THE RAILWAY SERVICE.

Otago Witness, Issue 3888, 18 September 1928, Page 14

THE RAILWAY SERVICE.

ira EXPANSION OF GOODS TRAFFIC. NUMBER OF PASSENGERS DECLINE. The Railways Statement was laid on the table of the House of Representatives on Tuesday by the Prime Minister, Mr J. G. Coates, who is also Minister of Railways. It presents a review of the operations of the service during the past year and shows that while the goods tonnage carried on the railways has increased, the resultant gain in revenue has been more than offset by the decline in the passenger traffic. The net earnings are less than those of last year by about £100,000; but owing to an increase in the burden of interest charges the deficit on the year’s workings is shown as £291,452, compared with £99,659 in 1927. The Minister reiterates his policy of providinj a service that will adequately meet the transport needs of the community while at the same time exercising a proper degree of economy.

MINISTER’S STATEMENT.

FINANCIAL OPERATIONS. REDUCED PASSENGER REVENUE. In presenting my sixth annual Railway Statement, said the Minister, I have to report that the gross revenue from all sources was £8,524,538, an increase of £89,884 on that of the previous year, whilst the expenditure was £6,685,123, an increase of £194,243. The net earnings, therefore, amounted to £1,839,415, or £111,360 better than was antcipated in the forecast given in my last year’s Statement. The net revenue amounted to £1,839,415, as compared with £1,943,774 last year, a decrease of £104,359; while interest charges increased from £2,043,433 to £2,130,867, or by £87,434. Included in the gross revenue is the sum of £489,568 credited in respect of developmental lines, At sum which is higher by £44,347 than the corresponding amount for the previous year. A sum to cover accrued depreciation and provision for renewals, amounting to £615,674, was debited during the year to working expenses. Against this there was an expenditure of £321,542 for assets written off or renewals effected during the year. The net increase in the rerenews and depreciation fund was therefore £294,132, the total amount standing ' at credit of the fund at the close of the year being £930,870. Interest charges increased from £2,043,433 to £2,130.867, or by £87,434. Of this increase, new 7 lines taken over during the year accounted for £11,608, while the balance was due to improvement works and the provision of additional rolling stock. The interest burden on improvement works under construction was particularly high this year, amounting to £75,000. This amount is charged to working expenses. The revenue from passenger traffic decreased by £158,884, or by 7 per cent., the principal contributing factors being the heavy bookings incidental to the tour of our Royal visitors, the Duke and Duchess of York, in the previous year, the competition of road motor services, the increase in the number of private motor cars, and the trade depression through which the country has been passing. Unfortunately, it has not been possible to reduce expenditure' on passenger services in keeping with the very heavy shrinkage in revenue, but, on the contrary, it has been necessary to provide more attractive services at higher cost in the endeavour to retain existing business. This is borne out by the fact that the revenue per passenger train mile decreased by nearly 11 per cent. It is noteworthy that low-rate suburban season ticket traffic shows an increase of more than 5 per cent.,-with a corresponding increase in the peak load for which

accommodation must be provided. Freight revenue increased by £83,969, or approximately 2 per cent. Substantial increases in live stock, grain, frozen meat, dairy produce, wool, native coal, motor spirit, cement, and manures were to some extent offset by a decrease in timber and road metal. It is unfortunately a fact, however, that owing to the operations of competition by road services the railways are not securing the full benefit of the increased primary production in the Dominion. On the expenditure side the principal increases occurred in maintenance of permanent way and signals (£74,743) and maintenance of rolling stock (£77,283). The increase in permanent way expenditure is due partly to the greater average mileage of track maintained (21 miles) and the necessity for improving the condition of tracks and bridges to carry a greater volume of high-speed traffic, and heavier axle loads. _ . The increased cost of maintaining rolling stock is attributable largely to the higher overhead charges arising out of the workshops reorganisation, on which heavy expenditure (that is- not yet reproductive) has been incurred. The greater number of dwellings provided for the railway staff was responsible for an increase of £24,717 in expenditure, while additional road motor services account for an increase of £23,877, including full provision for interest, depreciation, and maintenance. During the year the number of men employed Was considerably in excess of'requirements, but as a matter of policy their services were retained in order to relieve unemployment. RETIREMENT OF RAILWAY BOARD. Mr F. J. Jones, chairman of the Railway Board of Management, retired on March 31, 1928, and the necessity arose for a reorganisation of the railway ad-

