RAILWAY ECONOMIES.

New Zealand Herald, Volume LVIII, Issue 17844, 27 July 1921, Page 6

RAILWAY ECONOMIES.

■♦—, "CUT" IN SERVICES LIKELY. HIGHER FARES INADVISABLE DEAD LOSS ON SOUTHERN LINES. [BY TELEGHAPH. —OWN CORBESPONDENT.] WELLINGTON. Tuesday. The fact that expenditure is overtaking revenue in the railway service is receiving the attention of officers of the department, 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 economies in the operation of the railways by the reduction of unprofitable services. The department cannot cut out all the trains that are being run at a loss, but savings are, it is believed, possible without reducing the facilities for travel and transport below a reasonable level. The railway returns for April and May showed that the percentage of expenditure to revenue on the North Island main lines and branches was 89.55, against 68 per cent., last year, and in the South Island 105.02, against 75.36 per cent, last year. These figures—which are not expected to improve 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 on 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 be made to prevent tte railways placing an 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.