RAILWAY DEPARTMENT.

New Zealand Herald, Volume LXVIII, Issue 20961, 26 August 1931, Page 11

RAILWAY DEPARTMENT.

MOST DIFFICULT IYEAR.

EFFECTS OF DEPRESSION.

KEEN ROAD COMPETITION.

FORCING DOWN OF RATES

[BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Tuesday.

" The year has been a most difficult one, owing principally to the general depression and to the increased and increasing pressure of competition," says Mr. H. H. Sterling, general manager, in discussing in his annual report the commercial activities of the Railway Department. He also says he believes the prospects for the incoming year from a business point of view indicate that another difficult period lies ahead.

In its endeavours to hold its position, Mr. Sterling says, rail transport had been compelled to make substantial reductions in its rates to a greater extent than heretofore. The result had been a substantial extension of the system of local rates for fixed lines of traffic between specified points. In addition, there had been an extension of local rates for merchandise traffic from the principal trading centres to the inland towns, and it might now be said that local rates radiated from all centres carrying on a trade of any volume with other places distant up to 200 miles. It had also been necessary to provide delivery services at the majority of the principal inland towns. Transport Control Urged. Reviewing the position in respect of the local rates provided to retain and secure the general merchandise traffic over the principal routes, Mr. Sterling says a comparison with the previous year's traffic would not substantiate any observation, favourable or otherwise, as to the general result accruing from such rates, because the general trade depression obviously had been affecting the three forms cf transport—rail, road and sea.

While local rates had been effective in holding and regaining a volume of traffic it was known that intensive competition was responsible for a considerable portion of traffic being lost. Much of the competition was quite uneconomic, and no improvement in the position could be seen unless some legislative method of control of traffic were enacted and the principle of making the user pay were adopted. The efforts made to combat road competition over the principal trading routes had had the effect of diverting the attention of the road operators toward the transport of a portion of the low-rated traffic. In consequence of that, together •with the economic conditions, competition in the transport of the lower-rated commodities was facing the railways. The flow of such classes of traffic was principally to the centres. In order to minimise operating costs the road hauler would convey by way of back-loading practically any class of traffic offering and could command a slightly higher rate owing to the collection and delivery costs being taken into account. Lower Rates to Hold Custom.

The railways had retained the greater portion of the business relating to the transport of daily produce, the figures for butter and cheese showing an increase of 24.500 tons over those of the previous year. The tendency, however, was toward the department having to reduce rates owing to the lower market prices for the products. There had been a marked decline in the conveyance of wool, the decrease being 5165 tons, or 30,825 bales, compared with the previous year's figures. Certainly a larger portion of this year's clip was being held, the quantity being estimated by a leading stock and station company as 210.000 bales, but. the department's experience had shown that there was a greater tendency toward road transport being adopted. Evidence that the inter-island throughbooking system was appreciated was shown by the fact that there had been an increase on the previous year's figures amounting to 2000 tons in freight and £4281 in revenue. During the year an extension of the system to North Island and South Island ports, additional to the service between Wellington and Lvitelton, was established. "Circumstances have been adverse to the development of passenger traffic," proceeds Mr. Sterling. "In previous summers we have obtained very satisfactory results from the promotion of special week-end excursion trips between the principal centres and attractive resorts, but the conditions prevailing this year, together with the Napier earthquake disaster, have compelled us to restrict these excursions considerably.

"The promotion of farmers' excursions during the winter had to be abandoned. Similarly, the travel at holiday periods has been curtailed on account of prevailing conditions. Overseas traffic has decreased about 25 per cent, this season, and, considering the conditions in Australia and in other countries at present, the prospects for an immediate increase in overseas traffic are not propitious.

"Reviewing the conditions which have obtained during the past year in respect of transport generally, and at the same

time having regard to the fact that circumstances do not indicate that an improvement can be anticipated in the immediate future., the prospects for the incoming year from a business point 6f view indiciate that it is likely to be a difficult, one.

