THE RAILWAYS

New Zealand Times, Volume LI, Issue 12021, 26 December 1924, Page 4

THE RAILWAYS

REPORT OF ROYAL COMMISSION . CHEAPER EXCURSION FARES RECOMMENDED HOARD MANAGEMENT FAVOURED DEPARTMENTAL CONTROL OF FINANCE The report of Sir Samuel Fay and Sir Vincent Raven, the English railway experts who toured New Zealand as a Royal Commission to report on the New Zealand railways, has been released by the Minister for Railways (the Honi J. G. Coates) for publication. The report discusses the situation at great length, and concludes with a long list of recommendations. In several important respects the views of the commission agree with those lately expressed by the Minister, notably in regard to management and finance.

SYSTEM DESCRIBED

EIGHT SEPARATE SECTIONS TREND OF DEVELOPMENT. / The Now Zealand railways are divided into eight separate and disconnected sections, four of these feeing in the North Island and four in the South Island, there being no through communication between the two islands. In the North Island the system extends as far north as Optra and Okaihau, these being srhuated respectively 606 miles and 618 males from Wellington, the headquarters of the Bail way DepaWßnent. In the North Island there fore two avenues of communication between east and west, one via Frankion Junction and the other via Palmerston North. In the South Island. apart from the three short isolated suctions in the Westport, Nelson, and Pieton areas, the railways begin at Parnassus, 82 miles from railhead on the Piotom section, and are concentrated on Christchurch, Dunedin, and Invercargill, the only means of communication between the east and west feeing via the Otira tunnel, this connecting the Greymouth section of, the railway with the remainder of the Pout-h Island system below Parnassus. The south-eastern sector of the South Island possesses a number of branches, some of . which are unprofitable and are ■likely to retrain so for many yeirAto come. From Parnassus, the northern pxtramity of the main line system in the South Islandto Bluff, the southern extremity, the distance is 467 miles. 1 The system comprises 3063 route miles of line, of whioh, at March 31st, 1924, only 43 miles were double track. Bidings account for 836 miles, so the double mileage reduced to single track is 3942. This compares with 2864 route j miles and 3679 single track miles at (March 31st, 1914. During the year ended March 31st, 1924. the Bailway ■Department carried 28,436,475 passengers, as compared with 28,173A72 in the year ended March 31st, 1914, this representing an increase of 22.71 per cent. Freight traffic in the last financial year amounted to 6,925,517 tons, las compared l with 6,019,633 tons in the | earlier period, an increase in 1923-24 ! over 1913-14 of 15.05 per cent. Over ; the same period the number of locamoitives increased by 22.66 per oent., i while tractive power rose by 49.42 per ■ cent. Other increases in rolling stock (were 12.08 per cent, in carriages, this (raising the seating accommodation by 113.90 per cent, and 29.67 per cent; in wagons, the increase in wagon stock representing 42.35 per cent, advance in carrying capacity. The total revenue for the year 1923Si was £6,984,211, and the working expensee £5,403,766, thus leaving £l,680,445 to cover the amount required 'to meet interest on leans. The percentage of working expeases to receipts in ■ the two periods was 71.24 in 1913-14 and 77.37 in 1923-24. This brief summary shows the general trend of development during the lest few-years, and the following table indicates the financial results oyer the period. It is to be noted that capital expenditure ' has increased 27.95 per dent., revenue 72.73 per oent., working expenses 7.61 per cent., and rate of interest payments 14.5 per oent. > 1914, £67,067 net loss. . 1915, £69.846 net loss. 1916, £312,429 net profit. 1917, £464,596 net profit. 1918, £187,884 net profit. 1919, £lßO,fjoß net profit. 1920, £134,830 net profit. 1921, £313,650 net lossy. 1922, £1.247,893 net loss. 1923, £532,779 net lose. 1924, £226,345 net loss. FINANCE An examination of the capital account of the Now Zealand railways indicates that comparatively small sunirt wow pa-id for l*nd pn-rchases, that several branch lines weie purchased from private companies, and Harbour Board funds provided for the construction of certain lines, the obligations upon them being assumed by the Railway Department. Some six to seven nrilbona sterling were spent upon railway-construction out of accumulations of the consolidated revenue, and no loans were, therefore, issued for this amount. Tim average capital cost per mile is £13,560, being shout £3OOO less than New South _ Wales, which system is on the 4ft B|in gauge and has heavier rails, but £5500 more than Queensland and £4900 more than Sonth Australia, the former being a 3ft Bin gauge system, and the other partially so. BAILWAY CAPITAL COMMITMENTS. At March 31st laiit, capital- commitments upon lines open for traffio were £41,399,427. At the same date the State indebtedness upon those lines and works plus lines under construction, totalled £48,270,352. Railway capital, therefore, represents between one-foutth and one-fifth of the total loan account of the State of £220,000,000 resting upon tho Consolidated Revenue Funds. Whether this amount represents exactly the loan account of the State attributable to railways is not quite clear. It is on evidence £6,500,000 less, duo, as before noted, to the employment of accumulated funds upon construction work. In the lost twenty years the capital account on lines open Air traffic has been doubled. and since l? 114 there has been an addition of £9,041,340, or, roughly. 23 per cent., whilst mileage of line has increased by 190 miles only, or 6.64 nor cent. The railway capi-

