RAILWAY OPERATING COSTS

Evening Post, Volume CII, Issue 49, 26 August 1921, Page 6

RAILWAY OPERATING COSTS

The announcement that, during nearly four months of the current financial year (Ist April to 23rd July), the expenditure on the railways is 99.77 per cent, of the revenue, is a forcible reminder of the change that * has come over the scene. In the corresponding period of last year the percentage was 74.58, and even the South Island showed a percentage of less than 81, but for the current period its percentage is 107.73; that the South Island railways, instead of paying interest on cost of construction, show a substantial loss. American railway returns indicate a similar diminution of profit, but an American writer finds a silver lining to the cloud by contending that the unsatisfactory financial balance is due not to lack of business but to high operating costs. He writes i ■ ,

There would be cause foi* dismay if the roads had been able to operate profitably and yet had been unable to obtain the business to make this possible. On the contrary, there is no lack of business other than a seasonal one; and the volume is sufficient, and will' become more so, to enable the roads, with properly adjusted costs, to do business at a profit instead of at a loss.

We hope that seasonal circumstances will be found to be in large measure responsible for the New Zealand railway figures also; but it would be useless to shut one's eyes to the • fact that the Americans are " adjusting costs," partly by means of a revision of wages that went into force in July. Costs that cut not only profits but also business are suicidal, and the whole cost of transport on land and sea requires careful watching, especially by a country situated as far from its markets as New Zealand is, in comparison with its compe-

titors,