RAILWAY MANAGEMENT

Taranaki Daily News, 3 October 1929, Page 9

RAILWAY MANAGEMENT

COMPETITION FROM ROADS AID TO LANDS DISVEU'I’MLNT. CONCERN OF GENERAL RUBRIC The first and. .largest differentiating factor is the new lines that were taken over during the year, and for which credit for loss was not received by the department, says the general manager of railways,, Mr. H. H. Sterling, in his annual report. These were the Kirikopuni and East Coast Alain Trunk sections. The operating revenue on the Kirikopuni section from the time it was taken over until the end of the year was £2495; the expenditure was £7481. The expenditure on the East Coast Main Trunk railway was. £72,689, while the. revenue was £49,678.. The total operating expenditure on the two lines was (£80,170. and the operating revenue was [£52,173. Deducting these figures from the revenue and expenditure as shown in the figures for 1928-29, we find that if these two lines had not been taken over the expenditure would have shown £6,769,213 and the revenue £8,695,802, giving a net revenue on that basis of £1,926,589, as compared with a net revenue on the same basis last year of £1,839,415, tin increase for this year of no less than !£87,174. In addition to this, it has to lie noted that during the year under review there hftfl been put aside out of revenue for the general renewals and depreciation fund and the insurance fund Ito less than £43,680 more than last year, all of which money,, of course, ■was actually earned by the. department O.s revenue over its operating: expenses.’ •It will.be seen, therefore..’that if we Consider the railways from the point of view of operating revenue and expenditure, the department has made substantial progress during the year. HANDLING OF TRAFFIC. Dealing with the question of the more Economical working of the traffic at present handled by the department, I feci that there should be possibilities in this direction by the use of smaller units of transport production, which may bo in [pie form of rail-cars »r engines of smaller size or special type. This is one of (the questions io which I gave consideration soon after I assumed the full duties of my office, and it is now. the subject of comprehensive investigation. fan the completion thereof definite proposals will be immediately formulated, (To the end also of reducing operating icoste there has already been substituted in some cases on our system road motorbuses for trains, and Where this cau.be done to the financial advantage of the department I can see no sound reason [tyhy the department should not protect its revenue by such means, and continue (to give the transport service to the people of the districts affected that before the development of the road motor ve.jiiicle was given by rail. I regard it as imperatively necessary that art improvement should bo Snado in the standard of our passenger polling stock. We. have drawn up a programme of rolling stock construction' to this end, but our capacity to carry Out this programme is, of course, limited by the amount of finance thdt can be made available, and I desire to express the opinion that, the improvement Or, indeed, the maintenance of the position of the railways, will depend on the •making of such financial provision as will not hamper our efforts in this connection. I desire to emphasise the aspect of the Effect that is likely to accrue from a growth of the practice of allowing the road motors to take high-class goods, while - leaving those in the lower classes [to the railways. The inevitable results pf such a procedure are, I think, such as call for the very serious consideration of every member of the community. The capital invested in the railways fs irretrievable, and it is, moreover, borrowed capital. The overhead costs remain more or less fixed, and, however good the management may be, coste Cannot be reduced in proportion to the [loss of business diverted to the roads. JTh& expenses hitherto recovered from passenger or high-grade goods traffic must be recovered from the busine-is .that remains or be passed on to the taxpayer. LOWER GRADE FREIGHTS. If such expenses are charged against the long-distance or lower-grade traffic A serious position must arise. An increase in the long-distance rates will penalise the inland areas, which, being almost entirely dependent on rail transport, will pay more for their imports Und can export only at higher cost. The cost of primary production will rise owing to increased freights on such lowrated goods as coal, fertilisers, timber, grain, fruit, livestock and roadmetal, Whether for long or short distances. Coastal district's that already reap the benefit of short haul road transporta;iion rates will receive no additional' benefits, but will pay more on bulk [traffic. Speaking broadly, it; appears that the pendency will be to reduce the cost of imported goods in districts adjacent to sea ports and to increase the cost-, of primary production in all districts, a tendency which may result in disaster a country depending so largely on jts exports of primary products. A fair proportion of farm products are 'seasonal, and result in an unsual demand at certain periods for transport equipment, and this involves expensive Empty waggon haulage in order to have the wa"goufl at the various loading stations to°mcct requirements. The railways also afford direct advantages to the farming community by concessions .that have been frequently stated and are well known, such as low rates for agricultural lime and artificial manures, etc., and these concessions represent a definite investment by the Community at large in the ventures of the farming industry. It is really equivalent to the community finding some portion of the capital necessary for the adequate development of ihe business of the farmer. What is the community entitled to Expect from the farmers in icturn! purely no less than that the farmers Will, ‘by making use of the railways, give the community an opportunity of recouping itself at least in some mensuse for its outlay on their behalf. It is regrettable indeed that we fiml on some Occasions farmers’ organisations taking an o,l! too narrow view of their obligation in thia regard. They entirely, ignore (he advantages they have received from the policy of the railways and have deserted' the national institution shal hao done and is doing so much for

