17

D.—4

locomotives, that the manufacture of locomotives can be undertaken in the Dominion at a cost of 5J per cent, in excess of that of the imported engine. It has been stated with authority that Messrs. Price Bros, will lose considerably on the "A" compounds, and I am personally convinced that at the present moment it would be quite impossible to place an order for similar locomotives, either in New Zealand, the United Kingdom, or America for the same amount per engine as is being paid to Price Bros. I have already pointed out that for the ten "Wf " locomotives the contract price was £86 19s. Bd. per ton. Immediately after building those machines Messrs. Price Bros. built two similar locomotives for the Public Works Department, the price for which (exclusive of the Westinghouse brake) was £3,000 per engine, giving an average rate of £88 ss. per ton. Regarding the cost of manufacturing locomotives at Addington, I again repeat, notwithstanding the opinion of the Board to the contrary, that the rjrice is not £100 per ton, and I do not consider that the Board's estimate as to the amount of commission that should be charged is a proper one. It is far in excess of that charged by any other railway system, and is, moreover, calculated on the total cost of labour and material, in contradistinction to the practice adopted elsewhere of computing the commission on wages-charge only. The commission, which represents shops' charges, is a fluctuating amount, and varies according to the industry carried out and the class of establishment. I am aware that it is the practice in some establishments to add a percentage on both material and wages, but the majority of firms, in estimating the cost of producing an article, add a percentage to the amount expended on labour only. The proper percentage for shop charges on labour can only be determined by practical experience. In the New South Wales workshops, for instance, although I have shown that the percentage added on the cost of labour' is 32J per cent., the fluctuation is from 25 to 32J per cent. In Queensland it is from 12J to per cent. It is, however, admitted by the New South Wales Railway authorities that their workshops' charges are fixed on a high scale. Our practical experience is that the present rate of commission is sufficient to cover the legitimate charges, and, if based on the actual cost of the wages, and irrespective of the material, it represents approximately a charge of 24 per cent. The Department's experience in connection with the manufacture of locomotives is that it is better to make a thoroughly good engine in the first instance than to turn out an inferior article, for the reason that the better the class of workmanship and material used in the manufacture of the locomotive the less the subsequent cost of repairs. With regard to the Board's suggestion as to the course that should be followed in the event of the Department itself deciding to continue the manufacture of locomotives, I desire to say that, in my opinion, the requirements of the Department in the matter of new locomotives are not of such volume as to justify me in .urging the Government to set aside the money necessary to establish and equip a manufacturing-shop. It is not, nor has it been, contended that the whole of the appliances installed in the Addington Workshops are of the most recent pattern and up to date in every respect; but many of the machines, although of the older type, are still capable of doing good and efficient work and of meeting all the requirements of the Department; and in the circumstances I do not consider I should be justified in recommending a large expenditure in money in buying machines to replace them. The latter course would likewise commit the Department to a very considerable expenditure for shop-extension, and I am strongly of opinion that the policy that has been adopted of making the best of the appliances that are available under the existing circumstances, and devoting money that must be otherwise spent in the provision of machinery and extension of workshops to provide rolling-stock for meeting the more urgent requirements of the Department, and enabling the business of the Dominion to be carried on efficiently and to the interests of the public is the wisest and best one. If it is desired to establish a manufacturing workshop, and the Government is , prepared to find the large sum of money to meet the capital expenditure that would be involved annually in keeping the establishment going, the requirements of the Board could be met by converting the Hillside Workshops into a manufacturing workshop, equipping that shop with suitable appliances, and making the Addington and Invercargill Workshops repair establishments. Having due regard to the prospective requirements of the Department, I am, however, strongly of opinion that the establishment of a manufacturing-shop would, at the present time, be unwarranted and unjustifiable, and that the requirements of the Railways in the matter of locomotives can be amply provided for by letting additional contracts to private firms within the Dominion and carrying out such new work at Hillside, Addington, and Petone as is required to keep the men, who must necessarily be employed for repairs, fully engaged. While I hold these views, I at the same time fully appreciate the desirability of improving the equipment of the various workshops from time to time as circumstances warrant and funds are available, and it has been my practice during the last fifteen years to keep myself in touch with the most up-to-date appliances and methods, and, by judicious expenditure of the funds placed at my disposal by the Government for the purpose, to make such additions and improvements to the workshops machinery from time to time as the circumstances permitted. T. RoNATNB, General Manager. Approximate Cost nf Paper.— Preparation, not given ; printing (1,500 copies), £8 4s. 63. '

By Authority : John Mackay, Government Printer, Wellington.—l9o9. Price 9d.]