D.—l.

The heaviest Shay locomotive which the builders recommend for a 42 in. gauge has a tractive power of 33,764 lb., which at the ratio of nine-fortieths of the weight on the drivers corresponds to about 150,0001b. on the drivers. This is the total weight of the Shay locomotive recommended, with about one-quarter of a full load of water and coal, and, as every wheel of both engine and tender is a driver, it is the weight on which to rate the tractive power, and will be used in estimating the cost of repairs per engine-mile from Diagram 3. The builders rate this locomotive to haul 260 tons behind the tender from Otiria to the Summit of line C. On line Eit is rated for 223 tons, and for line F 195 tons. I have cheeked these figures, and find them correct. All the economic comparisons of the Arthur's Pass lines in my reports have been based on traffic equivalent to five hundred, seven hundred, or one thousand trains per annum in each direction, the east-bound trains having 278 gross tons behind the tender. The number of round trips per annum required by the proposed Shay locomotive to handle this traffic would be—For line C, 535, 748, 1,070; for line B, 624, 873, 1,246 ; for line F, 713, 998, 1,426. With the above data I have computed the annual costs given in the last column of Table 14. The minimum day's work for the direct locomotives heretofore considered was eighty miles per day. The average speed of the Shay locomotive is very much less, and it could not make more than three round trips per day, which, on lines C, E, and F, is about 63J miles. With 312 working-days per annum, this would make 19,812 miles per annum. The number of loco-motive-miles required per annum for the lines and volume of traffic under consideration is given in Table 15. Where the annual mileage required does not exceed three round trips per day, or, say, twenty thousand miles per annum, by more than 10 or 15 per cent., it will be assumed that the service can be performed by one Shay locomotive in service and one in reserve. For the two cases requiring greater mileage, two locomotives in service and one in reserve will be necessary. The miles that could be made by these locomotives while standing, not running, with steam up, multiplied by the corresponding cost from Table 14, gives the' annual cost for these engines for this condition. This cost, added to the cost per annum while running, from Table 14, gives the total annual cost of motive power for lines C, B, and F, operated with Shay locomotives. These results, together with the annual saving effected by the Shay locomotives, are shown in Table 15. Mr. E. H. McHenry, Chief Engineer of the Canadian Pacific Eailway, in a letter dated the 7th February, 1903, hereto attached, states on the authority of Mr. Thomas Tait, manager of transportation, that the speed of the Shay locomotives on the Phoenix Branch of that railroad up hill is 4-5 miles per hour, and down hill 8 miles per hour. For the round trip, this would give an average speed of 6 - 25 miles per hour. On this basis the cost per engine-mile of the Shay locomotive would be about 32-5d., and the cost standing with steam up, but not running, would be about 9'6d. The annual cost of motive power with the Shay locomotive, using the speed developed on the Phoenix Branch mentioned, is shown in Table 16. Table 16 has been worked out on the assumption that the same annual mileage could be made as in the previous case, which is not entirely probable. It is not unlikely that for line O with 1,070 round trips per annum, line E with 873 round trips per annum, and for line F with 998 round trips per annum, an additional locomotive would have to be kept in service, and the savings shown in the last column of Table 16 would then be reduced. The conclusions to be deduced from these figures are that the saving that might be effected by the use of the Shay locomotives for line C are so small that there does not seem to be any justification for adopting such special machine. The cost of breaking up the trains at Otira and Bealey, and making them up with a less number of wagons for the Shay locomotive with a corresponding increase in the number of train-miles, would probably use up all the saving that they could effect in cost of motive power. For lines E and F the savings in operating-cost that might be effected by the Shay locomotive are hardly large enough to determine the solution of the problem in favour of either of these lines, but if line E or line F were selected from other considerations, it might be advisable to consider the use of this locomotive thereon. Electbic Teaction for Line A. I have investigated the question of electric traction for the long-tunnel line, and on quotations received for the necessary machinery, materials, and labour, with fair allowances for freight, difference in cost of labour, and incidental charges, I find that the installation of power-house, sub-stations, third rail, bonding, transmission line, &c, complete, ready for operation, would be about £60,000 if trains are divided at Otira into 100-ton units, and about £70,000 if the trains hauled up to Otira by the road-engine are taken over the summit without breaking. These figures do not include the cost of the electric locomotives, which will cost more than steam locomotives for this service. This omission is favourable to electric traction in the economic comparisons, but the difference is not large enough to materially affect the results. Interest at 3-J- per cent, on the cost of electric installation will be about £2,100 per annum with 100-ton trains, and £2,450 with 300-ton trains. Electric traction in the long tunnel would eliminate the cost of ventilation, which, subtracted from the annual interest-charge of £2,100 for trains of 100 tons, gives excess annual costs for electric traction of £1,188 sterling for 500 trains each way per annum, £1,069 sterling for 700 trains each way per annum, £892 sterling for 1,000 trains each way per annum. To find the net excess annual costs of electric traction there must be deducted from the above figures any saving in cost of motive-power that may be effected by electric operation. There are no other offsets to the above excess charges. Attached hereto are some extracts from an exhaustive report on the proposed electric equipment of the Park Avenue section of the New York Central and Hudson River Bailroad in this city, by Mr. Bion J. Arnold. The conditions of this problem, excepting the cost of coal, are more favourable to electric traction than the Arthur's Pass long-tunnel line. The line is shorter, the number of trains incomparably greater, and the grades much less. The traffic is entirely passenger

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