THE RAILWAY SERVICES.

New Zealand Herald, Volume LIX, Issue 18016, 15 February 1922, Page 6

THE RAILWAY SERVICES.

There appears to bo somo justification in the financial results for the policy adopted by the Railway Department of curtailing services to reduce its losses. During the period of 24 weeks to September 17 the loss on working averaged £2261 a week; in the subsequent period of 16 weeks to January 17, when the " cuts" were in operation, tho profits averaged £12,690 a week, indicating an improvement at the rate of £777,000 a year. But while the withdrawal of services has been tho obvious first step in economy, and definite results have been accomplished, there is a danger that all the ground that has been gained may be lost by curtailing travelling facilities below the needs of legitimate and remunerative business. Unfortunately there is no assurance that the management is studying the results of its measures as carefully c.s it is striving to maintain the balance between the two islands. The Herald has consistently advocated the application of business principles in the running of the railways, and it has not challenged the department's decisions to reduce the services in the North Island. But from the outset it has contended that if " cuts " are necessary in the northern services, more drastic measures are overdue in the South Island. Once again the department has determined on a train-for-train cut, and once again it has shirked the task of discovering why the South Island railways are unable to pay working expenses. The.returns for the North Island for the two periods of 24 weeks and 16 weeks show a reduction in the average weekly expenditure of no less than £9237, while the revenue has increased by £2099, so that the working profit during the SeptemberJanuary period was at the rate of £14,772, as compared with £3436 in tho April-September period. There has been a substantial reduction of working expenses in the South Island also, amounting

to £7944 a week, but simultaneously the revenue has declined by £4329, with the result that while the

loss of £5697 a week has been reduced, the system was run at an average loss of £2082 a week. The significance of these figures is emphasised by the fact that if the net earnings of the North Island railways are maintained at the average rate of £14,772 of the last four months, the system will earn in a year £80,575 more than the interest charges on its capital cost. On the other hand, the working loss on the Southern system added to the interest liability represents a deficit of £811,362 a year. The department may be able to produce concrete evidence that the volume of traffic does not justify the continuance of the tri-weekly second express service ou the North Island Main Trunk. What justification has it for continuing to run the South Island railways at a loss of £2600 a day'!