The Dominion. MONDAY, SEPTEMBER 12, 1938. RAILWAY LOSSES

Dominion, Volume 31, Issue 297, 12 September 1938, Page 8

The Dominion. MONDAY, SEPTEMBER 12, 1938. RAILWAY LOSSES

In a recent speech the Minister of Railways, in attempting to cover up the increasingly heavy losses incurred under Socialist Ministerial control of the railways, made some sweeping assertions regarding the administration of previous Governments. As is customary with members of the present Government, he chose the depression period for the purposes of his comparisons. It may be of interest to compare the results shown for the three years, 1926-27-28, as against the three years, 1936-37-38, the latter period being mainly under the administration of the present Government, lhe Coates Government was in office in 1926-27 and the Ward Government in 1928, while the Savage Government came into office toward the end of 1935: The net earnings for the periods mentioned are as follows: Under Coates and Ward Governments. Earnings

As the average interest charge on capital is 4-| per cent., it will be seen that in 1926 there was an actual profit on the working of our railways, while in 1927-28 there was a substantial contribution earned in each year toward the interest charge on capital. But what a difference under Socialist Ministerial control. How rapidly the earnings are shrinking. The actual figures of losses incurred over the same periods are worth recording in order that the drift may be clearly seen:

In 1926, it will be noted, there was an actual profit. It may be claimed that this profit was due to the fact that in the period named an annual contribution averaging about £400,000 a year was being made to the Railways Account to cover losses on branch and isolated lines, which it was recognised could not be made self-supporting but were maintained as a matter of public policy. This, of course, should be taken into account in any comparisons made. But in 1931-32, when this direct subsidy was discontinued, corresponding relief was given to the Railways Account by writing down £10,400,000 of capital expenditure, thus relieving the railways of some £425,000 annually in interest charges. So the subsidy in the 1926 period was later off-set by the savings in interest charges. The comparison of losses between the two periods we have quoted is, therefore, a fair one. We mentioned this now to forestall the possible excuses which may be made by the Minister, who shows considerable skill in wriggling out of difficulties by confusing the issue.

Year. Net revenue. £ per cent. £ s. <1. 1926 1,992,234 ...4 6 11 1927 1,943,774 ... 3 19 10 1928 1,839,415 ... 3 12 10 Under Savage Government. Earnings Net revenue. per cent. Year. £ £ s. <1. 1936 1,051,477 ... 1 18 10 1937 903, S58 ... 1 13 0 1938 632,797 ...130

Coates-Ward Control. Savage-Sullivan Control. Profit or loss. Loss. £ £ 1926 ... 79,023* 1936 1,248,574 1927 ... 99,659 1937 1,405,896 1928 .. 291,452 193S 1,703,011 ♦Profit.