THE BURDEN OF STATE RAILWAYS.

Manawatu Herald, Volume XLVIII, Issue 3040, 25 May 1926, Page 4

THE BURDEN OF STATE RAILWAYS.

A SUBJECT OF SERIOUS THOUGHT. In view of the decision made by our Government to place the load of maintaining the running of some of our non-paying Railway lines on the Consolidated fund, having in mind also, the large deficits on some of the Australian State Railways the following article which appears in the April issue of tho Bulletin of The National City Bank of New York should be of general interest.

“The question of the ownership of the railways which proved to be the stumbling block in the way of Belgian stabilization plans, is a particularly important one in those countries of Europe which are experiencing budget difficulties. Everywhere in Europe ownership of the railways is burdensome to the Governments because they must be run at a loss in order to satisfy the public. The Dawes plan proposed that the state-owned railways of Germany, which were a charge on the treasury, he 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 1923, 550,000,000 francs in 1924, and 457,000,000 francs in 1925. 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. J.t 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 investment and for the administration. All industry .vould come to a standstill if business generally did not earn a return upon its investments. The French railroads, dominated y Government control, are a continual burden to the public treasury. M. Clemente], Minister of Finance in 1924, in his inventory of France’s financial condition, stated the railroad deficits of 1921, 1922 and 1923 as 2,o2o,9oo,ooo'francs, 1,147,300,000 francs, and 1,114,000,000 francs respectively. The situation remains about the same. In private hands and placed upon their own resources, these railroads undoubtedly would be made to pay by a readjustment of income and expenditures, but the report of the demands of foreign banks upon the Belgian Government, for the “industrialastion” of the Belgian railways is received with concern and pronounced disapproval in France. If Belgium cannot stabilize her currency without transferring the railways to private companies, and if that is to be the condition of foreign loans, the outlook for France is bad. Public consent never can be obtained, it is said. On the contrary, there is a strong demand that the government shall create more state monopolies, although those which it has produce deficits or insignificant returns, with service to the public by no means satisfactory. The same element in the parliamentary body which refuses to levy the taxes necessary to create a balanced budget wants more state monopolies, to be run on terms pleasing to the public rather than upon business principles After all, however, the population of New York City cannot be said to be very different from that of Belgium or France. The City is in pressing need of transportation facilities and private capital cannot be had to supply them on the basis of a. five-cent fare. The City asks the Legislature of the State to amend the law which fixes the municipal debt limit in order that the city may construct subways to be operated without expectation of profit, interest on the investment to be met from the general tax levy. There is the same refusal to face economic conditions and conduct public business principles here as on the oilier side of the Atlantic.” Nationalisation of Railways is a policy which the socialists of Britain are constantly advocating as if it were some wonderful panacea. The above shows that the experiences of those countries which possess State owned railway fail entirely to sustain (he economic conception of there being very special advantages in the Nationalisation! Though our Prime Minister, Mr. Coates, has strenuously endeavoured to place our New Zealand railways on a paying basis, the problem has so far failed of solution in*that a certain, measure of support is being sought from the general taxes. It is the case where practical experience makes light of what many deem to be sound in theory. Collectivism is not justi what it appears to the socialist visionaries. (Contributed by the New Zealand Welfare League).