ministration. Of the remaining two members of the board, Mr A. W. Mouat had already asked to be allowed to retire and Mr J. Masom- expressed his willingness to retire in order to facilitate the Government’s efforts to secure a permanency in administration. After carefully considering all aspects of the matter, the Government decided to appoint Mr H. H. Sterling to the position of general manager. I am sure that his return to the department as general manager with an enlarged commercial and executive experience will be of material assistance to the Government in connection with the administration of this important department. In reference to the retirement of the board, I desire to express my own keen appreciation, and that of the Government, in regard to the industry applied by the late board in dealing with the large volume of work necessitated during their term of office by the introauction of new methods and a modernised policy. I also wish it to be placed on record that the board performed good work at a critical stage of railway history.

TRANSPORT CHARGES. The goods traffic conveyed on the railways shows a steady growth, but it also has suffered severely from road competition, principally in the higher rated classes of goods. The average charge for conveyance of freight traffic by rail last year was 2.41 d per ton per mile. If this average charge could have been increased by as little as 0.15 d per toninile the deficit on the year's working w-ould have been met. while an average charge of. 2.01 d would have placed the railways in a position to dispense with tW credit received from the Consolidated Fund for the loss incurred on branch lines and isolated sections.

The question of ton-mile costs by any other method of transportation must be kept ever in view. To illustrate my point. 1 may say it is estimated that to carry existing railway freight by road—even assinmng the roads were in existence and sufficiently strong (which they are not) to carry the freight—its transport would cost no less than Is and possibly nearer Is od per ton-mile. In other words, the years goods-freight of 7.366,762 tons, which cost less than £5,000,000 to trans- „ y rail, would have cost at least £-3,000.000 to transport by road. The impossibility of economicafly carrying all fi eight by road is obvious", one need only mention coal, timber, stock, and fertilisers to giv e point to this statement. 1 lien there are the many inland industi ies entirely dependent for their very existence upon cheap transport cost, which the railways alone'can supply. It must further be remembered that the ni ?J e , freight is carried by road the less will be the benefit derived by, the community from the facilities available for cheap transport by rail. ROAD MOTOR SERVICES.

During the past year the department's road motor operations have been further extended by th e purchase of 38 buses which were operating in the Hutt Val-ley-Wellington service, the three buses which were furnishing service between Christchurch. Springfield, Whitecliffs, and Kowhai Bush. These vehicles were purchased by tile department in continuance of the policy, instituted ..in the previous year, of effecting a consolidation of the road and rail services in suitable areas. Experience clearly demonstrates that the motor bus has come to stay, and that for city and suburban passenger transportation it has a definite field of usefulness. The heavy peak traffic in suburban areas is such that it- cannot be handled economically by the motor bus, and the experience gained in the operation of road vehicle services in suburban areas indicates that the welfare of the travelling public is best served by a co-ordina-tion of the road and rail services rathej than by the general supplanting of the railway by the road vehicle. The depart ment now has a fleet of 56 motor buses in operation, and th e policy of developing the road vehicle as an auxiliary to the railway will be • continued in areas where the circumstances are such as to warrant the introduction of these services. PASSENGER TRAFFIC. The decline in passenger traffic that has been experienced since the year 1921 has had a very serious effect on the financial position of the railways. The problem is not peculiar to New Zealand, but is causing grave concern to railway managements in practically all countries. In the seven-year period 1914-21 the number of passengers carried by rail increased from 23,200,000 to 28,800,000. or by 24 per cent., and the revenue from £1.450,000 to_ £2,658.000, or by 83 per cent: ' Between 1921 and 1928 the number of passengers has decreased to 25,400,000, or by 12 per cent., and the revenue to £2,150.000. or by 19 per cent. The decrease is confined to the more profitable -ordinary passenger traffic. Season-ticket

