BRITISH RAILWAYS

New Zealand Herald, Volume LXXV, Issue 22931, 8 January 1938, Page 10

BRITISH RAILWAYS

The four great railway companies operating in Great Britain—the London, Midland and Scottish, the London and Noi'th-E astern, the Southern, and the Great Western — are all concerned in an extensive improvement programme for 1938. This is a further instalment of a great scheme established in 1935 with the direct co-operation of the Government. The part of it which is operating in the programme announced comprised the formation of a company, the Railway Finance Corporation, which in January, 1936, issued £27,000,000 of Government guaranteed stock. The money raised by the sale of these securities was to be lent to the four companies, in agreed proportions, for definite works of improvement. It is a five year plan, intended to bring the main transport system of the country to a higher state of efficiency. It has also been arranged that the materials needed should bo bought, so far as possible, in the areas of greatest industrial depression, the aim being to apply an economic stimulus where it is most needed. The State aid given was not dictated by philanthropy. It was inspired by recognition of the importance of the railways to the economic life of the community, as, for example, one of the greatest users of coal, and, of course, one of the most extensive employers of labour in the country. The total capital of the four companies amounts to more than £1,100,000,000. On this the return in 1929 worked out at a little more than 4 per cent. In 1932 it fell to per cent and recovered to 3j per cent in 1936. A good proportion of this amounts to the meeting of fixed obligations, interest on debenture stock and guaranteed stock. Though aided by the Government, the railways are 'expected to pay their way, and they are doing so.