The Hawera Star. TUESDAY, SEPTEMBER 30, 1924. RAILWAY FINANCE.

Hawera Star, Volume XLVIII, 30 September 1924, Page 4

The Hawera Star.

TUESDAY, SEPTEMBER 30, 1924. RAILWAY FINANCE.

Delivered e-ery evening by 5 o'clock In Ba?en. Mantua.' Norman by, Okaiawa, Efibam, fateu, Waverley, Mokoia, Whakamaxa. Oiianga,, Meremere. Fraae* Boad. and Otakeuo Manutahi, Alton, Hurleyville, Mangatoki, Kaponga, Awatuda, Opuuake,

The Mjlu.ster of Railways is Keen to put the service on a better footing, and in his statement of policy in the House last week indicated the methods ife intends to adopt, in order io effect improvements. For some years past in spite of fairly high fares and freights the railways have not been giving the returns which the Minister desires. It is true that in the last two years the margin of revenue over expenditure has improved considerably, but it is not sufficient to have a surplus unless it is large enough to relieve the Consolidated Fund from the necessity of drawing upon it to pay interest on the capital cost of the railways. Mr. McVilly, in his interesting comments published in today’s Star, shows that during the last

fourteen years the net amount earned

has enabled a surplus of £1,415,385 to be paid into the Consolidated Fund in excess of the policy requirement to meet interest charges of per cent, on capital, but the Minister thinks that there is room for improvements, and Mr. Coates’ desire is to place the railways upon a proper business footing. The handling of a great transport service is by no means an easy task, especially when considerable sections of line are linking places of small popu-

lation suck as is the case with the New Zealand railways. It is well known that lines are being operated which should not have been laid, and

which have very poor prospects of being payable propositions for many years to come. In other parts of the country lines are awaiting completion be loro it will be payable to operate them. 'Hie Minister is striving to have the most important lines built first, and his policy of concentration upon certain sections which promise to return the best revenue is regarded a s a good one. But the earnings of the railways are-'greater than they appear in the returns of revenue and expenditure, for a large quantity of goods is carried at special rates, and in some cases free. There are, of course, sound reasons why this is so, but it is unfair to the department not to credit it with this work. Lime and manures and materials connected with the Dominion’s main industries are among the goods carried free or at a very low i’ate. v No doubt this policy has helped to build up the industries, and indirectly the . country has benefited greatly, but to .neglect to credit the railways with these “invisible earnings” is not business-like and does not place the service on a true commercial basis. The, cost of such transport is included in th%, returns of expenditure, but the revenue returns do not show the full earnings of the lines. Some people argue that because the are owned and operated by the State, they should not be regarded as strictly commercial undertakings, but it has to bo remembered that the charges upon the loans spent in laying down the lines and providing ..the locomotives and rolling stock have to be met. and so do the costs of operating the lines, and unless the system i.s placed upon a proper commercial basis it may easily happen

that the- taxpayer has to pay unnabiy to make up deficiencies from time to time. Many people, we 'ear, look upon State concerns from the wrong viewpoint. They find that this .or that department has a surplus of revenue over expenditure, or more c --00% working costs, and they regard that surplus as so much profit. But what about the interest upon rnmey "neiit in providing the necessary facilities for a department to carry on its work ? ' That money has to be round and the loans fall due. Are they to be met by new loans, or is a definite attempt to be made by the Government to make the trading departments really payable? We hope that Mr. Coates’ efforts in this direction in the railways will be successful, and that similar attention will be paid to other departments, which, although earning a surplus of revenue over expenditure, are not paying concerns if J regarded from a commercial standpoint,.