business has shown a steady increase, which is' very marked in the low-rate suburban weekly tickets. A decline ot 6,016,483 ordinary passengers has been accompanied by a decrease of £568,351 in revenue, while an increase of 2,574,365 season-ticket passengers was responsible for an increase of only £59,914 in revenue. Exclusive of annual season tickets issued to members of the Legislature, which were not included in the returns prior to 1926. the average revenue ner season ticket journey was 3.5 d in 1928 as compared with 3.7 d in 1914. The number of passengers carried at season-ticket rates was 42 per cent, of the total in 1914, 47 per cent, in 1921, and 63 per cent, in 1928, while the season-ticket revenue for the corresponding years was 10 per cent., 7 per cent., and 12 per cent, respectively of the total passenger revenue.

The decline in revenue has not been followed by a commensurate decrease in expenditure. On the contrary, it has been necessary to provide increased and faster train services, together with improved facilities and rolling stock, in the endeavour to meet competitive conditions and retain a fair share of the business. The passenger train-mileage increased by 27 per cent. —from 3,082,000 in 1921 to 3,725,000 in 1928; while the revenue per train-mile decreased from 207 d to 131d—equal to 37 per cent. Every endeavour has been made to reduce costs, but the total running expenses have increased considerably. Higher train speeds have resulted in graater expenditure on maintenance of track. Improved standards in the comfort of passenger accommodation have been followed by a constant increase in capital cost, maintenance expenses, and tare weight of carriages, with a reduction in carrying capacity. In order to encourage traffic, selling and publicity organisations have been built up, improved booking facilities have been provided, and every avenue for exploiting the business has been thoroughly explored. While there is no doubt that this policy has been abundantly justified, it is unquestionable that the cost of carrying a much smaller volume of passenger traffic has increased, both actually and relatively, and the financial position of the railways has been seriously weakened. The position as it now exists is due wholly to the development of the road motor. Up to the present the decline in rail-borne ordinary passenger traffic shows no sign of having been checked either in New Zealand or abroad. A gross profit of 38.06 d per- passenger train mile in, 1914 and 61.86 d in 1921 has become a loss of B.lod per train mile in 1928. Not only is passenger traffic making no contribution towards interest charges, but it is not carrying its full shffre of operating costs. The loss has been met in part by the increased charges 'levied on certain classes of freight in 1925, but the balance has not been provided for, and the accumulated loss remains to the debit of the Railway Account.

SPECIAL-FEATURE TRAINS. During the year a great advance lias been recorded in the development of special excursion passenger traffic. The principal methods adopted have been the running of farmers’ trains and special week-end trains. In regard to farmers’ trains, which have been developed along progressive lines, representative farmers have reported in every case that the outing had been very well worth while; that their knowledge had been considerably extended; and that they have become better acquainted with those engaged in primary production—even with the people of their own province—on the excursions, through the facilities available for meeting and exchanging ideas upon topics of mutual interest. I believe that the “ farmers’ train ” idea has been more fully developed in New Zealand than in any other country. Moreover, other departments of State, notably the Agricultural Department, have lent valuable assistance in carrying out the scheme. It would he difficult to find in the whole range of the Dominion’s social life a movement that has drawn together more effectively people with similar interests, or that has been of so much practical value in the direction of standardising farming methods. In arranging these excursions the Railways Department has happily combined service with profit—profit both to itself and to the excursionists. The profit of the de-partment-is not large, but more particularly gratifying is the large amount of public satisfaction that is being afforded, and while this result can be .thieved with even the smallest margin of profit the department will have been realising in practice one ,pf the fundamental reasons of its being and what I regard a the main test of its success, namely, satisfactory service to the pub’ic. A further application of railway service to aid national development is ound in the arrangements that have been made to give those interested in commerce and in the secondary industries generally an opportunity that might be considered as equivalent to that already granted the farmers, for a plan is in hand to enable the running of an industrial train through the Auckland province in October. Alread the chambers of commerce have taken interest in this undertaking, and the touring business men and manufacturers will have an unequalled opportunity of coming into touch with people in every phase of the industrial and business life of the Dominion, and of learning the latest in manufacturing science that any district has to offer. Other pleasurable railway outings that have become a feature of traffic operating here are “ week-end excursions.” These excursions are also personally conducted, and everything possible is done to make the outings thoroughly enjoyable. During the year under review there liavd been 23,616 miles ruu by special

