First Order read: Adjourned debate on motion for House to go into Committee of Supply, to be resumed.

[Debate, adjourned the 4th April, resumed.]

2. The final accounts for last financial year are not yet available. It will, therefore, not be possible to give hon. members more than a revised estimate of the results for the year just closed, but these figures will be found to be a sufficiently close approximation of the actual results.

3. It will be remembered that the estimates submitted to Parliament last session provided for a gross expenditure during the year 1927-’28 of £28,728,395.

4. Estimates of additional expenditure to the net extent of £635,954 were recently approved by the House which, when added to the original estimate, made the total authorized expenditure for 1927-’28 the sum of £29,364,349.

5. When submitting the 1927-’28 additional estimates, I stated it was anticipated that the Administration’s revenue and expenditure for that year would approximately balance.

6. At that time, I had before me the actual results of working the railways, harbours and steamships, for the nine months April-December, 1927.

7. Those results reflected a loss of £33,429.

8. I also had the preliminary figures for the month of January, which reflected a loss of £56,700, making the accumulated loss to the end of January, 1928, £90,000.

9. In the green book which will be distributed this afternoon, hon. members will find the latest revised estimates of revenue and expenditure for the year 1927-’28. These estimates are based upon the actual position at the end of January plus the estimated results for February and March. At the end of January, that is the end of the first ten months, a net deficit amounting to £84,727 was reflected.

10. I am, moreover, hopeful enough to believe that the revenue during February and March will at least balance expenditure, whilst possibly even the expenditure during those months has been reduced sufficiently so as to wipe out that deficit before the close of the year. I may say that since the green book has been compiled the February results have come to hand, and February has given us a surplus of £13,296, which reduces the deficit which I have already mentioned of £84,000 at the end of January, to £71,431 at the end of February.

11. If this proves to be the case that results will be better than anticipated when the final accounts are completed and available, a slightly better position will be disclosed, but, at the moment, I do not feel justified in presenting a more favourable estimate than that contained in the green book.

12. These revised estimates indicate a possible deficit for the year which ended on the 31st of last month of £107,265, the individual results being: Railways, estimated surplus, £299,289; harbours, estimated surplus, £353,844; steamships, estimated surplus, £26,602; giving an estimated surplus of £679,735. But the surplus of £679,735 will be insufficient to meet expenditure on special appropriations of: Betterment fund, £250,000; deficiency in pension and superannuation funds, £287,000; reduction of interest-bearing capital, £250,000; totalling, £787,000, so that the net result is an estimated deficit as at 31st March, 1928, of £107,265.

13-14. In case the deficit occurs, it will be met from the Rates Equalization Fund.

15. It will be seen from the green book that the revenue of the Administration for 1927-’28 is now estimated at: Railways, £27,382,173; harbours, £1,673,886; steamships, £201,025; a gross total of £29,257,084 as compared with the original estimated total revenue of £28,768,104, or an increase of £488,980.

16. The green book also shows, on the other side, the estimated expenditure to be: Railways, £27,869,884; harbours, £1,320,042; steamships, £174,423; a total of £29,364,349 (which is the same as that reflected in the estimates of additional expenditure for 1927-’28), as compared with the original estimated expenditure for 1927-’28 of £28,728,395; an increase of £635,954.

17. As compared, therefore, with the estimates for 1927-’28 presented to Parliament last session—which estimates disclosed an anticipated net surplus of £39,709—we now have revised estimates showing increased revenue of £488,980, increased expenditure of £635,954, or an additional excess of expenditure over revenue of £146,974, resulting in the revised estimated deficit for 1927-’28 of £107,265.

18. There are certain features which arise out of a conciliation of the working of the Administration during 1927-’28 to which I wish to refer briefly.

19. The increase in the revenue from the railway main services occurs under all heads, with the exception of coal to which I will refer later. In the case of the passenger traffic during 1927, we conveyed nearly 81 million passengers—an increase of 1½ millions over the previous year.

20. The increase over the original estimate in the case of our goods earnings is particularly satisfactorily, being no less than £484,644.

21. It will be of interest to hon. members to know that during last year we conveyed 359,805 tons of export maize, as compared with 131,762 tons in the previous year, but the tonnage in 1927 fell far short of the tonnage conveyed in 1925, when, as hon. members are aware, we had a record crop, the drop being no less than 869,175 tons.

22. All heads of traffic, with the exception of coal, showed a satisfactory increase over the tonnage conveyed in 1926, the principal increases being: General merchandise. 97,191; export maize, 228,043; other grain and produce, 292,046; minerals and low-grade traffic, 47,145. But from a revenue point of view the greater portion of this traffic is low rated.

24. In order, in a measure, to meet these conditions, and to assist the coal industry of the Union, the Administration reduced its railway rates for the conveyance of shipment coal with effect from 1st January last. The reductions were:—

Bunker coal.—1s. per ton (2,000 lbs.) in the railway rates for bunker coal to Union ports and Lourenco Marques.

25. It is estimated that the annual sacrifice of revenue resulting from these reductions will be £141,527.

26. In the case of our livestock traffic, we conveyed over a million and three-quarters more animals by rail during 1927 than in 1926.

27. This was due to the unfortunate prevalence of drought in various parts of the Union, more particularly in the Cape Province.

28. Many thousands of livestock trucks were employed conveying stock in poor condition during the year, but no effort was spared by the Administration to meet orders for trucks as promptly as possible, the vital importance to farmers of securing prompt removal of their stock to fresh pasturage, being fully recognized.

29. Return of the stock to their home farms has also had to be arranged, and this traffic is at present being transported.

30. The provision of livestock trucks for this traffic severely taxed the Administration’s resources as ordinarily many of the trucks would have been employed in conveying other classes of traffic of a more remunerative nature, including livestock for the market, and to this extent the revenue of the Administration was sacrificed.

31. Water supplies for engine purposes also had to be hauled long distances owing to shortage of water in the areas from which the poor stock emanated, and this constituted an additional tax on engine power, necessitating the incurring of additional expenditure.

32. In the case of the railway subsidiary services, the revised estimates show both the revenue and expenditure to be below the original estimates. This is due to the grain elevators handling less maize than was expected; while the catering revenue also has not realized expectations.

33. Whilst I was reluctant to advocate any step which would result in increasing the cost of travel to the public, we were faced with the position that since the price of meal coupons was reduced to 7s. 6d. in August, 1925, a number of factors have occurred which increased the working costs.

34. These were principally due to the reduced hours of duty, increased cost of Superannuation Fund and local allowances.

35. After careful examination, it was found that the loss sustained in operating the catering service could not be avoided whilst meals were supplied at such a low figure.

