D.—3

1885. NEW ZEALAND.

REPORT ON MR. VAILE'S PROPOSALS RESPECTING RAILWAY RATES AND FARES. (BY J. P. MAXWELL, ESQ., GENERAL MANAGER, NEW ZEALAND RAILWAYS.)

Laid on the Table by the Hon. the Minister for Public Works, with Leave of the House.

The Hon. the Ministbe for Public Woeks. In compliance with your instructions that a report should be made on the so-called scheme of management of Mr. Samuel Vaile, of Auckland, I have the honour to remark as follows : — While Mr. Vaile appears to claim to have enunciated a " scheme of management," I can find nothing touching on a general "scheme of management," but only some very extravagantlyexpressed opinions on the subject of rates and fares, mainly unsupported by facts and with many errors and misstatements, comprised in various fragmentary circulars, letters, and addresses. In his printed circular of the sth April, 18^3, which he addresses to the Chambers of Commerce in New Zealand and Australia, he says, "It seems to have been assumed by the Governments of the colonies that the railways must be made to pay interest on the cost of their construction and maintenance. This I hold to be a most mischievous error." Again, he says, " I deny that they (the Governments) have any more right to charge interest on the cost of construction and maintenance o.f the permanent-way than they have on the cost of construction and maintenance of common roads." The curious error of supposing that it is usual to try to make railways pay interest on the cost of maintenance is repeated in Mr. Vaile's lecture of the 3rd November, 1883. It will be seen that there is a great degree of ignorance displayed in these remarks. Mr. Vaile means, of course, that it is an error to try to make the railways pay interest on their capital cost; but, with the inconsistency which is displayed throughout his writings, he violently condemns the Government because the railways do not pay interest, and urges steps which he asserts will make them do so. In the same circular, speaking of the rates and fares in use, Mr. Vaile says, " I have utterly failed to master them." Cadets of fifteen years of age who have passed the Sixth Standard at the Government schools have no difficulty in learning them. Mr. Vaile's original object in advocating low fares appears to be set forth in the same circular. He remarks as follows : " Take, for instance, the Eotorua Eailway, in which I am a shareholder. To go from Auckland to the junction of this line under the plan proposed would cost second-class passengers 2s. and first-class 3s. each ; thus, being carried so far on their journey for such a small charge, they would be better able to pay the higher fare for the rest of the distance." That is to say that, by lowering the fares on the Government lines, Mr. Vaile would be able to secure higher ones on the line in which he was interested. Mr. Vaile's crude and incomplete proposals for fares and rates, as stated in his circular of the sth April, 1883, are on a differential basis. In subsequent letters he violently condemns differential rating, and scurrilously attacks those who do not agree with his projects. We learn thus from Mr. Vaile : (1.) That his remarks apply to the Australian railways as well as to New Zealand. (2.) That he holds it to be a mischievous error to try to make railways pay interest. (3.) That he does not understand the present system of rates and fares. (4.) That he would have charged higher fares on the Eotorua Eailway, in which he was personally interested, than he proposed for the Government railways. (5.) That while he himself does not hesitate to propose differential rates and fares, he at the same time denounces them. It is difficult to seriously discuss the inconsistencies and misstatements with which Mr. Vaile's writings abound. When he suggests that it costs no more to carry a ton of passengers than to carry a ton of coals he is writing nonsense, though he may be unaware of it. When he says that " the loss on our railways increased from £180,855 in 1881 to £377,186 in 1884, and at this rate we should, in 1888, require £2,500,000 to support our railways," he is making a statement which is misleading, and drawing a conclusion which is false. He may or may not be aware of this. In either case he is equally untrustworthy as a guide, and consequently should forfeit all claim to the respect of intelligent men as an authority.