New Zealand Railways

Within weeks of Outram seeing its last revenue train, other lines were shut down: the Waihao Downs-Waimate section in South Canterbury, the Browns-Hedgehope section in Southland and the Greytown branch in Wairarapa. The Eyreton branch in North Canterbury was closed a few months later, in May 1954.

The pattern was clear. The era of railways as the mainstay of land transport throughout New Zealand was ending. One by one, most of the rural branches would disappear over the next forty years; the ones that survived the longest would be those serving bulk traffic, such as logs on the Dargaville branch in North Auckland and coal on the Wairio branch in Southland.

There were some rays of hope in the years immediately following the Second World War. In his annual Railways Statement to Parliament in 1950, Minister of Railways William Gooseman announced that revenue for the year to March was the highest yearly figure ever for New Zealand Railways (or NZR as it was usually called): £19.54 million. Passenger revenues were also up mainly because the department was able to put more first class and sleeping cars back into service after the war, along with the restoration of the daylight expresses between Auckland and Wellington (supplementing the overnight trains) and the running of special trains for the Empire Games held in Auckland that year. The annual loss had been cut to £1.05 million.

But Gooseman signalled that the years of government indulgence were over. After fourteen years of Labour government and its widening of state-owned activities in the economy, the more free-enterprise oriented National Party had come to power in November 1949 and the new minister made it clear to Parliament that 'the government considers it proper that those who avail themselves of the services provided by the railways should pay for them'.

In 1953, the government moved to close those lines that were without hope of paying their way.

Non-paying lines were as old as the railway system itself. That was all very well when there were few alternatives to rail, but as soon as road was able to offer cheaper and usually faster transport times (particularly over the shorter distances), then that was another matter. In 1926 the NZR chief accountant, Mr H. Valentine, said it was the non-paying branch lines that were the main factor responsible for the parlous state of railway finances. Twenty-eight branches were so classed and together they earned NZR £258,243 against their £541,710 combined deficit once their share of interest charges plus expenditure were added together. And that calculation allowed a credit of £36,568 for their assessed value as feeders; that is, the traffic they generated that would go on to earn revenue on main line services. Those lines covered a combined 1,245 km. There were exceptions, and Valentine drew attention to two branches that actually paid their way: Waitara in Taranaki and Foxton in Manawatu. The total cost (operating expenses and interest) was £23,044 but their revenue (£14,265) plus an allowance for feeder value of £14,273, left these earning a combined profit of £5,494. That these lines, together, covered only 40 km between them showed that a branch did not need to be long to be economic; they just had to serve the right places and have a demand for their use. Too many branches did not and, indeed, both Foxton and Waitara would once more subside into the red and be closed.

In 1931 the Chicago Tribune published a long article, 'Railway Luxury Hits Taxpayers in New Zealand'. Filed from Wellington on 6 December, the report noted that 'the story of New Zealand railroads furnishes one of the best examples of the inefficiency of a state built on the theories prevalent here'. Over the previous four years, NZR had failed by more than the equivalent of $US10 million to cover just its interest bill, let alone operating costs. The article described the South Island as the 'graveyard of the railway system' with a long trunk line running down the east coast and branch lines off it running toward the mountain range, looking like one half of a fish skeleton. 'These lines, pushed on against all prudence or considerations of return, have been the downfall of the railway system, for they had laid on it a burden from which it has never escaped'.