D.—4.

16

With regard to inventions of workmen, I have to state that for many years past it has been well known in the service that the claims of any member who invented and brought under notice any invention of practical utility would receive favourable consideration, and the appliance would be treated on its merits, and, as a matter of fact, the Department has from time to time received many proposals for so-called improvements in various appliances. As a general rule, however, the suggested improvements are crude and impracticable and it is not infrequently found thai they take a form that has been tried and discarded in the United Kingdom, the Continent, or American many years ago. A considerable amount of time is taken up in inquiring into the bona fides of the suggestions and utility of the appliances; and, although an occasional practical suggestion is made, it rarely happeils that a tool of any value is invented. Notices to all the workmen are posted in every workshop, inviting them to bring before the Department any improvements thai they consider practicable in regard to the method of working. Appliances have been submitted in several instances, and have proved of practical utility, and bonuses have been granted to the inventors. Regarding the final conclusions of the Board that the work at Addington is not done ,as expeditiously and economically as it might be, I have to say that, in my opinion, the finding of the Board in this respect is not in accordance with the weight of the evidence, the whole trend of which was that, having regard to the purposes for which the shops were erected, ~the appliances with which they are equipped, and the prevailing conditions, the output is satisfactory. A careful perusal of the Board's report shows that from first to last it has looked at the matter as from the point of manufacturing of new stock, whereas, as I have indicated at the outset, the manufacturing of new stock, although it has of later years assumed considerable proportions, is altogether of a subsidiary character when compared with the repair-work. This view of the matter is strengthened by the Board's statement that the plant and appliances are suitable for the carryingon of repair-woik, but that considerable additions are required before they can be classed as efficient for manufacturing purposes. The system is condemned as faulty because of the association of repair-work with new work, the method of dealing with and carrying on the manufacture of new work, the system of cost-keeping, and the tool system. Dealing first with the question of the association of repair with new work, I would point out that, having regard to the conditions that prevailed at the time the Railway workshops were established, and the fact that new work was originally only undertaken with a view to keeping the operatives engaged to carry on repair-work fully employed during those periods of the year when repair-work was slack, it would be impracticable to separate the repair from the new work. 1 fully appreciate the desirability of separating repair from new work, and, where the circumstances are such as to justify the expenditure, to have separate shops for each class of work. This is; the method upon which all modern manufacturing and repair businesses are conducted. Each class of work is specialised, and by keeping the operatives employed thereon constantly at a particular work, the output is increased. So far, however, as the requirements of the New Zealand Railways are concerned, I am strongly of opinion that neither the existing nor the prospective business is sufficient to warrant nay recommending the Government to set aside the large amount of capital that would be involved to provide for the establishment of a fully equipped up-to-date manufacturing shop, with its separate staff, and the annual recurring liability for finding the money necessary to keep the shop fully employed and pay the wages of the operatives. The minimum amount required for this, on the basis of existing expenditure out of capital on new stock, would be .£250,000 per annum. I have already pointed out that the method of dealing with and carrying on the manufacture of the work is governed by the existing conditions, and, as far as can be seen, very little improvement can be made in the method without incurring a very heavy expenditure to provide for the complete reorganization of the shops and their equipment. The system of cost-keeping is one that insures accurate results, and enables the necessary data to be furnished promptly and regularly, and is, moreover, eminently suitable for the existing conditions. Improvements in connection with the tool system has been engaging my attention, but have had to be deferred on account of the expenditure involved. I quite agree with the Board's opinion in regard to the existing system of classification, and I have for some time past been very strongly of opinion that the feeling that is permeating the members of the Railway staff, that because a man is No. 1 on the list be should slip quietly and unobtrusively into the higher grade irrespective of his qualifications or fitness for the position, and to the detriment of the better-qualified man who may be lower on the list, is not calculated to make for higher efficiency or to advance the interests of the service; and I consider the time lias arrived when it should be definitely laid down that promotion from the low to the higher grades of the service will depend entirely on the general efficiency and good conduct of the members, and not on the numerical position of the member on the Classification list. With regard to the statement that undesirable security of tenure of office is given to inefficient units, I need only point out that any member who is reported as being inefficient is promptly dealt with, and if his conduct merits it his services are dispensed with. With regard to the statement that the cost of production and output at Addington is, generally speaking, greater than at private and other Government workshops, I have already fully reported on this aspect of the matter in dealing with the cost of locomotives. It is not, therefore, necessary to reiterate what I have previously stated on this head; but there is, of course, no doubt that as a larger proportion of the new work is done at Addington than at any other shop, and the work is admittedly carried Out under conditions that are detrimental to the economical manufacture of new stock, the results of working at Addington must be less satisfactory than at any shops where better conditions prevail. I do not concur with the Board's conclusions, based on the prices quoted by Messrs. Price Bros., of the Thames, for the manufacture of " A " compound