D.—4

8

Memorandum for the Hon. the Minister op Railways. llailway Department, Head Office, Wellington, 6th May, 1909. With reference to the report of the Board of Inquiry into the administration of the Addington Railway Workshops, I desire to say that the difficulty the Board admits it has been confronted with in the matter of arriving at the results obtained, owing to the fact that both repair and manufacturing work are done in the shops, has been recognised by the Department as existing from the outset, and as having an appreciable effect on the operations carried on. The shops as originally laid out and equipped were essentially repair-shops, and until the year 1900 only an odd locomotive had been manufactured. The equipment and general lay-out of the shops were determined by the purpose for which they were originally projected, and in considering the question of efficiency or inefficiency due regard must necessarily be had to the circumstances and the purposes for which the shops are provided. When the business of the country began to expand by leaps and bounds in 1895, coincident with the resumption of the railways by the Government, the Department was confronted with the fact that the rolling-stock was totally inadequate to meet the requirements of the business. The position was brought under the notice of the Government, and instructions were at once given for the placing of an order for the building of a large number of wagons, carriages, and locomotives with the leading firms in the United Kingdom and America. The Government at the same time decided, as a policy matter, to supplement the rollingstock ordered from abroad by stock to be built in the workshops of the Dominion, thus giving employment to its own population. The establishment of a purely manufacturing shop, equipped with the best modern machinery, would have involved a very large expenditure that would have been quite unjustifiable, having regard to the facilities that existed and the amount of rollingstock required to bring the equipment of the railways up to the standard necessary to enable them to cope with the business. It was therefore decided that it would be wiser to devote any funds that were available to the provision of rolling-stock, and to utilise the existing shops and appliances therein for the manufacture of that stock, than to expend a large amount of money on the establishment of a manufacturing shop, the very existence of which would have necessitated, — (a.) A large addition to the capital cost of the railways. (h.) The laying-down of a large rolling-stock programme, and the commitment of the Government to continue such a programme annually to provide employment for the large number of men that would necessarily require to be employed in the shops, (c.) Imposing on the Government the necessity of providing annually and for all time the money required to meet the expenditure incurred in connection with the manufacturing shop. The wisdom of the course adopted has now become apparent, it having been found that the quantity of rolling-stock turned out of the existing Railway workshops during the last nine years has put the Department in a position to meet all the demands of the traffic, and I confidently anticipate that when the programme for 1908-9 is completed, a further large rolling-stock programme will not be essential for the purpose of enabling the Department to meet the requirements of the traffic, although a certain amount of new work must be done in the shops in order to provide full employment for the staff that has necessarily to be kept on in anticipation of repairwork, which fluctuates considerably. With regard to the standard for new and repair work, it is recognised in all establishments where both classes of work are undertaken that a unifoi m standard cannot be maintained, the conditions under which the operations have to be carried out being so widely divergent. It does not, however, necessarily follow that, because the rate of working of the wmt varies owing to the divergence of the conditions, it is unsatisfactory, or that a fair amount of work is not being done. In the ordinary course men who can be kept regularly employed on a given class of work for a lengthy period become more expert at that particular class of work than they would do if shifted about and called upon to undertake all-round work. With regard to machines, some of those in use at Addington are undoubtedly not of the newest types. They are, however, efficient for the purposes for which they are principally used. In contradistinction to these, however, there are many excellent machines of the most up-to-date character installed in the shops. This will be apparent when I point out that on additional plant and machinery for Addington £31,000 has been spent in the last eight years. I note that the Board in reviewing the Addington Workshops has compared the conduct of the new work with the modern manufacturing practice. In my opinion, such a comparison is unreasonable. Modern manufacturing practice is to entirely disassociate new work from repairwork. The conditions of this country, as previously pointed out, have not been such as to justify or warant the establishment of separate manufacturing shops; and, although it is true that, to meet the exigencies of the largely increased mileage of railways opened during the last few years, and a consequent expansion of business, the new work undertaken in the Railway workshops in the Dominion (and at Addington particularly) has materially increased, it does not necessarily follow that the same rate of manufacture can be maintained. In such circumstances the incurring of a large expenditure in establishing and equipping a separate manufacturing shop would, in my opinion, be entirely unwarranted. I take it that in making their criticisms the Board was unaware of this aspect of the question, which, I submit, has an important and material bearing on the whole subject under review. Dealing now with the question of the efficiency of plant and appliances, I observe that the Board finds there are at Addington, especially in the machine-shop, many modern and efficient machine tools, also that the shops generally are well equipped for doing repair-work. Their