RAILWAY ACCOUNTS

Hokitika Guardian, 7 January 1931, Page 5

RAILWAY ACCOUNTS

MUST BE ADJUSTED. (Associated Chambers of Commerce). The Commission which recently investigated the affairs of the Dominion’s Railway Department has placed on record some scathing comments concerning the multiplication of new lines—including many branch lines—which have little prospect of becoming remunerative during the life of the material employed in their construction. It was stated in evidence to the Commission by a competent authority

that owing to the increased cost of material and labour no new line laid dow nduring the last fifteen years, with the exception of short spur-col-liery lines, had any likelihood of paying. This means that as the lines now under construction are completed the loss shown in the accounts of the Department will become heavier and heavier. In other words, the cost of operating the lines will be added in a large measure to the cost of constructing them, and the lot of the taxpayer will be even harder than it is at the present time.

Then while Parliament is authorising the construction of new lines here and there, further expenditure is being lavished upon roads running parallel to the rails which in due course will become a formidable opponent to them. The branch lines throughout the country provide striking example of this development. If Parliament in opposition to expert advice, considers that certain development lines should be constructed then it should set aside a sufficient sum. from the Consolidated Fund to cover the cost of the work. The public then would have an opportunity to see how matters stood, and the. raihyay management would not bo responsible for the result.

It is estimated that when the lines at present under construction by the Public Works Department are completed and handed over to the Railway Department the capital account of this department will be raised, approximately by £13.630.000, thus bringing the total up to no less than £72,531,545, or just upon the amount of the whole public debt of the Dominion twenty years ago. The annual interest bill ou all lines, ' even at so

low a rate as 4J per cent, will then amount to no less than £3,095,341, even if not a shilling is otherwise added to the construction debt meanwhile. The Commission among other sagacious observations emphasises the importance of the Railway Department keeping proper accounts. In the opinion of your Committee, it says modestly, but emphatically, “proper steps must be taken to provide for the loss of capital which has resulted from the abandonment, obsolescence, and wastage of various assets, snd this can he done only by the cancellation of capital covering the full amount represented by assets coming undei this description. If the railways were piivately owned the loss of capital would undoubtedly be written off, as the directors could not present. and the shareholders would not agree, to a balance sheet showing assets much in excess of their value.” The obvious need of the Dominion’s railways is a management freed entirely from party influence.