NATIONALISED RAILWAYS.

Taranaki Daily News, Volume LV, Issue 50, 17 July 1912, Page 4

NATIONALISED RAILWAYS.

Great Britain is evidently awaking to the fact that it is quite possible to nationalise 'her railways successfully, and in this respect has evidently 'been stirred to consideration by the action of some of the children of the Empire, as well as by the experience of several Continental nations. The Prime Minister, Mr. Asquith, discussed the matter recently with a trades union deputation, and promised to interview the railway companies in the matter later. An enormous amount of capital, he said, has been subscribed and paid up—l am not going into the tion of "watering" and of capital unprofitahly and perhaps needlessly expended—for the construction and development of the railways. Our paid-up capital for 1911, the latest year for which returns are to hand, was £1,324,000,000. The gross receipts were 174% millions, and the expenditure 78y 2 millions. The net reeeipts were, therefore, little more than 48% millions. That brings out a net percentage return upon the greater capital of 3.0(5. If you go back five years, if you take the years from 1902 to 1907, you will find, I think, roughly, that the average percentage was about 3.44. So it is quite true to say, as one of the speakers did say, that 1911, as compared with the average of those years, showed an increase of .22. That percentage return of 3.06 is the highest figure obtained, certainly during the last ten years, but it is not, of course, a very high return for a commercial undertaking. This capital'has been subscribed and employed upon the ordinary commercial principle of obtaining as large returns as possible, having regard to the exigencies of the business, to the shareholders. You must not take the mere cost of the land. You must include what hifs been paid for- engineering, surveying, and the legal expenses, as well as the acquisition of the land, and in this country, where we have compulsory acquisition, it is acquired on very expensive terms. Bu.t even when you have deducted all the "watering," when you have drained off all the water, the return does not work out at more than 4.3, so that the difference is really only that between 3.66 and 4.3. That is substantial; but, even so, if you take it at 4.3, it is not an extravagant return for a commercial venture which is attended with a great deal of risk, and in.a great many cases* the ordinary shareholders have been kept for a long time without any return for their capital at all. The'notion that you can reduce fare and-rates and shorten hours of- labor and raise the wages of persons employed without paying for the capital value of the undertaking, by a very small number of years' purchase, is to me an illusory notion. Ido not think it will work out in practice. Ido not wish to prejudice the question. It is a matter for experts and those conversant with railway finance, hut undoubtedly it is a very serious question. I should like to have, and shall take the opportunity of having, the representatives of the railways here, and put to them some of these considerations. Then, if you like, you shall have the opportunity of a rejoinder, and we may possibly clear away some misconceptions, and possibly arrive at; a knowledge of some facts which you have not been able to explain here to-day, and particularly as to how, where the experiment of the State working the railways have been tried and is being tried, as in Germany and to some extent in France, that experiment works out, first, as regards the persons employed -by the railway companies with regard to wages and hours—and there I quite agree you must have regard to the whole position; and also as regards the customers, be they passengers or freighters, in fares and rates. Until we have the materials for a comparison of that kind and they have been carefully sifted and scrutinised, we cannot dogmatically pronounce which of the two systems is better.