The Press THURSDAY, FEBRUARY 16, 1950. Railway Finances

Press, Volume LXXXVI, Issue 26039, 16 February 1950, Page 4

The Press THURSDAY, FEBRUARY 16, 1950. Railway Finances

The inquiries the Minister of Railways (Mr Goosman) has made into the finances of the railway system, which are incorporated in a long report, printed in “ The Press ” yesterday, have disclosed little that was not to be read from successive Railway Statements presented by the previous Minister of Railways (Mr Semple). Even the departmental anxieties which, Mr Goosman discloses, led to representations to the Government on seven different occasions, were apparent in the General Manager’s reports that were included with the annual statements. Nevertheless, Mr Goosman’s report is a valuable document, in which facts the public should know about the finances of the publicly-owned railways are assembled and the cumulative effect of past policies is shown. Moreover, the report sets out for the public to see clearly the situation the new Minister of Railways takes over. It is not a happy situation. The last ment disclosed a railway operating loss of £1,449,374, £325,563 greater than the year before. The overall loss on operating all branches of the system was £1,102,866, £462,841 more than the year before. Interest on capital was not met. With this included, the full deficit was £3,813,814. The importance of Mr Goosman’s report is not, of course, its recapitulation of what was already known. That is simply a background against which is shown the way the new Minister looks at the problem of railway finances. The previous Minister of Railways became more and more inclined, as deficits grew yearly after the more prosperous railway years when war traffic boosted earnings, to accept deficits, to excuse them, to plead justification for them. In his last Railway Statement Mr Semple looked briefly at what he termed “ the vexed question ” of “ making “ the railways pay ” —and turned sharply away. He presented the thesis that the railways are “ a great “ public utility ”, spoke of their “ use “ value ”, their “ social nature ”, said that “the usual tests of com“mercial efficiency ... do not “wholly apply” to them—all to justify burdening the public revenue with the railway deficit, actual and foreseen. Though there is something to be said for these points, in combination they become a doctrine of defeat. Conveniently and elastically the doctrine could be stretched as far as widening deficits widen, always to be produced as sufficient reason for calling on taxpayers to come to the rescue. Management and workers in a system so loosely controlled would lack incentives to efficiency and, quickly, lose pride in the service. Mr Goosman rejects the doctrine and its effects. He will work to make the railways “ eventually meet “all operating’ expenses and pay “1| per cent, interest on capital ”. The policy of the Government of which he is a member “ will now “permit the injection of business “ principles into the organisation “ and work of the department. ...”

In part this will entail raising some charges and spreading others more equitably than at present over the system. It may mean adjusting subsidies on freights, not necessarily abandoning them, but perhaps charging them to departments responsible for them, instead of simply lumping them on the railways. Mr Goosman’s report suggests that better co-ordination of rail and road transport can §ave money. He believes that efficiency in the department can be tightened. Marked improvement will not come in a wedk or months. Moreover, the solution of contemporary problems must not move out of line with the future policy and operating problems of magnitude which are mentioned in Mr Goosman’s report. The new Minister’s task is certainly not smaller than that of his predecessor, but Mr Goosman may be expected to bring considerable resolution and capacity to the solution of the problems it presents. At the most modest assessment his report shows a refreshing readiness to give sober and overdue thought to railway finances and anxiety to improve them.