tal, revenue expenditure, and interest figures from 1914 to 1924 are given in the preceding table, whilst the diagrams on previous pages show how the revenue was earned and how it was spent in 1913-14 and 1923-24.

“POLICY RATE” OF INTEREST. The interest charged to tHe Railway Department is not the actual, figure Said upon State loans, but is a “poliqy rate” fixed at 31 per cant. Tho history of the fixing of an arbitrary figure commenced in 1896, when the railways were regularly earning more than sufficient to meet the actual interest (3 per cent.) due upon State loans attributable to railways, and it was then decided as a policy of State to so retdiuOT rates and fares that the net earnings should be no more than proved necessary to meet the actual interest paid. The 8 per Cent, figure continued until 1910, when, due to a rising rate of interest upOn leans, it was increased to 3J per emit., at which rate it has since remained.. Net receipts balanced, excepting in the years 1914 and 1915, the policy tend loan interest up to 1920. From the latter date, however, the increased cost of working the lines, notwithstanding a general increase Of 40 per cent, in goods rates and 25 per cent, in passenger fares from 1914 onwards, brought i down the net receipts below the policy rate of 3J per cent, to the extent of £124,376 in 1921, £1,021,156 in 1922, £384,385 in 1923—a total of £1,429.317. lki 1624 there was a surtffus of £31,802 over the 3} per cent , but a shortage of £236,345 on interest Pmrid by the State. The shortage dnr- . these years on interest actually lon loans wag £3,3301687,. These res prove that whilst an advance rates and fares Was sufficient to meet increased working-expenses from 1915 to 1920 and covered both policy and actual interest during these years, the increased charges Were not sufficient to provide for the higher rate of wages and enhanced cost of stores, pins interest on increased capital coming rote effect from tills onwards. INCREASE IN CAPITAL AND INTEREST ON LOANS SINCE 1914. Of the increase in capital since 1914 of £9,044,840 new lines <at a cost of £14(960 per mile) accounts for £2,884,868, new rolling-stock and machinery £3.633,298, grade improvements £807,691, while £2,280,683 has been expended in connection with additions and improvememte to stations and wdrks. Concurrently with the increase in capital the rate of interest upon loans rose from £3 16s 5d to £4 7b 6d per cent., and working-expenses, ear a consequence of advance in price Of coal and materials, together with an enhanced labour bill of some £l,500,000, were nearly doubled. CAPITAL EXPENDITURE CHARGED TO WORKING-EXPENSES. The workingiedpanses include. certain items properly chargeable tA capital, estimated at. £22,0(10 per-annum. PROVISION OF FUNDS. Far new lines, which are surveyed and engineered by the Public Works Department, moneys are provided by Parliamrant through a yearly Budget. At the present time ten new lines are under construction, one by contract with a time-limit, and others by Public Works employees or by contractors* oh small portwifis of earth-works. The time occupied in finishing the railways has bean unduly long, and it is clearly not economical to carry out Works in small Sections; on a yearly; estimate, but tho answer given is that all available labour is employed, lucid if more expeditious construction Were attempted the labour-market w'tfuld fee npeet to the general disadvantage ol trade and the community generally. On capital spent oh open lines and on working account a yearly Budget ik also presented, together with on esti-: mate of probable revenue. An exception to thi9 was established* in 1914, when the House qf Representatives voted a sum of £3,2Q0,000 for certain improvements recommended by the General Manager. This authority was Coupled with a proviso that not more than £750,000 should be spent in any one year. SEPARATION OF RAILWAY FINANCE FROM TREASURY ACCOUNTS. 1 New Zealand would appear to have escaped from some of the more flagrant disadvantages due to the. inclusion of revenue and capital receipts and expenditure in a consolidated State fund, but there is ample justification for the opinion expressed by the Minister for Railways as to the desirability of separating' railway finance from Treasury accounts. British budgeting .methods, which are followed in New Zentan, wfere nos at their inception formed for the propose of administering a large industrial un dertaking such as a system of railways, and they do not, and cannot, conform to the requirements of a revenue-pro-ducing establishment which needs not a yearly vote, but financial provision arranged from time to time as necessity arises, capable of dealing with a policy .and programme over a period of years, and at the same time sufficiently flexible to meet any emergency that may arise. We recommend that loans annd obligations which can be earmarked as attributable to railways be transferred to a separate railway account, that railway revenue and expenses, including purchase of stores, be included In ibis account. Iho whole being dealt with by the Railway Department. Provided there is a statutory obligation to keep railway funds' liquid and available on demand, tho Treasury might continue to be the banker to the Railway Department, although experi-* cnee in other countries hae shown that in times of financial stress moneys 'representing reserves or current remittances have proved too alluring to escape seizure in aid of other State obligations.

