RAILWAY FINANCE.

Taranaki Daily News, 28 July 1921, Page 5

RAILWAY FINANCE.

ECONOMIES IN CONTEMPLATION. TRAINS RUN AT A LOSS. The fact that expenditure is overtakI ing revenue in the railway service is receiving the attention of departmental officers at the present time, and it is understood that important recommendations are to be placed before the Minister of Railways for the consideration of Cabinet. These recommendations axe expected to involve economies iu the operation of the railways, by the reduction of unprofitable services. The department. cannot cut out all the trains that are being run at a loss, but savings are believed to be possible without reducing the facilities for travel and transport below a reasonable level. The railway returns for April and May, already published, showed that the revenue per mile of railway on the North Island main lines and branches for the first eight weeks of the financial year had been £3793, and the expenditure £3396. The figures for the corresponding period of 1920 were £3186 and £2166. The revenue of the South Island main lines and branches per mile of railway for' the eight weeks was £1856, and the expenditure was £1949, as against £1745 and £1315 for the corresponding period of 1920. The percentage of expenditure to revenue in the North Island w’as 94.47, and in the South Island 101.G3. These figures, which are not expected to be improved for several months, show that the South Island lines are actually being run at a loss, while t’he returns for the whole Dominion show a net return on capital of not much more than 1 per cent. The view taken by Ministers is that having regard to the general financial situation, a serious effort must be made to prevent the railways placing an additional strain on the Consolidated Fund. Increased wages, expensive coal, and dearer materials of all kinds have been factors in reducing the Railway Department’s margin of revenue over expenditure. Railway rates and fares have been increased substantially since 1914, and it is understood that further increases are not favored by the railway authorities. Official information concerning the intentions of the department and th© Government is not yet 1 available