RAILWAYS PROFITS AND HOURS.

Auckland Star, Volume LXVII, Issue 194, 17 August 1936, Page 6

RAILWAYS PROFITS AND HOURS.

In adopting the 40-hour week the Railways Depai-tme'nt is differently situated from the other Departments of the Government. It is a trading Department which for a period of years has been unable to pay the interest on its debt. Therefore a decision involving increased costs is made in the knowledge that the increase must be passed on to the taxpayer. In 1934-35 the interest charges on the railways amounted to £2,330,880, which was £1,243,390 in excess of the net earnings of the service, and the report stated: "It will be seen that the railways system, by a net payment of £1,087,490 into the Government account, earned a little less than one-half the interest due." The position has been fairly stable at this level for three years, prior to which railway net revenue was exceptionally low. In the worst year, 1930-31, when the Railways Board (now abolished) was given control, the figure was £688,727. An important change made about this time was the writing down of the railways capital liability by £10,400,000 —a transfer which relieved the railways but increased the national debt. In the earlier period of railway operations a profit of 3 per cent to 3f per cent was regarded as a sufficient return, and any excess over this rate was I handed back to the public in reduced fares and charges. For twelve years from 1910 to 1922 the railways actually earned 4.20 per cent, but since then there have been few years in which the former. basis of profits was reached, and for seven years the earnings in excess' of working expenses have been continually below 2 per cent. No estimate is given of the financial effect of the 40-hour week on the system, nor does it appear that the Department is in a position to compile such an estimate.