# The Truth about China and Japan/Document N

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CHINESE GOVERNMENT RAILWAYS
Official Returns for 1917
Explanatory Note.—The annexed returns of the Chinese Government Railways, giving the complete figures for one calendar year (1917), as well as a comparative statement covering several years, are important as an illustration of the consistent growth of China's earning-power Although railway communication is still in its infancy, and although the lines included in the returns have a mileage of only 4,000 (including several uncompleted trunk-lines), the revenue in 1918 amounted to more than $75,000,000 Mex.—say £14,000,000 sterling.
On this basis of earning-power, when all trunk lines now planned are built (about 8,000 miles) the gross revenue will be over $225,000,000 Mex. per annum—say £40,000,000 sterling. But with feeder-lines added, and with the Chinese trade expansion which cannot fail to come duly considered, there is little doubt that ten years from now—say in 1929—will have a gross annual earning-power of at least one hundred millions sterling.
This shows clearly the superlative value of China's railways and explains why Japan is making such great efforts to alienate as many lines as possible on China's territory and to prevent a proper unification of those that she cannot touch.
The Ministry of Communications announces that the returns of the Chinese Government Railways applying to the year 1917 have not been completely tabulated. Since the time required for printing and translating will be considerable, a preliminary statement embodying the more essential results is given to the press in advance of the full report. The following table condenses the returns of Revenue, Expense, and Income Debits and Credits into a single statement.
CONDENSED OPERATING AND INCOME STATEMENT
CONDENSED OPERATING AND INCOME STATEMENT
spite of this, revenues show an increase of $1,111,983.45 compared with the year before. This is remarkable in view of the fact that from July 27 to October 39 through trains could not be run on the Peking Hankow line, due to washouts, and that from August 8 to November 26 the north end of the Tientsin Pukow with considerable equipment was cut off similarly. Other lines were also interrupted more or less by floods. And on all the northern lines there was considerable embarrassment to traffic due to military manœuvres following the attempted Imperial restoration.
These various causes so increased Operating Expenses that as a result, Net Operating Revenues decreased slightly,—only $86,303.13. But Income Debits decreased $663,974.90,—due principally to the favourable rate of exchange for interest payments,—and Income Credits increased $325,768.68, so that the final Surplus for the year is $903,440.45 higher than in 1916.
Income Debits are explained to include Interest, Taxes, discount on depreciated currency, losses by exchange, rents and similar payments. Income Credits conversely are rents, gains from exchange, bank interest and similar accruals.
Three full years are now available for comparison under the Uniform Classification of Accounts. The final surplus for each of these years is as follows:—
The surplus remaining after all charges for the year had been paid in 1915 was equivalent to nine per cent, upon the investment made by the Government in these lines. In 1916 it jumped to over 17.7 per cent, and in 1917 amounted to 18.8 per cent.
If Net Operating Revenue be divided by the Investment Assets, by lines, the return earned upon the investment is as follows:—
Per Cent. Return on Investment
Operating ratio for the year increased slightly over 1916, but is still only 47 per cent. compared ​with 53 in 1915. Compared with foreign countries, this is a very gratifying result, as will be seen from the following comparison:—
Bulletin No. 100, Bureau of Railway Economics, Washington, D. C, U. S. A.—Austria 76 per cent., France 63 per cent., Germany 70 per cent., India 52 per cent., Japan 48 per cent, and U. S. A. 69 per cent.
The Operating ratio upon the several Government lines in 1917 was as follows:—
In gauging the above results, one reservation must be borne in mind. Upon the Peking Hankow, the Peking Mukden, the Tientsin Pukow and the Peking Suiyuan, revenues contain a considerable quantity ​of Peking notes of the Bank of China and the Bank of Communications. These are included at par value. On the other hand, expenses were paid largely in silver.
Announcement is also made of approximate return of traffic for the period from 1st January to 31st December, 1918:
The revenue for 1919 increased 34.4 per cent, as compared with 1915. The rapidly growing earning power of the Chinese Government Railways is seen from the following comparison of the revenue figures for the past 4 years:—