AS BUSINESS

Evening Post, Volume CIX, Issue 51, 1 March 1930, Page 8

AS BUSINESS

N.S.W. STATE RAILWAYS

FLOATING THEIE OWN LOANS

(From "Tho PostV Representative.) SYDNEY, 13th February.

In these days when every Stato is '•iiding it almost impossible to raise all tho loan money for its immediate re•quireineuts, the proposal that the New South Wales railways should be run as a separate business undertaking with power to arrange its own finance, just as any ordinary business would do, has aroused keen interest throughout Australia. At last the peoplo seem to be waking up to the extreme danger of political management and control—and is it any wonder seeing the tremendous burden which this has placed upon the peoplo of the Commonwealth? The suggestion is not actually a new one, but when it was made in times of great prosperity it attracted little interest. Politicians knew that they must lose a great deal of their voting strength if they were not able to promise a railway here and a railway there, without having to give a thought to its chance of showing a profit when it was working. And what politician would willingly forego tho chance of turning a sod for a new railway, and of attending the banquet which followed, and of listening to all 'the flattery from the local lights? There are sods turned in many town's in New South Wales whero thero are no rail-, ways, and where there never will be any railways unless a great change comes over the country.

Now the idea is that the manager should be tho manager in reality, just as much as if ho were manager of a private concern. He would bo expected to makel the railways pay, and to do all that was necessary to that end. He would bo expected to face tho irate settlers, and not to give away an inch of ground unless it was good business to do so. But, he would also> have to raiso his own funds, and not go.cap in hand to tlio State Treasury as ho does to-day. Not that the manager would object to that very much. Ho would at least know where ho stood, and he does not know that to-day. The manager of the New South Wales railways was nover in a worso position than ho is to-day, now that loan moneys have been so drastically cut. ■

It is admitted that in order to carry out tho scheme which has been proposed there would have to be a drastic writing down of capital. No man— no super man—could make tho railways pay with i their present burden of £120,000,000 capital debt. To give the railways a chance of being run as a business proposition at least £40,000,000 would have to bo written off. Once the capital was written down to a commercial basis, however, the railways could issuo stock guaranteed by the Government on which interest could be paid. With a reduced capital it would bo possiblo to make the railways pay, and cheapor fares and freights would compensate the- general community for the reduction in capital. In tho meantime there is likely to be a further curtailment in railway works owing to the serious shortage of loan money.