36. Consequently there was no alternative but to revert to the prices formerly charged, and from 1st August last the price of 3-meal coupon books was increased from 7s. 6d. to 8s. 6d. and the price of tea and coffee was increased from 3d. to 4d. per cup.

37. In the case of the harbours, the revised estimated results for 1927-’28 show an improvement over what was originally estimated for. The revenue reveals an excess of £67,823 over the original estimate, whilst the expenditure is £39,088 below that originally anticipated.

38. In the case of the steamships, we expect the revenue to be slightly higher and expenditure to be fractionally lower when compared with the original estimate.

39. As I so recently intimated to hon. members the outstanding features of the probable results for the year 1927-’28, when seeking approval to the Additional Estimate of Expenditure for that year, I need not dwell upon them again, and so will pass on to the prospects for the year 1928-’29, which year began five days ago.

(Comparison with revised estimated expenditure.)

40. An interesting comparison of the estimated expenditure for 1928-’29 of £29,414,222 is made by setting against it the revised estimate of the probable expenditure for 1927-’28.

41. The 1927-’28 figures are reflected in the Estimates of Additional Expenditure for that year, and they are shown to be £29,364,349.

42. The increase in the estimated expenditure for 1928-’29 over the probable expenditure for 1627-’28 is therefore £49,873.

43. The increase is made up of: Harbours, increase, £78,022. Less—Railways, decrease, £26,401; Steamships, decrease, £1,748. Net increase, £49,873.

44. I would now ask hon. members to turn to the memorandum which prefaces the Estimates for 1928-’29, and also to the heads of expenditure which immediately follow it. Hon. members will then be able to follow my comments more clearly.

45. Comparing the 1928-’29 Estimates with the original Estimates of Expenditure for 1927-’28 we get a truer reflection of the actual increase in the expenditure of the department as between the two years.

46. The Estimates of Expenditure for the current financial year, which were laid on the Table on the 21st February last, show that the total expenditure on the railways, harbours and steamships during 1928-’29 is estimated at £29,414,222.

47. The corresponding Estimates for 1927-’28 were £28,728,395, this reflects an estimated increase of £685,827.

48. This is accounted for by: Railways— working expenditure, £274,375; subsidiary services, £154,286; net revenue charges, £220,510. Harbours—working expenditure, £14,670; subsidiary services, £1,695; net revenue charges, £22,569. Total—railways and harbours, £688,105. Steamships—decrease in working expenditure, £2,278. Total net increase—railways, harbours and steamships expenditure, £685,827.

49. Dealing first then with the provision made for the ordinary working expenditure of the railways during 1928-’29 it will be seen that it exceeds the corresponding expenditure for last year by £274,375.

50. It will also be seen that the increase of £274,375 is distributed over most of the heads of the working expenditure, principally: Maintenance of rolling stock, running expenses and traffic expenses.

51. The expenditure on these three heads is, of course, largely governed by the quantity of traffic dealt with, and the train and engine mileage which requires to be run to move that traffic.

52. In regard to the saving of £137,235 under maintenance of permanent way, this is the result of various economies which it is anticipated will be effected without, in any way, lowering the efficiency of the standard of the track, which I am satisfied is in good order throughout.

53. With the view of reducing the costs of upkeep of the track, the question of the introduction of mobile gangs of men with motor trolley equipment has, for some time, been under the consideration of the Administration and in order that this system might be given a practical test it was arranged to give it a trial on the Winburg branch.

54. The report just received on the result of the experiment is gratifying, and indicates that a saving of roughly 23 per cent, on the previous cost will be effected.

55. Having regard to the results achieved, the Administration has decided to extend the system and, with this object in view, it is being arranged for one suitable branch line on each system to be selected for the purpose of trying out the experiment still further.

56. When this has been done the Administration will be in a position to deal with the future application of the system to branch lines in a comprehensive way.

57. If present anticipations are realized, the application of the system with result in appreciable savings to the Administration in the costs of the maintenance of the permanent way on branch lines.

58. After carefully considering the trade and industrial outlook of the country, the Administration considers that there is every reason to anticipate that the extent of our traffic during 1928-’29 will certainly not be less, and will be, in all probability more than that handled during 1927-’28.

59. We have, therefore, made provision for just over 2½ million train and engine mile more than we provided for in the original 1927-’28 Estimates.

This extra mileage represents an increase of 4½ per cent.

60. The estimated expenditure on the railway subsidiary services reflects an increase of £154,286. This is mainly due to a full year’s operations of the Durban grain elevator instead of six months as in 1927-’28; to the extension of the road motor services, and also provision for the first time for the tourist and travel department.

61. I shall have occasion later to refer to these subsidiary services, and, therefore, need say no more at the moment.

62. Under net revenue account, provision is made for an additional expenditure of £220,510. Of this amount £212,390 is required for interest charges on loan capital and interest on superannuation and other fund balances. The balance of the increase, i.e., £8,120 being for miscellaneous expenditure.

63. The growth of the capital expenditure on the railways and harbours, which since Union has increased from £87,263,366 to roughly £147,000,000, at the present time is considerable, and I would invite hon. members to study this matter in the light of the information given in the annual report of the general manager of railways and harbours.

64. This capital expenditure which includes the cost of new lines under construction, amounts, in the case of the railways, to £132,000,000, and harbours £15,000,000, a total expenditure on capital account of, approximately, £147,000,000.

65. The magnitude of that sum necessarily involves heavy payments for interest charges which for the year 1928-1929, are estimated to amount to a little over 5½ million pounds, made up of: railways £5,122,962, harbours £547,243, a total expenditure on interest of £5,670,205.

66. I do not propose to labour this matter further, but I do want hon. members to realize the magnitude and growth of the capital expenditure which compels the Administration to incur such a large sum annually in interest charges.

67. The position of the railways as a whole, that is, exclusive of the harbours and steamships is that an increase in the expenditure is anticipated of £649,171.

68. I, however, want particularly to emphasize that, of this increase net revenue charges, namely, interest and miscellaneous expenditure, account for £220,510. The balance of £428,661 is required to cope with the increased traffic and other business of the Administration, and is more than compensated by increased earnings.

69. I have explained already that the bulk of this increase in our working expenditure is to cover the working costs necessitated by the increased traffic which the Administration expects to handle.

70. The increase in the estimated harbour expenditure for 1928-’29 is £38,934, of which £14,670 is in respect of working costs and the balance mainly in respect of interest charges.

71. The tonnage of cargo handled at the harbours is expected to increase during the current year which necessitates a corresponding increase in harbour working expenditure.

72. In the case of the steamships, the reduction in the estimated expenditure of £2,278 is due to the sale of one of the Administration’s vessels on account of age.

73. I now propose to give hon. members the details showing now the increased expenditure occurs.

74. In the 1928-’29 Estimates provision has been made for additional expenditure for:—

Railways: Main Services, Working Expenditure.

