The Timaru Herald SATURDAY, AUGUST 29, 1936 RAILWAY YEAR IN NEW ZEALAND.

Timaru Herald, Volume CXLII, Issue 20509, 29 August 1936, Page 8

The Timaru Herald SATURDAY, AUGUST 29, 1936 RAILWAY YEAR IN NEW ZEALAND.

Disclosing a loss of £ 1 on the year's operations, the Railways Statement lias been presented to the House of Representatives, for consideration of Members. Two phases of railway policy in New Zealand doubtless will come up for discussion when the Statement is debated in the House. One is the increasing pressure of competition the railways are compelled to face, as road and air travel become more popular, and the other, is the relation of the Government’s railway construction policy to the future economic stability of the railway accounts. Brieflystated, the flnaucifil position of the New Zealand railways is as under:

A net revenue of £1,051,477 for the year ended March 31 last which, when interest charges of £2,300,051 are deducted, discloses a loss of £1,248,574. In the previous year, the loss was £1,243,395. Gross earnings totalled £7,004,316, compared with £6,627,928 in the previous year. Gross expenditure totalled £5,952,829, an increase of £412,402. Interest charges showed a decrease of £30,835, compared with the previous year.

From this summary, it is clear that while the railway revenue increased by £376,388 last year, expenditure showed a jump of £412,492. The report, however, shows that during the year, an increase of 7 J per cent, in salaries and wages was granted to the staff, and this involved an additional expenditure of £161,555. ‘‘When allowance is made for this expenditure,” says the report, “it will be seen that the results of the year’s operations are very satisfactory.” It is encouraging to note, of course, that a substantial increase in business was handled, particularly in the carriage of goods and live stock, as well as heavy tonnage carried. But expenditure continues to outpace revenue. The railway management, on its part, has shown itself thoroughly alive to its responsibilities and opportunities, and businesslike methods and more consideration for the comfort and convenience of patrons of the railways, have been successful in meeting the everincreasing pressure of transport competition at the hands of private enterprise. During the current year, however, the railway management will be called upon to meet substantially increased running expenses in the form of higher pay for all grades of staff, and a large increase in personnel to handle the business of the railway within the newly-enforced 40-hour week. The railway authorities, on their part, nevertheless, have reason for some misgivings in relation to the future, because of the decision of the Government to embark upon comprehensive railway construction regardless of the financial, soundness of the lines to be completed. Experts have already shown that the South Island main trunk line to pay'its way, must earn from three to four times as much per mile as the Lyttelton-Bluff section, and actually instead of earning £BOOO per mile per annum to pay its way, it would earn about £450 per mile—a figure based on careful investigations regarding the probable revenue returns. The Nelson-Inangahua line which is likely to cost say £40,000 a mile, would require to earn a revenue of over £BOOO per mile per annum —equal to that of the best earning railways in the United States. And so on. No one now attempts to say the Napier-Gisborne line will pay its way; indeed, some of the leading railway authorities insist that no railway constructed in New Zealand during the past twenty years will ever pay. Some have never paid working expenses, much less interest costs and depreciation. So that it can be said, that as the years come on, the railway management will be faced with greater difficulties in bringing railway revenue within reasonable distance of gross expenditure, much less lessen the amount of drawings the railways accounts makes upon the Consolidated Fund, which of course means the annual dip the railways make into the pockets of taxpayers. The Government, on its part, however, persistently insists that account must be taken of the value of railways from a developmental point of view, and it is this that has prompted resumed construction of unpayable lines.