trains of this type, 21,634 passengers have been carried, and a revenue of £15.609 has been earned. IMPROVEMENTS AND NEW WORKS. In view of the rapid changes now occurring not only in transport matters, but in the producing and commercial situation of the country generally, I think it is desirable to present a review of the whole position in regard to railway developments. The comprehensive programme of improvements and new works adopted in 1924 provided for an additional capital expenditure upon railways aggregating £8,000,000, this amount to be spread over a period of ten years. In presenting my programme for 1924 I emphasised that the position in regard to works which were urgent in 1914 had become acute during the succeeding decade, the revenue having increased between 1914 and 1924 by nearly £3.000,000, the passengers carried by 5,000,000, and the goods traffic by 1,000,000 tons. The 1624 report was drawn up in consonance with the Government’s general policy of national development in regard to land, hydro-electricity, telegraphs and telephones, wireless, irrigation, roads, highways, etc., each phase being related to the extensive programme of development of _the country’s facilities that must proceed if the full resources of the Dominion were to he applied towards the public welfare. It was pointed out that' since 1914 over 200 miles had been taken ovsr by the Working Railways Department, and that during the period of the programme a further 427 miles would be taken over. Since the 1924 programme was submitted 248 miles 36 chains of line have been taken over. This extra mileage has drawn further upon the rolling stock resources of the system and has accentuated the necessity for the adoption of methods to secure operating improvements. Notwithstanding the very heavy commitments necessary in the first year of the programme, the Government added to these by deciding to proceed with a complete reorganisation of its locomotive workshops. Experience gained during recent years from a study of the rapidly changing conditions in the field of transport, whilst fully justifying the policy that had been. laid down, calls for an amplification of the original programme, and, in addition, expanding business in new directions requires additional facilities. It has noy become apparent that developments in new directions, for which no provision was -made in the original programme, have become essential, the most important < being electrification at the important termini. a subject which I have now under consideration. These changed conditions have necesitated a complete review of the works contemplated, and I have asked the general manager to arrange for fresh proposals to be formulated, in classified order of urgency, based on present-day working conditions, and having regard

