MR VAILE'S HOBBY.

Evening Star, Issue 11674, 5 February 1902, Page 8

MR VAILE'S HOBBY.

A RAILWAY CASSANDRA.

[Special to thk Stau.]

WELLINGTON, February 4. Mr S. Vaile, one of the Auckland delegates to the Conference of Chambers of C<>.amerce, made Home startling statements in reference to the New Zealand railways id liny. In the coarse of a lengthy address lu- said that he proposed to show that, tiifil by business standards, our railways vcre a miserable commercial failure; that tluir recent boasted successful administra;i.>n amounted to a fraud; and that they had never paid so badly as they had done during the last few years. For instance, on the 31st March last we had 2,212 miles of working railways, which cost £17.207,328. The cost of the lines unopened was £1,022,729, making £18,230,000 in all. Desperate and, in his opinion, unprincipled efforts had been made to prove that this investment had given a return of over 5 per cent., and it was claimed that last year the lines paid £3 9s 8d per cent. He would prove that all they had earned was £1 10s per cent He expected that for the current year they would not earn more than from 18s to £1 per cent. Knowing that our English creditors regarded the railways as a most valuable asset, he had hesitated to expose their utter failure and the deceptive—he might Fay fraudulent—manner in which the railway accounts were made up. It being now fully evident that the Government and the department were determined that no alteration in the system should be made, and that the real position was being carefully concealed, he thought it his duty to point out the danger that was hanging over us. For the six years prior to the. appointment cf the Railway Commissioners our railways paid an average of £2 8s Id per cent per annum. This rate, though small, was honestly earned out of revenue, and was the highest rate they had ever earned. The increased rates said to have been earned lince then had been made to appear by rery gross manipulation of the public accounts. From' the appointment of the Irresponsible Commissioners the "starving" of our railways dated, and the practice of charging to capital account items that pught to have been, and previously had been, charged to revenue account. It was thev who opened the account "Additions t> "open lines." By the aid of £73,618 so obtained they contrived to show that the lines had earned an average rate of £2 14s 3d per cent., as against the former £2 8s Id. For this fictitious 6s 2d per cent, we had bad 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 liiw. and thev did as they pleased. In January, 1895, the present Government took clnnre'of the railways, and the old position v, ns reverted to. He drew particular attention to the fact that for two years after the Cuvei-nment resumption the account "Adli i ions to open lines " disappeared. Then in 1897 I the Government having passed an Amendment Act to enable them to do as ;iv- Commissioners had done) it reappeared in 1 rapidlv increased. The speaker here produced a table showing amounts expended, but on which nn interest was harped, as formerly, and the rates actuillv earned to be as follows:

The rates of interest falsely said to have been earned during those years were respectively £3 3s lOd, £3 4s lOd, £3 5s lOd, £3 Ss sd, and £3 9s Bd. The amounts charged (o capital account instead of revenue for additions io <i|icn lines in the same vears were £M,716": £156,732, £179,932, £218,357, and £325.032. If that was not "cooking" the |inblic.accounts he did not know the mean- !>>',' of that expressive slang term. Taking interest on our loans at 4 per cent., the loss on onr "railways, last year was £45,572, which was a awaking commentary on our loud boasting about the successful railway administration of the last few years. Was it any wonder that our taxation had increased in the past few years by 6s 3d per head? Many people had wondered where Mr Seddon's surpluses had come from. It was quite clear that they were obtained hy this manipulation of the railway accounts. It was "manifest that if the items which he had referred to had been rightly charged, instead of a surplus there must have been a veiy large deficiency. The Government had charged to the railway capital account £944,769, which ought to have been charged to revenue, and hail incurred a further liability of over £400,030. to cover which and help' the rate of interest up they last session took into their vole for "additions to open lines" £675,000. The expenditure of this account for the current year was almost certain to exceed half a million, for, as he had already stated, there was a liability of £400,000 to be provided for, and also the quarter of a million surplus which the Premier had promised. As business men they all knew tiiat if the proportion of gross revenue of our various establishments consumed hi working expenses was constantly h:< r» using there must be something wrong. With the management under the Commissioners for six years, by means of "starving" and charging £73,618 to capital instead ol revenue account, they contrived to reduce the cost of earning every £IOO to £6l 4.s 4d. Then the Government resumed control, and for two years, without any charge to "additions to open lines," the cost'was £62 10s 8d per £IOO. In 1897, notwithstanding that £64,716 was charged to capital that ought to have been charged to revenue, the cost of earning each £IOO w.-is £6l 7s. In 1893 £156,732 was charged to capital account instead of revenue. That year the cost rose to £62 6s. In 1899 the figures were respectively £179,932 and £63 5s 2d. In 1900 £218,357 was charged to capital, but the cert of earning each £IOO again rose to £64 16s. In 1901 £325,032 was again wrongly charged to capital, but notwithstanding these the earning cost was again £65 6s. Thus, after five years of the present Government's administration of our railways, notwithstanding the fact that they charged £944,769 to capital instead of to revenue account, the working expenses of the railways had increased £4 Is 8d per cent. The speaker next quoted a table showing that the total increase in working expenses for the last five years bad been £1,321,249 for an increase of 2,012,666 passengers and 1,251,839 tons of cargo, while the increase in the working expenses charged to . revenue account had been £376,481. What there could be in the increased trafhc to require this large increase in working expenses was more than he could imagine. He drew attention to the enormous increase in the number of railway employes. In 1883 we had 1,708 miles cf railway, employing 4,389 men, equal to ££ DPn per mile. Last vcar the figures were 2.212 miles and 7,793 men, a trifle over 3.52 men per mile. Last year 557 men were added to the railway staff—an increase unwarranted, and no doubt one great cause of the increase of working expenses, lie quoted figure? with the object of proving that our lines are worse furnished with rolling stock now than they were thirteen years ago. We must refoim our railways administration. The distribution of milways in proportion to population was most unfair, and lte quoted the following instances in proof:— Auckland, one mil-; to every 465.45 persons.

