COMPANY MEETING SOUTHERN RAILWAY CO.

MR. R, HOLLAND-MARTIN'S ADDRESS

Tim annual general meeting of the Southern Railway Company was held on Thursday, February 24th, at Southern House, Cannon Street, E.C. Mr. Robert Holland-Martin, C.B. (the Chairman), presided.

The Chairman, in moving the adoption of the report and accounts, said : The total gross receipts were up by £1,313,000, of which the increases in purely railway receipts were as follows : £830,000 passenger traffic, £11,000 goods traffic, and £16,000 miscellaneous--i.e., an increase of £857,000 or just over 4 per cent., making the total gross receipts from railway working £22,113,000. Now as to how this has been achieved. We have carried in the past year more than r,000,000 passengers a day. The total number of passenger journeys, including season-ticket holders' journeys, in 1937 was 378,714,000, an increase over 1936 of 18,452,000 (5.12 per cent.). Of this addition about 15i millions (5.6 per cent), including 6,000,000 season-ticket holders' journeys, was due to journeys made in the electrified area.

You will remember that last year we were pleased with our increase of I i,000,000 passengers ; we have now got this further great increase of 18,000,000 passengers over that figure, despite our lacking the extra day leap-year gave us in 1936, and we shall be disappointed if we do not see some further growth this year.

CONTINENTAL TRAFFIC.

Now I am going to tell you a little about our Continental traffic, and I have some cheering figures for you. Mainly owing to the fall of the French franc, there has been a large traffic increase in our Continental services, particularly those to France, which you will realise are more advantageous to us than the Belgian route, on which we do not own the steamers. We have had an outstanding year of Continental traffic. Of course, the Coronation brought many visitors from the Continent, but even allowing for this, I think we can be more than satisfied with our figures. I shall talk about the details of Continental traffic later, but the number of passengers carried by the railway in connexion with this traffic (excluding Channel Islands traffic) increased by 468,000, bringing in nearly £248,000 more under the head of railway working than last year.

Under the heading " Goods Train Traffic " there has been a small improvement of £12,000. We are £68,000 up on general

merchandise, again largely due to Continental traffic, also to our home traffics in cement, iron, steel, paper, &c., but we are £57,000 down on minerals and merchandise, a heading that covers mainly bricks, sand, gravel, &c., and the decrease is due to a slowing down

in the building trade in our area ; £7,000 up on coal and coke, due to increased through traffic from other railways (the total increase

would have been much greater but for a big falling off of Kent coal traffic, due to various internal causes—I am glad to say, however, that there seems now to be an-improvement here) ; £6,000 down on livestock, due almost entirely to the severe outbreaks of foot- and-mouth disease in the southern counties served by your line.

The net receipts from railway working are £88,000 more than they were last year ; the remaining net receipts after deducting miscellaneous charges have gone up by £238,000, the principal rises being steamboats, £236,000 ,000 ; docks, harbours and wharves, £22,000. This gives us a total increase in net revenue of £326,000, i.e., from k6,226,000 to £6,552,00o.

Some critics have commented on the wide difference between the actual increase in our gross receipts for the year and the increase

for 52 weeks as published in the weekly traffic returns. These returns gave an estimated increase of £731,000, whereas the actual rise in our gross receipts from all businesses for the year was kr,313,000- As some misapprehension still appears to exist on this subject let me repeat that the weekly traffic figures relate to passenger and

goods train receipts on the railway only. They do not include receipts from cloak rooms, platform tickets, and so on, and, what is more important in the case of the Southern Railway, they do not

relate to receipts from steamboats, docks, hotels and other businesses. Our railway train receipts were up by £841,00o compared with an estimate of £731,000 for 52 weeks as published in the weekly return —quite a cloie estimate when you remember that our total traffic receipts are £22,000,000. Our gross receipts from our ancillary businesses (mainly derived from steamboats) gave us an increase of £472,00o, and this, of course, was not reflected in the weekly railway traffic figures. In regard to air transport the loss was £5,000, practically the same as the previous year. Our policy now is to curtail our operations in connexion with the air as we feel that having been interested since 1934, we have obtained sufficient experience for the time lacing for us to use when needed, and we do not want to keep on spending any appreciable amount of money over this form of trans- port, though we do not consider the money spent by any means lost.

Phis brings me to the proposed Lullingstone Aerodrome ; in of the rapid development of building in the neighbourhood London, and in the realisation that this development would

:a render impossible the establishment of a new international 'on within the Metropolitan area, we purchased an option on a at Lullingstone, which we were advised by experts offered PL -uliar advantages for aerodrome purposes, such as immunity from fog, and, most important to us, accessibility from our railway. Though we possess the necessary powers to do so, we do not feel that it is for us as a railway to develop this site as an aerodrome. We have, nevertheless, ascertained the cost of levelling the ground and making the necessary rail connexions to an underground airport station in the centre of the aerodrome. We are of opinion that an airport of international importance so close to the Capital of the Empire is not a matter for private enterprise, but that the cost of providing it should be met, like the roads, in part by the State and in part by county authorities.