to the changed circumstances in many phases of our transport system. REORGANISATION OF WORKSHOPS As outlined in my Statement of 1925, the programme of reorganisation of the railway workshops was estimated to take three years. The methods for the new workshops reorganisation and the plans of the shops were finally approved in May, 1925, when details of the shops were sent to England for tenders. Tenders for the construction of the new chops were accepted from Sir William Arrol Co. and Dorman, Long, and Co., England. The coal strike in England in 1926, unfortunately delayed the despatch of the steel to New Zealand, and the programme consequently was delayed approximately seven months. However, since the arrival of the steel structural ' work, steady progress has been made, and at the present time both the Otahuhu and Hutt valley shops are nearing comple turn, and will be in use within a few months. In the South Island the situation is progressing more slowly on a- count ot the reconstruction Having to take place on the same sites as the present workshops. Consequently the buildings can only r be erected as old buildings are removed, on account of the necessity of meeting current requirements. The plan, in general, provides that all major repairs of locomotives will be done m one shop in each island, so that the maximum benefit of specialisation and special machinery can be taken advantage of. Thus the Hutt Workshops, in the North Island, and Hillside Workshops, in the South Island, will be locomotive repair and building shops, while Otahuhu and Addington. i n the North and South Islands respectively, will be the car and wagon repair and new building workshops I he design of the shops provides for extension should such at any time be considered necessary. Hie interna] capacity ot the shops has been especially increased to obviate one of the greatest losses in workshop operation in the old shops, namely', that arising from a large proportion of the work being carried on outside, exposed to the weather conditions. Provision has been made in the new workshops for building the departments requirements in renewals and newrolling stock. Another very important aspect that has been largely influential in determining the matter of improvement in workshops has been that of' the welfare of the men. Not only- will the new workshops provide an altered outlook for the men from the point of view of congeniality' as regards their working conditions. but their leisure hours have also been liberally catered for by the provision of such facilities as social halls, etc. With the completion of this scheme for concentrating all work into four main workshops, the smaller shops at East Town, Napier, Greymouth, and Invercargill will not undertake any heavy repairs. At East Town the points and crossing work for both islands has been concentrated. Here, also, all tarpaulin work for the North Island will be done, the South Island tarpaulin work being concentrated in the new shop at Addington as previously. In connection with the rearrangement of the staffs at the various centres a large number of transfers has been involved. Many difficulties have arisen in this connection, and I wish to place on record my' hearty 'appreciation of the invaluable services rendered by the. workshops committees in solving the serious problems that were inseparable from these transfers. These committees discharged their difficult task most conscientiously and thoroughly, and achieved results that could not possibly have been obtained in any other way. In my Statement for 1925 I indicated that provision was being made for the adoption of accurate costing methods and production schedules. These axe now in full operation, and the new shops will start off with fully-trained staffs in both these connections. The results achieved so far are sufficient to indicate that the savings anticipated have not been overestimated. For instance, in the four main workshops where the new modern machinery on the first year’s quota was temporarily installed, and where production schedules were introduced to route the progress of the work, the number of days engines were out of service under repairs has been reduced from 55 (1925 average) to 38 for a complete overhaul. from 36 to 24 fqr a heavy repair, and from 14 to 11 for a light repair. As an example of the results of improved methods and facilities. the building of 200 J sheep wagons at Newmarket Workshops has shown what has even already been accomplished. These wagons were a duplicate of similar previous orders, so that an accurate comparison can be made. The cost of wages per wagon in 1928 was £SO 5s lid, as compared with £67 14s 7d previously. A reduction of 27 per cent, is thus shown. USE OF NEW ZEALAND COAL. It is the Government’s policy to use upon the railways as large a proportion of New’ Zealand coal as can be warranted by the general economics of the fuel situation from time to time. The economic factor must, therefore, be considered as governing the application of this general principle in regard to the use of native coal, and must be taken as an explanation of any fluctuations recorded in the proportions of native and imported coals used when comparisons are made as between one year and another. For instance, present quotations indicate that Welsh coal can be landed in the Dominion at a price equal to that paid for the best New Zealand coal, and, with definite knowledge of the high qualities of the Welsh product and its suitability for our requirements, it is clear, that consideration must be given to the alternative of importing by those responsible for coal purchases. Convincing proof that the Government has succeeded in its special efforts to make New Zealand coal the principal fuel in use on the railways is afforded by the fact that whereas in 1924-25 New Zealand coal represented only 23 per cent, of the total, by 1927-28 the percentage had risen to 65.5. At the present time the department is buying all the bituminous (hard) coal it can procure from the New Zealand mines, in addition to the maximum quantity of native brown (soft) coal that it can burn. Waikato coals are being used to the limit of practicable consumption. Regarding the scientific treatment of coal and lignite by distillation, it has been stated that New Zealand brown coal eo treated would produce«« smokeless fuel of high calorific value. The possibilities presented by the carbonisation of our native brown coal, thereby producing &

satisfactory fuel for use in locomotives, have not been overlooked by the Government. The Railways Department, in conjunction with the Mines Department and the Department of Scientific and Industrial Research, has, after obtaining the most up-to-date information and special reports from the leading authorities in England, fully investigated this matter, and the mining interests in the Waikato are fully acquainted with the results. As an indication of the practical encouragement given by the Government to the establishment of a carbonising plant, we have made an offer to let a contract for the supply of all railway coal requirements in the middle North Island district should the industry be established. RAILWAY LAND.