Railway Subsidiary Services.

Additional provision for a full year’s working of the Durban grain elevator; for new road motor services and extension to existing services; additional business to be done by the publicity department and the tourist and travel branch 154,286

Railway Net Revenue Expenditure.

Harbours: Main Services, Working Expenditure.

Less:

which the 1928-’29 estimated expenditure represents when compared with the corresponding estimates for 1927-28.

76. At this juncture it may be of interest to hon. members if I indicate the extent to which rates and fares have been reduced since this Government took office.

The estimated amounts of revenue surrendered (apart from minor tariff adjustments) since June, 1924, are:—

The principal heads under which the tariffs were reduced were:—

77. The revenue from passenger traffic gives me occasion for concern.

78. During the financial year 1921-’22 the total number of passenger journeys was approximately 61½ millions, returning revenue totalling £5,380,000, while during the financial year 1926-’27 the comparative figures are 80,000,000 passengers and a revenue of £5,400 000. Thus while passenger traffic has increased enormously during the last five years, involving much additional expenditure, the revenue earned has practically remained stationary.

79. The fare reductions effected during recent years have failed to produce sufficient extra revenue to compensate the Administration for the expenditure involved in handling the increased traffic.

80. The Administration’s policy of reducing tariffs has been arrested by the factor of road motor competition.

81. I have commented in this House, on several occasions, on the question of competition with which the railways have to contend from road transport agencies.

82. The Administration does the pioneering work of providing transport facilities for the country and then private road competitors step in and reap where the State has sown.

83. The public do not often appear to realize the fact that the railways and Harbours repre sent a State concern in which there is over £147,000,000 sunk, and that in this matter the State is actually the public.

84. In fixing tariffs for the conveyance of traffic, it has always been the definite policy of the railways to pay due heed to the necessity for developing the resources of the Union. To that end the Administration has quoted specially low rates particularly for long distance traffic, and nothing should be done to endanger a continuance of that policy.

85. Our competitors, however, assail us only in the sphere of high valued traffic, which has in past years returned sufficient surplus revenue to support the vastly greater volume of low value traffic carried at what may be termed development rates.

86 The Administration is left to carry the traffic for which development rates are provided, while road transport competitors cut in to the high rated traffic on which the Administration depends for surplus revenue to support the low development rates, quoted with a view to promoting agricultural and industrial expansion.

87. Then again our competitors can charge one rate to one person and a different rate to another person for the conveyance of identical traffic, but as the Administration is bound by Act No. 22 of 1916 to charge rates and fares equally to all persons, its hands are tied in the matter of competing for the business.

88. Competition on these lines cannot continue indefinitely. Our competitors should be compelled to carry all descriptions of traffic, instead of, as at present, being able to choose only the more lucrative classes of traffic for conveyance by road, in competition with the services conducted by the Administration, otherwise the time may come when it may be necessary to give consideration to the question of increasing the rates on the low rated traffic.

89. Whilst dealing with the subject of expenditure I feel it is necessary I should say a few words about “operating ratio,” that is, as the hon. members are aware, the percentage of earnings required for operating expenses, which has been commented upon in the House recently.

90. Comparisons were drawn between the operating ratio of our railways and those of railways in other countries where, however, conditions are entirely different. Attention was also directed to the working expenditure of the Union railways for 1926-’27 having been 80.68 per cent. of the revenue, while it was only 74 per cent. in the year 1923-’24, that since 1923-’24 the percentage has steadily increased and that the tendency is for it to continue upwards.

91. Comparisons of this nature cannot be made without taking into consideration and giving due weight to the varying conditions, not only of the railways in other countries, but the variations which occur during different periods and time even, on the Union railways.

92. But if doubts are entertained in regard to the working costs of the Union railways, I would like the House to bear in mind the figures I shall now give comparing the operating ratio with railways in Canada and Australia.

102. Then there is the Administration’s liability in respect of the Superannuation and Pension Funds.

The fund balances in the Superannuation and Pension Funds at 31st December, 1927, totalled £11,684,355 made up of:—

103. The balance of the Superannuation Fund prior to the inauguration of the New Superannuation Fund amounted to £5,519,364.

104. The amounts charged to Pension and Superannuation Funds in respect of pensions and gratuities for the financial years l925-’26 and 1926-’27 were

106. These figures indicate that the staff realize and appreciate the benefits of the New Fund.

107. In addition to these admissions to the New Fund, 16,145 servants in temporary employment on the 1st September, 1925, when Act 24 of 1925 came into operation, were automatically admitted to the New Fund in terms of the Act, and from October, 1925, to December, 1927, 19,048 temporary and permanent servants were admitted to the New Fund, equal to a monthly average of 705, clearly indicating how the staff appreciate the benefits of the new Act.

108. The superannuation committee of management, in terms of Act 24 of 1925, has dealt with 1,031 cases of breaks in service prior to the 31st May, 1910; of which 880 were condoned and 151 declined. There are a few other cases still to be investigated and considered.

109. In terms of Section 6 (4) of this Act, the Administration has dealt with 199 cases; 176 of which were condoned, 13 declined and 10 are still under consideration.

110. In 1924-’25 the amount charged to revenue (excluding subsidiary services) in respect of pensions and gratuities; £ for £ contributions to the Pension and Superannuation Funds and their deficiencies was £421,193.

111. During the year ended 31st March, 1927, the actual expenditure under these heads was £889,736, an increase of £468,543.

112. For the year 1928-’29 the estimated expenditure is £850,140.

113. This heavy increase, I may say, is due to the inauguration of the New Superannuation Fund, involving increased £ for £ contributions by the Administration owing to the increased rates of contribution and the admission of temporary servants, and an annual contribution of £125,000 towards the estimated deficiency in the fund on its formation. This was attributable to ante-dating and the Administration’s £ for £ contributions in respect of the period prior to the 1st September, 1925; also to an increase of £78,300 per annum increased deficiency contribution to the 1912 Pension Fund, the result of the actuarial valuation at 31st March, 1924, when the deficiency was £1,962,399.

114. The expenditure for the year ended 31st March, 1927, includes the sum of £103,831 in respect of pensions and gratuities chargeable to revenue and the estimated amount under these heads for 1928-’29 is £101,000.

115. The contributions by the Administration to the deficiencies from 1st April, 1924, are:—

116. The quinquennial valuation of the old and new superannuation funds and the 1912 Pension Fund is due to be made at the 31st March, 1929, and then the deficit in respect of the old and new superannuation funds will be actuarially calculated based on the actual transfers to the New Fund, the effect of antedating, and the condonation of breaks in service, etc.

117. The £125,000 per annum is a contribution towards the deficit estimated by the actuaries without a detailed valuation.

