Untitled

Hokitika Guardian, 9 June 1926, Page 2

TnniiE is an interesting phase of the Belgian financial situation which is worth noting. When the Belgian franc developed a sudden weakness in (March, attempts to stabilise the position were undertaken. But the Government, plan broke down because the necessary provision included at the behest of the English hanks who were co-operating, a demand that the stale railways be converted into a private industrial enterprise in order to trenthen Iho Government’s financial position. This proposal met with popular opposition as well as with the socialistic elinent in Parliament and the Cabinet. The burden of the State railways is a problem in New Zealand, and the non-waving lines are to be foisted on the consolidated fund to make up the deficit, so that where a section served hv a non-paying railway fail to keep up the revenue, the people as a whole will he called upon to do so. This process is not acceptable altogether to the North Island, hut that is another story. As regards the burden of State railways, there must necessarily during the period of a country’s development. he some lean times, lu respect to the position in regard to Belgium, and the request of the British hankers, there was a precedent as in the case of Germany. A financial journal remarks that the question of the ownership of the railways which proved to he the stumbling block in the way of Belgian stabilisation plans, is a particularly important one in those countries of Europe which are experiencing budget difficulties. Everywhere in Europe ownership of the railway is burdonsomo to the Governments because they must he run at a loss in order to astisfy the public. The Dawes plan proposed that the state-owned railways of Germany, which wore a charge on the Treasury, lie turned over to a corporation and they are now a source of revenue to the government and one of the important sources of reparation funds. The railroads of Belgium had a deficit of 301,000,000 francs in 1023, •350,000,000 francs in 1021 and 457,000,000 francs in 1025. A corporation would relieve the treasury of this deficit, pay the government a return on the capital invested and save something for itself, by means of business management. It is true that the public would pay the bill, but. it ought to pay what the cost of the service requires which always includes a return upon the capital invested and for the Adminitration. All industry would come to a standstill if business generally did not earn a return niion its investments.