Mr. President and Gentlemen,—

When we consider the vast influence railways have on the trade and commerce of any country where they exist it is wonderful how little attention Chambers of Commerce devote to them. It does not appear, even now, to be generally understood, that the development of the trade, commerce and industrial enterprise of any country depends absolutely on its transit facilities.

And by transit facilities is more and more meant railway transit facilities. Vast as is the importance of ocean transit it is as nothing compared with railway transit. If anyone doubts the truth of this statement, let him reflect on the fact that the total tonnage of the combined steam and sailing fleet engaged in the home and foreign trade of the United Kingdom in 1898 was 9,080,728 tons, and that if we take this at an all-round price of £16 per ton it will only amount to £145,291,648 while at the same date the paid-up capital of its railways was one thousand one hundred and thirty-four millions four hundred and sixty-eight thousand pounds (£1,134,468,000), or, say, nearly a thousand millions more than its shipping interest.

If we apply the same test to our own little country we shall find that the value of its shipping is but £2,200,000, while that of its railways is over £18,000,000, say, nine times as much ment, and one requiring close application and study, more as its shipping.

This being the case, gentlemen, it does astonish me that the Chambers of Commerce here and elsewhere have devoted so little attention to the important question of the

Policy that should Govern the Construction and Administration of Railways.

There are many reasons for this. The men who compose these Chambers are busy men. The subject is an abstruse and complicated one, one that 110 man would take up for amuse-

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study and time than most business men can give to any question not directly affecting their own particular business.

The object of my present paper is to endeavour to create a deeper interest in the railway question, to place very briefly before the Chambers of Commerce of New Zealand the creation, rise, and present position of our railway investment, and to throw out a few hints as to the principles that should govern the construction and administration of our railways in the future.

I have no intention of pressing on your notice, or again on this occasion, alluding to the Stage System. That will take care of itself; it is fast spreading over the world, and will come here in time. What I want to do, is to place clearly before this Congress the real position of our railway investment, to point out the causes of its failure, and to suggest how the position may be improved.

Having had to prepare this paper at very short notice, I have not found time to dig up the ancient history of the earliest efforts at railway construction in this country, suffice it to say, that prior to 1870, short bits of railway had been commenced in Auckland, Canterbury and Otago. These the Government took over at a total valuation of £1,104,281 2/5. I hope for the sake of the credit of the colony that this 2/5 was duly paid.

Our Government scheme of railway construction dates from the year 1870. The credit of the inception of this measure is due to Sir Julius Vogel. It was a grand scheme, and had it been honestly and faithfully carried out, we should have received far greater benefits from it than we have done.

All who are engaged in business pursuits, whether professional, trading or manufacturing, know this,—that, having our establishments as regards premises, plant, stock and assistants, in working order, that we could easily carry on Increased operations of from 50 to 100 per cent, at a very small increase in working expenses.

We also know that if we largely increased the capital invested; that we should expect the increased capital to yield a profitable return, otherwise we should not introduce it.

I propose to show that, tried by these well-known business standards, our railways are a most miserable commercial failure. I shall further prove that their boasted recent successful administration amounts to a fraud, and that they never paid so badly as they have done during the last three years, the year 1900-1901 being the worst failure of all, although in that year by far the largest carrying trade was done.

On the 31st March last we had 2,212 miles of working railways. These cost us £17,207,328, and lines unopened £1,022,729, say, £18,230,000 in all. Desperate, and, in page 4 my opinion, unprincipled, efforts have been made to prove that this investment has given a return or over three per cent., and it is claimed that last year they paid £3 9/8 per cent. I shall easily prove that all they earned was £1 10/-per cent., and I fully expect that for the current year they will not earn more than from 18/ to £1 per cent.

Knowing that our English creditors regard our railways, as our most valuable paying asset, I have hesitated to expose their utter failure, and the deceptive—indeed, I may say fraudulent—manner in which the railway accounts are made up. It, however, Being now fully evident that the Government and the Department are determined that no alteration in the system pursued shall be made if they can help it, and that the real position is being carefully concealed, I think it is my duty to point out the danger that is hanging over us. I invite careful attention to what follows.

For the six years prior to the appointment of the Railway Commissioners, our railways paid an average rate of £2 8/1 per cent, per annum. So far as the records show, and I can find out, this rate, though small, was honestly earned out of revenue, and it is the highest rate they have ever earned. As I shall prove, the increased rates said to have been earned since then, have been made to appear by a very gross manipulation of the public accounts.

