NOT DOING ITS SHARE

Sun (Auckland), Volume II, Issue 457, 12 September 1928, Page 14

NOT DOING ITS SHARE

PASSENGER REVENUE FALLS “RAILWAYS FINANCES ARE SERIOUSLY WEAKENED” (TUB SUN’S Parliamentary Reporter) WELLINGTON, To-day. While passengers are falling off heavily, and revenue is dropping, train running costs are becoming annually greater, and in the words of the Minister for Railways, “the financial position of the railways has been seriously weakened.” The extensive use of private cars is blamed for a great deal of the passenger losses, and a further drop is anticipated as motor-cars increase.

In his report to Parliament yesterday the Minister, the lit. Hon. J. G. Coates, says: “The decline in passenger traffic that has been experienced since the year 1921 has had a very serious effect on the financial position of the railways. The problem is not peculiar to New Zealand, but is causing grave concern to railway managements in practically all countries. In the seven-year period of 1914-21 the number -of passengers carried by rail increased from 23,200,000 to 28,800,000, or by 2'4 per cent., and the revenue from £ 1,450,000 to £2,658,000, or by 83 per cent. Between 1921 and 1928 the number of passengers has decreased to 25,400,000, or by 12 per cent,, and the revenue to £2,150,000, or by 19 per cent. “The decrease is confined to the more profitable ordinary passenger traffic. Season-ticket business has shown a steady increase, 'which is very marked in the low-rate suburban weekly tickets. A decline of 6,016,483 ordinary passengers has been accompanied by a decrease of £568,351 in revenue, while an increase of 2,574,365 season-ticket passengers was responsible for an increase of only £59,914 in revenue. EXPENDITURE GOES UP “The decline in revenue has not been followed by a commensurate decrease in expenditure. On the

contrary, it has been necessary to provide increased and faster train services, together with improved facilities and rolling-stock, in the endeavour to meet competitive conditions and retain a fair share of the business. “Every endeavour has been made to reduce costs, but the total runningexpenses have increased considerably. Higher train-speeds have resulted in greater expenditure on maintenance of track. Improved standards in the comfort of passenger accommodation have been followed by a constant increase in capital cost, maintenance expenses, and tare weight of carriages, with a reduction of carrying-capacity. “In order to encourage traffic, selling and publicity organisations have been built up, improved booking facilities have been provided, and every avenue for evploiting the business has been thoroughly explored. While there is no doubt that this policy has been abundantly justified, it is unquestionable that the cost of carrying a much smaller volume of passenger traffic has increased, both actually and relatively, and the financial position of the railways has been seriously weakened. “A gross profit of 38.06 d per passenger train-mile in 1914 and 61.86 d in 1921 has become a loss of B.lod per train-mile in 1928. Not only is passenger traffic making no .contribution toward interest charges, but it is not carrying its full share of operating-costs. “The loss has been met in part by the increased charges levied on certain classes of freight in 1925, but the balance has not been provided for, and the accumulated loss remains to the debit of the Railway Account.”