THE RAILWAYS

Hokitika Guardian, 3 May 1938, Page 5

THE RAILWAYS

RECORD REVENUE

BUT REDUCED PROFIT.

'(Per Press Association—Copyright).

WELLINGTON, May 2.

“The gross revenue of the railways for the financial year ended March 31, 1938, amounted to £8,634,186, the greatest amount earned by the railways in any year,” said the Minister for Railways (the Hon. D. G. Sullivan) in a statement to-night. ‘‘Contrary to the position in other services and commodities, the rates of fares and freights have not been increased. The revenue earned clearly points to the record traffic handled by the Railway Department during the last 12 months. “The gross revenue if £843,535 more than the amount earned in the year ended March &1, 1937, ana £346,070 higher than that earned in the'financial year 1929-30, w'hich w r as the previous record. Expenditure totalled £8,001,389, leaving a net., revenue of £632,797, or £271,061 less than for the year ended March 31, 1937. The increase in expenditure, amounting to £1,114,596, was principally due to wages increases, totalling £739,000, of which £442,250 was for providing improved wages and condition** for the staff and £296,750 for the cost of handling the increased traffic.

“The remainder of the increased cost was on account of the ..higher price of coal (£100,000), the greater consumption of coal in hauling the increased traffic (£41,000), the increased material used in the repair ,of rolling stock (£44,000), the increased cost of expanding subsidiary services, e.g., road services, refreshment, service, and bookstalls (£88,000), and other expenditure due to the increased traffic and the increased prices of commoditis £102,596).

T-he 40-hour week, adopted as one of. the Government’s policy measures for creating more employment, gave work, to an additional 1668 men in the. Railways Department during the. last year., : The cost of the 40-hour week .and other improvements in staff conditions, such; as the restoration of wages to the 1931, level, reduced the. profit on operations by £442,250 for the : year. . The.net revenue would have been higher by. this amount, or £1,075,047, instead oi £632,/y/, had these improvements 'in wages and conditions' not been made, or jr the cost had been passed on to the users of the railways.

““ih tins respect a comparison with' the nuunual year j.929-'BO, the previous itcoiu year oi gross revenue, is paiticuiariy inteiestmg. in that year the net revenue was xUi.9,'257. It in 19293o tne railways account had been called upon to meet eiiafges uue to additional wages aiid exchange tnat tne iV/3<-38 railways account was to hear, the net revenue of tile 1929-30 year would have been only £223,061, 0* £409,790 less than the net revenue of 1931-38.

‘‘The backwash or the depression policy is still affecting the nnancial position of the railways, but not only lias the accumulation of work postponed during those years been largely overtaken, necessarily at considerable expense, during the last two years, but a policy of advancement and service, to the business and industrial community throughout the whole system has been carried out.

“Another factor which has adversely affected the net revenue position this year is ueiay in delivery from England of steel for constructional requirements. The repair and maintenance of rolling stock generally fnave been advanced ahead of schedule, anu that purely constructional work has been retained through lack of material. “For the last four-weekly period ol the year, which ended on March 31, there was a decrease of £106,492 in tue net revenue compared with the corresponding period last year, £IOO, OOj of which was accounted for by the provision in tne March period ol a sum to cover the cost of the 1034 deferred regrading of salaries for a whole year in accoruance with legislative action taken in 1936, tho removal of ceitain anomalies created by the introduction of the 4()-hour week, and the unpiovemcnt in tlie wages of the lower-paid men. Tlie period was also live days less than the corresponding period of last year. Further, there was no Easter in the 1937-38 year.

, • l'ussenger trainc lor tlie year showed a revenue increase of 5 per cent over 1937 and a substantial increase in the total of ordinary passengers and season tickets. Goods tonnage reached the remarkably high figure ot approximately 7,517,000 tons, an increase of 1,305,000 over that of the previous year and 2,500,000 tons more thau the total carried in 1933.

“From the aspect which is most important, that is the national one, the financial results of the railway year are very satisfactory indeed, the net revenue being £102,000 in excess of the final 1937 Budget estimate. “I cannot conclude this reference to the financial results of the year’s working without a word of thanks to tlm management and staff of this great organisation for the good service they have rendered during the year to the people of the Dominion. “Finally, I wish to reiterate that a State transport system cannot be judged purely from its financial figures. The Government’s policy is that the railways should be administered not necessarily as a profit-mak-ing institution but ns a public depnrt-

ment of State, rendering a direct value to the community in social service and betterment.”