The late irresponsible commissioners took charge of our railways in January, 1889, and retired in January, 1895. From their appointment dates the "Starving" of our railways, and the practice of charging to capital account items that ought to have been, and previously had been, charged to revenue account. It was they who opened the account, "Additions to Open Lines." By the aid of £73,518 so obtained, "starving" and not charging interest on amounts spent on "Unopened Lines," they contrived to show that they earned an average rate of £2 14/3 per cent. as against the former £2 8/1. For this fictitious extra 6/2 per cent., we have had to pay most smartly. Prior to the reign of these gentlemen the law provided that interest must be charged on the cost of all lines opened and unopened, but we placed these commissioners above all law and they did as they pleased.

I have always considered the placing our railways under an irresponsible commission as an act of madness, and it is unquestionable that from that period dates the destruction of our railways, and the decrease in their profitable working. Prior to their appointment there were no votes for "Additions to Open Lines." The items so charged were paid for out of revenue.

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In January, 1895, the present Government took charge of our railways and the old position was reverted to. I want to draw your particular attention to the fact that for two years after this Government resumption the account "Additions to Open Lines" disappears, then in 1897 (the Government having passed an Amendment Act to enable them to do as the Commissioners had done) it reappears and rapidly increases, as the following table will show.

How the Rate of Interest said to be Earned during the Last Five Years is Made Up.

Year.	Amounts Expended but on which no Interest was charged as formerly.	Amounts charged to Capital Account instead of Revenue Account ("Additions to Open Lines")	Rates of Interest falsely said to be earned.			Rate actually earned.
	£	£	£	s.	d.	£	s.	d.
1897	957,588	64,716	3	3	10	2	12	2
1898	878,142	156,732	3	4	10	2	3	0
1899	786,891	179,932	3	5	10	2	1	9
1900	850,385	218,357	3	8	5	2	0	2
1901	1,022,729	325,032	3	9	8	1	10	0

Well, gentlemen, if this is not "cooking" the public accounts, I do not know the meaning of that expressive slang term. You will see how cleverly it has been made to appear that in each succeeding year an increasing rate of interest has been earned, and we all know of the loud boasting about the successful railway administration of the last few years, but when we look into the matter, we find that me rate of interest earned has rapidly decreased, until from £2 12/2 per cent, in 1897 it fell to £1 10/- in 1901.

Taking interest on our loans at A per cent., the loss on our railways last year was £455,750. Is it any wonder that our taxation has increased during the last two years 6/3 per head.

But, gentlemen, the deception practised in the railway accounts is not all that is involved in this matter. Many people have wondered

Where the Rt. Hon. Mr. Seddon's Surpluses came from.

It is quite clear that they were obtained by this manipulation of the Railway account. As I have shown above, during the last five years the Government has charged to Railway Capital page 6 Account £944,769 which ought to have been charged to Revenue Account; and have incurred a further liability of over £400,000, to cover which and help the rate of interest up, they last session took another vote for "Additions to Open Lines" of £675,000. It is manifest that if these items had been rightly charged, that instead of a surplus, there must have been a very large deficiency. The expenditure on this account for the current year is almost certain to exceed half a million, for as I have already stated there is the liability of £400,000 to be provided for, and also the quarter million surplus which the Right Hon. the Premier promises us.

As the charges I have made against the Government and the Railway Department are very serious, it will be as well to apply a few more tests as to their accuracy.

As business men, we all know that if the proportion of gross revenue of our various establishments consumed in working expenses is constantly increasing there must be something wrong with the management. Let us apply this test and see.

What it Costs to Earn each £100.

Take the six years prior to the appointment of the Railway Commissioners and we find that the average cost was £66 0/8 for each £100.

Then, under the Commissioners, for six years, by means of "starving" and charging £73,618 to Capital instead of Revenue Account, they contrived to reduce this to £61 4/4.

Then the Government resumed control, and for two years without any charge to "Additions to Open Lines," the cost was £62 10/8 per £100.

The last five years deserve a little more careful attention. So rapid has been the increase in the cost of working, that it has attracted the attention of the financial journals in London.

In 1892, notwithstanding that £64,716 was charged to Capital that ought to have been charged to Revenue, the cost of earning each £100 was £61 7/-.

In 1898, £156,732 was charged to Capital Account instead of Revenue, yet the cost rose to £62 6/-.

