RAILWAY FINANCE.
ALLEGED SERIOUS LOSS.
AN INTERESTING REPORT. (Fkou Our Own Correspondent.)
AUCKLAND, February 14
An interesting report upon the subject of New Zealand railway finance was presented by the Railway and Shipping Committee of the Auckland Chamber of Commerce at the meeting of the council of the chamber yesterday afternoon. The committee had had befcre it a letter from Mr Samuel Vaile relative to the subject, and ako an article by Professor James E. IxJ» Rossignol, of Denver University, U.S.A.. which was published in a magazine in August last, and extracts from which were published in the Herald some time subsequently. The report of the committee, which was presented by its chairman (Mr Barth Kent), .was a 6 follows :—: — " Upon a presentment of a summary of the working of the New Zealand railways from 1897 to 1906 by the two gentlemen named, it is shown that this Dominion has suffered a less of no less th-in £4,480,147, ibut your committee is not quite at one with the gentlemen named in their method of placing the entire cost of 'additions to open lines ' wholly to revenue account. We are of opinion that a very substantial amount of such additions should be placed to capital account, and not to revenue, and, of course, that would very considerably modify the total loss shown by Mr Vaile and Professor Lee Rossignol from 1897 to 1906. To illustrate this matter m as simple a way as we can. we will invite your attention to the year 1906. At that time the total length of railways open was 2406 miles. The gross earnings for that year were £2,349,704, and the. working expenses were £1,621,239, showing a profit of £728,465. The interest on the railway debt (£24,092,085) amounted to £903.453, thus giving a loss of £174,988 for 1906. Now comes the very important item or 'Additions to open lines' for 1906-^viz., £353,025. Your committee is of opinion that out of this large sum for additions to open, lines there must be a very considerable proportion which rightly should be placed to the debit of revenue account, and the balance placed to capital account. As ■io the proportions, your committee has no information, but whatever the amount that should be debited to revenue account— and it must be a serious one, — such amount must be added to the working loss of £174,988 already shown. Mr Vaile and Professor Rossignol show that the actual net Ic6s upon the working and maintenance of rau•waye for 1906 was £528,013; and, whilst your committee ia unanimously of opinion that a considerable proportion of the item "Additions to open lines" should go to capital account, there can be no doubt ■whatever that the annual loss upon the ■working of the whole of our railway system is a very heavy one indeed. It now remains for the Executive Commttee of this chamber to determine what further action (if any) it will take in this very serious matter. "it is a subject of the very pravest importance to the whole' Dominion, mid the- causes which have led to the very serious losses in the working of our ra.ilvay system for the pastUO years should be fio'roughly examined and the necessary remedies applied, if the present annual lea is due to preventible causes."
STATEMENT BY SIR J. G. WARD.
REPLY TO CRITICISMS.
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Otago Witness, Issue 2814, 19 February 1908, Page 37
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557RAILWAY FINANCE. Otago Witness, Issue 2814, 19 February 1908, Page 37
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