NEW ZEALAND RAILWAYS.

Timaru Herald, Volume CXXV, Issue 18492, 6 February 1930, Page 8

NEW ZEALAND RAILWAYS.

ADDRESS BY GENERAL MANAGER. Mr H. H. Sterling (General Manager of Railways for New Zealand) addressed about sixty members of the South Canterbury Chamber of Commerce at a quarterly general meeting of the Chamber last night. The president (Mr F. S. Shrimpton) occupied the chair, and introduced Mr Sterling to the meeting. At the outset, Mr Sterling expressed appreciation of the honour conferred on him in having been asked to address the Chamber. He said that the railways were undoubtedly the most important industry in the country. Transport had been called the vital industry of commerce, and he believed that very aptly described it, for he could not conceive that anything could tie up the commercial life of the country more definitely than any tie- : up in the transport industry. It had j advanced to such a position in the commercial, industrial, social and domestic life of the community, and indeed in relation to every aspect, that they were appalled to think how they would get on if they did not have that transport which was in use throughout the 24 hours of the day. Firstly, he intended to deal with the railways as : a commercial institution, and secondly, as a developmental institution. There had been a tendency to judge the railways from a commercial standpoint, when they knew that they were being run from quite a different standpoint, one in which the developmental standpoint, if not uppermost, was a very potent factor. One heard it said that the railways were not paying, but he wondered whether, on reflection, any present would say that the revenue and expenditure ' accounts enabled them to say that the railways of the country did not pay. The railways gave certain services, some on a commercial basis, and some on another basis. The whole of the benefit derived from the railways was not contained in the revenue account. There were some services which they could not expect to be revenue-producing, but they had been adopted because they would be of benefit to the country. For instance, there were preferential rates for locally-manufac-tured commodities. The basis for these rates was that the railways were helping local industry. Then there were some rates which were not intended to give even the community a financial return, but were held to be justified on other grounds. For instance, there were workers’ weekly tickets, which enabled workers to get six trips in and out for 2/-. The return to the railways was unremunerative, but would anyone say they should be abolished? Mr Sterling said he quoted these cases to show that while the expenditure was wholly shown in the railway accounts, the benefits were not fully reflected in the revenue account. Continuing, Mr Sterling said there were no railways* in the world to-day which felt the pressure of new conditions in the same way as the New Zealand railways had. Before the advent of motor vehicles, the railways had a quasi monopoly. They could give unpayable services, and yet recoup themselves. As time went on a new element was introduced which enabled people to say that they were not goittg to pay a little extra in order that the accounts might be balanced. In New Zealand -a' careful analysis of the position was necessary to determine the equity or inequity of the position. There had been a growing tendency among persons requiring transport to transfer their high-rated goods to the motors and leave the lowrated goods to the railways. So it would be seen that through no fault of their own, they had not been able to square the ledger through means previously adopted. Mr Sterling said he was not quite so blind to the change which had taken place in the transport industry as not to recognise that the motors had come in to serve a useful purpose, and that they were here to stay. The capacity of the railways in any country was limited, and when they saw a deficitt of £1,250,000, they might at least hazard the opinion that they had reached the limit of their resources in this regard. There was a conception that motor competition had reduced transport costs. . This was based on the fact that the motors carried certain goods for lers than the railways between some points, but it did not follow that the sum total of transport cost to the country was being reduced. The transport cost to the country was not what an individual might pay, but what it cost to produce transport. Last year they would have squared the account at 2.86 per ton mile. The actual revenue came to 2.41 d per ton mile, the balanoe required being .45d per ton nile. There were two points to keep in mind, firstly the total transport cost to the country, and secondly distribution. It was the latter which caused most trouble, for the decision was individual and the responsibility communal. Mr Sterling then quoted figures showing the principal quantities of goods carried last year. These included grain 350,000 tons, meals 120,000 tons, root crops 100,000 tons, coal (hard) 1,100,000 tons, coal (soft) 1,000.000 tons, manures 600,000 tons, and agricultural lime 140.000 tons. The total quantity carried, according to these classifications, was 6,530.000 tons out of a grand total of 7,613,000 tons, so that it would be seen that these goods constituted 86 per cent, of the tonnage carried. The revenue derived from the low-rated goods amounted to £3.798,953 out of a total of £4,898,391, or less than 78 per cent, of the total. In as much as the tonnage of the low rated goods represented such a large proportion of the tonnage carried, it would not be difficult to square the ledger by increasing the rates on the low-rated goods. 'I hey hesitated to do this for two reasons. Firstly because they would be collecting from the users more than a private railway would collect, and secondly because it would not be in the best interests of the country to do so. Mr

Sterling said that he did not hesitate to say that in the conditions in which we existed, the railways were being economically run. No opportunity was being missed to cut down expenditure, and no chance was being lost of increasing the revenue. The speaker went on to detail the difficulties being contended with in passenger traffic, and how cheap excursions, had been fostered and nurtured until they had attained big proportions. Mr Sterling dealt fully with the business methods which had been adopted on the goods, side. He also made reference to .the criticism which had been made concerning the facilities which had been placed at his disposal for getting Bbout the country in order to come in close contact with business men. He considered the criticism was as unbusinesslike as it was unfair. Whoever held the managerial position was entitled to reasonable facilities for carrying out his -work. (Applause.) In reply to a question by Mr W. T. Ritchie as to whether it would be possible to apply oil to the tracks so as to minimise or eliminate the dust nuisance ojs the railways, Mr # Sterling said that this matter had been given careful consideration. It had been suggested that spent oil from motor cars might be used, but he had ascertained from his chief engineer that this would,

hot only be too costly, but when the oil surface became disturbed by workmen, passengers would have to contend with an oil laden dust, which would be worse than the existing nuisance. However, attendants had been placed on the main lines especially to dust carriages, and a big improvement had been effected. Asked by Mr W. L Tait if the De- • partment had done anything further 1 j in regard to arbitrary freights between Timaru and Christchurch, Mr Sterling said this opened up a material point. Railway rating in general, esr pecially in the case of State owned j railways, had as a basis a mileage charge. There had been special rates from the earliest times. For years there had been a special rate between and Oamaru to compete with shipping, and another betw r een Christchurch and Kaiapoi to compete with the carriers who operated there. Most of the overseas shipping came from the south, and it was in order to compete with the coastwise shipping from Christchurch to Timaru that a special : rate had been made. Differential rates i were determined by the different cirI cumstances obtaining in each case. 1 On the motion of Mr G. S. Cray, Mr j Sterling was accorded a heaity vote of i thanks for his address.