FINANCE AND INVESTMENT
(Continued from page 974) HOME RAIL ESTIMATES
With another month to run to complete the half-year it is already becoming apparent that the railways' gross takings will not differ materially by the end of June from the cor- responding totals of 1938. Week by week the figures are showing increases and there is now very little leeway to make up. If, as I think can safely be assumed, expenditure has been running below last year's level, the net revenue figures for the first half of 1939 will tell an encouraging story. Estimating net receipts is a notoriously tricky business, but as a rough guess I should expect the London, Midland and Scottish to show a rise for the half-year of about £300,000 ; Great Western, of £350,000 ; London and North Eastern, about £ 100,000 • and Southern, of £100,000, all of which would be distinctly cheering after the dismal start in the first quarter of the year.
What of the outlook? So far as actual gross receipts are concerned, I think the chances are in favour of their holding up well. Iron and steel, coal, shipbuilding and engineering look like enjoying really active conditions for a long time to come, which means good business for the three heavy lines, and Southern has the advantage of higher fares in the London area and, if politics keep quiet, a fair volume of Continental traffic. But even so one should be cautious in estimating the possible increase in gross receipts for the second half of the year over those of the second half of 1938. To assume that the current rate of increase of about £200,000 a week will be maintained would obviously be optimistic, since comparison will be made with a 1938 curve which was flattening out after a sharp fall in the early part of the year. Similarly, the really big savings in expenditure in 1938 were made after June, so that this year's expendi- ture figures will soon be comparing with figures which were themselves falling. Even after their recent rise, railway stocks are, in my view, worth holding for moderate improve- ment, but I feel that, from a speculative standpoint, the cream has now been skimmed off.
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