In 1899, £179,932 was charged to Capital instead of Revenue, and the cost of earning each £100 rose to £63 5/2.

In 1900, £218,357 was charged to Capital, but the cost of earning each £100 again rose to £64 16/-.

In 1901, £325,032 was again wrongly charged to Capital, but no-withstanding this the cost of earning each £100 of revenue rose again to £65 6/-.

Thus we see that after five years' of the present Government's administration of our railways, notwithstanding the fact that they charged £944,769 to Capital instead of Revenue page 7 Account, their Working Expenses have increased £4 1/8 per cent.

As I have already said, the indications for this year are that we shall have a still worse result.

If this is successful railway working, then I do not know the meaning of the word failure. I wish to draw attention to the fact that notwithstanding the rapid and enormous increase in the charges to Capital Account, the percentage of Working Expenses to Revenue just as rapidly increases also. Nothing could more clearly prove that the system pursued is radically wrong. I now produce a Table showing for the last five years the Increase in Passenger and Goods Traffic over each preceding year; and also the Increase in Working Expenses.

Year.	Increase in number of Passengers carried over preceding year.	Increase in Tons Carried.	Increase in Working Expenses.	Chanced to Capital Account ("Additions to Open Lines")	Total Increase in Working Expenses.
		£	£	£	£
1897	276,961	281,129	37,687	64,716	102,403
1898	232,877	149,440	68,137	156,732	224,869
1899	283,289	105,692	72,546	179,932	252,478
1900	512,731	503,815	122,621	218,357	340,978
1901	706,808	211,813	75,489	325,032	400,521
Totals	2,012,666	1,251,889	376,481	944,769	1,321,249

I invite your special attention to the rapid and enormous increase in this account. What there can be in the increase ill traffic to require this huge increase in working expenses is more than I can imagine.

I should like, gentlemen, also to direct your attention to the enormous

Increase in the number of Railway Employees.

In 1888 we had 1,758 miles of railway, and these employed 4,389 men in all. This was equal to two and a-half (2½) men per mile.

In 1894, the last whole year of the Commissioners we had 1,948 miles and 4,920 men, or slightly over 2½ (2.52) men per mile.

Last year we had 2,212 miles and 7,793 men, or a trifle over (3.52) men per mile. Last year 557 men were added page 8 to the railway staff. It appears to me that this excessive increase is altogether unwarranted, and it is no doubt one great cause of the increase in working expenses.

It will be as well to ascertain what we have gained, by the large increase in our Railway Working Expenses and the £1,018,387 charged to Capital by the Commissioners and the Government, and I shall have no difficulty in proving that our lines are

Worse furnished with Rolling Stock now than they were 13 years ago.

That is the year before the Commissioners took charge, and I again "repeat that it is they who are mainly responsible for the present position, for they it was who introduced the practices that have led to this deplorable result.

In 1888 we had One Engine to every 6½ (6.49) miles of railway.

In 1888 One Passenger Car to every 3½ (3.44) miles.

In 1888 Over 4½ (4.63) Trucks per mile.

In 1901 we have

1 Engine to every (7.25) miles.

1 Passenger Car to every 3¾ (3.67) miles.

5 Trucks (4.92) to every mile.

This is the real position after the Government alone claim to have expended £659,693—to say nothing of the £400,000 liability on new rolling stock. That such a state of things can exist is nothing short of amazing. It seems incredible that, after this vast expenditure our lines should be worse furnished with rolling stock than they were 13 years ago, and the question naturally arises, What has become of the money?

I now propose, gentlemen, to speak very briefly on the

Causes of this Lamentable Failure.

First I place the system of administration pursued. This Professor R. T. Ely has more correctly described as "Our abominable no-system of railway." Years ago, writing of it I said, "The whole present railway system has been cradled in fraud and reared in corruption, and there will be no real lasting progress in the world until it is entirely swept away." To this statement after further years of study I adhere. We must reform our administration.

Next we must be more just as regards our railway expenditure and railway charges. Our railways can only prosper as they are worked in the interests of the whole community. We are far too small for any portion of our community alone to support them.

Let us take a look at the way our railway

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Mileage in Proportion to Population

has been distributed.

Including the little scattered bits at Kawakawa, Kaihu and Whangarei, and taking no account of the thirty or forty thousand Maoris who are now large users of the railways,

• Auckland has 1 mile to every 465½ souls.
• Wellington, Napier and Taranaki 1 mile to 476.
• Canterbury and Otago 1 mile to 266½.
• West land, 1 mile to 11½.
• Nelson, 1 mile to 1,148.
• Picton, 1 mile to 684½.

