The gross earnings, expenditure, and net earnings per average mile open for the past ten years were as follow:

The tables indicate that while the gross earnings gradually improved up to 1902, the peculiar conditions of 1903 resulted in a considerable reduction; a substantial improvement is, however, observable in the return for the year just closed. It is evident that the strict economy exercised during the year ended 30th June, 1904, has borne good fruit. The revenue has improved, while the working expenses are lower. Under the present management the railways should, with fair seasons, not only pay working expenses, but also interest on the capital cost of the lines and equipment.

Coaching and Goods Traffic.

The following table shows the number of passengers carried on the lines of the state during the year 1881, and for each of the last ten years, with the receipts from coaching traffic and the average receipts per journey :

The number of passengers carried on the railways of Victoria reached its maximum in 1890, when no less than 58,951,796 persons made use of the lines. The reaction following on the banking crisis of 1893 unfavourably affected the traffic, and in 1895 the number of passengers fell to 40,210,733; a gradual improvement, however, has since been manifest in the returns. Victoria occupies the leading position among the states as regards the number of passengers carried, the latest figures being as follow:-New South Wales, 33,792,689; Victoria, 54,282,003; Queensland, 4,144,314; South Australia, including the Northern Territory, 9,751,065; Western Australia, 10,225,976; Tasmania, 814,483; and New Zealand, 8,306,383. The superiority of the Victorian figures results from the large number of passengers carried on the suburban railways, the Melbourne system effectively serving the population within a distance of 20 miles from the centre, and carrying upwards of 88 per cent. of the total passengers. The magnitude of the suburban traffic is evidenced by the fact that the average receipts per journey during the last year are shown to be 7·27d., as against 10.27d. in New South Wales; 28.68d. in Queensland; 9-12d. in South Australia, including Northern Territory; 10-85d. in Western Australia; 31.06d. in Tasmania; and 18.84d. in New Zealand.

The amount of goods and live stock tonnage in 1881, and for each of the ten years from 1895 to 1904, with the earnings therefrom, is shown in the following table :

The table indicates a gradual increase in the tonnage carried and earnings therefrom during the seven years preceding 1903. The considerable falling off in 1903 was due, as already pointed out, to the total failure of the harvest; but, in consequence of the favourable season in 1904, the tonnage and earnings are the highest for the decennial period. Particulars of the subdivision of the tonnage of goods and live stock into a general classification are not available, and no information is furnished that will admit of a comparison being made in order to determine how far the cost of carriage per mile has been reduced during the period under review.

QUEENSLAND.

The progress of railway construction in Queensland for the first ten years after the opening of the Ipswich to Grandchester line was somewhat slow, only 268 miles having been constructed. In the decade ending in 1885, more energy was displayed, and a further length of 1,167 miles was constructed, while during the quinquennial periods ending in 1890 and 1895, extensions of 712 and 250 miles were opened. The length of line open on 30th June, 1904, was 2,928, miles, and the amount expended thereon for construction and equipment was £20,887,585, or at the rate of £7,134 per mile. During the year ended 30th June, 1904, the length of line open for traffic was increased by the opening of the extensions from Nerang to Tweed Heads, Goomeri to Wondai, Esk to Toogoolawah, Redbank-Bundamba Loop, Gladstone to Rockhampton, Hughenden to Richmond, and Mareeba to Atherton.

The railways of the state may be grouped into three divisions, comprising six systems. The southern division extends from Brisbane to Wallangarra in a southerly direction, to Cunnamulla in a westerly direction, and to Rockhampton northerly along the coast, and has fifteen branch lines connected with it. The central division extends from Archer Park to Longreach, and has five branch lines connected with it. The northern division comprises the line from Mackay to Eton, Mirani and Pinnacle; the line from Townsville to Winton, with a branch to Ravenswood, and another to Richmond; the line from Cairns to Mareeba, with a branch to Atherton; and the line from Normanton to Croydon.

For many years the construction, maintenance, and control of the railways were carried out by a branch of the Public Works Office, and subsequently by a separate Ministerial Department with a Secretary responsible to Parliament and administering the details of the office in a manner similar to any other Crown Minister. The "Railways Act of 1888," however, while leaving the Minister in charge of the Department, vested the construction, management, and control of all Government railways in three Commissioners, of whom one was to be Chief Commissioner. The number was subsequently reduced to two, and later a single commissioner was appointed holding the authority formerly vested in the three. In undertaking railway construction the state is guided by other considerations than those which would direct the action of private investors, and is content, for a time at least, to recoup the expenditure in an indirect form. The disastrous result of the continued drought has operated against successful management during recent years, and in consequence of the fact that the rate of interest returned on capital expenditure during the past three years does not compare favourably with the previous years, a policy of stringent economy is to be pursued, and the rates and fares have been increased with the object of reducing the deficit.

Revenue and Working Expenses.

The net sum available to meet interest charges during the last decennial period is shown in the following table :

:

As the table shows there have been considerable fluctuations in the proportion of working expenses to gross earnings. The net earnings for the year ended 30th June, 1900, were 35-22 per cent. of the total earnings, as against 36.33 per cent. when the railways were placed under their present control. The return for 1900 was considerably lower than those of the preceding two years, and was due to the fact that the railways were compelled to carry very large numbers of starving stock and large quantities of fodder at unremunerative rates. There were also heavy disbursements to replace and increase the stock of locomotives, and to carry out works which, though improving the equipment of the railways and ensuring safe running, have not been of a reproductive character, while during the year substantial increases in pay were conceded to all classes of railway employees. For the year ended 30th June, 1901, the revenue from passenger traffic showed a substantial increase; the decrease in earnings shown in the preceding table was entirely due to the loss of live stock by drought and consequent stoppage of station improvements, and to the necessity of carrying starving stock and fodder at merely nominal rates. The net earnings for the year were thus reduced to 19.66 per cent. of the total earnings. A slight improvement was manifested in the year ended 30th June. 1902, the percentage gained being 28-18 of the total earnings, the increase in rates and fares being responsible for the advance. Working expenses were curtailed by a reduction in the train mileage, and by the exercise of stringent economy in administration, and with the return of favourable seasons it was hoped that more satisfactory results would be secured. The adversity of the season during the year ended the 30th June, 1903, however, was responsible for a heavy decline. Less wool and live stock were carried, while the

traffic in produce from the agricultural districts decreased by as much as 43 per cent. The returns for 1904, show an increase in the passenger traffic, and also in all classes of goods traffic, save that of minerals other than coal; while with the exception of general charges, which have been slightly increased, the working expenses under each heading show a reduction over those of the previous year.

An analysis of the working expenses of the Queensland railways for the ten years, 1895-1904, is given below. Taking the first year with the last it will be seen that there has been a substantial increase in the total cost, as well as in the rate per train mile and per mile of line open. In 1899 the expenditure per train mile had been reduced to 32.35d., as compared with 40.82d. in 1893 and 42·05d. in 1902. There can be no doubt that the expenditure for 1899 had been reduced below the point of safety and some services had been starved, and this necessitated in the following years an abnormal expenditure on improvements of the locomotive, carriage and waggon stock, and in bringing the equipment generally up to a better standard to ensure the safe working of the lines. In 1901 there was a considerable outlay on relaying and other heavy works; similar expenditure, or, at least, expenditure on so large a scale, will not, of course, be needed for some little time.