RAILWAY LOSSES

Dominion, Volume 24, Issue 58, 2 December 1930, Page 3

RAILWAY LOSSES

General Situation

NEED OF REFORM (Associated' Chambers of Commerce.) ‘ « The report of the commission, presented to Parliament during last session, after a- very searching investigation of the affairs of the Railway Department; is ; anything but reassuring. It discloses, indeed, a very disquieting financial position. ■ On March 31, 1926, the total capital invested in the working railways of the Dominion amounted to £47,608,676, and on March 31, 1930, to £59,201,545, thus showing an increase of no less than £11,552,869 during the. four years. This is disturbing enough in itself, but its effect is accentuated by the fact that the interest charges grew from £1,913,310 in 1926, to £2,132,324 in 1930, an increase of no less than £219,014. Even this is not the end of the story by a very long way. There are at present a number of railway lines in course of construction —a large proportion of them unlikely to pay their way—which, it is estimated will add approximately £13,630,000 to the railway capital account, and so bring it up to the huge sum of £72,831,543. Even with so low a rate of interest as per cent., the annual charge upon the sum just mentioned will run into £3,095,341. In spite of the large increase in capital expenditure upon the railways in operation from 1926 to 1930, the gross, revenue has not been proportionately maintained, while the gross expenditure has increased out of all reasonable measure. The following are the deplorable figures:-— Gross Gross revenue, expenditure: £ £ ’, 1926 8,101,221 6,468,428 1930 8,288,115 7.358.558 In other words; during the last four years the gross revenue of the Railway Department has increased only by £186,894, while its expenditure during the same period has increased by £890,430, which is equivalent to an extra cost of £703,536 to secure a negligible advance during the four years. All. these figures are.taken from the official report of the Railway Commission, and can be accepted, therefore, without any reservation. This being the case, it is difficult to think of any more damning indictment of political control than is supplied in. the Railway Department’s own figures. , The Commission with its recommendations has offered suggestions for remedying .the position, but so far the Government appears to have ignored the Commission’s most important suggestion of all, namely, the change in control from politicians to a general manager responsible to a commercial directorate.