This distribution is certainly not in the interests of the whole colony, and the money expenditure is still more unfair. I fail to see what good can be done to the colony by concentrating so much of the public expenditure south of the Nelson province.

Nor is it in the matter of railway construction only that the distribution is unfair. The same evil exists in railway charges. By means of various expedients known to railway men, certain districts are favoured at the expense of others. Thus, in 1900, Canterbury and Otago obtained in remission of railway charges £57,775, Wellington, Napier and Taranaki between them obtained £11,872, and all that fell to Auckland's share was £2,727. The whole South Island obtained £61,012, and the North Island £15,009. I could give many other examples of how some districts are favoured and others oppressed, but the above will suffice.

The question arises

How can we Improve the Position?

and here let me say that we ought never again to entertain the idea of appointing a rail way commission. If we had not taken that unwise step, much of this present trouble would never have arisen.

Parliamentary control is the only right control. We can got rid of a Parliament, but a Commission must stay out its time, and even Then it is very difficult to move. Australia will find this out to its cost. I consider the colony owes a debt of gratitude to the present Ministry for abolishing the Railway Commission.

I think that one of our first steps towards improvement should be to insist on the railway accounts being brought under the control of the Auditor-General. I do not understand how it is, or why it is, that the vast sums of money passing through this department are allowed to be dealt with practically without inspection or control.

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Then we must learn to deal more justly by each other, and insist; on a more equal distribution of railway facilities. We ought to be able to rise above our petty provincial jealousies and work for the good of the whole colony. One of the chief reasons why our railways do not pay better is the shameful way in which the Northern end of the colony has been treated in the matter of railway construction and charges. We have made great sacrifices for the benefit of the whole Empire. Cannot we make some small ones for the benefit of our own country?

Then we must have a simple and fixed railway tan If. One that can be read and understood by anyone. I speak with knowledge when I say that there is no reason whatever why this should not be done. The only obstacle is the fixed determination of the chief officials to maintain the secrecy and mystery that now surrounds railway working. They will not until they are forced, part with the power which this secrecy and mystery gives them. By it they can help one district and depress another. For instance, last year the average charge for carrying and delivering each ton in Canterbury and Otago was the same as the previous year. In Wellington they were reduced 1d. per ton and in Auckland raised 3d. per ton. I may mention in passing that for months past our railways have been run without any printed tariff.

What we really want

is a truly national transit system, one that shall meet the wants and requirements of the whole people. Our system does not provide for the wants of one-fourth of the community, hence its failure, financially and socially.

We want, and must have, a system that will develop the trade that lies hidden among the great bulk of the people.

We want, and badly want, cheap transit, but we want far more, an equalisation of transit charges, on a fair and just basis.

We want a system that will open up, not close, our great producing districts, a system that will enable the distant farmer or miner to bring or send his produce to or from market without having all his profits eaten up in transit charges.

We want a system that will enable the city artisan, clerk or labourer to make use of his special knowledge or strength in a town or district 100 or 300 miles away from the city he may now happend to find himself jammed up in.

We want a system that will enable the invalids of our poorer classes to visit our health resorts. It is a cruel injustice these people are subject to.

We want a system that shall attract population to our shores, and promote settlement of our land: a system that shall page 11 make the barren lands of this country able to contribute their fair share of taxation, and so relieve the pressure of the heavy burden that now rests on a few only.

In conclusion, gentlemen, let me say that the present ruinous loss on our railway investment is maintained solely in the interests of the chief railway officials and their friends, and I again say that it would be quite easy to add another million to our railway revenue without materially increasing the working expenses.

Dining the brief discussion that followed the reading of this paper, the question was raised, Whether it was right to charge interest on sums expended on lines still under construction? I replied that prior to the appointment of the Railway Commissioners it was both law and custom to do so, and I believe that law is still in existence. Someone disputed this, but a reference to Hansard of 3rd September, 1885, will prove that I am right. The then Minister had not charged interest on lines under construction. I pointed this out, and as a consequence he had to ask leave "to lay on the table an amended statement of the profit obtained," etc., and said that the error "has been pointed out to me through the press by Mr. Vaile, of Auckland." This should be conclusive.

In India the practice is to charge the railways revenue account not only with interest on the amount expended on lines open, and under construction, but also on the unexpended balances of all sums appropriated for railway purposes. (See Indian Railway Report for 1900, Part I., page 5.