At the inception of the railway system the Minister was given power to lease sites on the railway land for storing goods, and this provision was taken dvantage of in the South Island, and particularly in Canterbury, where stores were erected by settlers and merchants for the 'storage of grain and other produce. This was not only a great convenience to the lessees, but also of considerable advantage to the department. In the course of time, as settlement advanced, tnere was a demand for business sites on railway land near railway stations, and the Minister’s powers of leasing were gradually extended until now leases can be granted for a term of 21 years with a right of renewal for a similar term. Valuable business sites on railway land at Petone and Newmarket will be available for leasing when the new railway workshops are opened, and the time has arrived when, in order to obtain the best financial results, more attractive leases must be offered to the public. It is proposed, therefore, to introduce this session legislation whereby the powers of the Minister may be extended so as to enable the department to grant such conditions of tenure as will enable the best rent to be obtained. CONCLUSION. It is proposed to continue the policy that has been pursued during recent years of running the department in accordance with sound commercial principles, with an eye ever upon the development of the country. I recognise that the department must give a service that will enable the transport needs of the community to be adequately met, while at the same time extravagance and undue costliness in the matter of railway services are to be strictly avoided. During the past year the ra.ilway staff has given valuable service in the practical development of this policy, and I desire, in conclusion, to pay my tribute to their work in this connection and to say that I look forward with the greatest confidence to a continuance of their efforts to maintain the railways in the highest possible state of efficiency. RESULTS OF WORKING.

The following is a summary of the working for the year ended March 31, 1928, as compared with 1927: — tear ended March 31.

revenue will reach £8,500,000 and the expenditure £6,670,425.

Before justices of the peace at Hastings on Thursday last Thomas Martin Power and Frank Pepper were committed for trial at Napier on a charge of robbery with violence on August 29 by stealing £l3 and a watch, of a total value of £l4, from the person of John Scott, station cook. Charged at Christchurch with using insulting language to naval reservists in Cathedral square (says an exchange), Victor Robert Blackburn, aged 18, said that because of the men’s leggings and uniforms he thought that they were American bluejackets. Accused was fined £3, in default 14 days’ hard labour. An application for time to pay was refused. Blackburn had called out, “ Who won the war? ”

Particulars. 1928. 1927. Total miles open tor traffic . . 3.180 3,164 Average miles open for year .. .. 3,178 3,157 Capital cost of opened and unpencd lines .. £58.797,458 £56,028,477 Capital cost of open lines .. .. 51,187,376 £49,183,916 Capital cost per mile of open lines £16.097 £15,545 Gross earnings .. £8,524.538 £8,434,654 Working expenses £6,685,123 £6,490,880 Net earnings .. £1,839,415 £1,943,774 Interest charges.. £2,130,867 £2.043,433 Deficit £291,452 £99,659 Percentage of total working expenses to gross earnings 78.42 76.95 Percentage of net earnings to capitai invested .. 3.64 3.99 Railway operating earnings .. .. £7,343,845 £7,423,472 Railway operating expenses .. .. £6,302,119 £6,158,283 Net railway operating earnings .. £1,041,726 £1,265.189 Percentage of rail- » way operating expenses to earnings 85.81 82.96 Operating earnings per average mile open £2,310 £2,351 Operating expenses per average mile open £1,983 £1,951 Net operating earning per average mile open .. .. £327 £400 Operating earnings d. d. per train-mile.. 162.62 166.14 Operating expenses per train-mile ... 139.55 137.82 Net operating earnings per train-mile 23.07 28.32 Passengers, ord- ■ nary 9.299.157 10,305,065 Season tickets .. 632,763 585,094 Total passenger journeys .. .. 25.379,665 26,002,137 Goods tonnage .. 6,854,865 6,833.436 Live stock tonnage • 511,897 475,013 Train-mileage .. 10.838,594 10,723,864 Engine-mileage .. 15,383,051 15,212,086 1’or the current year I anticipate the