to Winton, with a branch to Ravenswood; the line from Cairns to Mareeba; the line from Cooktown to Laura; 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 two years does not compare favourably with the previous years, a policy of stringent economy is to be pursued in the management of the railways, 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:

With the exception of the last two years the foregoing table shows a gradual tendency for earnings to increase, but 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. It will be observed that the result secured for that year is considerably lower than those of the preceding two years, and is 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 in carrying 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. There was consequently a large increase in expenditure which was not accompanied by a corresponding improvement in the earnings. 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 in the net earnings was manifested in the year ended 30th June, 1902, the percentage gained being 28.18 of the total earnings. Despite a shrinkage in the traffic the receipts show a slight improvement consequent on the increase of rates and fares. Working expenses have been 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 is hoped that more satisfactory results will be secured.

An analysis of the working expenses of the Queensland railways for the ten years, 1893-1902, 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 necesitated in the following years an abnormal expenditure in regard to improvements of the locomotive, carriage and waggon stock, and for bringing the equipment generally up to a better standard to ensure the safe working of the lines. In 1901 there was a considerable amount of money expended on re laying 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.

Interest returned on Capital.

The financial results of the working of the lines are exhibited in the following table which covers a period of ten years :—

A fair proportion of the railway construction of recent years has been in country of a purely pastoral character, and it is manifest that a sufficient traffic to prove remunerative cannot be looked for immediately from localities possessed of only a scattered and limited population; but it is confidently expected that these lines will ultimately pay interest on cost of construction. Unfortunately, Queensland in common with the other provinces, suffers from the construction of lines of railway not warranted by existing or prospective traffic, and which will always be a handicap to successful management.

Earnings and Expenses per Mile.

While the results now secured cannot be compared with those of 1880, when the net earnings per train mile were a little over 43d., and per mile open £222, a satisfactory state of affairs is disclosed by a review of the figures shown for earnings in the subjoined tables. It will be seen that the net earnings per train mile, as well as the net return for each mile of line open, have, except in the last three years, been fairly well sustained. The fall in 1900, 1901, and 1902, as compared with

the previous three years, is due to the fact that the continuance of the drought and the consequent loss in sheep have operated against the revenue from the carriage of wool, while the increased traffic which was obtained consisted largely of the removal of starving stock from and the carriage of fodder to drought-stricken districts, a class of traffic which had to be undertaken at unremunerative rates. The gross earnings, expenditure, and net earnings per train mile for the past ten years are shown in the following table :

:

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