"The natural tendency in trade is to ease expenditure largely by restricting operations; consequently transport returns must be affected thereby, and, with the slackness in trade urging road operators to maintain their position, increased competition ■ will result," continues Mr. Sterling. "Indications are that more frequently irresponsible people are attempting to make a livelihood from road carrying operations, this in turn forcing established road carriers to reduce their costs to a minimum,. which again must serr onsly reflect, upon rail transport.

"The efforts made to combat road competition hair© been effective to a certain extent only, inasmuch that the system of reducing rates and providing increased facilities has enabled us to hold a portion of the transport business, but, with the increasing competition being encountered from day to day, and the absence of any control of the situation generally, the position obviously will tend to become more acute, and this yjosition will be intensified so long as the railways are faced with subsidised road competition."

THREE YEARS AS MANAGER,

REVIEW BY MR. STERLING.

DIFFICULTIES OF PERIOD

[BY TELEGRAPH- SPECIAL REPORTER.] WELLINGTON, Tuesday.

After being general manager of railways since June 1, 1928, Mr. H. H. Sterling will shortly vacate that position to become chairman of the Railways Board.

In reviewing the activities of the department during the three years of his general managership, Mr. Sterling stated in his annual report, tabled in Parliament to-day, that a great deal of spade work had been done, both in improving the standard of service and in reducing costs, in face of very great difficulties. There had been three changes in Ministerial control during the period, a fourth change in the form of control by the constitution of the Railways Board, and a full overhaul of the department by a Royal Commission. Such circumstances, alone were sufficient to curtail very materially the amount of lime which could be devoted to fresh work and new ideas.

"The side of the department's work with which the management is most particularly concerned is expenditure/' said Mr. Sterling "I would emphasise that the ground-work we have accomplished has already made itself substantially felt, and will continue to do so. The department has been faced with a serious trade depression, while the position regarding competition and the conditions of the transport industry generally have created a state of affairs, from a revenue point of view, that could only be described as difficult in the extreme.

"We have, however, maintained an unceasing vigilance as regards competition, and, as regards the condition, of affairs in the industry, we have endeavoured, v?he;re possible, to secure coordination by voluntary effort, and as to the conditions which could not be met in that way we have endeavoured to bring to the public a view of th? position in proper perspective." In relinquishing the general managership Mr. Sterling expressed thanks to the staff for their loyal services, stating that he had had the benefit of many helpful suggestions from all ranks of the service. He had also appreciated much friendly criticism from the press and the public. "Criticism, especially of a constructive character, serves an excellent in keeping the organisation up to a high standard of alertness," he added.

SUSPENDED RAILWAY.

GISBORNE TO WAIKOKOPU.

PETITION URGES COMPLETION

[BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Tuesday.

A strong plea for the completion of the East Coast railway, one of the major railway undertakings suspended by tho Government;, is made in a huge petition presented, to the House of Representatives to-day by Mr. W. D. Lysnar (Independent.—Gisborne) on behalf of 8400 signatories resident in Gisborne and Wairoa, and in the counties of Cook, Waikohu, Uawva, Matakaoa and Wairoa. It was slated in the petition that the Gisborne and the East Coast district was hampered find restricted in development by the lack of railway communication. The harbour facilities were inadequate for the needs of the district while the road access was over high ranges with heavy grades, narrow formation and sharp bends.

The petition farther set out that when the Napier-Waikokopu connection was completed, a sum of nearly £4.000,000 would have been spent without the Poverty Bay source of the revenue, which alone justified the line, tapped, and that only 20 miles of the suspended GisborneWaikokopu section, on which considerable work had already been done, remained to be completed. "The immense amount of construction work already completed must have a considerable bearing," concluded the petitioners. "We hold that this district, owing to its isolation and geographical situation, can never be developed to its full capacity without railway communication."