RAILWAY DEPARTMENT

Gisborne Times, Volume LV, Issue 6142, 28 July 1921, Page 6

RAILWAY DEPARTMENT

POSITION OVER THE SLUMP

SOME SERVICES MAY BE "CUT.”

WELLINGTON, July 26. The fact that expenditure is over- | taking revenue in the railway service is receiving the attention' of Departmental officers at the present time, and it is understood that important recommendations are to be placed before the Minister for Railways for the consideration of Cabinet. These recommendations are expected to involve economics in tho operation of the railways by tlie reduction of unprofitable services. Tho Department cannot cut out all the trains that are being run at a loss, but savings are believed to be possible without reducing the facilities for travel and transport below a reasonable level. The railway returns for April and May (already published) showed that the revenue per mile of railway on the North Island main lines and branches for tlie first eight weeks of the financial year had been £3,793 and the expenditure £3,396. The figures for the corresponding period of 1920 were £3,180 and £2,166. The revenue of the South Island main, lines and branches per mile of railway for the eight weeks was £1856, and the expenditure was £1919, as against £1715 and £1315 for the corresponding period of 1920. The percentage of expenditure to revenue in the North Island was 94.17, and in the South Island 101. 3. These figures, which are not expected to be improved for several months, show that the South Island lines are actually being run at a loss, while the returns for the whole Dominion show a net return of capital of not much more than 1 per cent. The view taken by Ministers is that, having regard to the general financial situation, a serious effort must he made to prevent the railways placing additional strain on the Consolidated Fund. Increased wages, expensive coal, and dearer materials of all kinds have been factors in reducing the Railway Department’s margin of revenue over expenditure. Railway rates and fares have been increased substantially since 1914, and it is understood that further increases are not favoured by the railway authorities. Official information concerning the intentions of the Department and the Government is not yet available. —Special.