ABSENCE OF RESERVES. There are no reserves to meet wasted and wasting assets in the shape of ivear-and-tear of rolling stock, or permanent way. The accounts do not, therefore,* disclose the actual position, inasmuch as depreciation in value is not charged against working expenses year by year and accumulated to meet renewals as. they become due. This has been provided for in part by charging such re-* newals as have been carried out to. working expenses, the idea being that this method maintains the stock at its. original functional value. Particulars,; of these we deal with under the heads' of “Management (Mechanical and Permanent Way).” It ie stated that'“it is in the want of an account which runs on from year to year, and the existence of which is quite independent of annual appropriation, that the explanation of the fact that there. is no depreciation account of the Railway Department mainly lies.” , An adequate reserve is a necessity,, not only for the purpose of meeting the cost of replacement, but in order to equalise the charge for renewals. An instance of misleading figures due to charging, renewals only as they arise is furnished by the profit and - loss shown on the Whangarei section of railway during the past few years. In 1620 renewal of line accounted for £1561 only, and a profit was published of. £8484. In 1921 renewals cost £B3IO, and a loss of £540 resulted. In 1932 and 1923 the renewals were £12,611 and £27,061 respectively, and the losses were £lO,670 and £18,622. In our report upon “Management (Mechanical and Permanent Way’)) we indicate the reserves that should be made. Our recommendations under this head, whilst preventing a further slipping will not provide for the past, whicK must be made good out of revenue as and when renewal arises. LOSSES UPON BRANCH LINES. The loss upon the working of certain sections of railway is published in the accounts, and there is also syecial reference to the loss upon the Otira tunnel section. In the case of the latter we* do not regard these figures as indicating fairly the result of construction of this Very expensive tunnel, 51 miles in length, with its machinery and equipment for electrical working. To pick out nine miles of line, including the tunnel, and show the loss upon that small section of a through-out run between Christchurch and Greymouth, a distance of 145 miles, does not exhibit a true picture, inasmuch as traffic could not be convoyed from one side of the South Island to the other but for tunnel, construction. A real figure of value can only be obtained by taking the earnings and expenses between Christchurch and Greymouth districts and ap-, plying them to the cost of construction of the throughout route. In calculating losses upon branch lines no credit is given for earnings upon trunk lines from traffic passing to and from the branches. A branch hue may, -taken, by , itself, show a lore, Whereas.the earnings upon the main line due to branch line construction may be sufficient to turn the less into a profit. A case in point is the Fairlie line, Which, in .1923-24 shows a dhfieit (including interest) of £3Bl, but-the mileage earnings from the traffic on the,' mam line were £15,607. In all countries there are sections of railway which do not pay their way, and New Zealand is no exception. Any country with its transport system not fully developed may be expectedhave for many years portions of line regarded by the Railway sng, especially if they are not connected up with the Main Trunk system, although from a State point of view the developmental value of such lines, apart from Crown land and forest improvement, amply justifies their construction. There is a further advantage to the State in which’ railway; revenues do not share—i.e., increased taxable income, not only adjacent to new lines but generally throughout tho State, due to the opening up of the country by transport facilities. It is a question for consideration whether or no the Railway Department should he relieved of any loss by aid from consolidated retl'c State decides to undertaco the* construction of more than a certain number of -developmental lines within a • given period, it is ciear that may break down, follow°y high charges and inefficient services as a result of pressure to economise. New Zealand’s prospective railway system in the North Island is a iiflking-up of through routes, and there are. fgw dead ends. It is different in the South, where there are many branch lines with no early prospect of forming them into through routes to and from more prosperous localities. It is hot unreasonable that some share of general State increment should go to the agency producing the result, where the absence of revenue is calculated to restrict transport facilities, not only in a particular area but throughout the country. We recommend, therefore rest loss on new lines should he borne by consolidated revenue, unless such lines form, a -connecting link between sections of the main System, and with the further proviso that the loss be reduced in so far as liability oh consolidated funds is concerned, by tho value of traffic (ie6s 70 per cent working expenses) contributed to the main line. It will be seen that the mileage opened during the past ten years has been email, but in the next decade tmere will be a_ considerable number of lines coming within such an arrangement as we propose. If an arrangement on the basis mentioned had been ih operation during 1928-24 a credit be the Railwav Department would have: arisen of £136,064. ORGANISATION “INVARIABLE DIFFICULTIES.” The organisation of the New Zealand railways at the present time follows what is usually known as the departmental scheme, under which each department has an executive head, working under the General Manager. There is, however, an exception to this general rule in the Caafe *of tho New Zealand railways, in that on the recent retirement of the Chief traffic, manager liis position was not filled, his duties being undertaken by the Genera] Manager through a first assistant (for transportation) and a eecond assistant (for rates and staff). There has nbt always been a General Manager in charge qf the New Zealand railways- That was the original arrangement, but in 1889 a hoard of three Railway Commissioners was apixnnted. This form of management, however, lasted only. for five years, at the end of which period the control of the railways pasted back to the Minister for Railways, who Supervises the development of this great national asset through a General Manager, resbonsihlo directly for the administration of tile undertaking. A chart shows the present organisation. NEED FOR TIGHTENTNG-UP. j We have given careful consideration , to the question of organisation. Our ■ observations have shown that there is need for a general tightening-up,-- both iin tho direction of more clearly 'defin-

