THE RAILWAYS

Evening Star, Issue 8231, 31 May 1890, Page 2 (Supplement)

THE RAILWAYS

AS AIDS TO TRADE AND PROGRESS. Mr G. W. Russell last week read to a of the Christchurch Industrial Association an interesting paper on the management of our railways. At the outset Mr Russell disclaimed any desire to attack the management of the railways on the lines adopted ; the management, of its kind, compares favorably with that of railways in other countries. What he dees criticise is the principles of the management. On the 31st March last there were employed by the railways 4,326 persons, and the gross revenue for the year then ended was over a million, so that next to the Government the railways are far beyond any other the biggest “ concern in the colony. This being the fact it is remarkable how little attention the Legislature bestows upon it. Except a committee on Mr Valle’s proposals, and a discussion in the House last session on the same proposals, practically nothing has been said in either House on the subject. The railways were handed over to Air Maxwell so completely that people began to look upon them almost as his personal property, and the appointment of the Commission has resulted in no change whatever in the management, while the Legislature has lost the power of interfering if it desired to do so. Mr Russell criticised the reported profit on last year’s work, showing that if the coat of the railways were properly reckoned—including their share of the cost of raising the loans and departmental expenditure—the net profit would be only L2 5s per cent., not L2 12s. _ The savings claimed were nearly all obtained by reducing services. Then he goes on to ask : “ How have the railways affected the trade and progress of the country ? Has that increase of settlement and population taken place in the colony which an expenditure of some L 16,000,000 on railways, entailing payment of some L 640.000 per annum, was expected to Above all, have we succeeded by our railways in pushing back our population into the interior and settling the distant lands ? The answers must be decidedly in the negative—that the railways have not been thesuccess they were expected to be from a colonising and industry promoting point of view, that as the railways are now run they are of littis or no benefit to the colony, so far as lands situated at any considerable distance from the sea coast are concerned j and I unhesitatingly affirm that if we are to people our distant lands, if we are to settle a population and offer inducements to them to farm an area which lies beyond the fringe around our ports, we must go in for a radical reform of our railway tariff. We must not only alter our present policy, we must reverse it. Instead of making the production of revenue from our railways the first and chief consideration, we must make it subordinate to that of offering inducements to people to go and settle on and farm the unoccupied parts of the colony contiguous to and affected by the railway lines.” If the railways were doing their duty as colonising agents every year should show an increased traffic, whereas tonnage and passenger totals have been almost the same for the last six years, though the mileage has increased more than one-fourth in that time. Mr Russell admits that the last four years were years of great depression, but the railways did nothing to reduce the depression; on the contrary, intensified it, by the carriage rates becoming a higher proportion of the value of tne articles carried. And the improvement that has taken place has not been because of but in spite of the railway policy. Having dealt with the evil results of the present system, Mr Russell turns to the remedy. First of all we should cease to make the payment of interest on cost the primary idea of our railway policy. That is the policy of the railway capitalist who cares nothing for general prosperity except that it may bring grist to his mill. “The State is in a different position. The State secures indirect benefits from public works by the enhancement of the value of its lands, the increase of its stamp duties, its Customs duties, and its other sources of revenue, none of which reach .the pocket of a mere capitalist, who builds a railway lino as an investment. The Stste secures its return in another shape nit.-.,,, cher—viz., in the increased prosperity vts people and the development of iis ..,9. That was the original idea of our Public Works system, and the sooner we go back to it the better. . . . If wo are to get the colony as a whole out of the slough of despond it is in, we must lay aside the question of interest on cost of construction, and gauge the success of our railways rather by the tons of stuff they carry and the people they settle on our lands than by the percentage they pay.’’ This being adopted as the leading principle, the next should bo simplification of the tariff. At present there are about a thousand heads of classification, and a dozen or so ought to serve, In reducing the rates

