THE RAILWAY ACCOUNTS.

New Zealand Herald, Volume LXVI, Issue 20365, 20 September 1929, Page 12

THE RAILWAY ACCOUNTS.

Considerably over £5,000,000 were added during the last financial year to the capital liability on which the Railways Department is expected to pay interest to the Consolidated Fund. The net result of operations during the first 20 weeks of this year is that the revenue available to pay interest charges is £70,000 less than last year. There has been a gain of about £34,000 in gross receipts, but working expenses have expanded by £104,000 —for every pound $f additional revenue the department has spent £.3. Expenditure in the North Island has no doubt been increased by the addition of 60 miles of line, but there has not been any similar extension in the South Island, where the working expenses have also expanded substantially. Obviously, the tendency revealed by the latest accounts cannot be allowed to proceed unchecked. As it is, the arrears are already so heavy that the prospect of their being overtaken is not hopeful. Nor does the present situation offer any encourage-

ment for heavy expenditure on new railways. The Government's programme is bused upon nothing more substantial than the Prime Minister's belief that if the problem of unprofitable branch lines is solved, and considerable additions made to the existing system, the whole service will earn interest on the capital outlay. Action in regard to tho branch lines, however, appears to have been indefinitely postponed, while the general retrogression only confirms the doubts regarding the possibility of solvency being restored by increasing the capital expenditure. In 20 weeks, the net revenue from the North Island railways was equivalent to only 7s 8d per cent, on the capital cost; the return ori the South Island railways was. 3s lOd, or exactly half. These figures are exclusive of the miscellaneous services, which arc not apportioned. They do show in a most instructive way the relative positions of the two railway systems. Yet it is in the South Island, where railway , earnings have always been utterly < inadequate in proportion to capital expenditure, that the Government j proposes to spend the bulk of its , projected £10,000,000. <