THE RAILWAYS.

Southland Times, Issue 17628, 17 April 1914, Page 4

THE RAILWAYS.

Although the details of railway revenue and expenditure for last financial year have not yet been made public Mr Herries has announced that the net return upon the capital invested will be £3 12s 6d per cent. As the net earnings show a decrease as compared with those of recent years there is certain to be much criticism of the results obtained by a Reform Minister of Railways in the first complete year of his administration. All things considered the return of 3.625 per cent. cannot be regarded as unsatisfactory. For the preceding year the net profit was at the rate of 4.04 per cent., but in 1012-13 there were two Easters, and each Easter means a gain to tbs railways of about £25,000. Not only was there no Easter in the 1913-14 year, but there was also no good fortune to assist the Minister in swelling his receipts. On the contrary the smallpox scare and the strike undoubtedly affected railway traffic, and though the revenue for the year just closed was larger than that for the year immediately preceding by some £70,000, the increase would have been very much greater had there been no strike and no epidemic of smallpox. It has been estimated that the strike alone cost the railways £IOO,OOO. To earn £3 32s 6d per cent, under conditions so unfavourable is not a bad performance. more especially when it is remembered that in anticipation of a good year substantial increases were made in wages. Of the increase of £150,000 in the expenditure probably more than half represents better payments to employees. For the other half the Minister will be expected to give a satisfactory explanation. The Lyttelton Times suggests that it may be accounted for by the Minister's action in “providing Auckland with luxurious suburban services and a second through express.” Mr Herrics will probably have something to say on that point. In the meantime the net return may be compared not unfavourably with the average of recent years. Taking the fifteen years from ISOS to 1913 the average net return was 3.52 per cent. For the six years of Sir Joseph Ward's administration the average net return was just about £3 12s 6d, so that under adverse circumstances the railways have maintained a good average of net profit. Had there been no smallpox epidemic and no strike and an Easter in the year it is probable that despite the increases made in the scale of wages the net return would have been equal to the best previously recorded. As the ratio between earnings and expenses has somewhat improved during the last four months the net return from the current year should yield very good results.