BRITISH RAILWAYS

New Zealand Herald, Volume LXXIV, Issue 22916, 20 December 1937, Page 10

BRITISH RAILWAYS

The sum of £2,000,000 to be spent next year by the London, Midland and Scottish Railway is but the latest of several substantial indicators of the share the British railways are taking in recovery. Their rejuvenation in recent years has been remarkable. In 1931 their financial position had become acute and their future appeared extremely doubtful. Yet they were one of the largest industries in the country, giving work directly to about 600,000 employees, and exercising a powerful influence on the prosperity of other major industries, such as coal and steel. Obviously great issues would have been involved in their decay. The solution was found in a' forward policy aided by cheap money made possible by the Treasury guarantee of both principal and interest. No less than £59,000,000 of railways 2$ per cent stock at 97 has been issued under a special scheme, and a smaller amount at Thus were financed improvements which, it was believed, could be counted on to yield the added revenue for service of new capital, bearing rates of interest lower than the current financial condition oE the railways would have rendered necessary on an unsupported appeal to the investor. The belief has been amply borne out by results. No doubt the railways have been helped by the general process of recovery, but they have made no inconsiderable contribution toward it. As in New Zealand, gross British railway revenue has increased markedly in the last* two years, but here net revenue has declined while in Britain the advance has been steady in every year since 1932. In that year net revenue was £27,200,000, and last year, £36,500,000, showing a profit increase of no less than 33j per cent. While New Zealand railway finances are fast deteriorating under political control, the British under private management are steadily improving their position, an improvement in which the employees have shared.