Reduction in Expenditure.

Without going into details, Mr. Sterling said he was pleased to be able to indicate that, notwithstanding a drop in revenue for the year of £1,070,000, the Department had actually been able to achieve an increase in net revenue. That, of course, was the result of the efforts which had been made to reduce expenditure, the figures for the year showing, in comparison with those of the previous year, that expenditure had been reduced by approximately £1,200,000. Compared with 1930, expenditure showed a decrease of £1,687,000.

“This result,” Mr. Sterling continued, “has been attained without reducing the service below what would be regarded as a reasonable standard from the customer's standpoint. The Board realises, of course, that there is a point below which expenditure cannot be reduced without a disproportionate sacrifice of the standard of the service. This requires a very nice balancing of the factors involved in the consideration of this question. The Board is steadily pursuing the policy of economy, but it will be realised, in face of what has already been achieved in the reduction of expenditure, that further reductions become increasingly difficult. Especially in such an institution as the railways, a point must be reached where service must be regarded as at a minimum, so that further reductions in expenditure are not really possible as a business proposition. For instance, between main centres express train services have to be maintained, and while revenue may drop to half, the expenditure is practically stationary as regards that service. So in relation to other phases of the Department's activities, such as goods service, refreshment rooms, etc. The Department has at all times to be in a position to meet the fluctuations that take place, and it is the peak of fluctuations that, generally speaking, determine the strength of the organisation that has to be maintained in order to give a service that will be free from complaint.”