ing the actual responsibilities of the chief officers and. of reorganising , the overhead administration so that it may better meet the peculiar needs of New Zealand. Generalisation Was perhaps desirable in . the earlier days of the railways, but thfe time has come when decentralisation to a certain extent is necessary. District officers lean too much upon the central authority in matters of detail, with the result that delay and consequent irritation to the public, as well as loss of traffic, follows. On tho operating and commercial side this is especially noticeable,, the head office being overburdened by correspondence on detail matters which should he capable of settlement through district authority. No regular conferences excepting an anual one (mainly upon staff questions) are held. Many of tho lines, in addition to being isolated sections, are at considerable distance from Wellington, and frequent inspection by chief officers is not possible ; thus many defects, which the eye of an experienced railway man would detect and remedy, continue in existence. A , commercial organisation until quite recently, Was non-existent, with the result that motor-car enterprise lias made serious inroads on both passenger and goods traffic. From evidence given in the course of our- investigations it is clear that the public expect something more in the shape of personal contact with responsible officers than has obtained hitherto. This has reference not only to charges,, time-tables, and facilities, but also to email matters of equipment and regulations. A far better appreciation of the services rendered by the railways would, we feel sure, he the outcome of discussion on the spot between representatives of the public, who own the railways, and, a responsible officer with authority to Settle the minor questions s ofrequently arising. Relief from these would enable headquarters' officers to devote prompt attention to major questions which they alone should determine. BOARD FAVOURED.

In connection with State railways there are invariably difficulties great (and small, brought about by political • pressure upon Ministers to give something which, whilst of local value, is not to the general advantage of the railways,' or oreate an undue preference to one section of the community as compared with another. In the general interests of the country the farther away a railway administration can be removed from political control the better, in qrder that an impartial decision may be given upon all questions affecting- transportation facilities. In stating this wo, recognise that where, the people own the railways the Government must decide when and where railways are to be built, and what, are to be the maximum charges levied upon passengers and merchandise. Having decided these things, however, and appointed competent men to manage the large industrial enterprise of which a railway system is comprised, it is wiser to leave it in expert hands rather than to have political pressure brought to bear upon Minister, in season and out of season, to do things that ought to bo done and to leave undone those things that, in the general interest, ought to be done. Having regard to the geographical and other aspects of the New Zealand "railways, wo consider that a Railway : Board consisting of a chairman and two other members, one to control inainly commercial affairs and the other competent to direct the operation would prove the best type of management. - We suggest t’ne appointment of ail operating and equipment* assistant, and in addition to the chief technical officers at headquarters we rocommcndf. t/he' appointment of two gen oral superintendents, one for "the North Island, with headquarters at Auckland, the other at Christchurch for the South Island, responsible directly to the. board, - and acting under regulations and instructions applicable to the system as a whole, for operation, commercial matters, and maintenance within their respective areas, tho keynote being centralisation of principles and decentralisation of details, thus making for greater economy, more efficient working, and improved relations with freighters and the public. FOR EACH ISLAND. In* each island tho district engineers and -mechanical assistants to report mnothly through their general super r infebdent to .the chief engineer and mechanical engineer respectively upon work performed, the state of Work, and machinery under their charge, ahd take instructions thereon. In addition to this the responsibility of the chief engineers, civil and mechanical, to be exercised by . frequent inspection by themsbiv es or tneir principal assistants. : It is, of course, understood that workshops are under the complete control of the chief mechanical engineer and chief engineer respectively. The’divisional sueprintendents, given a wide dfecertion with encouragement to develop areas under their charge, and being clothed with the necessary ' authority to deal with probletne as they arise or seek adv-ioe when in doubt, would relieve headquarters from a mass of detail and correspondence. Being in direct oontact with freighters and the people in general, they would he enabled to familiarise themselves with the conditions, ideas, and needs of each town and district, and Obviate formal communications and orders from the board. They should make management personal, as distinguished from distant management, which tends to appear impersonal. Many of the local grievances to which our attention has been directed could promptly be dealt with, or would probably never arise, under the mere direct and authoritatiye supervision of the general superintendent. We suggest that format conferences at headquarters should be held once in three months. 8 , . The districts at present under control oif traffic managers should be rearranged as shown upon the following diagram, and placed in control Of district superintendents under the control of the general superintendent. Whilst tlie latter would require a competent office staff, it is considered that there need ha little, if any, increase in the total personnel, having regard to the reduction in the number of districts. The districts would have tho approximate mileages indicated below NORTH ISLAND. » Miles. No. 1, Auckland ............... 7194 No. 2, Western 4551 No. 3, Wellington 6014 ~180g" SOUTH ISLAND. Miles. No. 1, Qhrisiohurth 378 No. 2, Dunedin 480 No. 3, Southern sf>7j 19214 CHIEF OFFICERS AT HEADQUARTERS. Tho chief officers at headquarters would bq os follow^: A secretary .who should doal with publicity and 'adevrtising matters.* An operating aiid equipment assistant. A solicitor to deal with the legal and estate work of tho department. A chief engineer. A ohief mechanical engineer respon.