them to accept a comparatively small advantage that in many ease? must be evanescent-in character. Such a policy on the part of the rural community, if persisted in,'must have an inevitable reaction-. Unjust conditions cannot be permanent. It is obviously unjust for the. railways to make sacrifices in the interests of the farmer who, when the opportunity arises for him to show appreciation of this in a practical way, declines to pursue that course. 1 do not wish my statement in this regard to be misconstrued into a threat —nothing of the kind is intended —I merely state the obvious fact that the searchlight of public criticism is being directed on the financial police of the railways. Its financial operations must come under review, ami if the community does not, through the failure of certain sections to recognise and act up to their moral obligations, obtain the return from its in vestments on behalf of the rural community to which it is morally entitled, action will be compelled by the interests of public finance, which cannot indefinitely sustain a growth in the financial burden which the railways may be on the taxpayer. We have found that the greater proportion of the farming community appreciates the position and accords us loyal support. I would plead with the remainder to consider the position well, as thev arc in danger of doing an injury not only to themselves, but to the farming community as a whole. J a;i7 well aware of the necessity of providing rates for the conveyance of our valuable exports on a scale which will enable them to compete successfully in the world’s markets, and I think it will be found that, when all the circumstances of, the case are taken into consideration, the rates charged for the commodities which constitute the principal items. ,in the railage bill of the man on the land are now on such a basis as will achieve this desirable object A«d at the 6anie time assist materuiliv in the further development of the agricultural and-pastoral wealth of the Dominion. I am optimistic enough to think that with the development which has taken place in the top-dressing of the lands of the Dominion (in which low railway rates for fertilisers play no small part), and the valuable research and experimental work being carried out by the Agricultural Department, the two agricultural colleges, and the various experimental farms throughout the Dominion, the indications point to a considerable increase in our export trade. For bulk transport, which constitutes the major part of our exports, the Railway Department has the facilities and equipment to deal efficiently with such traffic, and there is no doubt that the railways alone can in the future, as in the past, provide that measure of assistance to our rural industries through the medium of transport that is so necessary for the expeditious development of those industries. But to do this adequately the’ railways themselves must be in a healthy condition, and any action that tends to weaken the railways will likewise affect adversely their power for service, and the rural industries will undoiibtedly suffer.

MANAGE RIAL EFIHCIENC Y. 'Are we to have no test of managerial efficiency? To answer this question 1 think we must consider what can and should be expected of the management. Stated iu the fewest words, it seems to me that the duty of (lie management of a railway system such us ours is to carrv out the policy set for the workof the department at the lowest cost that the carrying out of such policy permits of. Obviously we cannot eliminate all the factors that might be held to vitiate the test, but we can get a nearer approximation to such elimination than the accounts afford. I think that bettei information on the internal working of the department can be obtained by inference to the operating statistics. Even these do not wholly eliminate nonmanagerial factors. As being principally concerned (as regards the financial figures} with the working costs, thyj. wdll be affected by such non-managerial questions as decisions of the staff appeal board (the constitution of which, among other things, takes the final determination of all'appeals in respect of the remuneration to be paid for first division positions out of the hands of the management); the policy in respect io unemployment (which may require the department to carry a larger staff than is really necessary for the demands of its business); the policy regarding preference to locally-made or Empire-made materials (which may require the department to pay more for its materials than it otherwise would). I do not wish to be misconstrued as implying any judgment (adverse or otherwise) on these matters. 1 merely mention them in an endeavour to assist towards a clear judgment on the railway position; and while an interpretation of the statistics may entail consideration of. and allowance, for, such factors as those mentioned, I think they approach much more nearly to an elimination of non-managcrial factors Chan the mere balance of the, revenue and expenditure accounts. FARMERS’ EXCURSION TRAINS. The development of the farmers’ excursions took its rise in the first place from the many requests we had from time to time for concessi’ins in the matter of farefl to farmers during ilie slack season iu the farming ityjuslry. YVe could not. as a matter of railway economics, justify an issue of excursion tickets to farmers alone as a class. We felt, however, that the matter should not be allowed to rerst at that, and it was concluded that, if conditions could bo created that would assimilate the farmers’ traffic to that of an excursion traffic which has its principal justification in large bodies of people travelling together, it might be possible to do something to meet the demand of the rural community in the matter of the above-mentioned request. To that end the department has organised farmers' excursions from point to point, and their efforts in this direction have been entirely successful. We have received many expressions of very warm appreciation of our efforts in this direction. The success of the department’s work lias not only again demonstrated its capacity for service in ft direction that is peculiarly ita own, but has also provided a means for the betterment of the Dominion us a whole by affording facilities for the farming community in the various districts to exchange views with one another, to the undoubted enrichment of their knowledge and their capacity to get the best results from their farming operations. LEVEL CROSSINGS. During the year the problem of level crossings lias continued to engage attention, and the’policy of progressive development in the protection of Igvel

