Mr. SPEAKER, as chairman, brought up the report of the Committee on Standing Rules and Orders, as follows—

E. G. Jansen, Chairman.

Committee Rooms, House of Assembly, 31st May, 1933.

Report considered and adopted

Following message sent to the Senate—

House of Assembly, 31st May, 1933.

Mr. SPEAKER announced that the Committee on Standing Rules and Orders has appointed the following members to serve on the Select Committee on the Rand Water Board Statutes 1903-’32 Amendment (Private) Bill, viz.: Messrs. O’Brien, Coulter and Oost; Mr. O’Brien to be chairman.

Message read from the Senate—

The Senate, 30th May, 1933.

Third Order read: Third reading, Agricultural Pests Amendment Bill.

Bill read a third time.

Fourth Order read: Third reading, Franschhoek Water (Private) Bill.

Bill read a third time.

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

[Debate, adjourned on 30th May, resumed.]

1. 2. The year 1932-’33 commenced with an accumulated deficit, brought forward from the previous year, of £2,498,209.
2. 3. In the estimates approved by Parliament last year, provision was made for an expenditure during 1932-’33 of £26,066,652.
3. 4. Revenue for the year was anticipated to amount to £25,997,511, so that allowance was made for a deficit for the year 1932 ’33 of £69,141.
4. 5. In the green book, which will be distributed this afternoon, hon. members will find published therein figures showing the revised estimated results for the year 1932’33.
5. 6. The accounts for the year 1932-’33 are not yet closed finally, but it is considered that the figures shown in the green book will be sufficiently close to the actual results, when it is known, to warrant our regarding them for the moment as actual.
6. 7. From the green book it will be noted that instead of a deficit of £69,141, the year 1932 ’33 ended with a deficit of £1,196,273 or an increase in the deficit of £1,127,132.
7. 8. This adverse result was brought about by the revenue from all sources failing to reach anticipations by £1,954,067, while, on the other hand, savings in expenditure were effected of £826,935, the adverse difference, of course, being as already stated, £1,127,132.

1. 9. To deal with the revenue first, it will be recalled that, at the time the estimates for the year under review were framed, there was nothing to indicate that traffic would continue on the down grade to such depths as were actually experienced.
2. 10. On the contrary, bearing in mind the abnormal drop in revenue that had already taken place during the preceding year and the special steps that had been taken partly to meet the position, it was confidently anticipated that revenue for 1932-’33 would at least be no less than that of the year 1931-’32.
3. 11. Experience, however, proved otherwise.
4. 12. Of the total shortfall in revenue, railway earnings alone dropped by £1,420,444, and it is of interest to compare, with the previous year, the earnings under this head for each quarter of the year.

13. The comparison is as follows:—

1. 14. I mention these figures because they illustrate the abnormal drop experienced during the first quarter of the financial year and how in later quarters a steady improvement was manifested until in the last quarter of the year there was actually an increase, as compared with the same quarter of the previous year.
2. 15. In this shrinkage of revenue all heads of railway earnings were affected, but it was proportionately greater in some cases than in others.
3. 16. This is illustrated by the following:— Passengers decreased by £578,448 or 12.4 cent.; parcels decreased by £50,378 or 6.5 per cent; goods and minerals decreased by £485,264 or 3.9 per cent.; coal decreased by £297,781 or 10 per cent.; livestock and miscellaneous decreased by £8,573 or .7 per cent.—Total decrease for the year, £1,420,444 or 6.4 per cent.
4. 17. In regard to earnings derived from harbours and steamships, a similar state of affairs was experienced, the position being that, compared with the previous year, there was a shrinkage in harbour revenue of £114,155 or 9.6 per cent.; and in steamships revenue of £33,594 or 28.1 per cent.
5. 18. The improvement in earnings that has taken place in the last quarter of the year is, indeed, a welcome sign, as it would seem to indicate that the lowest point in earnings has actually been passed and that from now onwards, a more hopeful view may be taken of the prospects for the current year.