118. From 1st April, 1925, the contribution £162,000 in respect of the 1912 Pension fund is (he annual sum required to 30th September, 1942, to liquidate the deficiency of £1,962,399 actuarially calculated at the 31st March, 1924.

119. I am sure the House realizes that the Administration is liable for a large annual increase in expenditure by the inauguration of the New Fund, but as stated when the Bill was under discussion in the House, the improvements made were overdue.

120. As the result of the circulation amongst the staff of the draft Bill, and the representations made, it has been decided to postpone it sine die.

121. This Bill was read a third time on the 7th March.

122. The Bill which has since passed through both Houses, provides for the payment of a gratuity to servants who, not being entitled to admission to membership of any pension or superannuation fund, are retired on the grounds of age, ill-health or physical disability, or severe bodily injury, after fifteen years’ service or more.

123. The Bill does not apply to casual servants, except such casual servants as are guaranteed employment for a minimum number of days in any specified period.

124. The gratuity will be calculated at the rate of ten days’ emoluments for each year’s service.

125. It is estimated the annual charge to revenue will be £5,000 per annum.

126. This Bill was read a third time on the 5th March. It provides for certain amendments of the Service Act and the New Superannuation Fund Act of 1925 and confirms and validates the retirement of the Hon. C. L. N. Felling, C.M.G.

127. It also condones the break in service of certain servants who went on strike in January, 1914, and who at that time were not contributors to any pension or superannuation fund, provided they were re-employed on or before the 24th January, 1917, that is to say within three years of the termination of the 1914 strike.

128. As hon. members are aware the retirement of Sir William Hoy, late general manager of railways, on reaching the age limit, took place last month, although he had been on leave since last November.

129. Sir William Hoy had been with the various administrations in South Africa prior to Union and was appointed general manager on its inception.

130. I feel hon. members will agree when I say that during his regime great developments took place on the South African railways and at the harbours, and I do not think I am saying too much when I say that the grip, the vision and the organizing capacity of Sir William Hoy very largely assisted in that development. He rendered outstanding services, to the State.

131. Hon. members are also aware that Sir William Hoy’s successor is Mr. J. R. More.

132. Mr. More is one of the ablest men in the railway service. He has had a long training and his experiences have covered practically the whole of the Union. His knowledge of the ramifications and potentialities of transport, in all its bearings, is, therefore, unusually comprehensive and fits him more than any one else in the service to carry the responsibilities connected with the operation of the railways and harbours of this country.

133. Hon. members will remember that I made a statement in the House recently in regard to changes in the organization of the Railways and Harbours Service.

134. I then explained very fully the reasons which actuated the Administration in deciding, after very careful deliberation, to make these changes and I indicated the direction in which such changes were to he made.

135. It will not be necessary, therefore, for me to recapitulate what I have already stated.

136. I may, however, inform the House that the Administration decided to make the following appointments, to operate from the 1st April. 1928:—

137. These officers will function for and on behalf of the general manager whenever necessary in their respective spheres.

138. System managers under the new organization have been appointed as follows—

139. As already indicated to the House, the positions of assistant chief civil engineer and financial assistant at headquarters, have been abolished.

140. With regard to the control of the transportation expenditure offices, which has hitherto been under the respective assistant general managers and divisional superintendents, these have now been placed under the control of the chief accountant, who will function as financial adviser to the general manager, in addition to his ordinary accounting work.

141. The wisdom of this change has exercised the minds of the Administration and its senior officers for many years.

142. Opinion was so evenly divided at one time that an enquiry, with a view to making the change in control, resulted in recommendations being received to allow the existing organization to remain.

143. After careful consideration, however, the Administration decided to make a change and to place the financial and expenditure work under the control of the chief accountant.

144. By placing the control of these activities under the control of the chief accountant, it is anticipated that considerable economy will result.

145. I wish to reiterate the opinion already expressed, that these changes will, it is considered from the point of view of my colleagues on the Railway Board, the officers of the Administration, the staff they control, and the general public, result in improved efficiency, and that they will not necessitate any increase in the establishment, nor will they entail increased expenditure to any great extent.

146. I have already indicated to hon. members that arising out of the general re-organization, we had decided that the position in connection with the establishment and control of the Administration’s workshops required more concentrated attention and thought than has been practicable in the past.

147. There has been very considerable expansion in the work undertaken in the workshops.

148. During the year just closed, considerable efforts have been made to carry out the large quantity of repair work arising out of the extended use to which the engines and trucks have been put.

149. The demands made by traffic for the use of rolling stock generally are very great, and it is recognised that, in order to deal satisfactorily and expeditiously with repair work, it is necessary that the workshops should be considerably augmented.

150. At some centres additional buildings or re-modelling of existing buildings are necessary, while at others more up-to-date machinery is required.

151. The whole position is being carefully considered and, as far as the financial position permits, the necessary improvements and extensions are being given effect to.

152. The introduction of new machinery and new methods, whereby greater efficiency and output can be achieved, is one direction in which it is considered additional assistance is required.

153. In order to meet the need for more efficiency in workshops control, it was decided to appoint an officer to assist the chief mechanical engineer with the designation of “assistant chief mechanical engineer”.

154. The appointment of this officer will enable the chief mechanical engineer to concentrate his attention more exclusively to designing, and the better co-ordination and control of the workshops from headquarters.

155. The assistant chief mechanical engineer will keep in close touch with the various workshops, and in consultation with the local mechanical engineers will devise ways and means whereby greater efficiency, economy, and output can be attained than has hitherto been possible.

156. The officer selected for this post is well versed in workshops practice and is thoroughly experienced in all branches of mechanical engineering work.

157. As announced in this House last session, consequent upon the representations made to the Administration towards the end of 1926, by colliery and other interests in regard to the question of truck supply, a commission consisting of two senior officers of the Administration was appointed to investigate the position in all its phases.

158. The commission has completed its investigations and has presented a most interesting and informative report.

159. Recognising that the distribution of truckage has a very important bearing on the question of supplies and on the business of the railways, the commission was requested, in addition to dealing with the various departmental aspects of the truck problem, to place themselves in touch with the larger commercial and industrial concerns and discuss difficulties and the remedies from the ordinary business man’s point of view.

160. The hope was expressed that colliery owners, livestock dealers, farmers, co-operative societies, chambers of commerce, and other interests would assist with suggestions as to any measure which might, in their opinion, be adopted with a view to improving the existing methods.

161. Advice was also invited as to the expansion of business and development of the resources of the Union during the next five years, thus affording the commission information which would be of assistance in considering the probable requirements of rolling stock to meet such development.

162. The interest displayed and the evidence tendered afforded ample proof of the desire to assist in achieving the object for which the commission was appointed.

163. A gratifying feature of many of the interviews and letters received by the commission, was the generous acknowledgment that the officers of the Administration were invariably doing their best to meet difficulties created by shortage of trucks, engine power and facilities generally.

