OUR RAILWAYS. THE PREMIER REPLIES TO CRITICISE.

Evening Post, Volume LXXV, Issue 40, 17 February 1908, Page 8

OUR RAILWAYS. THE PREMIER REPLIES TO CRITICISE.

"ENTIRELY ERRONEOUS ASSUMPTIONS." \ [nr TELEGRAPH. — PHES.-I ASSOCIATION.] AUCKLAND, 'Ihis D.»> Ihc Premier, interviewed at Cambridge, made a fulthcr reply to the criticisms of Xpw Zealand railway finance. He said Professor Lo Rossignol's assumption * thai there has been a lo^s of £4,380,147 on tho railways during tho last ton years it -entirely orroncoiis. It it manifestly wrong t a ' include £3,122,478 expenditure) on addition !o oprn hncs in the capita) com of lines and compute interest on that sum, and ill the hiiino tinin ilcduct additions to open lines expenditure from the not piofit. ot working. Ha\ing lcfl tho amount in capital it may fairly be assumed that tho piofesaor was satisfied that the practice of including additions to open lines expenditure in capital wan correct and sound in principle. . Clearly, therefore, ho has erred in deducting £3,L52,478 from the net earnings. The net lwn fallowed by him must, therefore, bo reduced by this £i,122,478 which he had wrongly deducted. This leaves a difference of £1,257,699 required, according to the profebsor's showing, to bring the interest on the capital cost of the railwaj-s up to 3.70 per cent., which lie contendfc they should earn. Concessions given to the public in tho matter of fares and freights amount to £850,000, and the value of increased train Hen-ices to £883,000. These, concessions, representing money the Government has returned to the u.scrs of railways, jointly total £1,733,000, or £475,000 in excess of the amount that 1 would have been required to pay 3| per cent, intorent which the professor assumes to be the average rate paid for the capital invested. This takes no account of the concessions in pay given to the railway staff, which amounted to another £375,000 i Professor Lo IvOEsignol'H lino of argument is» that the railways should earn the full amount of interest and that tho value of tho line3'as adjuncts to settlement should not be taken into consideration ; in fact, that tho policy of being satisfied -vith p. net return of 3 per cent from the railways and giving the people of the Dominion as concessions in fares and freights tho surplus over A puz cent. Is wrong, in principle, and that what should b3 dono is to work the railways as a mere rcvenue'earnirg machine. Tho nut profit on working, to which raferencfi is made, ib shown clearly in' the Railway Statement as being tha difference' between the revenue and expenditure and which is_ available for interest purnnscss. The figures shown in tho railway reports and copied into Professor Ie Rossignol'b table give the true remits of tho working of tho railways and eliow that in no instance ha\ c our railways gi\en a return of less than 3 per cent., even when tho capital cost of ut-.-opened lines has been included. With regard to the question of what items should cr phnuld not bo rharged to additions to open lines, the practice followed by the department is perfectly sound in principle and is, moreover, m accord with the practice in operation in other States. It has been fully discussed at various times .and 'has received tho concurrence of such men as J. Matlieton (late Chief Commissioner of Victorian Railways, afterwards General Manager of tho Midland Rail-way,-England), Charles Olliver (Chief Coin|miMioncp of Xew South Wales Railways), David Kirkealdie (of Iho same line), 'Pendleton (Chief Commissioner, South Australia), Shallon (Commissioner in Queensland), and -Tohn Davioa 'formerly General Manager of Weot Australian Railways, now holding a prominent position on the Midland Railwaj-V England). Tho Value- of the' concessions to tho users of rail\vay3 was incalculable, e'*, en bojond th« total of amounts which had been conceded to them. It would be the easiest thing in the world to make thc\ State Railways of New Zealand produce largo dividends. There wa& no reason why 10' per cc-nt. could not be taken out, but would it bo a wit,c courso'to follow? Quite irrcspecti\oly of Professor Rossignol's opinion the Dominion would for at least many yeai-if go on utilising its railways as vl> great engine to help and promote the genoral interests of the people? both in town [ .intl country.