1. 19. Turning now to the expenditure incurred during 1932-’33, I have already mentioned that, compared with the original estimates for that year, a saving was effected amounting to £826,935.
2. 20. This represents a saving of 3.2 per cent. and may appear at first glance to have been insufficient in its relationship to the shortfall of £1,954,067 or 7.5 per cent. under revenue.
3. 21. But in this connection I would remind hon. members that in a business concern of the magnitude of our railways, harbours and steamships, it is impossible for expenditure to be reduced concurrently with, and in the same ratio to, a decrease in revenue.
4. 22. This applies especially to the year under review when the shortfall in revenue was abnormal and wholly unexpected.
5. 23. It must also be remembered that a large proportion of our costs includes charges which do not vary to any appreciable extent with fluctuations in the volume of traffic transported.
6. 24. As a matter of fact, in the extraordinary circumstances that prevailed, the saving effected was a remarkable achievement, and to illustrate this, I would like to mention for the information of hon. members certain unit cost figures.

1. 25. Let me first direct attention to the operating ratio for the railway transportation services—that is, the ratio of the working expenses to the revenue earned by these services, expressed as a percentage of the revenue.
2. 26. Hon. members will appreciate that the tendency in times of falling revenue is for the operating ratio to rise, without it necessarily meaning that the railways are being badly managed.
3. 27. In spite of this, however, in the year 1932-’33, when, as I have already mentioned, there was a heavy drop in revenue, the operating ratio was reduced to 75.61 per cent. or a decrease of 4.26 per cent. as compared with 79.87 per cent. for the previous year.
4. 28. Stated in another way, this means that for the year 1932-’33 it cost £4 5s. 2d. less to earn £100 of railway revenue, than it did in 1931-’32.

1. 29. Then again, in the train mile costs there was a reduction of 5d. per train mile, the total cost being 7s. 11d. as compared with 8s. 4d. for the previous year.
2. 30. These figures afford evidence amply sufficient to convince hon. members, that the comparatively heavy deficit for the year was not due in any way to lack of efficiency, or lack of economy in management.

31. Before concluding my remarks on the results of working of the past financial year, permit me to mention a few facts and figures for 1932-’33 compared with the previous year.

1. 32. The number of passenger journeys during the year ended February last was 69,941,617, a decrease compared with the previous year of 3,464,587.
2. 33. Of this decrease in the number of passenger journeys—1,948,139 were in respect of suburban traffic and 1,516,448 in respect of other than suburban traffic.

1. 34. For the 12 months ended February last, the tonnage of goods and mineral traffic conveyed was 11,293,865 tons, whereas in the previous corresponding 12 months the tonnage was 11,550,077, or a decrease of 256,212 or 2.2 per cent.
2. 35. The decrease was composed of: General merchandise, 180,593 tons; grain and produce (excluding grain for export), 130,289; minerals and low grade traffic, 200,223; or a gross decrease of 511,105; while on the other hand, increases were experienced in respect of: Sugar cane, 10,219 tons; grain for export, 244,674— 254,893; making, as I have just mentioned, a net decrease of 256,212.

1. 36. The tonnage of coal conveyed also shows a considerable falling off, compared with 1931-’32. The quantity conveyed during the 12 months ended February, 1933, was 6,538,599 tons, which, compared with the previous year of 7,765,357, represents a decrease of 1,226,758 or 15.8 per cent.
2. 37. Of this decrease in coal traffic, coal for local consumption accounts for 816,057 tons, and coal for shipment accounts for 410,701, total decrease, 1,226,758.

1. 38. In regard to livestock traffic, for the 12 months ended February, 1933, compared with the previous year, there was an increase in the number of head conveyed, the figures being respectively: For the year 1932-’33, 3,711,613; and for the year 1931-’32, 3,593,649; an increase over the previous year of 117,964 or 3.3 per cent.

1. 39. Turning to the results of working the subsidiary services, which, as in the case of main services, experienced an all-round drop in revenue, I will deal first with that of the catering services.

