The Railways Want More Money!
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Swollen Traffics and Reduced Services Responsible for Present Huge Profit Which May Reflect Seriously upon Post-war Conditions and Encourage Control of Competitive Means For Transport
FOR some time past there has been evidence of action being taken to bring about a revision of the 1941 Agreement between the Government and the railways. In this connection it is understood that the companies have transmitted to the 'al.0 W.T. a request from the stockholders following resolutions passed at this year's meeting. Financial circles give strong support to the plea for more generous treatment and an examination of the position appears to justify the case for the claimants. During the past three years the revenue a the railways (including the lesgelion Passenger Transport Board). has been limited to £41,000,000 per annum. In the same period the Government received £129,000,000 as its share of the revenue pool. This reveals keen judgment and far-sighted policy so far as the Government is concerned, inasmuch as a rich source of income has been provided for the National Exchequer. Undoubtedly the railway companies, with the experience of falling revenue in the years preceding the war, were eager to grasp the offer of a guaranteed revenue. . Bearing the foregoing facts in mind, the stockholders are requesting that the Agreement should be revised, so as to provide the railways with thestandard revenue of _ £58, 000,000 .
This demand should' be considered in conjunction with the past, present and future position of the railways. It must be remembered that railway traffies during the war period have grown to abnormal proportions which exceed all "previous conceptions of railway carrying capacity. For example, in comparing the year 1943 with pre-war days it is revealed that main-line passenger. traffic„ excluding seaSon ticketS, rose by 20 per cent. During the same period the average distance of journeys increased by SO per cent., and passenger miles by 60 per cent., whilst freight-ton mileage rose by amounts ranging from 13 per cent, for coal to 86 per cent, for merchandize. Notwithstanding. these gains fewer train S are being run on the passenger services,. consequently overcrowding and loss of time are frequently 'experienced by the travelling public. It is obvious that the swollen traffics and reduced services are responsible for the increase in the revenue, of which the Government takes so large a share.
Increased Railway Charges Probable
These facts, it will" be appreciated, have a definite bearing on the future. Since the outbreak of war there have been substantial increases in wages., the price of coal and other operating costs. Charges. hewever, have risen by, approximately, only 16i per cent. In contrast, the war-time rise in both retail prices and the general level of wage rates is about 40 per cent. It is estimated by competent authorities that the post-war production will be in the neighbourhood of 15 per cent. over the pre-war level. In such event the post-war volume of railway traffics will be affected accordingly and may reach 10 to 15 per cent. above the 1938 level. The result, obviously, will be a drop in the gross revenue of the railways. It may be assumed that steps will be taken to bridge this gap, and the most likely coerse to be adopted is that of increasing railway charges. Indeed this step might almost be regarded as a probability and the remedy, be found along these lines. Whatever attempts may be made to deal with the position, it is evident that control of road trausport•will be maintained after the war and may even become permanent.
In the days to come the war-time cry concerning the shortage of rubber and fuel will have lost its meaning and, therefore, can then no longer be employed as an excuse for the restriction of road transport. The only means by which the railway revenue can be secured will be by the continued control of traffics. Any movement which may be made to increase freight charges, doubtless, will
4ve a repercussion in respect of the traders and manufacturers who have submitted to a system which would not be tolerated in peace-time. Such a surrender was made possible only through the pressing needs and war demands. So when the wheels of industry revert to normal production it is unlikely that the traders will accept a transport system specially designed and operated for war-time conditions, Doubtless they would resent being compelled by Regaletier( to send their goods by rail at what. might be greatly increased charges. When the field of competition -is reopened in the home as well as in The foreign markets, speedy, efficient and cheap transport will be a most essential factor in the transport world.
What, then, is to be the yardstick? Is railway revenue to reign predominant over all other considerations, with the railway complex widening and deepening, Or will freedom be restored so at to enable traderS b:i serectthe form of transport" best suited ter their individual needs? Surely the minimum required is freedom of Choice and permission for all forms of transport to operate freely. If trade and industry are to have forced upon them a transport system which creates bottlenecks in production, causes delays in both inward and outward deliveries and generally impedes the wheels of progress, then many of the reconstruction projects nevi envisaged will be wrecked at the start.
Road Transport Must Keep Fully Alert
A further point which must be taken into account is the effect that' increased railway charges will have upon the cost of living. It may be assumed that the high level of wages and high prices now obtaining will .show a steady decline after" thewar, although the purchasing power of the pound obviously must be less than it was before the war. The future of the railways, therefore, is very closely related to the social and economic life of the community. For that reason it becomes of thehighest importance and significance. It is to be hoped that the representatives of the road-transport industry will watch the: position racist carefully and be fully alert when the plans regarding the future of the railways are made known.
Reverting to the request of the stockholders. The annual revenue of £43,000O00 yields 3.7 per cent. on their capital . [Actually on the nominal value of their stock, which is much higher than the market value.--En.] and naturally they submit that a higher return is overdue, having regard to the abnormal earnings of the railways. Such a claim is neither unreasonable nor unjust. There is, however, no justification in a policy which has impoverished ond form of transport to enrich another: There have been repeated requests for a Government inquiry into the whole of the finances of the railway 'companies and. for an examination, in particular, of the question of over-capitalization. It is asserted in many quarters that the railways are overcapitalized and that a reduction should be enforced. In such an event a higher return for the -stockholders weuld be automatic and would eliminate' any question of the restriction of road transport Tor the purpose of swelling the railway revenue.
There is one aspect regarding the future of the railways. in relation to road transport which has not been sufficiently ventilated. It is the question of road-transport concerns Which are either owned or controlled by the railway companies and have representatives upon the legislative councils or representative bodies of the industry. There is strong feeling concerning this matter, and it is claimed that the practice is not desirable, as it enables the railways to obtain early knowledge of much inside information, It may be that the pressure which is being applied by them' for closer working between road and rail is the outcome.