THE RAILWAYS.

Dominion, Volume 2, Issue 568, 24 July 1909, Page 6

THE RAILWAYS.

NORTH AND SOUTH COMPARED. SOME INSTRUCTIVE DIAGRAMS. As has been pointed out many timos lately in The Dominion, thoro is a feature of -the railways .finances that is almost as unpleasant, and quite. as remarkable, as tho heavy annual .loss of tho system—namoly, the extraordinarily low and . diminishing earning power of the lines in. the South Island under present, conditions.. In 1907-8, for, example, tho net return on the cost of-the opened lines- was . £418,000 or. 4.28 per cent., in tho ■ caso of the' North Island, and £1398,179, or only 2.71 per oent., in the case of tho-South' Island. This great differeiico botweon the percentages is due to ..the fact that tho capital cost of opened lines in the South was much greater .than.in the case of the North, being £14,587,995; as against £9.713,534. , , V ■

Tho tabulated figures are very remarkable, but it is when they are ■ converted into ' graph" form that their significance becomes visible and striking. We give below a diagram showing tho variations .of "not* profits on working" for somo recent years. Tho horizontal axis has the. years -marked off on it; tho perpendicular axis, is the measure of rovenue. It will bo seen that tho net -revenue, in the case o£ the North , (indicated by . the solid black line) has risen continuously and rapidly.. In 1901-2 iit was not much more than half .the not revenue of the southern lines, but it rose tp equality during 1907, and is now the gwater of the two, , and still trending upwards. -Tho net rovenue in the-case of the South'(indicated by Ithe dotted line)' has fluctuited round about £400,000, and was actually lower in 1908-9—not merely relatively, but absolutely—than it was in 1901-2. : -v '

The" following graph shows -the percentage of net return on' capital up to 1907-8, the last year for which exact data, are available. •It will be seen that tho percentage in the case of the northern lines has risen in a very striking way, while the southern percentage once ovor 3.s,''has drifted steadily downward (tho solid black line represents -the NorthJ" the. dotted :-lifcie . the: South) -.-tt

The following arc the figures of the'above graph?— ;> Year.,.' ■ North. South. 1901-2 i. -3.04 . 3.69 1902-3 3.20 3.39 1903-4 3 72 3.50 1904-5 . 370 3.03 1905-6 3.60 .2.99 1906-7 .....4.11 3.02. 1907-8 ._...... 4.28 2.71 ' It must not bo forgotten that this Southorn doclino has taken place despite the much; greater amount of capital at work in the South. In the six years 1902-1903, tKo sum of .£2,523,161 Has been added in opened lines in the "North; in tie ;sb,me period the sum of £3,675,797 was added in the South.' In the . following : diagram the perpendicular

axis represents the "net revenue" and tho horizontal axis the capital cost of openod linos. It will be seen that, in the casO i of tlio North (solid line), an increase. of capital has caused a sharp and continuous increase in net revenue, In the case of the South (dotted line) the not revenue fluctuates about one level, despite the extra, capital set at work. The North, in other words, has responded in a most striking way to the increase of capital, while tho South seepis unable to make any responso to the millions spent on it. Here is -the diagram: The figures represented by the third diagram are sot out in'the following table. The figures are for ."'.capital'.cost of opened lines " and "net profits oil working," and afo for.the years .1901-2, etc., to 1907-8. . '.- North'. - South. Capital cost. Rovcnue. Capital cost. Rcvomio. £ £ , £ £ '. 7,190,373 ... 218,G92 . 10,912,198 ... 403,657 7,741,7431 ... 247,898 11,277,880 ... 382,721 8,209,761 ... 305,000 12,435,062 ... 430,017 8,697,387 ... 322,301 1 12,971,535 ... 394,030 9,107,966 ... 328,866 ' 13,360.337 ... 399,599 9,288,180 ... 382,374 14,182,656 ... 429,717 9,713,534 ... 416,000 1 14,587,995 ... 390,179 Although by 1906-7 and 1907-8 tho "not profits" in the case of this island had-grown greater than tho interest (calculated at 33 per cent.) on the capital cost, the'net profits for tie seven years wc.ro in tho _ aggregate less tham. the interest bill. Taking the interest at' 3J per cent, (and leaving out; of account tho question of loan money being used to pay charges • that should have been borne by revenue), the net loss for tho seven, years was on the Northern lines £26,046. On the Southern linos the dead. loss.amounted for the seven years to £522,864, or 20 times as much. as was lost in the Nortlli. Island! In oitlher words, of the certain and known ;loss (there is a further loss that is not ex.iwbly known, being hidden by the use of loan .money for purposes probably chargeable to "eapifcal)-rof this known loss of £548,910 for tho .seven yoars, the South Island was responsible for £522,864, or' 95.2 per ocnt.!

And- as the loss had to be made.good by tho oountry- as a, whole;' through .and as: the bulk of tho population is.in,this is-, land,' tho' people of this island , have .hacl to pay . over £250,000 in seven -years in t aid of ; users of the railTOys. .' ; -1 Upon-our third diagram ono observation ' requires to be made. it .is clear enough that (as moifi. money , is expended in this island, the line,of revenue will climb' hig!her .and fhig'her.. ? The crosses at "the >latter "end of the solid line representing the North represent ! what, a cautious estimate, makes certain. It will be seen that our dotted forecast is placed at a much lower angle than wo might excusably have taken: As for tho South; •the limit of net: earnings appears to have been reached ycojs ago., A sale of unclaimed dogs by auction will be held at tho Corporation' Yards, Clyde Qnay; to-day, at '2.30 p.m. 1 •.' ■'

The following are ■.■■the figures graphically expressed above:— ' North. ■ South. : .Year. £ £ - 1901-2 ... . ... . 213,692 . ■ '403,657.: 1902-3 ... 247,898 382,724 : 19034 305,900 - ,436,017 1904-5 322|301 394,030 1905-6 ... ... 328,866 ' 399,599 1906-7 ... '. ... -. 382,374 ■' 429,717' 1907-S -.... 416,000 , ■ - 396,179 ; 1908-9 ... ... 420,031 . . 394,679