The Press TUESDAY, JULY 30, 1940. Railways Statement

Press, Volume LXXVI, Issue 23085, 30 July 1940, Page 6

The Press TUESDAY, JULY 30, 1940. Railways Statement

The fifth Railways Statement presented by the Hon. D. G. Sullivan gives him an occasion, of which by no means too little is made, to display certain welcome results of the operations for 1939-40. Gross revenue touched the record total of £10,199,070, a peak reached by almost regular annual advances from the 1934-35 figure of '£. 6,600,000. Net revenue, though floods and the interruption of tourist traffic were adverse factors, jumped to the highest figure for a long time at £1,189,031, only £II,OOO short of the estimate; and the increase over the net revenue figure for 1938-39 was almost per cent. If railway operating figures are considered separately, they show that gross earnings increased by more than £750,000 and net earnings by £477,000; and comparison of the expenses-earn-ings ratios is also encouraging. Thus the percentage of total expenses to gross earnings was 92.50 in 1938-39 and 92.67 in 1937-38; last year it fell to 88.34. The percentage of railway operating expenses to earnings, 95.73 in 1938-39 and 96.05 in 1937-38, fell to 90.66 last year; and the average mile of open line, which earned £ 90 net in 1937-38 and £lO3 in 1938-39, earned £243 in 1939-40. Undoubtedly these are figures which justify the Minister in claiming that the centennial year was one of “ notable achievement “ in the railway history of this country.” But the Minister claims more than that. Referring particularly to the sharp rise in net revenue, he says; “The result is a vindication of the Gov- “ ernment’s general transportation policy, ‘‘which, recognising the railways as the most “ vital of the country’s, means of internal trans“port, has made them more serviceable to the “public, protected them against uneconomic “competition, and improved the standing and “ usefulness of related auxiliary services," When the railways were showing very bad financial results, the official answer to criticism always was that this test was not valid, the function of the railways being developmental rather than commercial. In other words, financial results do not measure policy. To-day, the results are better*., and the Minister declares that they vindicate the Government’s efforts and aims in the field of transport.'in other words, financial results do measure policy. But this change of attitude is not a change from right to wrong or from wrong to right. It is only a change from one unsatisfactory attitude to another. The department used to emphasise one set of facts and ignore the rest; it now tends to emphasise another set of facts and ignore the rest. It is consistent while it changes, because, of course, the facts emphasised are those that now suit it. This is the habit of thought which accepts as proved what has never been proved at all: that the country’s best interests have been pursued in a policy ,of railway. development and railway protection. But more concrete illustrations may be found among the. facts and figures frhich the Minister disregards. Between 1939 and 1940, miles of track open increased from 3319 to 3390; at the same time the capital cost of miles open increased by £4,382,580, from !£ 58,676,608 to £63,059,188; the total of interest charges rose from £2,418,116 to £2,575,196; and the average cost of the open mile o' line rose ."‘from £17,679 to £18,602. The impact of the new works’ begins to demonstrate itself; and “begins" is a word full of dangerous warning. Moreover, while it is.a very good thing that the railways, last year, were» -able to. carry [£1,189,031 of their total burden of interest, it remains a hard fact that they did not carry nearly half of it. They were nearly £1,400,000 shorty As the mileage of the large new works is completed,, as their heavy capital cost is trans■ferred to the Railways Department and the capital cH&'ge comes to bear, this deficiency threatens te climb. It is not easy to remember whgn the I&flister for Railways or any other exponent df the Government’s “general transporta- “ tioh? policy ” last set hiinself to estimate the revenue-earning prospects of, for example, the South Island. Main Trunk line. It is not easy to remember any cool-headed calculation which promised anything better than an operating balance between gross earnings and gross expenditure, ,Which would leave the full interest charge as a deficit. But until the Minister is as ready €o comment on the disagreeable facts as on the agreeible ones, his picture of results must be misleading; arid until he pays some attention to the problems of the near future, his inteipretation of policy, and results is shallow opportunism- - : -