sible for the design, Maintenance, and renewal of rolling stock, the management of locomotive workshops and plant, and the sueprvision of runningshedS. , , , A signal and electrical engineer. A chief accountant. A cashier.* A comptroller of stores. A manager of refreshment rooms and dining-cars. *New appointments. With regard to the selection and appointment of members of the board, the desideraition is to secure harmony and team work in its fullest sense at headquarters. This can only be achieved by selecting trained railway men, possessed of vision, zealous in. carrying through the reorganisation of the operating, mechanical, and commercial branches, and intent upon bringing tho Now Zealand railways up to the average world standard of cheap and efficient transport. GENERAL REMARKS. In our opinion the New Zealand railway track has been exceedingly well laid, and the standard of maintenance is a high oho. Such a high standard naturally reflects itself in the cost, and we think that in tho case of branch lines, where the traffic is light, flying gangs might be usefully, employed instead of having men permanently stationed there. We think consideration should be given to the question of reducing the number of district engineers, of which there are nine. Three in eaoh island should adequately meet the case, thus enabling higher salaries to be given without increased cost. ABSENCE OF RESERVES. No cash reserves exist to meet relaying, the work done year by year being relied upon to keep the lines up to standard. Based upon the life of rails, there should be an average of at . least 100 miles relaid each year. It is not possible to determine future costs, but on the present price of material and lalboiiir a figure may be given of £3OOO per mile, a total of 100 miles representing £300,000 per annum. In the event of a less mileage being relaid in any one year, we are .of the opinion that a reserve, representing wastage, should he set up to provide for the future, and to keep accounts under this head level year by year. Based on the capital value of locomotives as at -March 31st, 1924, the sum of £79,423 should he spent annually on renewals or set aside in a Renewals Fund. MULTIPLICITY OF LOCOMOTIVE TYPES. There are some forty-eight different types of locomotive in service on the New Zealand railways, some of which are very antiquated. With such a variety, standardisation of parts ia not practicable and infest Bdd to maintenance costs. , The renewal of locomotives jivjdqmunetnded should do away with a'number of these types.BOILERS AND FIREBOXES. The age of the boilers is far higher than any experience on English or American ralways, the average age of those condemned, being 27 J years in New Zealand as Compered with 16 in England. At the' same time it was stated' by the chief mechanical engineer in evidence that the water _is bad, and that, other than putting a Composition into the boiler, no steps to combat this are taken. The only reason that can be given for this great age is that the engines are not getting the Sabre amount of Work in i-heir lifetime as those in England or America; but, Whatever the cause, the effect should bo a lower maintenance cost per year and a Speedier output for tho, locomotive.** ■ ... * ’ Steel fireboxes are used, and these apparently also have an unusually long life as compared with copper boxes, and. under these, conditions, the costs should compare favourably with railways using copper boxes. LOCOMOTIVE COAL. In the chief mechanical engineer's evidence he stated that Welsh coal was far better thah any he could get either in Australia or in New Zea laud, and that his experienco showed that there would be a saving of 30 per cent, in coal-consumption. As it would appear that Welsh coal could bo procured at practically the same price as Newcastle coal, and if the reduction anticipated hy the chief* mechanical engineer ia realised, there would be a saving of some £200.000 per . annum on the purchase of Welsh coal. Ts shown by tho chief mechanical engineer in his evidence he is responsible for selecting and recommending the coal that should he used. No doubt ho will give due consideration after careful trials to what extent-it is Possible economically tb use the New* Zea rand ooal. RUNNING DEPARTMENT.