164. Many important recommendations were submitted by the commission and these are receiving the careful consideration of the Administration.

165. Unfortunately financial considerations have prevented many of the excellent suggestions being adopted, but action was taken where possible and effect will be given to other recommendations as circumstances permit.

166. A recommendation that the rolling stock control at headquarters should be re-organized has been taken in hand. To be effective, however, a considerable and continued expenditure will be required for the installation of up-to-date telephonic communication and provision is being made in the Capital and Betterment Estimates, which will be shortly placed before hon. members, for a commencement to be made with this work.

167. On the whole the truck supply at the collieries was reasonably well maintained throughout the year.

168. There were, however, occasions when complaints were made with regard to the shortage of empties, but the shortages were only of a temporary nature, due chiefly to the incidence of seasonal traffic and the urgent necessity for the removal of drought-stricken stock to fresh pasturage.

169. Ample truckage was available for the transport of bulk maize and the crop was moved expeditiously. Supplies of trucks for the conveyance of general traffic were also satisfactorily met.

170. At this point, I wish to mention that the new coal stacking ground at Wests, Durban, with a capacity for 60,000 tons, which was placed in commission in June last, is not being taken advantage of to the extent the Administration had reason to expect.

171. While a number of trucks, which hitherto would have been delayed underload with coal waiting the arrival of steamers, has been released much earlier and returned to the mines for further loading, the highest tonnage stored on the stacking ground at any one time was 32,827 tons, and that was on 11th January last.

172. With regard to electrification, the completion of the special works at Colenso, which were undertaken to safeguard the water supply to the power station and other items of minor importance, brought the construction programme of the electrification of the Pietermaritzburg-Glencoe section of the Natal main line to a conclusion.

173. I am pleased to be in a position to inform hon. members that the earlier initial difficulties have been overcome and the equipment is functioning satisfactorily.

174. The installation as now completed is designed to handle 30,000 tons of traffic per day, in addition to the passenger services.

175. During the period the Administration was operating the power station and transmission plant, the question of providing for the increased traffic in future was given consideration.

176. Since taking over the plant, the Electricity Supply Commission submitted definite proposals, which have been agreed to by the Administration, for increasing the plant by installing additional boilers and turbine generators.

177. The completion of this large work has brought much needed relief to the transportation of traffic over Natal main line.

178. Steady progress has been made with the contingent works on the Cape Town-Simons-town line, and it is anticipated that these will be sufficiently advanced to permit of the line between Cape Town and Retreat being electrically operated in June next.

179. The fact may not be generally known, but the work is being carried out departmentally under the Administration’s own engineers, and is proceeding satisfactorily.

180. With the introduction of electrification on this section of the line, provision will be made for an improved and accelerated train service.

181. A new signalling installation was recently completed at Cape Town terminus.

182. This installation was essential to the completion of the electrification of the suburban line, inasmuch as it was necessary that the old overhead gantry signals and signal cabins should be dismantled before the overhead electric track equipment could be installed.

183. The new signal installation is electrically worked, the switching and signal operations being automatically controlled by the trains in the section.

184. The installation has been built up on the most modern system, and the old familiar semaphore signal has given place to a day colour light signal, giving the same indication to the train driver by day as at night, thus lending itself to simplicity.

185. The installation is the first of its kind on the Union Railways.

189. Hon. members will be aware of the increasing number of accidents occurring at level crossings throughout the Union.

190. The position became so serious that it was considered desirable to appoint a commission to deal with the problem and to submit a report and recommendations.

191. The report which recently came to hand contains a great deal of information. Many suggestions and recommendations are put forward for improvements, particularly at the busier crossings on main trunk roads.

192. Recommendations and suggestions are also submitted in regard to the elimination of certain crossings, by the erection of bridges or subways, the approximate cost of the work, and how the expenditure might be apportioned to the different bodies directly concerned.

193. To give effect to these recommendations a considerable sum of money would be required. The matter is now engaging the close attention of the Railway Administration and the Government.

194. The report is being printed, and copies will be placed on the Table of the House shortly.

195. Included in the miscellaneous expenditure net revenue account is an item of £3,500 in respect of the Perishable Products Export Control Board.

196. This amount represents the cost of the emoluments and expenses of the chairman and ordinary members of this board which are chargeable to the Administration.

197. The board has now functioned for nearly two years and has rendered excellent service to the exporters of perishable products.

198. By reason of its increasing efficiency and the growing realization by fruit exporters that co-operation with the board is essential to their interest, the removal overseas of the record citrus crop of 1927 was carried out in a highly satisfactory manner.

199. The transport of the 1927-’28 deciduous crop, which, by the way, is expected to reach more than 30,000 tons as against 23,000 tons last season, has thus far been effected in a manner which reflects great credit on the board’s organization, and has earned the praise of all fruit exporters.

200. A milestone in the history of the transport of perishables from the Union was reached when the freight contract was recently concluded.

201. The clauses relating to perishables provide that as from 1st January next, ample suitably refrigerated shipping space will be provided to lift, week by week throughout the year, the export perishable products of the Union up to a specified tonnage limit over a period of at least five years, at rates of freight which can be regarded as very favourable to producers.

202. The great bulk of the fruit will probably be discharged at Southampton and will be carried free of cost, to the exporters, to London.

203. Fruit exporters are now assured that their products will be removed from the port of shipment with a minimum of delay in suitably refrigerated shipping space, and conveyed overseas in fast vessels.

206. The magnitude of the business transacted by our railways is such that criticism and complaints are not always avoidable.

207. When users of the railways have reason to complain, particulars are invited, as this affords an opportunity of correcting what may be wrong.

208. It is our desire to give the public satisfaction. We, therefore, welcome suggestions, so that ways and means for improving the service may be found, or of applying remedial measures when these are necessary.

209. With this object in view, it has been decided that suitable officers on the various divisions should be specially deputed for the purpose of looking after the interests of the Administration’s commercial activities.

210. In the selection of the officers for this work regard has been had to the road motor services and other phases of railway business which may require attention, in addition to which the officers selected will attend meetings of agricultural societies, farmers’ conferences, etc., so as to keep in touch with public requirements and the feeling of the community generally so far as the interests of the railways are concerned. I may say these officers have already done excellent work on the different divisions.

211. Having digressed at some length, I now return to the estimates for 1928-’29.

212. Hon. members will observe that provision has been made in the estimates, in accordance with the policy announced three years ago, for a further sum of £250,000 towards the reduction of the interest-bearing capital. This will be the fourth occasion on which these contributions have been made, and, at the end of 1928-’29, we shall have relieved our capital indebtedness by £1,000,000, and consequentially an annual liability for interest of no less than £50,000. If we had not made this special contribution from revenue we would, of course, have closed our year with a substantial surplus, but we believe that it is better to work our railways on sound business principles. It is a very simple sum. Deduct £107,000 from £250,000 and you will get the surplus.