these principles ought to be kept in view ; *' that all the actual necessaries of life which are produced in the colony, or are admitted at a minimum duty because they are necessaries, should be carried as low as possible ; second, that all articles admitted into the colony duty free or a low rate, in order to a-sist the industries of the country, should receive further aid by being carried at a minimum rate; and third, that all the ‘natural products of the colony, and all those industries which our people are endeavoring to establish, should receive every possible encouragement in the way of cheap freights, not only of the raw material, but also of the manufactured article after it leaves the factory, in order to wipe out the imported article. In other words, I maintain that our Customs tariff and our railway tariff should go hand in hand, and that it is no use. giving a concession to a man to enable him to start an industry with one hand and take it away with the other.” It is needless to repeat Mr Russell’s instances iu which these principles are contravened by the present tariff. The concessions proposed should not merely apply to the first railage from the factory, “ the marking of it as of New Zealand manufacture should be quite enough to secure special cheapness of freight for any article wherever it travels on the railways.” The “minimum” quantities should also be reduced. So far Mr Russell had dealt chiefly with the effects of the erroneous principles on trade and manufacturing industries. He then goes on to show how they hamper the progress of agriculture. Mr Stead had proposed that special concessions should be given to immigrant capitalist farmers. Mr Russell says the concessions proposed are a mere bagatelle, and what keeps suoh people away is the fact that the farmer now here is not really prosperous—the railway rates crush him if prices are low and he has far to rail his produce. Prices go up and down (generally down), but the railway rate is for the farmer a fixed quantity, which must be paid before his goods are delivered. If one of Mr Stead’s farmers took up 300 acres of virgin land sixty miles from Lyttelton, a little figuring shows that he would have paid over LIOO in railway freights and fares by the time he could begin to farm his land, and afterwards his railway expenses would be something like Ll5O a year or 10a an acre on his land. Mr Vaile had published calculations of the railage expenses of equal farms at different distances from port, which show that it is utterly impossible for men at eighty and 100 miles to compete with those at seven or fourteen. “No difference in the price of land could make up for the extra transit charge. This it is that has taken the value out of country lands, for land has no value unless it can be occupied and profitably worked.” “This (says Mr Russell) strikes me as the greatest blot on our railway system—that whereas they were meant to encourage population to settle at a distance from the port, by heavy freights and charges they force the population to settle as nearly as possible round the centres, because high freights limit the number of articles a farmer can produce to advantage ; and the result is that only highvalued crops like grain and wool are grown. In fact, the railways, which were meant to act as a centrifugal force, in spreading our population out, act centripetally in compressing it as near the ports as possible to save freight.” The example of potatogrowing is given. Potatoes cannot lie grown profitably beyond a few miles from a port. To make the railways what they should be, colonising agents, “not only should there be very large reductions iu the freights, but also we should abolish the mileage basis and adjust our charges on a system of stages, under which we should carry stuff (especially the products of the colony) any distance within a certain radius for the same amount.” This is the system proposed by Mr Vaile, and it is the system so successfully adopted in Hungary with respect to passenger traffic, “ Some such scheme as that, if applied to the freight of the products of the colony, would certainly stimulate the industries and help the farmers. The impetus which would be given to the production of articles now only grown within certain limited areas near to the port would greatly increase our export trade; but it would do more than this—it would stimulate the internal trade of the colony to an extent we can hardly conceive, by setting districts moving which are now lying undeveloped. I maintain that, instead of the railways being so managed as to scrape the last possible penny out of the pockets of the producer, our policy should be to leave every farthing we can in the pockets of the people. Instead of asking What can we put on the charges ? the query should be What can wc take off 2 And it should ever be borne in mind that the greatest attraction that any country cau offer to outsiders is the prosperity of its inhabitants.” Mr Russell finally answers some possible objections to his views:—lt docs not signify that our railway rates are as low as those of other countries, it is clear that they are not low enough. It is not true that the landed proprietors would reap all the benefit, for the larger proportion of country farms are freehold, not rented ; the larger proportion of rented farms is near the chief towns, where the landlords now take advantage of the favor their lands receive from the railways. People near ports would have no right to complain that their lands would be reduced in value by the greater value given to distant lands; for they would be increased with the increase of general prosperity. The railway revenue would be decreased at first, but would by-aud-bye recover, and in the meantime general prosperity would be greatly promoted, trade would be greatly increased, and this would react on the consolidated revenue through all its branches ; and as for any loss of revenue, it would be merely a matter of degree. The railways do not pay interest on their cost now. Mr Russell concludes with a passage from the last report of the Commissionersln the study of the export trade and of the various resources of the colony, with an intelligent appreciation of how the abundance of one district may supply the wants of another, the railways, by giving reasonable facilities for exchange, become a moat important agency in quickening new industries into life, and in promoting the settlement and trade of the colony.” That sentence, he says, was the whole text of his paper, and if the Commissioners will only give effect to the principles it contains, New Zealand will soon revive, our industries will flourish, and our exports will be multiplied.