The Daily News WEDNESDAY, JULY 10, 1929. RAILWAY ECONOMICS.

Taranaki Daily News, 10 July 1929, Page 8

The Daily News WEDNESDAY, JULY 10, 1929. RAILWAY ECONOMICS.

A bulletin that should prove interesting and informative to the people of the Dominion has lately been prepared by the Department of Economics of Canterbury College and issued by the Canterbury Chamber of Commerce. As it deals with the problems connected with railways and transport it cannot fail to attract attention, even on the part of those who consider there is little, if anything, new to be said on this important subject in which the whole community is more or less concerned. That the service rendered by railway transport to economic progress throughout the world is inestimable cannot be questioned, but the forward march of developmental expansion has brought to light a formidable competitor -in the shape of petrol-driven road motor vehicles possessing the great advantages of mobility and direct delivery, another factor being the termination, of the monopoly heretofore enjoyed by the railways. The outcome of this change, both as regards passengers and goods, shows that road motors have deprived the railways of the most profitable part of their business. In many countries this new-- competition has stimulated the railways to unwonted vigour in providing services and seeking business. Where the railways are privately owned it is a much easier task to adjust the altered conditions than in the case of State-owned and controlled transport services, for the simple reason that the co-ordina-tion of road and rail transport is an economic question to be settled on economic rather than on political grounds. While eventually the public has to pay for all losses on State-owned, railways, yet the same public reaps the benefit of the competition between the somewhat cumbersome and overburdened management charges inherent to a State department and the economically governed enterprises of keen commercial private caterers for public custom. The Canterbury College bulletin stresses, though not unduly, the point that in England the railways, which are privately owned, in desiring co-ordination of road and rail transport, want the abolition of restrictions on their own activities as road transport operators in order to com-

pete fairly with their riyals; whereas in New Zealand “it is widely feared that co-ordination may mean first, the placing of such restrictions on privately owned road transport as will prevent competition with a State railway monopoly, which many regard as far from efficient, and, secondly, the bureaucratic control of a new development of transport which promise to benefit the country greatly if left unhampered.” It could only be expected that, judged from an economic point of view, it would be considered that the greater losses on the Dominion railways would be attributed to uneconomic internal organisation and uneconomic capital expenditure. The bulletin expresses the view that figures quoted in the 1928 Railway Statement admit that the railways are overstaffed; that the passenger revenue per capita has decreased, and that although the traffic costs have fluctuated very slightly, the cost of maintenance has risen by 29 per cent., the increase in expenditure on rolling stock being forty per cent. It is pointed out that in 1909 there were 2704 miles of line in operation, which had cost an average of £10,494 per mile; that by 1928 the mileage was 3180, the average cost being £15,413 per mile, adding twenty million sterling to the capital liability, hence the remark that “It is well known that the cost of construction per mile is now so high that few new lines can be expected to pay; yet .illions of borrowed money have been poured into new construction of doubtful value.” The excuse for uneconomical expenditure and the violation of business principles has, observes the bulletin, always been that the railways have aided development. It was a perfectly legitimate argument so far as main lines running through areas which could profitably be developed were concerned, but otherwise was open to question. It has also been held that the railways belong t 6 the people, and are at their disposal, but the public have no real voice in controlling expenditure. It would be just as logical to contend that road motor vehicles aid development, and that therefore the proprietors arc justified in heading for bankruptcy by careless expenditure.- Constructing and working the railways are State enterprises—a trust for the people—and it is imperative that strict business principles should be followed.