215. Provision has been made in the estimates for the same contribution from revenue during 1928-’29 as was provided for in the previous four years, viz., £1,500,000.

214. The Renewals Fund on 31st December last had a credit balance of £3,414,910, against which commitments amounted to £1,346,948, so that for the time being the position is reasonably secure.

215. I informed hon. members last year that I expected to receive the report of the special committee appointed by the Administration to conduct an investigation as to the adequacy or otherwise of the contribution of £1,500,000 annually to the Renewals Fund in respect of railways only.

216. Unfortunately, certain unavoidable delays have taken place, but the report has now been received, and is under consideration. It is a most valuable report which I hope later on to lay on the Table of the House for the information of hon. members.

217. Allied to the Renewals Fund is the Betterment Fund, to which it will be seen it is proposed to make a contribution of £250,000.

218. The time probably will arrive in a few years when the growth of the railways and harbours may require an increased annual contribution to the fund, but at the moment I do not think that this is necessary.

219. The Betterment Fund had on the 31st December last, a credit balance of £142,061.

220. There remains to be referred to the expenditure on the subsidiary services, which, as the estimates shew, provide for an increase over the corresponding estimates for last year of £154,286.

221. This increase is made up of comparatively small increases in the case of the catering and bookstall services.

222. The bulk of the estimated increased expenditure is required on account of the: Grain elevators, £30,772; road motor services, £87,869; tourist traffic, £26,950.

223. In the case of grain elevators—and I would ask my hon. friends from the Free State-who have been pressing me with regard to the extension of the grain elevator system to give special attention to this aspect of our railway work—the increase is entirely due to the fact that provision is made for a full year’s working of the Durban elevator as compared with six months in 1927-’28.

224. The total quantity of maize and kaffir corn received into the elevator system during the current season up to the end of February, amounts to over 2,750,000 bags, as compared with 1,170,000 bags for the corresponding period of the previous season.

225. Of the total deposited in the system this season, 200,000 tons have been exported in bulk, and about 18,000 tons were delivered for local consumption, leaving a balance of approximately 58,000 tons, the bulk of which is expected to be exported shortly.

226. The increased production gave promise of an estimated surplus of about 7,000,000 bags available for export, and a much greater tonnage turnover was expected at the beginning of the season’s operation.

227. Unfortunately, however, the weak state of the market oversea, which was influenced by the enormous supplies of maize available from the Argentine, caused a general lull in the export business during the busy intake period, thus causing serious congestion at a time when elevator space was urgently required.

228. As the season advanced there were definite indications that advantage was being taken of the cheap storage tariffs to make use of the elevators as warehouses for the storage of grain, thus depriving the system of a reasonable tonnage turnover and preventing the majority of farmers from securing elevator facilities for disposing of their maize.

229. In the light of this new experience, consideration is being given to the question of revising the storage tariffs to prevent the elevator system being used as a warehouse for purely speculative purposes during the busy intake period, especially in a season when there is a definite exportable surplus of maize.

230. Unfortunately these abnormal conditions have seriously affected the revenue-earning capacity of the elevator system.

231. The maize crop for the forthcoming season, according to the latest estimates, is expected to yield 21,628,000 bags, as compared with last season’s estimate of 18,218,000 bags— an increase of 3,410,000 bags.

232. The increase is expected from the Transvaal and Orange Free State where the yield is anticipated to reach 8½ million bags and 7¼ million bags respectively.

234. Hon. members will, I think, agree that there are very good reasons to proceed with caution in extending the elevator system. The financial results of working the elevators since they were brought into operation in 1923-’24 shew that although there was a surplus of revenue over expenditure during that year of £1,338, each year since then a deficit has been shewn. The deficits were: 1924-’25, £75,755; 1925-’26, £11,914; 1926-’27, £79,419; 1927-’28 (estimated), £98,817; 1928-’29 (estimated)—(if the conditions are similar, and there is no flow, there will be an increased loss), 160; total, 266,065. So that for the six years ending 1928-’29, the estimated total deficit is a sum of no less than £264,727.

235. The comparative failure of the 1926 maize crop was the primary factor in the grain elevator system reflecting the loss in the financial year 1926-’27, whilst the disposal of the 1927 crop, although considerably larger than that of 1926, was adversely affected by the inability to find overseas markets on account of the economic conditions to which I have already referred.

236. I may say that the question of reducing these deficits by means of a revision of our charges is receiving careful consideration by the Railway Board and responsible officers of the Administration, as also is the whole question of the working of these elevators in its relation to ordinary transportation working, with a view to ascertaining whether the true relationship between these phases of railway operations is reflected in the accounts.

237. The contributions to the Renewals Fund in respect of depreciation on the grain elevators, as hon. members will see from the estimates, amount to a sum of no less than £72,000 per annum.

238. The magnitude of this contribution, and bearing in mind the fact that up to the present the disbursements from the Renewals Fund in respect of the grain elevators has been practically negligible, warranted the Administration in causing a thorough investigation to be made into the whole position.

239. As a result of this investigation it has been decided to reduce the contribution to the Renewals Fund by approximately £23,500 per annum.

240. I am hopeful that as a result of the consideration which has and is being given to the subject that the financial results of working the elevator system in future will shew an appreciable improvement.

241. I do not think, however, in view of the loss which the working of the elevators-has involved, that any further explanation is necessary as to why the Administration hesitates to commit itself at the present time to an extension of the elevator system.

242. The elevator at Settlers embodies certain modifications designed to effect economy both in construction and operating costs, so that the experience gained in the construction of this elevator will be invaluable to the Administration when the time arrives for considering an extension of the elevator system.

243. A few words with regard to the road motor services. The comparatively large increase from £197,000 to £285,000 in the estimated expenditure for the Road Motor Services calls for a few comments.

244. During 1927, this system of transport was established in 51 districts throughout the Union, and 19 extensions were made to the services in operation prior to 1927.

245. At the end of the last calender year the route mileage operated totalled 6,359, an increase over the previous year of 2,996 miles.

246. During January and February of this year nine additional services were inaugurated which resulted in an increase of 820 miles.

247. The Administration has under consideration many further proposals for the introduction of road motor services, some of which have been approved, and others are still being investigated.

248. To afford a better idea of the extent to which the road motor services are utilized, I may state that during the last calendar year-877,432 passengers, 52,069 tons of goods and 393,189 gallons of cream were transported by these services.

249. The goods traffic consisted mainly of commodities such as butter, eggs, poultry, fruit, vegetables, etc., as well as farm implements, household requirements and goods for retail at country stores.

