T).—2

XXIII

Reorganization. Mr. R. W. McVilly tendered his resignation as General Manager in December, after forty-five years' faithful service. The Government decided that in future the railways would be administered by a Board of Management of three members. Immediately 011 taking office the Board commenced with the reorganization of the methods of control. The departmental system, based 011 that in use on British railways when the New Zealand railways were first inaugurated, was replaced by the divisional system, with the object of giving more flexibility to the operating side of the business, and better co-ordinating the various functions in connection therewith. Naturally, it will take some little time before the full effects of the' change are felt, but there is every reason to believe that the decentralization of the details of management will prove satisfactory to the clients of the Department. The main object of the change is, so far as the Department is concerned, a better functioning of the various operations connected with train-running ; and, so far as the public is concerned, a more personal and closer connection between the Department and the public. Finance. Arrangements have been put in hand to bring into operation, as from the Ist April, 1925, a change in policy with regard to the financial control of the Department's funds. On the expenditure side accounts have been reclassified to show in proper detail how the money has been allocated, and to enable any fluctuations to be immediately placed. To provide for depreciation, Renewals Funds have been created. These funds will equalize the replacement charges over a series of years, and enable the wear value to be debited each year against the various lines, rolling-stock, appliances, &c. A Betterments Fund will also be built up with the object of providing for small additions for which no funds from capital are available, and also to provide for the writing-off of the value of the present works which are scrapped as the result of the provision of improved facilities on the new works programme. Insurance funds to provide for and equalize the payments on account of workers' compensation, fire, slips, and floods have also been created with a view to stabilizing the finances of the Department. The Department will be placed on a business footing —that is to say, as from Ist April, .1925, it will be required to provide full interest instead of a policy rate of interest on all capital charges. In addition to this the superannuation subsidy previously paid from the Consolidated Fund will be a directcharge against the Railways revenue. On the revenue side, to provide for the largely increased expenditure devolving on the Department, recoveries for work done for other Government Departments will bo obtained. Credit for the losses on branch lines and small isolated sections, after making full provision for the value of their branch traffic to the main lines, will be recovered from the Consolidated Fund. Remarks on these losses are referred to elsewhere. A revision of the tariff has been made, which it is anticipated will, with the addition of the recoveries referred to above, bring in sufficient revenue to enable the Railways to pay in full all the outgoings necessary. Statistics. With the growth of the railways the necessity of adequate statistics has become an increasingly important factor, and there is probably no branch of administration that has developed in the railway world in recent years to such a degree as that of statistics. The form of the statistics was, after much debate, practically settled in Great, Britain after the passing of the Railways Act, 1921, and statistics in that country have become generally standardized. In order to establish a set of statistical returns in New Zealand on the model of those adopted in Great Britain, advantage was taken of the presence in the Dominion of Mr. J. A. Warren-King, Statistical Officer 011 the Great Western Railway (who was attached to the Royal Commission consisting of Sir Sam Fay and Sir Vincent Raven), to engage his services for that work. Mr. Warren-King accordingly remained in the Dominion for some months for that purpose, and duly recommended the adoption of certain forms which he considered suitable to the conditions obtaining in New Zealand. His recommendations have been put into operation, and a Statistical Officer has been appointed whose special duty will be to see that the required statistical information is properly compiled, and to analyse the same and bring under the notice of the Board all matters disclosed thereby which call for remark. The statistics have already proved of material benefit to the Board in administering the affairs of the Department, but, as their nature largely lies in their affording a means of comparison of one period with another, the full benefit of their adoption will not be realized until they have been in operation for over a year, and their value will increase considerably as time goes on. Train Services. The growing importance of the principal business centres and the increase of commerce between them called for a radical review of express and mail-train services which would reduce as far as possible the time taken between the terminal points of the Main Trunk systems in both Islands. It was fully appreciated that alterations such as were contemplated would react on all subsidiary trains, and, in effect, require a revision of practically the whole of the Dominion train services, with all the changes which this would entail in local arrangements to meet the requirements of the producing and trading interests. The work devolving on the transport and operating staffs of the Department in giving effect to this extensive programme has been extremely heavy ; but it has been undertaken in a spirited manner, with the result that a considerable portion of the revision has already been accomplished, and it is gratifying to find that commendations 011 the success of the work in meeting the desires of those bodies and groups representing the producing, manufacturing, trading, and travelling interests of the Dominion have been practically unanimous.