THE RAILWAYS

Hokitika Guardian, 30 April 1931, Page 2

THE RAILWAYS

THE PRESENT SITUATION (The Associated Chambers of Commerce of New Zealand.)

The first generation of New Zealand settlers decided that they needet, a

railway’■ system. They also decided, philantropically, that the railways

would be even more beneficial to pos- ' tenty than to themselves, so they raised money on loan, paid the interest and left the capital repayment to the: second generation. The _ second generation followed a similar line otf argument, except ■ that they went further and left the problems of depreciation and obsolescence as well as the repayments of the original and succeeding loans to the third, and piesent generation. The third generation is now wondering what to do about it all.

Had the railways been constructed and operated according to business methods they would not only' have ful-

filled their purpose, but have contributed substantially to the revenue of

the country

Unfortunately, they

were put under political control with consequential evils of interference

with the management, “influence” and lack of coordination between depart’ments. As at present handled, we

have a General Manager ate £3,500,per annum with less real authority than the branch manager of a country store,

without the power “to hire and flre,”

We have a system of finance that has brought the Railways to the verge of bankruptcy. We have a system of new construction that is governed entirely by political considerations, and a general policy that is ns indefinite as it is unstable.

WHAT THE NEW RAILWAYS BILL

PROPOSES,

The Bill proposes to supplant the

General Manager by three men (now to five), whose' qualification's may or may not be such as would enable them, to take over (from the General Manager and the Minister of Railways the job of controlling the country’s largest enterprise. Under, the Bill too much Ministerial power remains, and that power is obscurely and contradictorily defined The result may easily lend to even greater chaos,than at present. The first part of Clause 15 for' instance, transfers the present powers of the Minister to the Board, the second.part takes many of them away again while the Bill as a whole removes all real power ifrorn the General Manager and makes his office superfluous. The Bill makes no mentiori of the Appeal Board, If this is to remain as at present the Bill gives no real authority to the Railways Board to deal with the staff. The notual Con- ... troller of the Railways at present is the Magistrate who presides at the ■» Appeal Court, for he, and he alone possesses the ultimate power of dismissal. If the Chairman of the proposed Railways Board is to be the de facto Manager he will need to possess transport and technical knowledge. So (far as one can see, the present General Manager is the only available man in New Zealand with the necessary qualifications, so possibly the Government intends to appoint him Chairman. Summed up, the Bill as a whole, appears to be a political gesture, designed to allay public agitation, whilst, in reality, preserving the present situation, with little or no change . WHAT THE COUNTRY. NEEDS Political interference and mismnnr agement, lack of provision for depreciation or obsolescence and similar factors have been the direct causes of the chaotic position into which the Railways have drifted. The blame cannot fairly be charged to the officials in nominal charge of the Department because they have had no real authority or opportunity' to show their capahilit- : fies. That being so it seems only, fair, if the Department is to,make a fresh start, that it should be placed upon a reasonable capital basis.

Already £10,400,000 ha e been transferred to the Treasury, and the interest presumably is to be met from consolidated revenue. This amount is not enough. Judging from the recent i Royal Commission’s report an amount of at least £2o,ooo,ooo.should b e written off capital. An account should' be opened by the Treasury to be known a 6 the “Railways Deficiency • Account,” irting with the £20,000,000 abovementioned. The interest, plus a fixed amount for eventual extinction, should be paid out of ordinary taxation. If such taxation raised a storm of protest, so much the better, for the “Deficiency Account” - itself, plus its ..impopularixy, would be a monument .' for many years to the failure of pol- , itics in business and a perpetual daner signal to the politicians of the ; future.. f With its capital reduced to approximately £40,000,030 the Railways, un- • der proper control, should have a reasonable chance to succeed. Evidently a large number of amateur would-be saviours of the Railways are aspirants to the position of Director. It r,pems a pity that the Prime Minister has yielded to the pressure which Mr Veitch recently described, and has increased the number of Directors from three to five. A smalt directorate '.'would be infinitely stronger and more decisive than a large one. The new

fees proposed are too small to attract the class of man required, and the probable result will be continued failure.

Criticism, unless accompanied by constructive suggestions, it nob very help, fill. So the Associated Chambers of Commerce suggests the following method of Railway re-organisation :

(1) That the Railways should be incorporated in the same way as a Public Company,; with a definite capital to say £4(>.(!OO.CO!) and a detinue charter of franchise. The adult population of New Zealand, approximately 400,00'J, would be the shareholders, each with a £IOO share. These shareholders, through the Government, which they acquire through the ballot box, should elect three j directors to control the policy of the Company. As with Judges of the Supreme Court, these Directors should be subject to removal, only by resolution of both Houses of Parliament.

2. This Corporation must be entirely divorced from Parliamentary or Ministerial control,, and placed in the hands of its Board of Directors, with the same powers eg the Directors of a Public Company. These Directors should be men of wide business experience, but need not necessarily have transport or technical knowledge, 3. This Board, although entrusted with the formulation of the general policy of the Department, should appoint n General Manager, possessing the necessary transport and technical experience, who should he given the responsibility and opportunity of carrying the Board’s policy into effect. 4. The appo'ntnient or dismissal rf the entire staff should be in the hands of the General Manager, 3 The Board of Directo’s, In eon. imitation with the General Manager, should have the sole power to initiate or stop new construction; to continue or discontinue traffic on implying lines, and to fix all tariffs, passenger and freight. 6. Finance 'or new undertakings, unless provid'd out of revemv\ should be provided by the Government, making any addition to the railways cap - .- ■ tal, on the authority of Parliament. 7. The office of Minister for Reil- • wavs should h n .abolished and the I Board should deal with PeHiaurnt when necessary through the Minister of Finance.

8. The purchase o c stores should be vested in the General Manager, but single contracts beyond a definite amount (say £5,000) should be subject to the aporoval of the Board.

9. A full time Chairman seems necessary, but as the work will be of a responsible character, remuneration shonlfl be £ISOO per annum for the Chairman and £750 each per annum for the other tpembers o' 1 the Rmj-d. but the Board should not exceed three in number.

. 10. Ordinarily, the nnpomtment of fOenernl Mana<mv should be in the Board’s hands, but. ns the nr°sent occupant is under definite engagement for a fixed period, be should f>° given a. rensounble opoortunitv to show bis onnnb’lities. Tf the Board eventually finds him inenmne+ent. it should bn T ’e the power to te»-n”’»*ntp hiq engagement on irmtnnllv satisfactory fen-ms.

11. Tt should be a duty of fhe Board to make n comprehensive armiml report to Parliament and to issue nubile statements o p its progress from time to time.

12. Tim Pp c cbr-i-k*! l,*> knot on reooo-m'eofl r , o>v>>i->e’ - e‘p 1 Snbjpet to fl io con n Wo - ion of the •rp’lv'-.—. rVrmmm+mv, -'-m obsolescence should, in future, be charged against revenue.

13. The Anneal Board, as at present constituted, should be abolished. In conclusion, the Associated Chambers of Commerce anneals to Parliament to settT dftvisb'p'v t’-'s r<"--'il o’mslion o p Railway Control. Gut- r-onnf.-y is staggering under an almost, ~v>tm->>---able load o e t.nvation Tim railways, as now handled, fv-ms 1 . the mn«t rr-’n-pling item of all. »ntll. e»,i .>n|nc« they are nlaeed en a Iv*<- ! >-mcc-_VI,-n bas’S. there is little chance cf the country regaining financial stability.