OUR RAILWAYS

Waikato Independent, Volume XXII, Issue 2385, 17 August 1922, Page 5

OUR RAILWAYS

EARN 1.07 PER CENT. | A YEAR OF DIFFICULTIES The following reference to the Railways of the country appears in the Minister for Finance’s Financial Statement, presented in the House on Tuesday night:— The 1 gross receipts from the workingrailways amounted to £6,643,59.1 —a decline of £265,000 on the previous year’s figures. The working expenses amounted to £6,237,727. The net revenue is therefore' 1 £405,864 —representing a return of 1.07 per cent, on capital cost. The year has been one of abnormal difficulties —a post-war condition common to railway systems throughout the world. Although the net result of working does not provide sufficient return upon, the capital expenditure, too much significance cannot be attached to that fact, and in measuring the result, due consideration must be given to the causes operating to bring it about. The railways have in point of fact been working under abnormal conditions due directly to the economic effect of the war. On the one hand the prices of stores and materials have increased and wages have greatly advanced since 1915. These advances reflect themselves in increased operating expenses for the year just ended, as compared with 1915, by 130 per cent. On the revenue side the rates for the carriage of passengers and goods have been raised during the war period by 25 per cent, and 40 per cent, respectively. Up till 1920 the trade in the country was .stimulated by the high prices of its products. This resulted in an expansion of the railway business to an extent sufficient to make up for the disproportionate increase of the rates in relation to the large increase in expenditure. The shnnp in trade last year, however, changed the position, the reduction both in exports and imports reflecting itself strongly in the railway receipts. The small additions that had been made in the railway charges were therefore no longer sufficient to maintain a proper balance, and the falling prices of the country’s products made, it impracticable to further advance the rates. The only means of regaining normal relationship between revenue and expenditure was therefore to reduce the latter, and steps were taken to do this. The matter is still engaging the close attention of the Government and departmental experts. The problem is, however, by no means a simple one. A reduction of wages has been made in terms of the Public Expenditure Adjustment Act, but this did not come into operation until January, 1922, consequently the reductions did not have any marked effect on last year’s expenditure of the Department. As illustrating- the practical results that have been obtained in the direction of economy, it may be stated that in September, 1921, the expenditure exceeded the gross revenue by £54,000, while on the 31st March,, 1922, the revenuo was in credit to the extent of £405;564. For the year ending 31st March, 1923, it is anticipated that the revenue will amount to £7,200,000, and the expenditure to £6,164,000. In regard to railways, it must not be forgotten that they act x>owerfully in the development of the country and the promotion of its industries, and in pursuance of this policy they daily render services to the Dominion in many cases at below actual cost.