D.—2

X

As to the first question there can be no doubt whatever of the necessity for increased expenditure during the year in the matter of repair to rolling-stock. Whether rolling-stock requires repair or not is purely a question of fact —that is, the rolling-stock is either in good order so that it is up to the necessary standard of efficiency for the work to be done or it is not. The fact is that the rolling-stock was not up to this standard. This position did not arise suddenly, but was the accumulated effect of conditions which developed over a period of years. Since the workshops-reorganization work was put in hand the disturbance of the work in the work shops prevented that amount of work being done that would otherwise have been done in the matter of repairs to rolling-stock. This more particularly applied to locomotives. It will be realized that rolling-stock can be allowed to fall away in the matter of repairs until a certain point is reached when the process must stop if a breakdown in the organization is to be avoided. Postponement of repairs always makes the repair bill heavier when circumstances make it inevitable that the work must be faced, and this is what happened in the present instance. Last year we arrived at the stage when the postponement of repair work could no longer continue, and the position became such that immediate and definite action of an intensive nature had to be taken in order to enable the position to be met and the services carried on with a reasonable degree of efficiency. "We found ourselves in the position of having to draw up a programme of concentrated work immediately we obtained the use of the new workshops, and even before the reorganization had been wholly completed. Our programme had to be drawn up on the basis of having a large amount of work done before the busy traffic season again set in, and this involved the performance of a large volume of work within the limited time available. The result was the working of much overtime at, of course, greatly increased cost. Another circumstance that had a bearing on our expenditure was the work we had to undertake in connection with the relief of unemployment. Of course we obtained the benefit of this work in overtaking arrears of repairs, but the expenditure that was involved had the effect of throwing our finances out of focus. As regards comparison of this year with previous years, more detailed particulars under the various headings are as follow : — Repairs to Locomotives. Increase, £182,542. The number of heavy repairs carried out during the year was 240 as compared with 153 the previous year, an increase of 57 per cent. The increase in the expenditure on the other hand (£182,542) was only 31 per cent., and this notwithstanding that, as mentioned above, a good deal of work had to be done at overtime rates. It will be seen, therefore, that by comparison with the previous year we received good value for the money expended. Unemployment relief under this heading was responsible for £23,044 of the total increase. Maintenance of Cars and Wagons. The increase in expenditure on maintenance of cars and vans was £26,923, or 11 per cent., of which unemployment relief accounted for £7,046. The number of heavy repairs to cars and vans increased by 27 per cent. Expenditure on maintenance of wagons increased £46,311, or 8 per cent., including unemployment relief, £12,199. The number of heavy repairs increased by 27 per cent. It will be seen from the foregoing that the additional expenditure incurred on the maintenance of locomotives and rolling-stock was laid out to good advantage, and, so far as the necessity for undertaking the additional repair work was concerned, I do not hesitate to say that we had no option but to definitely face the position. It is, of course, regrettable that it was necessary to undertake such an abnormal expenditure in one year, but the position was the natural consequence of the slowing-up of repair work that was inseparable from the transition period of the change over from the old workshops to the new workshops. It will also be seen that unemployment relief was responsible under the heading of Maintenance of Rolling-stock for no less than £42,289, which, as I have previously indicated, also serves to distort our expenditure figures when a comparison is being made with previous years. Locomotive Transportation. There were increases under this heading of £19,021 in drivers' and firemen's wages, and £80,255 in fuel, while there was a decrease of £12,120 in cleaning-costs. The increase in drivers' and firemen's wages was due to increased train services. The percentage of increases in the wages bill for last year was 3-41, and the increase in engine-miles was in exactly the same proportion, showing that the wagescost in relation to work done remained constant. The increase in the fuel bill was due to the difficulties which we experienced in obtaining suitable classes of coal for our needs. As a result, principally, of the flooding of the Hikurangi Mine and the earthquake on the West Coast, which interfered with our supplies from the mines in that area, we were forced to supplement such supplies as were obtainable in New Zealand by further supplies from Australia. Owing, unfortunately, to the fact that the mines in Newcastle field were not working, we were compelled to seek supplies from the southern New South Wales mines and even from Queensland. These classes of coal were not up to