Net miscellaneous receipts, from which we draw no less than

£I,237,000, were down by £6,000. Under this heading rents from houses and land went up by £16,000, a very satisfactory result upon which our estate agent must be congratulated. Rents from hotels were up by £4,0oo, and other rents up by £ t2,0oo. General interest and interest from investments in other undertakings, though it included an increased revenue from Hay's Wharf Cartage Company and our 'bus companies, were down by £23,000.

RESERVE Ftnens.

You will have noticed in the report that we have transferred £400,000 from the Improvements and Contingency Fund to the Rolling Stock Renewal Fund, which needed strengthening, and, further, because the essence of good finance is to build up strong reserve funds, we have, in view of the rise in costs, made an extra provision of to per cent. in the allocations we have made to all our principal reserve funds.

Then instead of continuing to carry our fire insurance ourselves we have placed the major portion elsewhere. We have therefore transferred £5oo,000 from the fire insurance fund to the improve- ments and contingency fund, leaving £140,000 in the fire insurance fund to cover the risks still carried by ourselves.

Our reserves are therefore in a healthy state to meet the extra cost of materials, and I hope that this fact will have its influence on future dividends on our Deferred stock, which it is our desire to maintain at a steady level with, let us hope, occasional movemet ts in one direction only—upwards.

After making these provisions we are left with the increased revenue of £326,000, and are able to recommend to you, after pay- ment in full on our other stocks, not the dividend of ¢ per cent. with which we resumed payments on the Deferred stock last year, but a dividend of 14 per cent., a decided improvement which I hope you will regard as satisfactory. And having paid that we place the balance of £6,000 to our carry-forward.

Having dealt with the accounts, I will now give you some more information on the various events that have had a special incidence on the working of the railway during the past year.

In July, 1937, the three railway unions submitted to the Railway Staff National Tribunal claims for reduced hours and increased rates of pay, including the restoration of the remaining II per cent. deduction and the standard rate of pay for night duty and Sunday duty, which had been reduced in April, 1931. The Tribunal restored the standard rates, and also granted some wage increases to the lower-paid employees, a decision which was accepted by the railway companies and the trades unions.

. The additional annual cost to this railway of these and other concessions granted last year is £7oo,000, an average of 4s. a week to each employee, but you will, of course, realise that the full incidence of this has not fallen on the year under review.

I should like to say a few words about the 5 per cent. increase in rates and charges. I can assure our passengers and traders., who found this increase irksome when it was first imposed, that we waited as long as possible before we applied to the Railway Rates Tribunal. But we could not ignore, in the interest of our shareholders, the incidence of the increased wages, the restoration of the cuts, and also higher cost of materials—so, in common with the other companies, we felt that it was absolutely necessary to ask for the 5 per cent. increase. This is not very great on a small fare such as London to Aldershot third-class monthly return, which has been increased from 6s. to 6s. 4d., or the rate on a ton of vegetables from Nine Elms to Aldershot which has been increased from 7s. 3d. to 7s. 7d.

Now as to our electrification programme. You will see from the

report that full electric services on the direct Portsmouth line were begun in July last, and that similar services will start next July to Portsmouth Harbour via Chichester, serving Bognor and Little- hampton ; an electric service will also operate between Brighton and Portsmouth. Other electric schemes in hand include the railway from Virginia Water to Reading via Ascot, from Ascot to Ash Vale Junction, from Frimley to Pirbright Junction, and from Aldershot North Junction to Guildford. Work has also been started on the elec- trification of the lines from Gravesend Central to Maidstone West, Swanky Junction to Gillingham, Strood to Rochester and Otford to Maidstone East.

WATERLOO AND CITY RAILWAY.

You probably read in the Press a few weeks ago severe criticism of the Waterloo and City Railway. We have long been conscious of the shortcomings of this important link in our system and readily met a deputation of regular travellers on this line at Waterloo. We were glad to be able to show them that delay in improvements had not been due to lack of sympathy with their real grievances or to c issedness on our part, for there were very serious difficulties to be contended with and to relieve their minds that we were at last in a position to do something. It is our constant endeavour to make the Southern Railway as comfortable and efficient as any line in the world, but before initiating any improvement we consider most carefully how the capital cost of that improvement can be made productive. In such a way we hope to be able to present year by year a story of physical and financial progress based on conservative finance, and, having set such a course, we look forward with confidence to the future. (Applause.) The reports and accounts were unanimously adopted.