RAILWAYS' DEAD CAPITAL

Evening Post, Volume CXV, Issue 68, 22 March 1933, Page 6

RAILWAYS' DEAD CAPITAL

It is pointed out .by the Australian representative of the Evening Post\' : that the proposed reduction of New South Wales railo?L° apital from £140,000,000 to £100,000,000 will interest the rail° way management more than the taxpayer, because the latter will continue to pay the loan interest. The loans will still be there, and the railways will still be there, but with the reduction of their capital account the gentle hope that the railways will one day pay interest on all their loan capital is abandoned. In that case the railway; management will have a more free hand to do something to win back business, and it is suggested that'' "lower railway charges" may result. Lower charges would have the effect of giving to

the user relief that at present cannot be given to the taxpayer. If, however, railway business could "be rebuilt solidly on a lower charge basis, relief to the taxpayer also would ultimately come. Just as the 4 per cent, bond of a solvent Government is better than the 5 per cent, bond of a Government so near to bankruptcy as was New South Wales in 1931; so also a railway system capitalised at £100,000,000, and economically .able to pay interest thereon, is better for everybody than a concern loaded with an excess of dead capital.