The Dominion. WEDNESDAY, AUGUST 28, 1912. THE RAILWAYS POSITION.

Dominion, Volume 5, Issue 1530, 28 August 1912, Page 6

The Dominion. WEDNESDAY, AUGUST 28, 1912. THE RAILWAYS POSITION.

The Railways Statement presented to the House of Representatives yesterday by Me. Hereies deals with the year which ended on March 31 and for which, therefore, the Minister was not responsible. In most particulars, therefore, this complex document, the preparation of which takes a considerable time, bears no new impress. Although he could not expected to effect, in the very brief time elapsed since ho took office, any alteration in his Department's stereotyped way of doing business, Mr. Herries has nevertheless introduced some new and important features which inspire us with some hope_ that he will check the drift of railways finance, Although the net revenue for the year is about £20,000 better than in the preceding year, the addition of about a million to the capital sunk in the system has produced the result that the net return on capital is less than it was for 1910-11. It is given in the Statement as 3.98 per cent on the capital cost of open lines and 3.70 per cent on tho cost of open and unopened lines; but this result is obtained partly by spending less on maintenance than what a long series of reports shows that the engineer really considers adequate, and partly by charging to capital a great many items that should appear in working expenses. Under the heading "Additions to Open Lines," tho sum of £372,018 was expended and charged to capital. If this moneyhad been charged against revenue, the net revenue would have been about £8-10,000, and the net return on all tho capital sunk in the railways (£32,089,179) would have been about £2 12s. per cent, which would have meant an actual loss, when all was said and done, of about £400,000 for the year. No doubt some of the items thus charged to capital are fairly so chargeable, but there has been no method, and no principle has been laid down, in the matter. The Minister is to be complimented unreservedly on his introduction of a comparison between the earnings on the Northern lines and the earnings in the South. We have for years kept this point before the public, but it did not suit the Ward Administration to admit its importance. The Minister shows that while the North Island main line and branches paid £■! 1.95. 7d. per cent on the cost of construction, tho South Island main lino and branohci.

paid only £3.25. per cent. If the interest the country has to pay awav is reckoner at £3 lGs. per cent (Mlt. IUILLAii ft estimate), there was a dead oss of. £82,040 on the Southern main nne aud branches for the year. After quoting other figures—such as that chc nut revenue per average mile upon in this island was £GO7, or precisely double the figure for the •South Sm-iln. Hkihues suggests that the great strides made by the revemuo in this island is in part due to the rapid increase of settlement, uot, ho adds, "the whole question requires investigation as to whether the results arc due to circumstances over which the Department has no control or whether they are due to the management of the railways." Jhe Booiiw that investigation is made the better, and the Minister has no right, oven to appear to be apologising for emphasising a fact Uio full investigation of which will lead to an understanding of some of the most persistent evils of the Government of the past fifteen or twenty years. In the treatment of the employees, in the authorisation of construotion. in the methods of construction, m the scheduling of services— in all these things the Seddon and \\ ard Administrations were governed, not by a care for the national interest, but by the consideration: What will it pay us to do as a party 1 Mr. Herries promises also to • investigate the cause for the abnormally high ratio of working-ex-penses to earnings, which he cannot believe is due simply to the rate of wages paid to the employees. An expert railroad man should not have any difficulty in finding the weak spots_ in the details of management, aud it should he a first instruction to the new General Manager that lie shall consider himself an investigator to begin with. The Government has decided not to do away with Ministerial control of the railways, and while wo are convincedit is the facts of the railways management _ that have convinced us— that Ministerial control is essentially undesirable, it is doubtless reasonable to allow the now Government an opportunity of investigating matters before any change is instituted.