My paper is comparative, and, of course, I could not show the relative position of profit in this, and former periods, except by taking the account in the same manner throughout. Had my object been to make out a case against the present Ministry, I could have done much more. For instance:—

Prior to 1896 all the numerous host of Government official were carried free, so were the mails, and all the material used in railway construction or other Government work. Now, these are all charged for as ordinary traffic, and this very elastic item goes to swell the railway dividend. In 1895 they estimated these services at £38,500; since then they have not condescended to tell us what they consider them worth—I suspect the amount would surprise us.

There is another railway account that wants looking into, and that is "Refunds." Its precise nature I have not succeeded in finding out, but I understand it is for sums returned page 12 to users when they have been overcharged, and for rebates given to large users, "Special Kates for Quantities." In other words, differential rates to the wealthy.

In 1895 these amounted to £92,092. In 1896, to £91,298.

In 1897, to £98,245. In 1898, to £98,889; In 1889, to £95,946. In 1900, to £115,107. In 1901, to £123,159.

The rapid rise in the last two years is noticeable. It would be interesting to know to whom these "refunds" have been made. Ought not our railway accounts to be strictly investigated?

The position I take up is this: Our railways are owned by a company, the shareholders being the community, and the directors the Ministry and the general manager and sub-manager. The "Railways Statement" is the annual report and balance sheet of these directors, and I say in this report the accounts have been so manipulated as to lead the shareholders to believe that their investment is yearly paying them an increasing dividend, when the said directors must be aware that the dividend is year by year rapidly decreasing.

Special Note.—The above paper is printed word for word, as I read it before the Congress, which received and thanked me for it. Every figure in it is taken from the public records, and I am prepared to stand by them, as also by the facts stated, and conclusions drawn.

The proceedings of this Congress, and the papers read before it, are now—per favour of the Premier—being printed by the Government Printer. Pressure has been put upon me to alter my paper so as to make it reflect less strongly on the Government. This I have absolutely declined to do.

As I have been threatened that the edition in the hands of the Government Printer will be "cut down and altered in a manner you will not like," it is necessary, that I should state, that the above is the edition for which I am responsible, and that I have had no hand whatever in any alterations that may be made in the one issuing from the Government press.

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Sir,—I am indebted to a friend in Wellington for a copy of the report of the Railway Committee on my Petition dated 22nd June last, and also a copy of your General Manager's remarks on my evidence. I think I was entitled to have these papers sent to me officially, but neither the Railway Department, the Committee, nor the Government appear to have thought so.

I notice that Mr. Ronayne's letter to you, Sir, commenting on my statement is dated the 11th October, or exactly one month after the conclusion of the said statement. He therefore had ample time to consider his reply.

I have been so long accustomed to gross misrepresentation by the chief officers of the Railway Department that I cannot say his letter surprises me, but I may say that for want of knowledge of his subject, and of truth, it equals anything that has preceded it. His object, of course, has been to try and make out that the introduction of the new system would cause serious financial loss, and he compiles a ridiculous and false table to show that the loss in one year would reach £216,723.

In the first paragraph of his letter he says, speaking of the working of the Hungarian railways, "No reliable information is available with regard to the expenditure incurred in working the increased traffic:" and in his next paragraph he repeats this statement thus: "Although the Department has no figures available to show the increased expenditure in working the Hungarian system, etc., etc."

To procure this information from official sources cost me two pence and a postage stamp. The sources of information that were open to me were open to Mr. Ronayne also, and I ask you, Sir, if it is creditable to this country, that its chief railway officials should be in such a state of ignorance of the most interesting and important experiment in railway administration, that has ever taken place. Newspaper proprietors have thought it worth their while to send special commissioners to Hungary to investigate on the spot, but our general manager did not consider it worth the expenditure of threepence.

I may remind you, Sir, that on the 5th November last year, I sent you a letter which gave in detail the percentage of working expenses to revenue of the Hungarian railways for each year from 1881 to 1898 inclusive, and I added, "These figures page 14 are all taken from the reports of the British Consul-General at Buda-Pesth." As a matter of fact, they were prepared for the British Government by Mr. Gerard Lowther, and Mr. Acting-Consul-General Brull, and are therefore beyond dispute. I also pointed out that they proved absolutely that raising the fares in Hungary had decreased and not increased the ratio of profit.

