RAILWAY AFFAIRS.

Hawera Star, Volume XLV, 27 August 1925, Page 6

RAILWAY AFFAIRS.

ANNUAL REVIEW

THE YEAR’S EARNINGS.

OTHER FEATURES OF WORK. WELLINGTON, Aug. 25. '1 lie railways statement, traversing the work of the past financial yeai, was laid before Parliament to-night by the Minister for Railways, the Hon. J. G. Coates. The net revenue for the year amounted to £1,567,108, equal to 3.55 per cent, on the capital _ invested on lines open for traffic. Taking into consideration the extraordinary circumstances that prevailed, and the exceptional demands that had to be met during the financial year, the results were, in the Minister’s opinion, very satisfactory. The complete cessation of operations for eight days, as the result of the disagreement with one section of the employees, resulted in a loss estimated at £150,090. Increased contributions to the Government Railways Superannuation Fund amounted to £BO,OOO. The infantile paralysis, epidemic adversely affected the Department’s revenue during the summer months, and! was responsible for a loss of about £IOO,OOO. It would he observed, however, that the returns from goods traffic showed much improvement over the previous yeai. The most, important changes m policy given effect to were tli e creation of a special railway fund and the general reorganisation of the Department's financial and accounting systems. Under this policy the D c ~ partinent will have full control of its own funds. It will be called upon to pay- average interest on capital expenditure, making depreciation for renewals fund, insurance, and charges for T-epairijig slips- and! damage. Ahe Department will also pay the Government contributions to the railways superannuation fund, and generally meet all its obligations, but on the other band will be recouped for services rendered as might bo practicable. The policy will be to manage the railways so that the receipts will he sufficient to meet working expenses, interest on capital, reserves, and sinking funds.- Surpluses will-be devoted to improving services, reducing freights, etc., and deficits will be met by taking steps to improve the financial results in the directions indicated by the statistical data compiled. The Minister then briefly reviewed the findings of the Royal Commission, and dealt with the reorganisation of the Department. Referring to tariff matters, the Minister said that “frank and free discussion, with communication by correspondence reduced to a minimum, lias enabled the Department to obtain that knowledge of the views of its customers on which alon© could be based- sound judgments on the many and- intricate questions that arose for settlement in connection \vith the tariff. That the Department has been enabled to bring about that closer personal relationship is one of the most pleasing, as it is one of the most useful, results of the new* policy. The policy in contemplation last year was one of reduction of general rates. With a marked improvement in the- financial position of the country during the Last year the whole aspect in regard to railway rates lias been changed, and the demand is now for improvements to services. It had. also become more evident that the times required a closer assimilation of the Department to a business. The policy of running the Department on commercial lines has met with universal public approval, but such a policy required* largely increased revenue- to increase the rate of interest to be paid, and to provide for renewals, etc., in accordance with sound business principles. As a corollary, rate adjustments involving increases in certain directions became necessary. Care lias been taken to distribute these increases as equitably as possible. The Minister referred at length to the competition of the motor lorry. He said:* “The most important, departure- from the Department’s past policy has been the creation of special rates to meet special conditions du© to serious motor competition in certain localities. Investigation showed that this competition was securing a good deal of the best paying business and leaving the lower-freighted commodities for the Department to handle. There were instances ill ■which the carrying brought the latter class of goods to the nearest railway station, while carrying* those in tlie higher classes right through, to destination by road. Benzine and dairy produce constituted the backbone of the motor competition, and to the carriage of these much attention has been given by the officers of tlie commercial branch of the board. Benzine has been reclassified from, class. A (rate and a half) in 1922 to class B (plus 25 per cent for any quantity), representing a reduction from £3 14s to £2 11s lid per ton for a distance of 100 miles, [n addition, special rates have been arranged to secure traffic in, certain districts. As a result, our benzine traffic is increasing, and the position is being very closely watched. “For dairy produce special rates have been arranged to recover traffic from competitors, and the latest reports indicate that in the forthcoming season the results will be highly satisfactory. It is natural that differentiation of rates should give rise to some complaint against such a. policy in a State-owned undertaking such as the railways, but the study given the problem by those concerned made it clear that in localities where the motor could compete under the conditions existing extraordinary nurn soles would have to be adopted. Unless it was checked, this competition would make such- serious inroads into the Department’s revenue as to leave tlie Government no alternative but to increase freights nil round to make ends meet. In addition,- the further loss of traffic would mean reduced service, -which in itself is sufficient to drive traffic away. Undoubtedly the steps were' taken >in the public interest.* In this connection it is clear that the position of railway versus roads is economically unsound, inasmuch as commercial lorry owners have not been called upon to nay a quota of the cost of road production and maintenance commensurate - with the services obtained, whereas the railways have to meet all obligations.”