General Outlook.

“Efficient transportation is so closely allied to the general welfare of the public that it may be taken as an axiom that it must be organised and carried out on scientifically co-ordinated lines. For close on 100 years the leading means of transportation has been the railway; its growth has been tremendous and for land travel it gradually supplanted all other means. The advent of the internal combustion engine and its use in motor vehicles, has of late years, brought a very strong competitor into the field, and to-day all railways throughout the world are feeling the pressure from the competition of the motor bus and, in a lesser degree, from the motor lorry. As in all new departures in methods it will take some little time to place where the line of demarcation lies between the motor bus and the railway carriage. Where a motor bus enjoys the use of a well surfaced road built and maintained at the expense of the general public without paying an adequate share of the necessary costs, it naturally is able to offer attractions in the way of service and fares not open to its competitors. This, however, is a passing phase; countries throughout the world are investigating the subject with the object of fixing the taxation on a satisfactory basis. With this fixed, and proper costing systems in use to enable the cost of the services to be properly allocated, it will no doubt be found that the motor bus has a limited field in which it can outclass its competitor in the railway ……..

“It must be recognised that both forms of transportation are indispensable and it will be a gain to all when it is recognised where the field of the motor bus begins and ends. The right to carry passengers entails corresponding obligations to the public, and in undertaking the transport of passengers one of the most important obligations is that of providing and maintaining a regular and reliable service. At present many motor bus services, while doing harm to the railways, are being run at a loss. On the other hand when it is clear that a certain zone can be more cheaply operated by motor buses than railways, then the opportunity of taking off the train services should be seized by the Railway Administration with the consequent saving in operating costs. Where the traffic is insufficient for both services people cannot expect full operation at a loss. It must also be clearly recognised that motor bus services have their limitations. For bulk transportation such as is obtained on suburban services in the mornings and evenings the railway is likely to easily hold its own. For the in-between services it may pay the railways better to replace the steam railroad services with buses on the road, both on account of the cheaper operating costs and of the greater mobility of the buses. Experiments in this direction are already being made……..

“In Great Britain, the United States, Australia and other countries railway administrators are fully alive to the fact that it is necessary to co-ordinate the motor services with the railway services rather than to enter into a war of systems which would only be disastrous to both. As previously stated the governing factor in gaining the traffic will be the comparative cost per ton mile of the competing services. Without going into the matter in meticulous detail these costs must include: interest on the capital cost; provision for depreciation and renewals, and the operating cost. The charges per ton mile will then be fixed at a rate sufficient to bring in a revenue to cover all charges …… the difference between profit and loss on a railway is in the obtaining of the last small percentage of revenue which must be coaxed and encouraged and which is easily affected by the lack of conveniences and facilities …… Engineers are more or less familiar with the great advantages of a good costing system in which all work carried out is reduced to, and recorded under, unit costs. The same method is applied to the general working of our railways, and accounts are now kept under a large series of job numbers to enable costs to be analysed…….. The configuration of the country is such that much of it consists of heavy grades and sharp curves……… On good and well maintained straight tracks a speed of 55 miles per hour can be run with perfect comfort, and on curves a speed of eleven times the square root of the radius in chains where the curve is sufficiently canted will give very smooth running.

“The function of a railway is:—

1.	To build up the wealth of the community which it serves;
2.	To pay its way as a business enterprise.

“Generally it may be said that if the construction of a railway is financially justified it must largely benefit the community as a whole. On the other hand there may be sufficient justification in the benefit derived by the community to warrant its construction although the line does not pay its way. In such a case the loss made is a justifiable charge against the community benefited. Logically, if a railway is to be run as a business enterprise, provision should be made for such losses to be recouped to the railway accounts.

“Efficiency must be the criterion, and if the system is run as a business proposition what I might term the mechanical efficiency of the machine as a whole will be enormously greater than if run on the basis of providing free transport. In the latter case all incentive to good work is lost, little progress will be made, and the service will be run at excessive cost. Other things being equal the true measure of efficiency is the balance sheet.”