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Hokitika Guardian, 13 July 1932, Page 4

Reductions in expenditure totall ng £1,200,000 during last financial year had enabled the Railways Department to show an increase in, its net revenue, in spite of a fall in gross revenue totalling £1,070,000, said the chairman of the Gov, mment Railway? Board, Mr H. H. Sterling, at Auckland. He said that, compared with 1930, the expenditure fell by £1,687,-. 000. This result has been atta ned without reducing th-ei Service, below what would be- regarded as a reasonable standard from the customer’s ' standpoint. The board realises, of course, that there is a point below which expenditure cannot be reduced without a disproportionate sacrifice of the standard of the service. Tins requires a very nice, balancing of the factors involved in the, consideration of this question, The board is steadily , pursuing the policy of economy, but it will be realised, in fare of what has already been achieved in the reduction, of expenditure, that furthe* reductions become increasingly difficult. EspeciaTy in such an institution as the railways, a- point must he reached where service must he regarded as at a minimum, so that further reductions ip expenditure are not really possible as a business proposition, For instance, between main centres express train services have t be maintained, and while revenue may drop, to half, the expenditure is practically stationary as regards that svice. So h relation to other phases of the department’s activities, r as goods service, refi e limcnt rooms, etc. The dfi’in-tment has at all times to, be in a position to meet tlie fluctuations tha,t take, placp, and it is the pojk of the fluctuations that, generallyl speaking, determine the strength of the organisation that has to be maintained in order to give a service that will lie free from crun plaint. For the first two months of the nresc' i t financial year revenue continue.] to fall, but notwit’-*landing tin- increasing difficultv of obtaining reductions in expenditure, it wa-s satisfactory to note that expenditure- bad boon reduced to, an ovum greater extent, so that for the first two months there had been an improvement in the net revenue. True, the sum, £2OOO, was -

not great relatively speaking, but in the circumstances' it was gratifying to know that the board had been able' to show a credit balance, small though it might be.