250. I am sure hon. members will appreciate that the volume of dairy and farm produce conveyed from distrits where no system of organized transport previously existed must in the aggregate, provide a considerable and consistent income to those hitherto debarred from the profitable disposal of their products.

251. The policy of providing road motor services with the object of stimulating the productive efforts of farmers and small holders in country districts continues to meet with a gratifying measure of success.

252. Several of the services have, I regret to say, not been accorded that measure of support which the Administration had the right to anticipate.

253. The financial results of working each service is being carefully scrutinized, and it is necessary that I should sound a note of warning.

254. If, through lack of public patronage, the financial position of the services is not sound, consideration will have to be given to the termination of the facilities.

255. Provision has been made for the first time in the estimates for a sum of £26,950 for tourist traffic.

256. This is a new head, and includes expenditure in the nature of hotel accommodation (not the building of hotels), and transport expenses (other than the Administration’s ordinary services), which it is expected will be incurred in connection with the tourist traffic in South Africa.

257. In order that undivided attention might be given to the development of tourist traffic, a tourist and travel branch was created in July of last year. The organization has been virtually completed and is now functioning with gratifying results.

258. This branch was established to meet the needs arising out of the desirability of encouraging South Africans to learn more of their own country, also the extended interest manifested oversea in our country as a holiday resort and the consequent rapidly increasing number of tourists and visitors to our shores.

259. The functions of the new department are primarily to make travel easier for local and over seas travellers. Advance arrangements for rail journeys, hotel accommodation and motor trips are made and intending passengers are advised of the most suitable routes and the facilities available.

260. Detailed arrangement for land tours are made to facilitate the journeys of large parties of oversea visitors arriving in South Africa by cruising ships under the auspices of tourist agencies of world-wide repute.

261. Tourist bureaux have been opened in Johannesburg and Cape Town, and a third office will shortly commence operations at Durban.

262. As a result of the discussion at the Imperial Conference on the subject of Imperial air communications, action has been taken to give effect to the Government’s decision to provide a nucleus airship mooring tower base in South Africa to facilitate a demonstration flight by airship, projected to take place about August, 1929.

263. The structure and plant of the mooring tower are on order for erection at a site to be determined by the Government.

264. The Administration is in direct touch with the Air Ministry concerning the various details necessary to complete the required arrangements, and the sum of £70,000 has been provided in the Capital and Betterment Estimates to be submitted later to the House, to meet the Administration’s contribution.

265. I will now briefly review the estimated revenue for the year and subsequently the estimated final results of working for 1928-’29.

266. If hon. members will refer to the green book they will see that we anticipate from all sources a total revenue of £29,436,470, made up of: Railways, £27,626,624; harbours, £1,627,821; steamships, £182,025; total, £29,436,470.

267. The railway revenue estimate of £27,626,624 includes in respect of main services, £25,297,632, which is based upon an average weekly revenue of £485,000, as compared with the actual average for the year 1927-’28 of £483,500.

268. The revenue from 403 miles of new railways, which it is anticipated will be opened during 1928-’29, will accrue during the year, and this, coupled with normal development which is taking place throughout the Union, as well as the extra revenue expected from the maize crop, reasonably may be expected to yield the £1,500 per week, which is necessary in order to bring our earnings up to the figure upon which the estimate is based.

269. The position in regard to the construction of new lines is that of the 1,951½ miles authorized under various Acts, 1,267 miles had been completed and opened for traffic at the end of March, 1928, and 684½ miles still remained to be completed.

270. The lines under construction at the moment are: George-Knysna, 42 miles; Bothaville-Bultfontein, 78 miles; Brits-Beestekraal, 27 miles; Singlewood-Zebediela, 32 miles; Potchefstroom-Losberg, 31 miles; Hermon-Porterville, 36 miles; Ceres-Prince Alfred Hamlet, 7 miles; Ondekaremba-Witvlei, 79 miles; Empangeni-Nkwaleni, 35 miles; Louis Trichardt Deviation, 7 miles; Messina-Limpopo (preliminaries), 9 miles.

271. Construction work will be put in hand on the remaining lines authorized, as soon as financial and other considerations will admit.

272. In the case of harbours, the estimated revenue has been set at an average of £30,500 per week, which is slightly lower than the actual receipts for 1927-’28.

273. We are budgetting for a slight decrease in the revenue from steamships due to the fact that, as compared with 1927-’28, we shall be operating one steamship less in number during a portion of the year.

274. I feel satisfied that our revenue estimates can be considered to fairly represent what may be anticipated during the year which we have just entered upon.

275. While we have abundant evidence of the development which is taking place in the Union, we are not unmindful of the deplorable effects of the prolonged drought in certain parts, and realize that this may not be without a repercussion upon the general prosperity of the country.

276. Briefly then, the position is that, with an estimated revenue of £29,436,470 and an estimated expenditure of £29,414,222, we are budgetting for an estimated surplus during 1928-’29 of £22,248.

277. During the course of the year the staff establishment has increased, but when consideration is given to the extended services which the Administration have introduced, and the expansion of traffic which has taken place, this is not surprising.

278. The road motor services have necessitated an appreciable increase in staff, whilst the new works in progress, such as the Cape suburban electrification which, as I mentioned a short while ago is being carried out departmentally, have also tended in the same direction.

279. The position at the end of December, 1927, as compared with the corresponding period of the previous year was as follows: Graded staff—1927, 41,482; 1926. 39,337. Civilized labourers—1927, 22,126; 1926, 21,682. Indians— 1927, 1,222; 1926, 1,562. Natives—1927, 30,181; 1926, 32,017. These figures include servants on the temporary and permanent staff, and those employed casually and on piecework.

280. I now wish to make brief reference to the improvement of the conditions of service of the staff.

281. Immediately after this Government assumed the reins of office, representations were made from all sections of the staff for improvements in their conditions of service. The representations were carefully considered, and where it was felt that there was reasonable justification for improving the conditions of railwaymen, the Government went a long way towards meeting the demands.

282. In response to insistent representations, a committee was formed in 1924 to examine the hours of duty of the staff, throughout the Union, who were working more than forty-eight hours per week. The Administration, as far as the financial position permitted, adopted the main recommendations of the committee’s report and improvements were introduced with effect from the 1st February, 1926, which resulted in increased expenditure to the extent of nearly a quarter of a million pounds per annum.

283. In 1925 the House passed a Bill dealing with the superannuation benefits of railway and harbour servants, to which I have already alluded this afternoon.

284. The object of the Bill was to effect improvements in the conditions governing the payment of superannuation allowances and also to place the superannuation fund on a sound and solid foundation.

285. The Administration has now guaranteed the solvency of the fund, and the increased benefits accruing to the staff resulted in additional contributions by the Administration, amounting to a very considerable sum.

