CONTROL OF RAILWAYS.

New Zealand Herald, Volume LXVII, Issue 20641, 13 August 1930, Page 14

CONTROL OF RAILWAYS.

SYSTEM IN A "BAD WAY."

REASONS FOR THE LOSSES

VIEWS OF MR. E. E. VAILE.

Reasons why the railway system in New Zealand was not,, a paying concern wero advanced by Mr, E. Earlo Vailo in on address given at a luncheon of tho Rotary Club at Rotorua, While emphasising that tho railways were "in a vory bad way" of business, Mr. Vailo expressed the opinion that, under capablo management and freed from political interference, tho system could easily become a remunerative one.

In discussing tho causes for failure, Mr. Vaile placed last tho factor of road competition by motor vehicles, which lie said was usually advanced as tho chief cause. Tho principal cause was that for a long period 'tho railways had a safe monopoly of tho carrying trade. Tho old bullock waggons, coachos and horse-drays were hopelessly outclassed by the railways and they offered no serious competition. As a result, tho railway management became indolent, inefficient and altogether arbitrary in its methods. Tho evil was increased by a Government monopoly—the worst and closest of all monopolies. Reorganisation Essential,

There had been a gross overcapitalisation, Mr. Vailo said. Railways had been built at enormous cost through difficult and poor country for political purposes. Tho policy had evon now been altered and lines wero still being built on a more colossal scale than ever before, no adequate inquiry being made as to tho prospect of their ever paying. Uneconomic rates of wages were being paid for construction and for working. Wages were paid at a rate much greater than their earning capacity and many more men were now employed than was necessary. Tho working expenses of tho railways had been going up by leaps and bounds at the samo time that returns wero shrinkingl • , Efficient management was required to remedy the prosent state of affairs, Mr. Vaile said. Tho management must first reorganise and .must require the whole staff to reorganise. They must obey the old business maxim, "the customer is always right." instead of maintaining tho view that they wero always right and tho customer always wrong. Management and staff had to realise that their customers wero their patrons, and their interests, and even their whims, must bo studied and accommodated. Revision of Tariff Urged. Having imbued tho service with a keen, competitive business spirit, the next step was to destroy the present tariff and frame n. new one, vastly more simple and with the charges based mainly on the value of tho servico rendered. There wero 13 classes and about 1500 items in the classification of goods and the chargo varied with almost every mile of distance. On top of these complications were a variety of increased charges for small lots and special freights over favoured portions of line. Tho clmrgos on a tonnage basis varied from nothing to £6 IS3 2d per 100 miles. . Quoting comparative cases, Mr. \ aile said that fencing wire, essential to tho development of country and easy to handle, was charged at a rato over twico as high as coke, which was not essential and required a great weight of rolling stock to haul it. Grass seed was charged 27a a ton from Auckland to Rotorua and clover seed, a more compact and bettor freight, was charged 48s 2d. There were differences in tho charges for loc&l and imported goods, this being a- particularly irritating and unjust form of protection. Allowances were also made in accordance with the use of a commodity when tins could not possibly be any concern of the carrier. Criticism of Fares.

' Fares on tho railways were uniformly too high and were based on mileage—!* wrong principle, Mr. Vaile continued. Faros should bo reduced substantially and adjusted, with freights, on tho basis of distance. As an example of mismanagement, the present passenger traffic between Auckland and llotorua could bo considered. The first-class single fare was £1 6s sd, tho charge by service car being £l. To meet tho competition, tho railways had reduced the return faro by 5s to £27s lOd, as against £2 by motor vehicle. It was plain that a considerable number of 5s would bo lost, and that not a single passenger would be gained. In addition, tho reduction obtained only from Auckland to Rotorua and not from Rotorua to Auckland.

Tho placing of a luxurious express train 011 the Rotorua run was a needless expense in Mr. Vailo's opinion. Every day tho observation car travelled with an averago of two passengers, and two or threo first-class coaches each carried five or six passengers. It would have paid tho department better to havo used tho monoy spent 011 the Rotorua train in improving existing coaches and in reducing fares. Another expensive folly of tho department was tho opening of shops in various centres for tho sale of tickets. In some casos a shop was quite close to tho railway station itself.

Serious Feature 0! Road Competition. Mr. Vailo said that road competition will! the railways was not nearly us serious us imagined, Tho official returns showed that motor vehicles niovod about 700,000 tons of goods a year, while tho railways carried over 7,500,000 tons. Tho most serious foaturo of road competition was that tho motor-lorries woro carrying tho best paying class of goods. Tho cliprgo by motpr transport was according to tho value of tho service ronderod, ajul no concern was taken for what uso thoy were put nor of their composition. The lorry owners would not carry lima 100 milos for nothing, nor would they convoy coal, bricks, earth, road metal or manuro below cost. § , Tho averago freight, with lorries was Is a ton a milo and that on tho railways 2.41(1. Although tho railways lost, tho public gained by tho cheaper service. Motor competition could bu eliminated merely by putting tho railway tariff on a rensonablo basis. Tho actual cost of railwny transport was small, and capable management would result in a reduction of tho freight charges. In India, tho freights and fares had been fixed so low that road competition was impossible, and tho railways showed a surplus of £8,000,000 last year. Mr. Vailo said thoro woro many factors which, if properly emphasised, would induco tho public to patronise tho railways, in preference to servico cars. Travelling on tho railways was vastly steadier and safer, was mora comfortable, and travellors wero ablo to movo about more frco'fy and to talk to friends in othor carriages.