The Daily News SATURDAY, SEPTEMBER 27, 1924 DOMINION RAILWAYS.

Taranaki Daily News, 27 September 1924, Page 4

The Daily News SATURDAY, SEPTEMBER 27, 1924 DOMINION RAILWAYS.

General interest is invariablytaken in the annual statement to Parliament reviewing the result of the working of the railways for the past year. Additional attention was aroused in this year’s statement by reason of the forecasting of several important reforms in the system. As usual, much stress is laid on the earning power of the service, particularly in relation to the profits being sufficient to pay the policy rate of interest (3f per cent.) on the capital cost of open lines, which now amounts to over forty-one and a quarter millions, necessitating an excess of over a million and a half to meet this charge. Last year the net profit on working was slightly over a million and a half, or about a quarter of a million more than in the previous year,while the working expenses were nearly one hundred thousand less. From a commercial point of view this result is not altogether satisfactory, but the public may be thankful it was not worse. It has long been contended that the overhead expenses are a bar to making adequate profits even at the high rates of fares and freights that now prevail. While there are many points on which the department may be congratulated, there are others which need attention, and it is pleasing to note that some of the latter are included in the reforms now proposed by the Minister. Possibly the forthcoming inquiry by overseas experts may still further advance the prosperity of the railways. Possibly, also, had the department’s controlling officers been allowed to administer it purely from the point of view of the railways earning powers, a good many apparent anomalies, which the British experts are to enquire into, would not exist. It is common knowledge that other than commercial considerations have often swayed the policy of the department. There are two matters of outstanding interest that will probably attract attention in connection with this annual statement. The first is to be found in the Minister’s proposals for instituting a new system of accounts, whereby railway finance is to be brought into line with commercial practice as far as possible. This reform, though pressed on the attention of the Government for a long time past has been slow in materialising, but its advent will be none the less welcome on that account. At the same time it would be unwise to expect that a mere change in the accounting system will make any appreciable difference in the actual financial yield from this department of the State. Apparently, the Minister recognises this view, for it will be noticed that he bases his opinion on the railways being made to pay, on the presumption that reasonable facilities are given as well as upon the effect of the finances being placed on a more satisfactory position. An acceptable definition of “reasonable facilities” is j beyond conjecture and it may bfl made to mean that if the department is supplied with all it needs j as a starting-out point on a new | system it can be made to pay its ! way. The details of the new j methods for keeping the account, , appear to meet most of the requirements necessary for the, pur- I pose of commercialising the rail- ! ways and at the same time giving | the public a clear indication of j profits and losses. Parliament i will still control the annual appropriations, but deferred expenditure will only appear in the , railway accounts in the year in ’ which it is made, and this is as it should be. The provisions for depreciation and the building up of a reserve fund are certainly to be ’ commended, and clearly indicate that the railways are to be treat-

ed as a commercial concern, inj stead of a political, and run on sound financial lines. Without doubt, the public will watch the new departure with keen interest and concern. The other outstanding matter is 1 the report of the General Manager of Railways relative to the competition from motor traffic. He argues ingeniously some may think—that traders and others are being compulsory made to pay a higher rate than is justifiable to the motor carriers for the transport of goods from a railway station to the consignees, and that if a reasonable price for such service were charged it would be found that, the railway rates were not excessive, and that it is only because the motor carriers extract from their customers a higher charge than is justifiable for delivery from a station, that the total cost of carriage favours the motormen. What may be the actual position as to such a controversy cannot be judged until both sides have been heard, but it may reasonably be inferred that keen business men have studied this question and know to a certainty all its bearings. At all events the matter can easily be tested by the department entering into the delivery business, which, if the General Manager’s statement is correct, must be very profitable.