D —2

Freight traffic was again of record proportions, new records being set up in revenue, tons, and ton-miles. The revenue was £10,486,744, an increase of £1,582,982, or 17-78 per cent., and even without the tariff increase, which produced £1,049,692, the revenue exceeded the previous record by £533,000; the tonnage was 9,524,043, an increase of 194,710, or 2-09 per cent. ; and as a result of the increase in tons and an increase in the average haul, net ton-miles increased by 6-08 per cent. Decreases occurred in the tonnages of live-stock (23,000 tons) and artificial manure and phosphate (117,000 tons), although by reason of the tariff increases, the revenue in each case showed improvement. Commodities showing increases in tonnages were timber, coal, grain, benzine in tank wagons, and general merchandise. The tonnage of agricultural lime carried showed an increase of 4,605 tons to set a new record of 733,628 tons. EXPENDITURE Details of operating expenditure, divided into maintenance, transportation, &c., are also set out in Statement JSTo. 3. The increased expenditure is due once again to two main factors —a higher wages bill and increased fuel costs.

The following table sets out a division of the total expenditure, with comparisons with the figures for 1946-47 :

The increase in wages paid can be divided approximately according to the principal causes —viz., £212,000 for additional man-hours worked and £575,000 for higher ratea of pay and improved conditions of employment. The additional man-hours were incurred mainly in the road services and traffic transportation, while the largest single, item in the higher pay cost was the general increase of 10s. per week operating from Ist October, 1947, which cost £346,000 for the portion of the year to which it applied. The rise in the cost of locomotive fuels was due to the necessity of importing some 94,000 tons of American coal and to the increased use of fuel oil. It is estimated that the cost of the imported coal and oil fuel used exceeded the cost of the equivalent amount of native coal by £635,000 for the coal and £140,000 for the fuel oil. The general price level of stores rose and a larger quantity was used. Two main single items of increase were £51,000 for road service fuels and £61,000 for materials for tarpaulins. Under the heading of " Miscellaneous " the main variations were a decrease of £125,000 for deferred maintenance and increases of £82,000 for superannuation subsidies and £71,000 for ancillary lorries. The increase in the superannuation subsidy was due mainly to the increased cost-of-living bonus payable to superannuitants (£51,310 increase).

6

— 1948. 1947. Variation. Wages Coal and oil (loco.) Stores and material Depreciation and renewals Miscellaneous £ 10,375,359 1,873,799 2,636,305 1,495,865 1,329,569 £ 9,588,798 1,203,817 2,319,873 1,473,685 1,358,097 £ + 786,561 + 669,982 + 316,432 + 22,180 - 28,528 Per Cent. 8-20 55*65 13-64 1-51 2-10 Totals 17,710,897 15,944,270 +1,766,627 11-08