BRIDGING A GAP

Evening Post, Volume CX, Issue 137, 8 December 1930, Page 12

BRIDGING A GAP

INCOME-OUTGOINGS

LESSER RAILWAY SPENDING

OPEEATING SAVINGS

Measured by the barometer of monthly returns, the Government railways' rate of reduction in expenditure now exceeds the rate of reduction in its'revenue. That is to say, though the last four-weekly period shows a fall in revenue, the fall in expenditure is greater. The problem of thus meeting a falling ijoveiiue is a very great problem, {greater than is commonly recognised. As reduction involving the least possible burden on dependent labour is. the objective in a Government enterprise —as it ds in many private enterprises. Both in 'Australia and New Zealand much anxSoua thought has been given to this question, giving rise to the idea of the periodic holiday and various other ra-tionSng-of-employment schemes. But, whatever the method employed, the gap between expenditure and revenue has to be jiarrowed or closed. PUBLIiC AND FBIVATE CONTROLS ; BOTH BESET. It is .worth while here to point out how mucih the management of the railways hasp in common with private managements the world over. All face similar difficulties. There is a worlddepression, for which they are not responsible, -causing a lack of sale for their product, a lack for which they are no.t to lilame. The Electrolytic Zinc Company of Australasia s{vido chairman's statement) has M;oney locked up in unsold zinc, and tries to meet the situation with great and a greater operating efficiency. Equally the management of the New Zealand railways has found itself equipped with transport that it cannot sell, anil therefore forced—by forces beyond • its control —to reduce train mileage. The interest on cost of equipment remains, but so does the overhead payable by the private company on the zinc, it cannot sell and on the plants it does not operate. Whether one considers the position, of a State railway system, urged onward by road coimpetition and held foack.by political control; or .the position of a rubber-producing company suffering from the nfter-effects of the Stevensian restriction plan and from rubber prices below production costj or some other company that confessedly cannot read the riddle of the future prices of metals, or > soil:produets, or ■what not—the fact emerges in all cases that the prime factor; (contraction of business) is beyond control, and. can only be met with such, economies as each industry can effect in its own sphere, with due regard to possible future developments and to its employees' present needs. WORLD-WEATHER DICTATES . SHORTER SAtL. ' Viewed as part of a general situation, the monthly message of the General Manager of Bailways' (communicated through the "New Zealand.Railways Magazine" for December) is good. ' Mr. Sterling writes to his staff in these .terms :— "The accumulating evidence of general decline in prices the world over and the lessened trad© and partial slump conditions in many formerly thriving- industries, have had an inevitable reaction on transport business, to which the railways have been no exception. We have had to shorten sail to meet the high wind of adversity and weather the storm. This has enitailed readjustments in every branch of the service and has demanded, from, all, patience and fortitude in the difficult task of reducing expenditure in conformity, with the demands of a lessened and less resilient traffic. This task is now on the way to accomplishment, the latest figures indicating that our total expenditure during the last four-weekly period has been decreased by no less than £80,000. "Unfortunately, there has also been a decrease in our revenue, though for the period mentioned this decrease was £.20,000 less than the decrease in expenditure. 'From a purely operating point of view this is undoubtedly a very creditable peformance, but from the point _of view of general financial results it is disappointing. An examination of the incidence of the decrease in revenue shows that it can only be ascribed to the prevailing depression which has resulted in a shrinkage of trade. For the results of such conditions we, as a transport concern, can no more be held responsible than, say, the Customs Department can be held responsible for a shrinkage in Customs revenue due to the same cause. Nevertheless, it behoves all concerned to be active to reduce to a minimum the effects on our business of such circumstances as" I have mentioned. ''To improve our position there should be no slackening in the check upon expenditure by those in a position to control it, and a concentrated effort by personal solicitation supported by judicious advertising to secure a larger share of the transport busiaeßß along the routes which we serve. "There is an increasing willingness observable amongst all sections of the community to recognise the national importance of using the railways wherever possible in preference to competitive road transporters, many of whom end up in financial collapse, but who, during the period of their operation, drain the Department of vital revenue." A WORD TO THE WISE. The more responsible section of the farming. community, realising that concessions must be paid for, will read the following paragraph in the - General Manager's message with approval: "The case for railway patronage is especially strong where special concessions are granted. These concessions are based on the general benefit whicli they bring to the community. From this point of view everybody has an interest in bringing about the results for which the concessions are designed, and bearing in mind that the ability of the Governmental finance to maintain these concessions has a limit and that the position is vitally affected by the condition of the railway finances, I appeal to the public to take the long view in this matter when considering the question of placing their transport business."