THE OTAGO DAILY TIMES TUESDAY, JANUARY 17, 1922. RAILWAY FINANCE.

Otago Daily Times, Issue 18455, 17 January 1922, Page 4

THE OTAGO DAILY TIMES TUESDAY, JANUARY 17, 1922. RAILWAY FINANCE.

In the present days of falling prices and depressed trade, railway systems most, in common with other business enterprises, suffer loss of revenue. The Railways Statement which was presented to the House of Representatives last week-end represents the latest addition to a succession of dismal documents which cover almost thp whole of the English-speaking World. It is not, a cheerful production. Indeed, the main effort of the General Manager of Railways appears- to bo in the direction of , proving that the New Zealand system is not quite so badly off as are some others elsewhere. The average patient is not considerably heartened, nor is his recovery much hastened, by being told that certain other sufferers arc really in worse plight than ho himself is. Three ' eloquent lines in the table headed “Results of reveal the serious condition of the railways! of the dominion and the steepness of the grade down which they have been travelling: Tear ended March 31, 1920. '1921. Passengers, ordinary Goods, tonnage ... 6,597,232 6,085,360 Net earnings per train mho ..; ... ... 53.28 d. - 32 86d. These figures show that for the past financial year the railways carried more passengers and more goods than during the previous year and yet carried lels per train mile. A large portion of the General Manager’s statement is devoted to an explanation of the circumstances which produced this unsatisfactory result. Incidentally, it should be remembered that of 26 per cent.’ above pre-war rates of fares were made in 1920 and again in 1921 and that there were also two increases in freights of 40 per cent., the effect of which was necessarily to increase the burden on industry. Mr M'Villy’s explanation is that increased costs of materials and wages had made railway - undertakings unprofitable. It is to be acknowledged that ho has' produced a great deal of evidence in support of this contention. Whether he has proved it or failed to do so depends on the view that is taken respecting the soundness of the departmental policy. The department Has been handicapped by its inability to apply, business methods to meet, the changed situation. It has'Curtailed services, but it is prevented by political ■ considerations from reducing its staff, even while, as we have pointed out, it has substantially increased charges to members of the public who are owners of the railways.' The only people who have dene anything, therefore, to meet the shortages in the railway finance are the owners and useijs of the system. To them the screw has- been applied in a vigorous fashion m the shape of increased fares and freights. It is interesting, moreover, to note that in his

annual report the GWeral Manager de-: votes some attention to certain "con- I venience" services and throws some doubt on the possibility of their- continuance. • "The existing conditions," says Mr M'Villy, "necessitate serious consideration being devoted to the qiies-. tion whether the department is to continue to.run at a loss services that in { the past were laid on as a pure convenience, or to provide only services that are Essential to-meet the reasonable and legitimate'requjrements'of tho The railways, being a public utility, should, like the postal services, bo conducted for the convenience of the public, and it has;, yet to be proved whether many of the recent railway "cuts" wei-e, in conjunction with increased fares and freights, really calculated to stimulate, a sluggish revenue. When a public utility depart? ment seeks to lay down a hard mathematical 'pojicy on a purely commercial basis it should be prepared to apply the policy all round. If only trains are to be run which pay and only because they pay, then the department must be prepared to / reduce the number of its employees to a proportionate extent. Otherwise the convenience only of "the public is ignored, the service of the public is curtailed, and the department's own object is defeated. ' The Railways Statement constitutes the latest addition to the vast"'mass of evidence that the earnest attention of Parliament should be given to the question of railway policy and more especially to the financial aspects of it. '.-■'.■