crossings has been pursued. The department employs a total of eighty cross-ing-keepers ‘at thirty-seven crossings, at an annual cost of £13,122. of which £llO7 is recovered from local bodies. The expenditure on the elnrihiation of crossings by overhead bridges or subways has been approximately £150,009. There have been warning bells installed at fifty-four crossings, “wig-wag" signals at thirty-two crossings, and flashing light signals al four crossings, at a total cost of £19.080. Every crossing has been provided with standard warniim iioUeos al a cost of approximately £26.000. 'The total expenditure on the protection of level crossings is in, the ticinilv of £195.080. of which amount the Highways Board has spent £13.000 ami the locdl bodies have spent £24.000. and there have been minor amounts provided by other persons or bodies, such as associations of motor interests. The annual cost to the Railway Department of the upkeep <sr warning devices amounts to £3SBO. Adding this to the wages bill for the crossing-keepers it wjll be seen that the recurring expense to the department on these two aspects of its operations is approximately £16,000. A further aspect of the level crossing problem to which consideration has been .riven is that- of the signal which is shown by crossing-keepers. Hitherto crossing-keepers have shown a green flag by day and.a green light by mglit with the growth of motor traffic and the adoption of signals for the regulation thereof it has become recognised that the colour indicating a danger signal to a motorist is red. This has tendc<l to cause some confusion ft! lex cl crossings, and if. could not be but concluded that the time had arrived when some change should be made to avoid tins difficulty. This, is being done in consultation with representatives of the motor associations, .and it is expected that new signals for crossing-keepers will shortly be decided upon, which will in future’entirely obviate- any difficulty ouch as that mentioned above. INCREASE IN THE STAFF. The total number of staff employed on March 31. 1929. including those engaged on works charged to capital, was 19.086. as compared with 18,584 the previous year, and the average number actually at work throughout the year was 18,536, as compared with 18,541 the previous year. Of the average number of staff at work during the. year 13,598 were permanent employees, while 4938 were casuals. The average number of men engaged on works charged, to capital was 1301, as against' 1087 last year. Fifty-.two members of the eecond.division were promoted to the first division, 156 members resigned, 92 retired on superannuation, 49 died. 45 were dismissed, and 573 engaged. The growth of the idea of the commercialisation of the railways is one of the most outstanding features of the railway problem to-efay. The pressure v on the State finances of deficits on account of the working of the railways has been a growing one, until it has assumed dimensions that compel serious consideration. It has been too often assumed that this growth has been due to some defect in the working of the system. An analysis of the position does notsupport any such assertion. The policy is determined from time to time by the Government of the day, and has to be accepted by the management, which then is charged to do its best to apply that policy to the workffig of the system. In applying the policy commercial methods are being used to the utmost possible extent; but unless the policy w commercialised, then at the very source of our operations we have a non-com-mercial factor which operates throughout the whole and sets definite limitations on the capacity of the management to get commercial results. Commercialisation means nothing el.se but the adoption of such'a policy and such methods of working as will ensure the best financial results directly through the revenue and expenditure accounts. If this result is • aimed at, thou the’only logical thing to do is not only to commercialise the methods of working, but also to commercialise the policy. The latter is unquestionably the governing factor and definitely circumscribes the operations of the former. Whether the department should be thoroughly commercialised is a policy question which this is not the place to discuss. I feel, however, that in justice to the railwaymen —and, indeed, to the country itsclf--thc issue should be laid bare. Some steps have already been taken which seem to be consistent only with a policy of commercialising the department. The action taken in that direction cannot, however, be fully effective until all non-commereial influences have been eliminated. The point is that to get the best results under either system—that is. under it non-commercial or commercial policy —-one or the other should be definitely adopted both as a etaudard for the operations or the department and as a standard by which to test its results. To adopt one for one purpose and the other for the other is inconsistent, futile and harmful.