9

D.—2

the factors which in the main conduce to bring about the position are increased wages and shortening the hours of the staff, increasing train services by running trains for experimental development niany of which are unremunerative, opening of new sections of railway in undeveloped country where business is necessarily very restricted and unprofitable, additional staff necessitated by the expansion of interlocking and safety appliances which has resulted in a large proportion of what were unattended flag stations being converted into tablet stations, many of which are double-manned on account of long hours. The more extended hours trains are now running on the Main Trunk systems also necessitates increased staff. The rates paid for fuel, stores, and materials of every description used by the Railway Department have advanced in sympathy with the improvement that has taken place in working-conditions and wages in foreign countries and foreign and local industries.' My research into this aspect of the railway question has revealed the fact that New Zealand is by no means singular in respect to the advance of percentage of operating expenses to earnings. Every large railway system shows the same upward tendency following on their general advance of wages and shortening of the hours of staff, the increase in price of coal and other materials, more lavish train services without increasing the tariff to bring in additional revenue to correspond with the advance in expenditure. A comparison of the percentage of working-expenses in the railways of other Australian States, as shown in Table 15, if compared with the similar table of last year, will show that the working-expenses of all of these railways have increased with the exception of Tasmania, and in most cases the increases have been greater than those in New Zealand. New South Wales, for instance, increased from 61-09 in 1911 to 64-23 in 1912, and the latest report of the Commissioner gives the percentage as 68-82 in 1913. In other countries the same conditions occur, and the New Zealand percentage, though higher than I would like to see it, is not higher than that obtaining in other parts of the world. In the Canadian railways, for instance, the percentage for 1912 was 68-7, and in the United States railways 69-33, as against New Zealand 68-13. The running of trains in excess of the immediate requirements for the purpose of developing the country and inducing settlement, thus creating a traffic that will ultimately be remunerative, is sound in principle as a business proposition. So long, therefore, as the close scrutiny that has in the past been kept on this and all other items of railway expenditure continues I am satisfied the best results will follow, and an advance in the rates of expenditure to earnings need be no cause for misgiving in so far as railway operations are concerned. The effect increased train-mileage has on the financial results of working the railways is illustrated by the following figures relating to the North and South Island main lines and branches respectively. The North Island train-mileage was increased by 499,951 miles during the year, and the South Island main lines by 107,376 miles. The earnings per train-mile in the North Island declined from Bs. 4d. last year to Bs. a decrease of 2|d. per train-mile, indicating that train services were in advance of the traffic. The earnings of the South Island lines advanced from Bs. 9jd. to 9s. 2fd., an increase of sjd. per train-mile, indicating that traffic had more than kept pace with the increased train services. The interest on capital earned by the North Island main line and branches receded from £4 19s. 7d. per cent, to £4 17s. sd. per cent., while that earned by the South Island main line and branches advanced from £3 2s. per cent, to £3 Bs. per cent. I am of opinion that the time has arrived when it is desirable for the Railway Department to establish in each of the four principal centres a booking-office from which passengers may purchase, the day or the day before they intend to travel, a ticket for any journey they contemplate taking by railway. I propose also arranging for the collection and delivery of parcels and passengers' luggage at each of the four centres, and for the conveyance of luggage between the ferry steamers and Wellington Railway-stations, also to inaugurate the system of " cash on delivery " parcels. These arrangements will, I have no doubt, be a public convenience.

2—D. 2.