The Dominion. TUESDAY, AUGUST 17, 1909. RAILWAYS FINANCE.

Dominion, Volume 2, Issue 588, 17 August 1909, Page 6

The Dominion. TUESDAY, AUGUST 17, 1909. RAILWAYS FINANCE.

The-latest characteristic examplo of the frank disregard for facts on the part of the Ministerial organ in Christchurch deserves special mention. Commenting on our ■ recent eornpcirison of fcho management of the New South Wales railways in 1908-9 and the management of our own railways in 1907-8, our contemporary says: ; .

Thoy take the New Zealand returns for 1907-8 because they happen fa have been ratlior poor, und tho New South Wales returns for 1908-9 because'they - happen to have been particularly good. This is their characteristic way of doing justice to their political opponents. . . . It is well known that the [N.Z.] lines did better in 1908-9 than they did in 1907-8.

And we are then told , that "it would have been fairer to reserve comparisons until the two railway systems could be judged in the same year and under similar conditions." Will it be believed that the newspaper which charges us with having dishonestly selected the worse year in the case of New Zealand and the better year in, the- case,of New South Wales is on both points making a direct misstatement ? What'are tho facts'! '. .

(1.) The New Zealand lines did woube in 1903-9 than in 1007-8. Tho ,'.'iiet profit on working" was £3 65.-Bd. per cent, in 1907-8. It was £3 2s. 7d: per cent, in 1908-9. (These are the official figures.) (2.) The New South Wales lines did better in 1907-8 than in 1908-9. The "net profit on working" was £4 Bs. lid. in 1908-9; it was £4 17s. 7d. in 1907-8. The final profit, after paying interest on capital and all expenses, was £388,892 in 1908-9; it was £579,931 in 1907-8.

When, therefore, using the latest figures of which we had knowledge at the time of writing, we took tho New Zealand figures for 1907-8, wo took the figures Which were-the more favourable to New Zealand; .'and when we , took the New South Wales figures for 1908-9, we took the figures that were the less favourableto New South Wales. This, in summary, was the comparison we made: ■' ■■■ Difference ' .' ■ N.Z. N.S.W.. against ' ■ 1907-8 ISOB-9 N.Z.. Net profits per cent. . ■ of capital ... .£3 6 8 £1 8 11 .£1 2 3 If we had taken the 1908-9 figures for New Zealand on which our contemporary. relies' this is how the comparison would have stood: . .'....-... Difference N.Z. N.S.W. againU 1903-9 1908-9 .. N.Z. Net profits per cent. ; of capital 2 7 £i 8 11 £1 6 i Our , 'comparison, therefore, actually presented the New Zealand railways in too ■favourable a light. Whether, when the Ministerialist journals state the exact opposite of recorded truth, they do so out Of ignorance, or-out of a complete and perfect disregard for common honesty, is a question which we would'not presume" to decide: ■ . ' •

The fact is, of Course; that the case for the defence of the New Zealand railway finances is so bad that at every plunge the" defenders make their position worse than ever. They have no way of escape from the facts. A local paper the other day hit upon the idea of announcing the accumulated loss .on ,-thc New South Wales railway's—-w.hich- tit .found in an article in a Sydney journal of July 29, last. In a note .in 1907 the New ' South Wales Auditor-General pointed out that the net shortage since the system began running ,was £2,807,866, and that wlien the amount advanced for replacements > and repairs in 1899, together with the interest on the ltailway Stores Account,for 32 years, was added, the. total shortage was £4,357,257. Our contemporary also quoted the Sydney newspaper referred to, whose financial' criticisms usually are very good, and Bound,, to the following effect: "If to that were added the interest which the State /has had to pay on the deficit—for it mostly has had to borrow money to make good the loss—the total deficiency would'probably be well over £5,000,000." This is doubtless true. Prior to being handed over to the Commissioners the railways lost heavily, but they are now paying handsomely. The net returns >fpr the last four.years have been: 4.42 per cent.,' 4.96 per cent., 4.88 per cent., and 4.43 per cent. Taking the average rate of interest on capital at 3.56 per cent, (it was £1,686,734 on a , capital of £47,100)512 in : 1808-9), it will be found that the New South-Wales railways are. now, out of the surplus.left after paying all expenses and interest, wiping off the losses of the ancient, past at an average rate of £604,560' per "annum. Since the Auditor-General issued his note in 1907, the railways have in three years made a final clear profit, amounting' to no. less than £1,643,055. Since the , friends .of political control have raised this point, we have been investigating 'the accumulated loss on the New Zealand railways. There has been a regular dead loss since the railways began to run. "During the last 20 years, 1889-90 to-1908-9, the "net return" reached even 3i. per. cent, only once. The total loss we have not.calc'ulated. But even the results for the.past ten years are startling enough. On the basis of calculation which is most favourable to the Government the net shortage is £814,080 for. the .ten years. When to this is added the loan money used to fortify the revenue, which averaged, say, £150,000 a year—it was £243,262 in 1907-B—it will.be seen that the net deficiency for the last ten years alone is over £2,300,000, and is increasing by hundreds of'thousands'every year. In New South Wales the net. deficiency for all the .past years amounts to less than £3,500,000, and is now being wiped out'at the average rate of half a million a year. The supporters of political control, we think, must try some other way of escape.