RAILWAYS AND PUBLIC WORKS.

Taranaki Daily News, 26 September 1921, Page 8

RAILWAYS AND PUBLIC WORKS.

WANTED BUSINESS CONTROL. “LOOK BEFORE YOU LEAP.” We have chosen in this Dominion to enter into a good deal of what some call “State Socialism,’’ others “State Capitalism” and others still (with a cynical turn) "Government vote catching enterprise.” Leaving it to our readers to choose their own definition we would yet affirm that up till now there has been more State politics than National business. With a Reform Government in power there ought to be some real changes from the bad methods of the past. A “getting down to business’ ’is what the country requires, and the Government that will do it properly is ‘-Reform,” no matter what name is given to it. The recently enforced “cuts” in the train services has brought the question of railway finance forcibly to all of us. There is no doubt that the high operaling costs are rather seriously affecting the payirig capacity of our Government railways. During the year 1916 to 1920, the railways were being (jam d on more favorable conditions than at any previous period in their history, the average yearly return on the capital invested during the live year period . being £4 15s 2d per cent. The entirely favorable conditions could not be expected to continue. Last yea-r the revenue reached the record total of £6,908.531, which was £1,156,044 more than in 1920. But the expenditure, which rose by £1,531.534, absorbed the whole of the increase, and £375.490 besides. The department attributes the increase in expenditure to the following causes: (1) The. re-establishment of the prewar train services. (2) Increased cost of operating duo to advance in wages and working conditions of stall'. (3) Increased cost of material, particularly coal. In 19'14 the running costs per train mile were 4s 2d. To-day they arc more than T2s. The re-establishment of the pre-war services increased the trainmileage by 1,894.784 (approximately 1,000,000 miles in the North Island). The operating costs increased 12.}d per train mile in the North Island and 9d in the South, but the receipts showed a decline of 31d in the North Island and Is H'.'.d in rhe South. The big drop in tin* case of the South Island necessarily reduced the margin between receipts and expenditure, the latter absorbing 90* per cent, of the revenue. Roughly speaking. £37,000.000 has been expended on the railways on capital account. Taking per cent as cost of capital investment that involves an annual charge I of £1.487.000. which must bo met before there can be any talk of "profit” on our railwa.y system. As the excess : of revenue over expenditure last year 1 only amounted to £1.271,001 it follows, that there was an actual loss on the i working railways last year of £215,559. This year’s results have shown con- ; siderablv worse than anything previous, and no ’doubt that is what has impelled the Government to take action. Ye learn that during the sixteen weeks till .July 23. the expenditure has absorbed 09,77 per cent, of the receipts, leaving ■ only a balance of £4,901 to meet the interest charges. The revenue on all lines amounted to £2, 1 Ei4,742 and the expenditure £2,119.841. South Maud showed an excess of oxnenditure oyer. 1 receipts of £6075. liui-.- are the prin-j

eipal causes: Coal is costing the Department. £2 4s per ton more than during the last two years. The wages bill last year meant an additional increased expenditure of £910,685, and an increase of Is per d \v, with the 44-hour week, is given to the tradesmen employed by the Department, from March 6, 1921. For the four weeks ended July 23, the expenditure was greater than the revenue disclosing an actual loss in working of £49,125. All reasonable people will recognise that such a state of affairs ought not to continue. The Government has done right in cutting out some of the dead or nonpaying running. There are lines which never were expected to pay from the time they were first laid down. That is another story, which wo purpose dealing with in another article. The fact is that, our railway finance is in a parlous state, and the Government deserves credit for facing the actual position instead of simply “putting off the evil day.” Short running on several lines must be enforced unless ? some means are found to reduce the general expenditure in the way of high running costs. The question of financing very slack sections should be cwi>« aidered from the standpoint of how far they serve the needs of development, but they ought not to be left merely as constant burdens upon the financing of our railway system as a whole. (Contributed by the N.Z.