THE RAILWAYS OUTLOOK.

New Zealand Herald, Volume LXVI, Issue 20263, 24 May 1929, Page 10

THE RAILWAYS OUTLOOK.

A double record was achieved by the Railways Department in 1928-29, for both actual earnings and working expenses were the highest in its history, the expansion being advantageous to the extent of £50,000 increase in net revenue. Even that slight measure of recovery is welcome after two years of retrogression. Unfortunately, it is not enough to cover tho increase in interest charges, due to the addition of 100 miles to the system, which, according to the Budget, is £124,000. The loss on operation has consequently increased to £855,000, with one exception the heaviest ever encountered. Even when credit is given for the subsidy, the final result is less favourable than last year. A radical reform in policy, designed to remedy this condition, has now been forecast by the Prime Minister. Indefinite indications of plans for adjusting the finances of the system have been given substantial form in an explicit proposal of "sorao system for doing*away with short sections and making the main systems pay interest on the money invested in them." There is no doubt that Sir Joseph Ward is on incontestable ground when he declares that tho device of paying a subsidy to the Railways Department to cover the loss on unprofitable branch lines is unsound, and that the country cannot indefinitely provide half a million a year as a palliative for a condition that is economically so serious that only drastic treatment can have any durable effect. In the past, losses have been excused on the ground that the railways were an essential agency in the development of the country, and that sacrifices should bo made by the whole community for the ultimate general benefit. The Prime Minister has realised that under modern conditions that argument has lost all its force. Eailways are not the only means of transport. They are challenged by a rival and are finding it hard to withstand the competition. Thus, if the railways arc to remain—and it is certainly extravagant to anticipate their disappearance—they must be conducted as an independent commercial concern, neither making excuses for losses nor claiming subsidies from taxation. Such are the implications of the Prime Minister's proposal, one of the most revolutionary policy pronouncements in the history of the New Zealand railways. The exposition of his plans will certainly be awaited with tho keenest interest.