The Dominion. THURSDAY, MAY 20, 1909. THE RAILWAYS.

Dominion, Volume 2, Issue 512, 20 May 1909, Page 4

The Dominion. THURSDAY, MAY 20, 1909. THE RAILWAYS.

. In view of Mn. Millar's statemsnt that "the railways must pay," a policy that hiis lod hiul to malto a poffiohal study of tha system, . tiio figures rolating to tho working of tho railways :in the past fiiiahcial ycai' fire of. Special interest.they appear in tlio. lasfc Outctte,. anci they show th'atjfckd.results. wdro Silich Worse than in ISOV-S, which,, as we have shown in.the .past, was .the worst, year on record. Thd total revenue is given as £2,929,626, and tho total oxpenditlife as £2,114,616, leaving a balance, which is known aa thd'"net -profit bn .working,'' 6f £814,711, Tkiß il the sum. left to pay the interest, for which 3|; p&r cent, is a mihimUm estimate, on capital, lo&ns amounting to something like £29,000,000—the capital cost' oil March 31, 1908, was nearly £27,000,000,. and the annual growth is about a mllliori and a half, while in the, past year thcrb was an extra'million for tho ManawatU line. On that basis tho interest bill is over £1,000,000. So that, even wheil helped out by loan money to the extent of two or three hundred thousand pounds, the railways will be found to have falleri short of paying their way by £200,000, The. strict accountancy that would takS note of the lota money slipped into rev l enlie Under tho head "ddditiortS to operi lines" would declare the rdil loss for the year to be from £400,000 to half a 'milliod sterling, ■ The rnvenUß increased by £107,588, but it took, according to tho Gazette, £165,050 extra expenditure to bring about ttiis increase.. The fosillt is that tho "net profit on working" is practically tho. same , aa in the preceding yearHBBJ4,7U againstj £812,179—wiiile the interest bill has t 'Sisanl by . the interest on the neW capital 'in# vantotlt s-iiaxt Iram tliAt oa tlw .iali!Ld

oxpended in purchasing tho Manawatu line. It may bo explained that these figtires, which are taken from the Railways Working Account, differ frotn those in the Consolidated Fuiid Account, the Bailways Account showing slightly better results. A good index of the financial condition is furnished by the proportion of expenditure to revenue. Another is the relation of lifit Barnihgs to capital. Tile following tablo speaks in unmistakable language of the increased cost of working and tho heavy loss: — Percentage of Expenditure, per net returns Year. cent: of Revenue, to Capital. 1899 ... 63.20 -... 3.20 ISOO. 64.80 ... 3.42 1901 65:30 ... 3.47 1902 66.80 - ... 3.43 1903. . 68.05 ... 3.30 1804 ... 65.98 ... 3.58 ■ 1905 ... 67.58 3.30 1906 69.00 ... 3.24 1907 ... 69.06 ... 3.45 1908 ... 70.59 ' 3.33 . .1909 1 ... 72:19 ? The unknown term may be guessed at when it ia said that the iiet earnings available to pay the interest bill are almost exactly the same as the net earnings that contributed only. 3.33 per cent, towards meeting tile much smaller interest bill In the yfeaf 1907-8. A safe figui'e to replace the query mark is obviously 3.20. On the South Island fnain lines and branches the expenditure index rose from 76.44 to 77.12 per cent. For the South Island as a whole the revenue increased by £30,011, but this increase was only darned by an increase of £31,511 in the expenditure. In spite of thß fact thai the interest to be paid Upon these lihes for the capital Bunk in them has largely increased, the mbney available to meet that interest hds stink frbin £iJ&6,179 to £394j079; The (jap is bigger than ever. The lines in the North Island, which c&rry those in the South on their back, yielded £137,576 more revenue- than -ih i§M-8, but it required an extra expenditure of £133,545 to produce it. The greatest sectidn of all—flurUiiui-BlUff—re-turned in 190Y-8 only 2.39 per cent, '.tdwards , thb interest ,on the £11,997,562 of capital sunk it, This year it has failed to provide even that' figure: It is no wonder that Mr. Millar, has been turning deaf ears to the requests of our Southern friends for further luxuries at the expense of. the rest, of the Dominion We shall have something to say upon the division of - the burden between the islands later on. In tho meantime, the public may profitably study the figures given above. They justify, to th& fullest extent'\ the' criticisms which eaUsed the Priub Minister to, fulminato against TaSt Doirij,- 1 ion. What, is. more satkfaciuryj they have stirred Mb. Millar into a serlbs of most emphatic repudiations of his chiefs contention that it is quite proper that the railways should not pay their wayi In a."bunch of newspaper cuttings reporting Ma. Millar's statements during his tour of Canterbury and Weetland in the last few daye, wo find statements like ■these: .. , "'' ■' .. v ... Sir. Millar said that the amount to be spent .annually on f railway] buildings in 'this country was going to bo materially reduced. "Five' trains had been stopped, and on every br&Ucli line where it was mown that the railways wero not paying it'would bo fcjs duty to reduce :tbe ."iervices. .' There. Whs'd (iMlor.il feeling that the railways should be made si'lf-SilpMttingi and that the Consolidated Fund should not be called updii to pay a-portion : of the deficit." . "The ivlible country was going, to be plit oil the satne basis." '• , ' '•'WO cnlinot offer facilities for people to travel if the result only entails a heavy loss .Oil 1 the Dn|rtrtment."" : "TlitJ Odslitidii df the Department was that the railways were not going to be .run-.'M philanthropic . .institutions. The railways had to mude to pay! 1 ' ': ; . . '.'Oil the general question of railway re; M,frs, li= tbok tip the position that tho collsdh'diitod revenue should no-t be calledupon to puyi anj- portion of the interest." This is .language', which contrasts veif notably with that Used by Sir Joseph Ward up till the general elections. Wd cannot forbear quoting one extract from fen angry statement by the Prime MiniscESTlii libs-official newspaper on Noveili-' 'cr 13: :. iThd Most ertraotdinary feature of tile lole; argument used to build up the uliiblo confcontioiifc put .forth fby the critical that when cornered by. a request to. state \t they would substitute for our policy r. declare that they would not increase, eager fares.or! transport charges upon 3,T)'ut would "reduce expenditure." They stop short without-' stating in whit ion they would reduce. There is only ay In which It ftlii be ddfie—tfedlifcb the r of trains ; and dismiss a largo numrailway employees, both lit the run■—ltaneh and the railway , workshops: The critics who advocated this policy, he had said two dayS earlier, had "antiqtinted \ideas"! Mr. Milur, evidently, thinks atherwiso., Thdre is ono grave weakness\in Mr. Millar's new enterprise. He appears to have overlooked the fact that the Midland Railway will for generations bej nothing but a gigantic machine for losinfe money. During the coming session a [demand should be made for a disclosure;-of the full 'loss on tho • tailWays eVery year. All we ! kiiow for cer< tain are the facts, that the,.interest on raiiway lokns id not less thai! 3j per cent., and that the real deficit is Somo hundreds of; thousaiidS.: In tho ciirroiit year it cahnot ba -mucli ; lets than £266,000, even ■\vhert the ;;dosingl of revenue with loan tiioncy is left out of account. would more effectively complete the public's ddticatiori than art annual statement by the Government of the exact deficit. Mr. Millar stated at Methven last week that "if Parliament did not support his recommendations the consolidated revenud would have to pay a direct grant to thd Railway Department:" That would bd the honest course,'and we trust that Parliament will insist ifi any case on knowing how miich that direct grant will amount to.