CHAPTER V.
FINANCE OF THE SCHEME.
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.