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Wairarapa Times-Age, 4 October 1938, Page 7

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-IN TH i MR SUL C REPLY ( “In the ordim have never paid, the Government . passenger charges transferred £365,00t dated Fund.” StatedRailways, the Hon. i. when replying in the last night to criticism of ti. accounts by the Leader of the. al Party, the Hon. Adam Hamiir “In every other year,” added Minister, “under all forms of Min terial and managerial control, the rail.. ways have never been made to pay.” For the six years prior to the Labour Government coming into office, the railways had shown a total deficit of £8,000,000. Dealing with Mr Hamilton’s criticism, the Minister said that to quote the results to July, and assume that they were representative of the whole year’s operations, was definitely wrong. The net revenue of the railways was mostly earned in the busy summer months. For instance, last yearfor the three months of May, June and July, the net revenue earned was £38,000, while for the single month of February the amount was £152,000. The net revenue of the whole railway undertaking at the end of July last year was £171,000, while for the year it was £632,000. This year at the end of July it was £44,000, while the estimated net revenue for the year was £505,000. The railways certainly had earned a smaller net revenue last year than in the previous year, and were earning less this year, but this was due entirely to the fact that no increases had been made in tariff charges, notwithstanding big increases in operating expenditure.

“The concessions to the staff over - the last two complete financial years increased the working expenses by £l,300,000,” the Minister went on to observe. “In addition, substantial increases occurred in the cost of coal and other commodities. In a recent editorial upon the New Zealand Railways, a Dunedin paper, after reviewing the 1938 Railway Statement, makes the following comment: —‘So far as the internal management of the railways is concerned, the guiding principles are to give as quick and as efficient a service as is possible. The public are treated as customers and receive courtesy and consideration in all branches of the service.’ I appreciate this tribute and I am sure the whole of the railway staff will' appreciate it, as it is a frank and genuine acknowledgment, truly representative of the public attitude towards the efforts of railwaymen on behalf of the people of the Dominion. OVERSEAS COMPARISONS.

“As has already been pointed out in the Railways Statement increases in expenditure for the year ended March 31, 1938, amounted to £442,196 on account of the 40 hour week and other salary and wage concessions granted during the year, and £672,400 for the cost of handling the substantially increased business and for meeting the increased price of coal, stores and other materials, as well as providing improved stock-loading, yard-lighting and other facilities at stations. A decrease in net revenue was foreshadowed, the budgetary estimate providing for a net revenue of £602,302 being exceeded by £30,495, providing a total net revenue of £632,797, notwithstanding the absorbtion of £68,453 for amendments to the wages schedule operating from September 1, 1937, which had not been decided upon when the estimates were prepared. “Upon turning to the latest records of leading railways overseas, I find that the directors of the London, Midland and Scottish Railways, the greatest railway organisation-in the world, as a result of the first half-year’s work in 1938, decided; to make no interim dividend either on their 4 per cent preference stock (1923) or on their ordinary stock, receipts having declined by £959,000 and expenditure increased by £437,000--a net decrease of £1,496,000, or a fall of over 10 per cent compared with the 1937 figures. Nor can the Great Western Railway pay interest on its ordinary stock, receipts in the first six months of this year having fallen by £306,000 and expenditure increased by £522,000, a fall of £828,000 in net revenue on the half year. This impresses me that the New Zealand railways, which, in addition to the indirect dividend returned to the community as a whole in many ways, paid a direct contribution of 1.15 per cent on the whole of the capital invested in'the year ended March 31, 1938, are reasonably holding their own in any fair comparison with railways overseas. The New South Wales railways for the quarter ended March 31, 1938, showed an increase expenditure of £407,163 compared with an increased revenue of £390,971. In each instance given, and in the working of railways generally in all parts of the world, the rising costs of working, both for wages and materials, have adversely affected the net financial return.” EARNINGS & REDUCTIONS. “Our predecessors,” added the Minister, “were able to make the railways pay on an accountancy basis. But on actual earnings under the National Government nearly £8 millions was lost on the railways in the six years before we came into office. During the four years of Railways Board control the nominal net revenue from the railways was £3,861,000. In the same period, however, the salaries and wages of employees were reduced by £2,175.000 and the nominal ordinary provision for maintenance and efficiency were cut by £1.786,000. a total of £3,961,000. Over that period they said they made a net revenue of £3,861,000, so that their only net revenue amounted to what they took out of the pockets of the workers and by starving the rolling stock.” ' The National Party now said they would make the railways nay. But the Question was, how were they going to do it? Labour had not increased freight charges or passenger fares or reduced the salaries of the employees. The railways were the only trading concern in New Zealand that had not increased its charges to the users. The Government was out to render the best nossible service to the users of the lines.