From Hansard of October 28th, page 788, I see. Sir, that you laid this letter on the table of the House, and that it was ordered to be printed.^* It is, therefore, evident, that when Mr. Ronayne wrote his report, the information which he says was not obtainable had actually been in the hands of the Department for more than a year. This is a very fair specimen of the untruthful manner in which the chief railway officials have always treated this important public question.

In paragraph 3 Mr. Ronayne says, "the maximum goods rates which are proposed to be charged are supplied in page 26 of Mr. Vaile's 'Social Problems," the goods rates being in many cases less than one-third of our existing rates. It is stated by Mr Vaile in his evidence that if three-fourths more passengers travelled at his proposed fares the same passenger revenue would be obtained as at present. The goods rates being on an average not more than half the existing rates, it would require at least double the volume of goods traffic to produce the same goods revenue."

All this is a very gross perversion of fact, I have never said anything of the kind. As regards goods traffic, everybody knows that the officers of the Department have tried every means in their power to entrap me into quoting goods rates, and that I have persistently refused to do so, or to fix any price for the transit of goods until I was placed in a position to do this without running the risk of loss to the community.

Mr. Ronayne professes to quote from my pamphlet, "Social Problems," but he had not the honesty to quote the footnote attached as follows:—Note.—The prices quoted for goods are merely given to show the system of charging. It is my opinion that very much lower rates can be fixed." To that opinion I adhere, but I repeat that I have never attempted to fix any "goods rates," nor will I do so until actual trial has shown what profit can be made out of passenger fares. The note quoted above has been invariably added in every paper I have published referring to goods rates.

As regards passenger rates, what I have said was that, assuming there was no increase in the average distance travelled, page 15 that then we should require a three-fourths addition, to secure the same amount of revenue, but I argued strongly (see Parliamentary Papers, I.—6B. 1901, pages 13 and 14) that the enormous reduction proposed in the long distance fares must so increase the distance travelled that the average fare would certainly reach 1/3d, and probably 1-8d, so that we should stand a very good chance, indeed, almost a certainty, of getting the same passenger revenue that we do now without carrying a single extra fare: This is very different from what Mr. Ronayne says I said; but possibly he may not be able to see the difference.

And now, Sir, a word as to the absurd table by which your chief officer seeks to establish the false position he has taken up. First, let me say that I have never given the slightest indication of the charges I propose to make for the various items of coaching with the exception of ordinary passengers and parcels, nor have I ever attempted to fix any goods rates. It, however, suits Mr. Ronayne to assume that I shall fix all these at half the present charges, and he further assumes that a reduction in the charge for passengers to an average of one-fifth, and the charges for goods to one-half the present charges, would have no effect whatever on the distance people and goods would travel. It is a disgrace to the controller of a railway system, to sign his name to such a statement. He has evidently followed in the steps of his predecessors, and not cared what he said, provided he could prevent the new system being tried.

I ask, Sir, if it is not intolerable that my work should be judged and condemned by a man who has shown such a thorough want of capacity to deal with it? But in justice to Mr. Ronayne I ought perhaps also to ask if he is to blame and give him the benefit of the doubt.. When we take a man whose sole training has been that of a mchanical engineer—and that, I am told, in a very small way—and ask him to pronounce judgment on the financial policy that should, govern a business institution employing eighteen and a-quarter (18¼) millions of capital, and nearly 8,000 men, what can we expect?

I think I have a right to complain that my work, which is purely commercial and financial, should be subject to the approval or condemnation of a man trained as Mr. Ronayne has been. It is not to be wondered at he declined to ask me any questions, or to answer any I might put to him; it would not have taken me half-an-hour to expose his complete ignorance of the whole subject.

The question naturally arises, Why are your chief officials so anxious to prevent the new system being tried? Parliamentary reports, the numerous petitions presented, the general wish of the people, and the result in other countries would more than justify them in taking the risk, if there is any, which I page 16 deny. I am, therefore, driven to the conclusion that they are acting in their own self-interests.

I regret exceedingly that my last visit to Wellington, and the large amount of time, trouble and money I have spent in an earnest effort to improve our railway administration should have led to such a miserable result. However, I am convinced that before long the country will insist on this great question being more honestly dealt with.

In conclusion, let me say that this report of Mr. Ronayne's makes it very evident that if the new system is to be tried, I must have some controlling power during the experiment.

No notice whatever has been taken of this letter, although it is addressed to Sir Joseph Ward in his official capacity.