Wellington, Napier, and Taranaki, one to even- 475.88. Canterbury and Otago, one to 266.60. Westland. one to 111.44. He gave figures to show that the same evil existed in railw.v charges. The first step towards iraprov-orient should be to Lring the railway accounts under the control of the Auditor-General, and not leave ♦hem practically without inspection or control. He said, also, that we must have a simple and fixed railway tariff that could be read and understood by everyone. The only obstacle was tixed determination of the chief officials to maintain secrecy and mystery, for the power which secrecy and mysterv gave. + hem was precious to them, and V its means they could help rne district and oppr;-s another. For inbtance, the average 'iharg'e last year for » carrying each ton in Canterbury and Otago wa»"the same as in the previous year. In

Wellington, however, the charge •■was- reduced Id per ton, and in Auckland it was raised 3d per ton. We wanted a system to develop trade, to effect cheap transit, to eqnalise transit charges, etc., to open up our great producing districts, to enable invalids of the poorer classes to visit our health resorts, to attnet population to our rhores, and to make tb*> barren lands of the colony able to contribute their fair share of taxation, thus relieving the pressure of the heavy burden that now rested on the few.

Mr John Dntbie said that Mr "Vaile had made some startling statements, some of which were.no doubt true, but many of which the delegates would find it hard to »Cre« with. For iuMance he for one. whilst condemning the Government for bad management in regard to the large amount of partially-constrncte 1 railway works which were ieft lving wascerjllv idle, such as the Northern Trunk line, many miles of which had been in an unfinished condition for years, was not prepared to subscribe to the theory that work'r.g railways must pay .nterest on all lines, opened and unopened. He thought, if thev examined the Blue Jsoob>, they would fcnd votes for the additions to unopened liue.i referred to by Mr Vaile during the year after the Government took control, though they might be under other headings. Mr Bayfield (Westpoit) could hardly credit Mr Vaile's figures as to the relation between open lines and population in Westland. He thought he must be making a mistake. # Mr A. H. Turnbiiil (Christchnrch) said Mr Vaile's criticisms were unfair, and his ('eductions absurd on the face of them. He hoped that the outside public would not .■magine that the Conference in any way endorsed Mr Vaile's statements, many of which he could refute himself by reference to matters within his own knowledge. Tt was absurd to base conclusions, as Mr Vaile had done, on facts and conditions prevailing over a number of years, which were not in any way analogous. Mr Daniel (Maatertoit) was of opinion that there was a great deal of truth underlying Mr Vaile's statements. They frequently heard of bridges being strengthened out of capital in order to carry heavier engine? on existing lines. Not only that, but those bridges were strengthened with perishable material, so that the process would have to be repeated every twenty years. That was ouiy a sample of the wastefulness that *ras going on. It was proposed that consideration of the paper be held over nntil the following day, but on the motion >( Mr Keith Ramsay (Dunedin) it was e» entually resolved—- ' That Mr Vaile be thanked for his paper, but. that the matter be allowed to drop."

Earnings. Percentacre £ £ s. A. 1896 ... 957.599 . ... 2 12 2 1898 ... 878,142 , ... 2 3 0 1893 ... 786,891 . ... 2 19 1900 ... 850.585 , ... 2 0 2 1901 ...1,022,729 ... 1 10 0