GERMAN RAILWAYS

Hokitika Guardian, 31 July 1931, Page 6

GERMAN RAILWAYS

FUNDS FOR REPARATIONS. BONDS AND MONOPOLY. H 3 I The present constitution of the Mat- - ional Railroad Corporation of Germany l dates from 1924, and is the direct outcome of the reparations arrangements - made at that time. The reorganisation of the undertaking became necess--1 ary because the corporation "'as compelled to take over part of the nationi al reparation payments, its annual con-, l tribution (for interest and amortization) being fixed at 660 million reichr marks, and because, in order to do so, it had to be converted from a Govern- . inent-owned to a privately-operated con- - cern. Jt received a monopoly on railroad operation in Germany until Dec- . ember .31, 1964, the date at which the , reparation bonds issued by it will he completely' redeemed, and the exclusive , right to construct and to operate any I additional lines ,ntended tor general ! ■ use. 'l'he German Government is entitled : to a share in its administration and . operation. The capital stock or the corporation amounts to 16.060 million . gold marks divided into common and preference shares. The common shares. . amounting to 1.3.000 million geld . marks, are issued in the name of the National Government, or—if the latter decides to do so—in that of any one of the Federal States. The reparation bonds in the amount of 11.000 million gold marks provided for under the Daw es Plan have been replaced, under the Young Plan, by' a fixed reparation tax of 660 million reichmarks per annum. The assets of the corporation were valued at 25,967 millions at the 5 close of the 1929 fiscal year. 3 j The Management. . | The corporation’s affairs are conduci ted by a Board of Directors, which conj sists of some of Germany’s leading ! economisers—and an executive com- ' posed of the general manager and eight j managers. The administration of the actual work is vested in the general manager’s office, the sub-office for Bav_ aria, a certain number of executive offices for various special purposes, three chief operating hoards, twenty | nine district offices, a number of I offices supervising local services, and j the numerous operating authorities, j The total length of the corporation’s ’ i system is just under .34.000 miles, and ' • the number of railroad stations is ’ i about 12,000. ‘ j As the corporation has been entrusted with the duty r of operating ser--1 vices throughout the country on sound business principles the managing board ' has thought it proper to co-operate with certain other organisations interested in traffic or to set up such organisations, i.e., those engaged in banking business and in regulating the deferred : payment of freights, the operation of ! sleeping cars, dining ears, de-luxe cars. , etc., tlie development of water-power ; resources in South Germany, and the ■ encouragement of passenger traffic. j On Business Lines. I I . The total annual income of the cor- | poration amounted to some 5,300 mil- ’ lion reichmarks in 1929. or about 171' j millions per working day. About 65 j pei' cent, of these receipts (.3500 mil- ■ lions) were contributed by the goods j traffic, and some 27 per cent. (1400 milj lions) of this money is required to cover I I the expenditure incurred ir, the oper- i | ation, the upkeep and the renewal of | the services and plant, about two-thirds j of the last-named amount being spent i <ui salaries and wages (3000 millions), j and the remaining third (1500 millions) ion materials. Out of the surplus earn- ! ings of about 860 millions, 660 milj lions have to be set aside, as has nli ready been stated, for the service of j the reparation bonds. If, after providi ing interest, contributions to the rei serve fund, and depreciation, any bal- | mice is left, it will he used for the pay-’ ■ nient of preference dividends. j Financially, the corporation is a coni- | ph'tely independent undertaking. It is j therefore compelled to restrict its ex- ! penditure to its revenue, no matter | what the general effects of such autoj matic restriction may be. This policy j has been carried through with great | consistence since the setting-up of the | corporation five years ago; and its proj sent sound financial status is directly 1 due to it.