 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 kinds 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.

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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 duo 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 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 share 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:—

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Note.—Messrs. Maxwell and Hannay received their appointments as general manager and sub-manager in 1880. Year. Population. Miles open. Capital expended. Passengers carried exclusive of season tickets. Tons carried. Train miles. Coaching revenue. Gross revenue. Net revenue. Interest earned. £ £ £ £ £ s. d. 1881 489,933 1,277 9,228,334 2,849,561 1,377,783 3,247,492 346,280 836,454 314,497 3 8 3 1882 .. 1,333 10,974,000 2,911,477 1,437,714 3,375,121 361,705 892,026 368,927 3 7 3 1883 .. 1,373 11,863,576 3,283,378 1,564,823 3,710,405 396,763 953,347 360,526 3 8 2 1884 .. 1,396 12,795,125 3,272,644 1,700,039 3,871,061 371,521 961,304 305,314 2 10 2 1885 .. 1,479 13,218,560 3,232,886 1,778,140 3,982,125 400,626 1,045,712 355,686 2 15 4 1886 .. 1,613 13,726,166 3,362,266 1,856,732 4,114,577 396,648 1,047,418 857,078 2 12 0 1887 .. 1,727 14,219,116 3,426,403 1,783,524 4,135,578 390,002 998,763 299,696 2 2 2 1888 .. 1,758 14,603,109 3,451,850 1,770,637 4,009,714 387,453 994,843 307,515 2 2 1 1889 607,000 1,777 14,875,187 8,132,803 1,954,125 3,794,080 357,548 997,615 350,570 2 7 2

Nine Years' History of the New Zealand Railways.

Note.—This table teaches us that during the last nine years we have:—
(a)Increased the mileage of our working railways by 39.1 per cent.
(b)Capital invested by 61.2 per cent.
(c)Passengers carried by 9.9 per cent.
(d)Tons carried by 42 per cent.
(e)Train miles by 16.8.
(f)Coaching revenue (this includes ordinary passengers, season tickets, parcels, horses, carriages, and dogs) by 3.2 per cent.
(g)Gross revenue by 19.2 per cent.
(h)Net revenue by 11.5.
(i)Rate of interest earned decreased by £1 1s 1d per cent.
(j)In 1889 we carried 150,565 fewer passengers than we did in 1883.
(k)The train service to the colony was less by 76,981 miles than it was in 1884, and this notwithstanding that we had 381 more miles of railway open.
(l)Our coaching revenue was £4157 less than it was in 1882.
(m)The gross revenue was £48,097 less than in 1885, while our net revenue was £18,357 less than in 1882, and the rate of interest earned less by £1 1s 1d per cent, than in 1881.

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 was 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?