The running of both passenger and goods engines is under the control of the locomotive department. At tbe larger engine-sheds it is the practice to post a daily duty-sheet pfoviding for the running of time-table dud special trains, and showing the hookingon time of eaoh of the men, the engine allocated, and the tram to be •worked. At the smaller Stations a weekly list is in operation. In our (Spinfon a weekly list could bo advantageously adopted at all runningsheds. The existing arrangement of laboriously copying out each day the names Of all the men and the trains they are to Work occupies a great deal Of valuable time, and, in addition, thtetrvj Bir<4 nimiefrcnls telephone callsi from the* men as to what their duties arc to be on the following day. From cases brought to our notice the special trains—-after eliminating conditional trains —formed a small proportion of the train servioe, and arrangements could easily be made to adopt a weekly roster, probably resulting in a certain saving in staff. Should "Occasion arise after an engine has left the engine-shed for it to be diverted from the train Whioh it is •hooked -to run, such alteration is arranged by consultation between the traffio train-running officer and the locomotive officer concerned. In our vie wthie appears to he a satisfactory artangeinent. RESPONSIBILITY OF LOCOMOTIVE DEPARTMENT IN PROVIDING ENGINES. The locomotive doportment is . responsible for the provisipfi of engines suitable’fo-r funning the trains, in having engines ready "to go into traffio at the recognised times at which thev aro required to enter the traffic yard, and in arranging the distribution of engine-power at various centres and terminal stations so that engino-power is available to cope with all traffio offering. When the engine - has left the en-gine-shed it is under the control of the traffio department, in that the enginemon must carry out the movements, shunting or marshalling, required of the train they are hooked to run—i.e., running of tho train after departure from the Starting-station is controlled by the traffic branch, and tho enginemon are required to carry out all the necessary shunting as directed by the train staff. REPORTING OF DELAYS TO TRAINS THROUGH ENGINE TROUBLE. Engine-drivers are required to report ftny unusual Circumstance by reason of which serious delay te a train is. caused, and all such causes of delays due to cup;i ne failure or engine trouble are investigated by the lc.tamG'- ; -'e of-

fieers concerned. Should such delays or engine trouble oe found to bo attributable to the enginemen, a punishment is inflicted upon those concerned, or, if they are due to faulty construction of the engine, steps are taken to prevent a repetition of such failure. Locomotive foremen make periodical visits to the various outstations under their control to investigate the running.

Delays to trains owing to engine failures are not numerous, and trains keep good time, hut it must be borne in mind that their running-time is easy, and that, generally speaking, they are lightly loaded. Road foremen, who are under the supervision of the locomotive foremen, periodically travel on various engines with a view to instructing the enginemen on the more efficient handling of locomotives, economical use of fuel and stores, and the handling and braking of trains and methods to be adopted in dealing with various breakdown*. HOURS OF DUTY OF ENGINEMEN. As far as practicable the work of all' enginemen is arranged on an eighthour day basis, with a maximum of 12 hours for any one shift. In the event of any delay occurring to cause the hours of any shift to exceed 12 the drier must adise his locomotive foreman by wire so that arrangements may be made to relieve such enginemen of the putting-away of their engines on arrival at the home station, or to nend out a relieving set of men to ensure that the working of the excessively long hours is reduced to a minimum. On an examination of the drivers’ ■tickets it is observed that numerous occasions occur of engine-drivers filling up their day in washing out, cleaning of engines, etc., and, having regard to the rate of wages applicable to engine-drivers, this appears to us as being an expensive matteer. It is quite obvious that drivers are not worked to the best possible advantage, and a revision of the time-table is necessary. WORKING OF ENGINES. In practice the majority of the engines are not restricted to a particular class of train, either passenger or goods, and there is considerable variation in the nature of train-running by locomotives from day .to day. In a number of discs enginemen change locomotivee at ..grossing-stations on the road in order, to avoid long hours on duty. Where' such changing-over occurs endeavour, is made to work engines back - to’ their home station by other trains to permit of the same cleaning and repair staff dealing with engines stationed at their own depot. RUNNING-REPAIRS AT LOCOMOTIVE DEPOTS. At the conclusion of each day’s run the engide-driver is required to enter in the repair-bookj kept at the locomotive running-shed, any matters concerning the condition of the engine that need attention, and the runningshed repairs staff carry out all repairs booked m this register before the engine is again sent in to service. Running-repairs,, such as adjusting brasses, attending to hot bearings, Working -piston and maintenance of packings and joints attention to boiler-tubes and superheaters, replacing broken, springs, 'wore brakeblocks, brick arches, and cleaning boiler-tubes, are undertaken -at tne various running-sheds. . • ORGANISATION. It is essential that there should be a chief mechanical engineer fully qualified and- thoroughly conversant with wp-to-date methods of railway working, who should have one divisional engineer in eaoh island to assist him. At..is a question whether the divisional engineer in the North Island could not act as assistant to the chief mechanical engineer, thus wiving three officers. This would enable better salaries to be given, with no increased cost, and would 'also put the works managers on a mow nibsttmti&l footing. RUNNING-SHEDS. There is a good deal of money wthioli, it is suggested should be spent on the running-sheds. We think that the proportion of engines under cover is -such that a large expenditure in this connection is- not warranted. At any rate, it -is noe -one of the most important needs of the mechanical engineering department. STATISTICS. There seems a great want of suitable returns comparing costs, etc., with other railways. It is impossible to be satisfied that the best is being done without a comparison of some Sind. technical training. It Would not appear that the young engineers are encouraged to qualify for any technioal degree. In fact, the chief mechanical engineer deprecated any introduction of a method by which this might be carried out, having a poor opinion of the technical training in Wellington, as will be seen by his' evidence. Should this be continued, it will be impossible for engineers trained in the railway service to rise to important positions in the future. We consider -this matter worthy of careful consideration. RAIL MOTOR-CARS.