286. I do not know whether hon. members fully appreciate to what extent railway and harbour servants generally have benefited, both directly and indirectly, under the provisions of this Act.

287. At the same time a Bill was passed amending the service conditions generally in regard to discipline, appeals and other kindred matters. The Bill aimed at a simplification of the procedure and provided better channels of appeal so as to ensure that the staff would have a fair and reasonable hearing in respect of grievances and disciplinary punishments.

288. The Act also provided for the constitution of the conciliation board which had, up to this point, functioned as a non-statutory body.

289. Amongst other improved conditions which have been introduced during the past two or three years may be mentioned the special cost of living allowance at Durban, the provision of medical benefits for European labourers, their wives and children, improved individual grading, which enabled a larger number of promotions to be carried out, and the introduction of the probationer scheme, under which the methods of training junior members of the staff for higher positions in the service is being systematically introduced.

290. It is estimated that the additional expenditure involved in all these improvements collectively amount to approximately half a million pounds per annum.

291. During the last few years the management has on various occasions, in consultation with the staff concerned, considered the times set for piecework under the bonus system operating in the mechanical workshops, but whilst the earnings of the men working under the system have shown a sharp upward tendency, no marked increase in output is indicated.

292. The Administration is not averse to an improvement in the earning capacity of the staff working under the bonus-earning system, but it is incumbent on it to be satisfied that the output is in proportion thereto.

293. The position, therefore, is being enquired into with a view to ensuring that the bonus-earning scheme is on sound economical lines, with a view to the maintenance of a fair and equitable adjustment as between output and earnings.

294. The Administration adheres to the policy of employing civilized labour wherever possible as a constituent part of its functions and will, as far as lies in its power, continue the development and gradual expansion of this policy on sound economic principles.

295. During the year 1927, the total number of graded staff increased by 2,145, whilst the number of civilized labourers employed showed an increase of 444 as against a decrease in the Indian and native staff of 2,176.

296. In this connection it is as well to point out that the increase in civilized labour was not the result of ousting Indians and natives from employment, but as a direct result of the increased activities of the Administration during the year, and to the substitution of native labour by civilized labour, whenever practicable, as wastages occurred.

297. The employment of civilized labour is fast becoming a settled factor in South Africa, as in other countries, and I am sure hon. members will agree this is as it should be if the social fabric of European civilization in this country is to be sustained.

298. The Administration has recently decided to increase the rates of pay of European labourers from 5s. to 5s. 6d. per diem on the basis of two annual increments of 3d. per day. The first increment will be given after the lapse of three years’ service, and the second twelve months thereafter.

299. With a view to assisting the staff in the Natal Province to more readily acquire a knowledge of Afrikaans, the Administration has appointed teachers at certain centres for the purpose.

300. The arrangement is working satisfactorily and should assist materially in helping those members of the staff who otherwise would find it difficult to obtain facilities for acquiring a knowledge of the other official language.

301. Although certain difficulties have been encountered in introducing these classes the matter is being pursued, so that the staff may attain the object which the Administration has in view, namely, proficiency in both official languages.

302. The establishment of continuation classes primarily for European labourers, under the age of twenty-one years, who have not attained the requisite standard of education to fit them for advancement to graded positions in the service, is also engaging attention.

303. The probationer scheme to which I shall refer later was evolved from that committee’s report.

304. Some of the other recommendations of the committee are still being explored and investigated with a view to ascertaining how far it is possible to adopt them, either wholly or in part.

305. Matters such as road motor transport, introduction of mechanical and labour-saving appliances for the more expeditious handling of goods generally, are a few of the important questions dealt with.

306. The probationer scheme evolved from the report of the organization and development committee, and modified to suit the requirements of the service, has now been in operation since April, 1927.

307. It bids fair to give satisfactory results which, however, will only be apparent after the scheme has been in operation for a year or two, but so far the results have been encouraging.

308. The scheme has been formulated with the object of attracting the best type of youth, direct from school, into the railway service, and provides for a graduated scale of remuneration commensurate with the age and educational qualifications of each youth.

309. An intensive course of training in the various branches of the clerical, trains operating, catering and other divisions of railway and harbour service is aimed at and, it is hoped, in time to build up a highly efficient organization by means of the probationer scheme.

310. The age restriction governing admission to the service, in so far as probationers are concerned, is laid down as from 16 up to 19 years in the case of employee grades, and up to 21 years in the case of clerical grades. The period of training ranges up to two years, according to the class of work in which training is imparted.

311. In the majority of grades only adults are permitted to undertake independent duty, and after having completed the prescribed period of training in such grades. Qualified probationers are appointed learners until they reach the age of 21 years when, if proficient in all respects and there is a vacancy, they are definitely promoted to the grade for which they have been training.

312. The scheme has been accorded a good reception by the staff. It is looked upon as supplying a long-felt want in the way of recruiting and training youths on leaving school to enable them to become efficient railwaymen. It ensures definite and systematic training, and a steady and reliable avenue of employment for a large proportion of the youth of the country.

313. In connection with the probationer scheme and in conformity with the recommendations of the organization and development committee, welfare officers have been appointed on each system who are primarily concerned with the recruitment and training of the probationers, both clerical and daily paid, but whose duty it is also to keep in close touch with European labourers and to act as intermediary between the controlling officers of the system and the labouring staff generally.

316. The period of office of the conciliation board constituted under section 24 of Act No. 23, 1925, expired at the end of last month, and arrangements are in hand for a fresh election of staff representatives for the new board.

317. The board, like its predecessors, functioned successfully during its term of office.

318. There have been many indications that the establishment by law, of an advisory body of this nature, has inspired a measure of confidence in the relationship between the management and the staff.

319. A word of praise is due to both nominated and elected sides of the board for the moderate and conciliatory attitude in discussing points of difference.

320. Many important questions have been amicably settled through the instrumentality of the board since its inception. The spirit of cooperation which has at all times been evinced in its deliberations and resultant recommendations are encouraging features for the future.

321. Since it has been a statutory body the board has handled such important subjects as the revision of the free pass and privilege ticket order instructions, seniority and methods of promotion of salaried staff and running staff generally, proposals of the organization and development committee, and the introduction of the probationer scheme, as well as numerous petitions received from the staff in connection with grading and other conditions of service.

322. The manner in which the staff, as a whole has co-operated with the management, and the support, loyalty, and efficiency manifested by all sections of the personnel have been most gratifying, and augurs well for the future of the country at large and the railways and harbours service in particular.

323. I am sure this House, and the people of this country, will not fail to appreciate in a full measure the loyalty, zeal and efficiency which have been displayed by the staff in all branches of the railways and harbours service. I now lay on the Table a statement of the Esitmates of Revenue and Expenditure for the financial year ending 31st March, 1929.