The final and most important criticism of the scheme will be on the matter of finance.

The question is, can a sufficient revenue be obtained from the small uniform fares and rates proposed, after providing for working expenses, to pay not only interest on the purchase money but the purchase money itself?

It is a curious coincidence that in the year 1838, before Penny Postage was instituted, the average amount received for every chargeable letter was 7d. and a fraction—the actual average railway fare now paid by every passenger (excluding season tickets).

The number of letters carried during the first complete year after the uniform rate of 1d. was adopted was more than doubled. Notwithstanding this the deficiency in net revenue was about £2,000,000, and the deficiency was made good out of general revenue, this being well worth while owing to the great benefit to the nation of Penny Postage.

In the case of railways, however, the amount involved is so large that no Government could be expected to give any consideration to a proposal which would involve making good so large a deficiency as would be occasioned by the reduction to a flat rate of 1d. As will be gathered from the remarks made when dealing with the principles of the scheme, this difficulty is now overcome by dividing the traffic on railways, both of passengers and goods, into two kinds of service, namely, Fast and Slow. It will be found that by this means no greater percentages of increase of traffic will be required to produce the same gross revenue as at present than 15 per cent. of passenger traffic and 10 per cent. of goods traffic. It will also be shown that if the increase of traffic should not exceed this estimate the additional working expenses will be so small that they would be more than met by the economies effected by unification. If these propositions prove to be true, then there will be no deficiency to be provided for.

It is necessary in order to prove this to set out the figures of the present receipts and expenses, and an estimate of the same under the proposed new scheme.

PRESENT FIGURES.

The following are in round sums the average figures for the two years 1911 and 1912, based on the Railway Returns published by the Board of Trade annually under the Regulations of Railways Act, 1871:—

The average fare for every journey is therefore 6½d.

In other words, if every passenger paid for every single journey, long or short, the sum of 6½d., then the gross receipts from passengers would be about the same amount as is now received.

Total tonnage of goods per goods train:

The total receipts for the two kinds of merchandise together show an average of 2s. 4d. per ton.

Note that the total tonnage of minerals carried is about four times that of general merchandise.

The total tonnage may be less than the above, owing to overlapping of the various companies, but for the purpose of my estimates I am taking these official figures.

ESTIMATES UNDER PROPOSED SCHEME.

(a) As to passenger traffic.

There is, of course, no official return as to the proportions of Main line and Local passenger traffic, but it is clear that the percentage of small fares must be very great. Assume that this is over 80 per cent., then there would be in round figures about 300,000,000 (that is under 20 per cent.) of Main line passenger journeys, and assuming that the number of first class passengers will be only 10 per cent. (the above average percentage of first and second class passengers), then the revenue from the existing number of passengers under the new scheme would be as follows:—

as against the present total of £45,000,000, or a deficiency of about £16,000,000 per annum, assuming there should be no increase in the existing traffic. This seems an appalling deficiency, but “Wait and See!”

It is quite clear that there would be a very large increase of traffic, more particularly of the long distance or Main line passengers, as under the existing system the fares for short distances up to 12 or even 20 miles are sufficiently low to remove practically all restrictions. In the case of long distances, however, there is this double restriction for passengers—namely, the time occupied and the high price of the fares. If the latter restriction is removed a very large increase of traffic is sure to result, not only for purposes of pleasure but also for business and trade purposes. The Local traffic will also increase partly by reason of the increased number of long distance passengers requiring the use of the Local lines (both suburban and small branch lines), and partly by the reduction to 1d. of many of the present suburban fares. In order, however, to be on the safe side in the estimate, I propose to take no account of any increase in Local passengers and to reckon only the increase required in the number of Main line passenger journeys. It will then be found that 250,000,000 more Main line passengers will provide for the above large yearly deficiency, as follows:—

This will bring the gross receipts from passengers to £46,750,000, with an increase of about 15 per cent. only on the present total number of passengers carried, and £1,750,000 more revenue.

The criticism may be made, however, that this number is nearly double the existing number of long distance passengers. Will such an increase be realised?

From a consideration of the following reasons it is submitted that not only will it be so, but that in point of fact a much larger increase may reasonably be anticipated.

Let me give one very homely illustration which has come under my notice. A domestic servant in London had a serious illness, necessitating an operation at one of the hospitals. Her parents lived in humble circumstances in a Cornish village. The mother came to London and had to pay £2 for a return ticket. Her daughter had to remain about two months in the hospital while the mother had to return home without being able to afford the luxury of another return journey to London. But during the whole of that time trains were going to and from the same place every day and night with plenty of room for the old lady, who could, of course, have been carried any number of times without any appreciable cost to the company.

Now, suppose the uniform fare of 1s. each way had come into operation, she or some other member of the family would, no doubt, have come up at least once a week, and instead of one return ticket which cost £2, and would be included in the Board of Trade returns as two passenger journeys, the family would have only paid 16s. for the eight double journeys, the extra cost to the Government would be nil and the increase in the number of passenger journeys would be 14.

It is not unusual to see long distance trains arrive in London with not more than 15 or 20 passengers.

(b) As to goods traffic.

For the purposes of the estimates of goods traffic there must be added to existing total receipts from goods train traffic the amount included in the official returns under the head of “passenger traffic” of £10,000,000 received for mails, luggage, and other goods carried by passenger trains, making the total revenue for goods at present of £74,000,000. There is no official Return as to the tonnage of goods carried by passenger trains, but assuming that the present average rate for goods carried by passenger trains is £2 per ton, this would represent a further tonnage, irrespective of passengers’ luggage, of 20,000,000 tons.

The figures under the new scheme, if there should be no increase in the tonnage carried, and assuming that goods by fast service should be no more than the amount now estimated per passenger train, would thus be as follows:—

Following the analogy of the passenger traffic, I will only estimate for an increased traffic by fast trains, and for this purpose there will be required:—

This increased tonnage it will be seen is an increase of under 10 per cent. on the present total of 550,000,000 tons. It is probable that with a reduction of freight per fast train to the uniform rate of 10s. per ton, a considerable proportion of existing goods train traffic would be transferred to fast trains, so that the same figure might be arrived at with much less increase in tonnage. This fact may also be taken into account when adjusting any mistake in the official figures of the total tonnage carried.

As in the case of passenger traffic, this percentage is surely not only a reasonable estimate, but one which may reasonably be anticipated, and, further, the increase will be progressive.

The following among other reasons may be adduced:—