There are many difficulties to be overcome with regard to rail motorcars using internal combustion engines on railways with heavy gradients, frequent stops, and requiring high acceleration. Wo are, therefore, unable to recommend any particular diesign which might he expected to fulfil the requirements on the New Zealand railways. It is noted that it has been decided to make trials of . certain petrol-driven vehicles. The information gained by these should bo of value.

For a light train service a suitable steam locomotive would seem to be preferable. and as a teontinel-Cammoll steam .rail coach is on Order, and this appears to have worked traffic satisfactorily and economically in Jersey over heavy gradients of 1 in 40 and round S-, 7-, and 9-ohain curves, with frequent stops from Corbicre to St. Heliers, useful information will be gained, our knowledge of the work done being second hand. The, North Eastern Railway of England ran steam trains with the locomotive in between two coaches, and with a driver’s compartment at each end, so designed ns to allow the driver working the train from each passenger coach, the fireman alone being on the engine. An old light locomotive was used and worked satisfactorily. It had the advantage that old Stock was utilised which had become obsolete for heavier "work, but was in every way suitable for light work of this description . On the New Zealand railways there would appear to be engines of light design, which it is understood are unable to deal with the work for which they were intended—i.e., Classes L and La, and these might be made use of by attaching a coach for light train service such as would be expected of a rail motor vehicle. These could take an extra coach, if necessary. We would strongly recommend that these be tried before experimenting with a light typo of steam engine which, if not successful, would be absolutely useless. We also think it unwise and injudicious- to work these engines with only one man. On looking into the working cri branch lines it nhows that engines taking mixed trains ft re kept standing for many hours. It would bo possible and desirable to rearrange the working so

