The New Zealand Railways Magazine, Volume 1, Issue 7 (December 15, 1926)
With half the current financial year already past, figures bearing on the results of operations up to this stage furnish material for a general review, on broad lines, of the present position in regard to traffic, revenue, and expenditure. They also supply a measure whereby the approximate final results of the year's working may be gauged.
Up to 16th October, 1926, the number of passengers carried was considerably less than for the corresponding period last year. This decrease (occurring as it does in suburban traffic, where motor buses, on account of their greater mobility, are well placed for competing) may be regarded as part of the definite loss which all railway systems have suffered since the development of an alternative method of transit. Whilst recognising the convenience to the public which such services afford, the change increases the problem of making the railways pay, for it must not be forgotten that much of the capital expenditure upon railways is sunk in permanent-way, rolling stock and equipment specially designed for suburban traffic.
The diversion of a considerable portion of this traffic to the roads therefore makes some of our capital unproductive; whilst such a course as cutting the losses and discontinuing the services cannot be resorted to, for faith must be kept with the workers who have been induced to settle in suburban areas because of the low railway charges for conveying them to and from their work in the cities. On traffic of this kind, profit can only be made on a big turnover. When, therefore, the dependents of these workers—dependents whose occasional trips to town helped to balance the suburban traffic account—decided to desert the railway for a service more convenient to their purposes, the loss became definitely pronounced. The decrease of £41,000 in passenger revenue may be attributed to this cause.
The course which might have been pursued—and which is now being experimented with—of putting our own buses on the road, was not one which economic considerations would, in ordinary circumstances dictate, for, obviously, even if we collected all the passengers offering, seeing that we already have a service capable of dealing with the traffic of the suburbs, the net return after meeting the cost entailed in buying and working bus services could not make the double service equivalently remunerative.
One point worthy of note is that during the last two months the rate of decrease in passengers carried has slackened somewhat. This is a hopeful sign. Season tickets, which fell back early in the year have since held their position. Trip bearer tickets have maintained their popularity. In livestock a gratifying increase on a steadily ascending scale has been recorded each period this year. Good service and keenness on the part of the staff have contributed to this result. Timber has dropped, but the tonnage of other goods shows a healthy tendency to grow, being already over one hundred thousand tons greater than last year's total for a similar period.
With all revenue accounted for, the first half of this year shows a net operating gain of £50,000 compared with the similar term last year. This is, however, more than counterbalanced by the increase in interest charges, an increase which amounts to a sum greater by one hundred and nine thousand pounds than for the corresponding period last year, leaving the accounts “down” £59,000 in the present comparison.
The heavy increase in interest is chiefly due to the capital account being increased by the taking over of newly constructed lines from the Public Works Department—lines which cannot yet pay an operating return at all equivalent to the interest charges involved.
Recent interruptions to traffic through heavy floods in various parts of both Islands, while tending to reduce traffic, will still further add to the expenses of this year's work, whilst we have no Exhibition this year to add to the prosperity of our summer season.
In view of this position a policy of economy must be followed in administration, whilst every effort will require to be made to stimulate traffic during the remainder of the year. The Board would once more remind members that their individual interests are bound up in the financial results of the year's working, and that their united efforts are necessary to ensure that every opportunity for gaining additional passengers, parcels or goods traffic will be availed of. At the same time the Board feels that it must, in the course of management, follow those directions along which the best promise is given for improving the financial position of the service.page 5
Experimenting with rail cars, feeder services, combined rail and motor bookings, motor services, etc., is being carried out as necessary in an endeavour to protect the business we now possess and build up new traffic. The outlook, however, is obscure and demands the closest attention by all concerned to make the best of the position.
By the time this message is circulated Christmas will be upon us, and the Board feels that it is appropriate to close with an expression of its gratitude for the fine sense of loyalty existing throughout the Service. It extends, with the season's greeting, its best wishes for the well-being and prosperity of all members, as well as of the people of New Zealand upon whose support and goodwill the success of the whole undertaking depends.
Happiness is a perfume you cannot pour on others without getting a few drops on yourself.