22 MARCH 1935, Page 53


The Raikvay utlook

AT first sight the outlook for Home Railways from the shareholders' point of view is far from rosy. Already, for the first ten weeks of the present year, the receipts of the four trunk railways show a decrease of over 1250;000, whereas for the corresponding ten weeks of last year there was an increase of no less than £1,700,000. Not Only, so, but during the current year there is every probability of expenditure increasing by reason of the partial restoration of the cuts in wages, an increase which -seems likely to be well over £1,000,000. Nor must it be forgotten that although during the last two years there has been a great improvement in net earnings of English railways the fact remains that over £200,000-,000 of railway capital is still receiving nothing in the shape of interest or dividends.


Yet in spite of these adverse points I am inclined to take' a somewhat more hopeful view of the outlook for railway shareholders. In the first place it must be remembered that while during recent years the trade depression, and especially the depression in international trade, has prevented the full recovery which -should have taken place in railway earnings; the wriod of depression has been accompanied not only by greater eecn3mies in expenditure, but, there is every reason to believe, by greater efficiency also in working and what may be equally important, by a changed view of the Management with regard to • the necessity for re- popularizing the railways with the travelling public. And while by no means overlooking the increase which has to be faced this year in higher amounts paid for wages, I am -inclined to lay equal stress upon the fact that at long last the management and the workers have been able. .-to agree upon the setting up of a new machinery for the .settlement of disputes. For past experience has shown that railway shareholders have nothing so much to apprehend as a revival of those. disputes leading . to strikes which have inflicted not only upon_ the railways, but also upon industries generally throughout the country, incalculable damage.

Then again it must be remembered that .greater freedom is now enjoyed by the railroads in the matter of fiking, rates, while the possible effects upon road transport of the Road and. Rail Traffic Act should : not be overlOoked. And most important of all, perhaps, is the result which should accrue' to the railways . if the recent judgement given in favour of the Southern Railway in the matter of rating assessments is not. challenged in the -Appeal Courts, and at present no such challenge appears to have been offered. This decision means relief in the assessments of the four trunk lines of not far short of £10,000,000, though, of course, the greater part 4_4 has to be charged to the Freight Rebate Fund. All the same the amount which conceivably will be retained by the railways promises to offset the increased cost Of wages, whiter given-an- iniproveineat- in traderthe greater 'efficiency.' of the railways should- mean that a larger . part of the increase iii gross earnings _ -be secured as net revenue than was the...ease some years ago. I am afraid it is still a far cry to a restoration of the old dividends on the Ordinary Stocks of the heavy _lines, but on the other hand many of the prior charge stocks of railway companies seem to show greater promise than for some time past.