as to allow for the running of a light passenger train by the same engine and carriages. This would enable more use to be made of the men and also of the rolling stock, instead of using a motor vehicle. We do not recommend any further money being expended on motor-coaches at present. RECOMMENDATIONS OF THE COMMISSION A SUMMARY FINANCE. (1.) That railway finance be taken out of the control of the Treasury, and the Railway Department be given full control of ite own funds. (2.) That reserve funds he established to provide for obsolescenoe and wasting assets of permanent-way and rolling-stock. (3.) That the Railway Department be recouped by consolidated revenue for losses incurred upon development lines, less the net value of traffic contributed by such lines to main lines. (4.) That the Railway Department pay the actual rate of interest upon loans raised for railway purposes. (5.) That the railways be so worked and managed that the gross reshall be sufficient to cover work-ing-expenses, reserves, and interest on capital, including sinking funds. In the even of any surplus, this to be devoted to reductions of rates and fares, and in the case of a deficit rates and fares be increased. (6.) That a yearly balance-sheet, showing capital, revenue, and net revenue, followed by departmental accounts in the usual company form and a corecast of capital commitments for the following year, be rendered to the House of Representatives. (7.) That the value of stores found on hand with branches and not on charge in the hooks of the Comptroller of Stores be used as the nucleus of a reserve fund for arrears upon rollingstock. ORGANISATION. (8.) That the Railway Department be managed by a Railway Board, comprising a chairman and two other members. • (9.) That a secretary, cashier, and an operating and equipment assistant he appointed. (10.) That a chief mechanical engineer, fully qualified and thoroughly conversant with up-to-date methods of railway working, be appointed. HI.) That general superintendents, one for the North Island system with headquarters at Auckland, the other for the South Island system with headquarters at Christohnrch, be appointed, responsible to the board and acting under regulations and instructions applicable to the system ae a whole, for operation, commercial matters, and maintenance within their respective divisions. (12.) That the number of traffic and civil engineering districts be reduced to six, three to each island. (13.) That one divisional mechanical engineer in each island is sufficient, and that consideration, be given to the question as to whether the NorthIsland: divisional engineer could not act as-assistant to the chief mechanical engineer. ENGINEERING. (14.) That new litrea likely to become main lines be laid with 701 b section rails as a minimum. (15.) That consideration be given to ■the employment of flying gangs for the maintenance of branch lines. '(16.) That moctoieations- be 1 - made ftp the proposals for improvements andj new works essential to copo with prek sent and prospective traffic. MECHANICAL. (17. y That modem machinery be provided in the locomotive workshops, and the'general arrangements reorganised. (18.) That a progress system lor dealing with repairs be adopted iq the works. (19.) That a system - of standard gauges bo introduced in connection with locomotive maintenance and renewal. (20.) That at Addington works a separate shop be provided for the maintenance of points and crossings. (21.) That the methods of bringing in locomotives for repair ho carefully reviewed, to avoid engines being brought in for thorough overhaul too frequently. (22.) That Petone and Addington works deal with the whole of the locomotive requirement in both islands. (23.) That Napier, Whangarei, East Town, Grey mouth, and Invercargill be closed down for locomotive work. (24.) That improved methods for getting engines through the shops he introduced, in, order to reduce the average time for heavy repair and thorough overhaul. (25.) That large expenditure on run-ning-sheds is not warranted, as the proportion of the engines under cover would appear to be sufficient. (26.) That the capital stock of locomotives be regarded as ample for requirements, bearing in mind the small annual mileage per engine. (27.) That as the average age of the existing stock of locomotives is high, indicating a number of obsolete types, these he replaced as early as possiblo. (28.) That, in addition to peiyetuating the A, Aa. Ar, Wab, and Ws clsases, a powerful type of sbqnting engine with throe cylinders, also a main line express engine having sft 6in driving wheels and three cylinders, be de-, signed, and for taking goods trains of heavier weight over steep inclines a suitablo Garratt engine be utilised. (29.) That new locomotives be pnrcliaed from outside, father than built in the existing shoos, which are not laid out for doing this economically. (30.) That consideration be given to Utilising old classes of engines, such as L and La, with one or two vehicles attached 'instead of ordering special rail motors. (31.) Tht consideration be given to the purchase of Welsh coal, which, as has been stated in evidence, would reduce consumption. (.32.) That trials-lie given to ascer tain to what extent it would he possible economically to use New Zealand coah (33.) That consideration be given to the maintenance costs of carriages and wagons, which would appear to be capable of reduction. (31.) That as the wagon stock appears to be high, careful consideration be given to the matter. (35.) That ns the average ages of car riages, brake-vans, and wagons are respectively 22.77, 27.45. nd 22.79 years, indicating a number of obsolete types, those be replaced as early ns possible, (36.) That standardisation be in traduced in connection with the length of carriages over lieadstocks. The types should not, exceed three, or at the outside four. Bogies and undor-franior also to be standardised. (37.) That suitable statistics.! returns comparing costs, etc., bo introduced. OPERATION. (33.) That a complete revision of time-tables is essential. (39.) That mixed trains be reduced to a minimum. • Otl.) That tourist, excursion, and half-day suburban traffic bo encouraged by increased facilities and papular fr.rrs. (41.) That the control of train move-

ment and distribution of wagon stock be centralised. Tha.t goods and paxoels in combination .with - meftoi-owhers he .introduced. (43.) That no rental in addition to cost of construction and renewal he charged on private sidings. ' RATES AND FARES. (44.) That excursion fares be reduced- , (45.) That fares for distances up to three miles be reduced. t (46.) That great caution he exerxased in reducing rates. (47.) That certain coal rates he increased. STORES. (48.) That the stores branch be reorganised so that the whole of the stores, including coal, be brought under the direct supervision of the Comptroller of Stores. (49.) That improved methods of conservation, distribution, and stocktaking be, introduced. j, (50.) That the method of charging out stores be simplified and arranged so that the Railway Department as " sumes responsibility for items immediately they are delivered. GENERAL. ; (51.) That more complete statistical ’ data be compiled. (52.) That a graduated scheme of \ railway-training be instituted. (531) That a programme of officers’ - visits to other railways he arranged. In this report under the several headings we make a number of suggestions which we consider should follow on the adoption of the above-mention-ed recommendations.