Manawatu Evening Standard. FRIDAY, SEPTEMBER 7, 1923 RAILWAY PROBLEMS.

Manawatu Standard, Volume XLIV, Issue 805, 7 September 1923, Page 4

Manawatu Evening Standard. FRIDAY, SEPTEMBER 7, 1923 RAILWAY PROBLEMS.

New South Wales is faced with the same problem that confronts the Government of this country—how to make railways pay that have been built purely for development purposes, and upon which the traffic does not even cover the working expenses of the lines operated. There are some 26 branch railway lines answering to that description in this country, and tho extensions of the railway system in New South Wales "out-back" hove added similarly to the burdens the whole svstem has to bear. By raising fates and freights, the New South Wales railways have this year been able to show a small after paying interest on tho capital investment, but Sir George Fuller, the State Premier, expresses the opinion that it is not fair to the users of the railways to expect them to meet the losses' on the unproductive lines, through increased freights and fares all over the railway system. We have, in New Zealand, over 3000 miles of railways open for traffic, the capital cost of which approximates to 40 millions sterling. Interest on that, at 3| per cent., which is the average rate of interest the railways are expected to earn if they are to pay their way, means an annual charge of £1,500,000, which has to be added to the working expenses, the latter _ running into something like six millions. To place them on a payable basis the railways should therefore be earning at least seven and a half millions, and even in the most prosperous years, l when the net profit on working realised from £4 16s 3s to £5 5s lid per cent., their earnings have not come within several hundred thousands of that total. Nor over the full period' of their existence can it be said thatthe railways have ever met the full interest charge on the capital investment. We sometimes . hear it said that the railways could, and should, be made to pay, and that they should return the full interest on the cost of construction—that they would do so were they in private hands and run on business linos. We are by no means blind to the shortcomings of the department in the latter respect. Some of its' methods are the reverse of businesslike, and have a penalising effect Upon both passehger and goods traffic ; but the railway returns, which are issued periodically, seem to indicate, that there are lines which are barely earning more than the axle grease needed to keep the Wheels moving. They are actually run at very considerable loss, fthd the question therefore arises, "Should the lines which are run at a profit be compelled to levy increased cliarges to the users, to make good the losses sustained on the unproductive lines P" Sir George Fuller, dealing with the question that has been similarly raised in regard to the New South Wales railways, is of the opinion that they should not. The losses, he says in effect,- should be defrayed out of the general revenue. And, as a matter of policy, that opinion seems to be based on sound premises. Some. 20 years or so ago, when the Victorian railway revenue was, slumping very badly, and the whole Victorian railway system was suffering from the losses incurred oh branch railways that were not paying their working expenses, the Victorian Government adopted the drastic policy of closing up the unproductive lines, and by rigorous retrenchment they succeeded in placing the balance of the system on a payable basis. The. Railway: Commissioners, who were expected to make the railways pay, simply declined to accept the responsibility if they were not allowed to close up the lines that were being run at a ruinous loss. Mr Massey hinted, some months ago,,

thftt-the poliey of the future, so, far as .the railways were concerned, might involve the closing of certain branch railways, that wire not . paying, and substituting motor lorry sorvices for them, the operating costs being so milch in excess of the earnings. The Minister of, Public Works, in this year's departmental statement, has made it clear that, where practicable*, road services will be substituted for railways in'such cases. It may be that, by elosing non-paying lines, the department Will be able to make a better showing in the return upon the capital sunk in the railways, Tjut.we are by no means sanguine such will prove to be the case. The remedy for the non-paying lines will m6fe likely be found in the substitution of motor rail services for the existing steamdrawn traffic.