1. 40. The business of the catering service has continued to suffer severely, not only on account of a reduction in the number of passengers travelling, but on account of a lack of patronage on the part of a large number of those who did travel.
2. 41. With a view to encouraging patronage of the dining cars, it was decided, with effect from December last, to reduce the cash tariff for meals on dining cars from 10s. 6d. to 8s. 6d. per day, the latter being the rate at which meal coupon books were previously sold. In view of this arrangement the sale of meal coupon books is no longer necessary and has been discontinued.
3. 42. While on the subject of the catering department, it may interest hon. members to learn that since the removal of the catering facilities, in November last, from the old Johannesburg station premises, to the new building, a gratifying increase in catering revenue has been experienced.
4. 43. The average weekly receipts have been approximately trebled compared with the takings in the old station.

1. 44. The reduction in number of the travelling public has also had an adverse effect on sales at bookstalls and from automatic machines.
2. 45. A significant feature of the bookstall business, however, is the increasing extent to which the travelling public are now supporting South African as against overseas publications.
3. 46. In regard to the advertising section—that is commercial advertising as distinct from advertising for the purpose of attracting traffic— considering the shrinkage in business brought about by the depression, the results obtained for 1932 ’33 may be regarded as not unsatisfactory, a profit having been earned in this branch only slightly less than that of the previous year.

1. 47. In connection with bedding equipment of trains a net profit equal to that of the previous year was also maintained.

1. 48. The working of the grain elevators for the financial year 1931-’32 resulted in a deficit of £59,000, while the year 1932-’33 ended with a deficit of only £9,391.
2. 49. This improvement was brought about by increased activities, particularly during the last quarter of the financial year when a marked increase took place in the quantities of maize exported, and the increased volume of wheat handled through the elevator system.
3. 50. The total quantity of maize and kafir corn dealt with through the elevator system for the current season up to the 31st March last amounted to 479,552 tons.
4. 51. This represents an increase of 39 per cent. over the previous year.
5. 52. Of this total tonnage, 321,422 tons were exported, representing an increase of 140,822 tons over the previous year.
6. 53. A gratifying feature of the season’s working has been the increased tonnage of maize shipments to Canada.
7. 54. On the termination of the Ottawa conference, as hon. members will remember, the embargo on the importation of South African maize into Canada was removed, with the result that approximately 104,000 tons of maize have been exported through the elevator system to Canada this season, as compared with the previous record of 86,000 tons.
8. 55. The wheat crop this last season was a record one in all areas in the Union, the total quantity deposited in the elevators amounting to 871,434 bags, as compared with 175,592 bags deposited during the previous year.
9. 56. Normally, all the 1931-’32 season’s wheat was due to be cleared from the elevators by the end of October, 1932, but owing to the supply being in excess of the demand, there were over half a million bags of wheat still in the elevators at that date.
10. 57. On representations being made by the wheat pool board on the difficulty of disposing of the wheat at a reasonable price, the Administration agreed to extend the storage period at the ordinary scale of storage charges, and in consideration of this concession the Administration was indemnified against all losses which might be sustained through deterioration of or damage to the wheat.

1. 58. The road motor services continue to fill an important role in the transport system of the country, without which primary producers not directly served by railways would be practically cut off from markets.
2. 59. In addition to light traffic, the transport of large quantities of heavy traffic such as maize, wheat, wool and fruit traffic has been undertaken. To mention just one instance in this connection:
3. 60. A heavy road motor transport service for the conveyance of wheat crops was introduced in the Heidelberg (Cape) area during the first week of December last, since when many thousands of bags of wheat have been carried direct from the farms to the railway station at Heidelberg.
4. 61. Where formerly, the farmers had to rely on small lorries doing numerous trips to and from with average loads of only 20 bags per trip, the railway administration’s large powerful lorries, with two trailers attached, have been moving wheat at the rate of 150 to 200 bags per trip.
5. 62. The bulk transport of such large quantities of wheat has come as a pleasant surprise to the farmers, who agree that it has relieved them of a good deal of the worry and trouble connected with the transport of small lots by private lorries.
6. 63. The provisions of the Motor Carrier Transportation Act have been the means of eliminating unfair and wasteful competition in a number of areas, though there are still some areas where the position is unsatisfactory.
7. 64. Owing to the financial stringency and hardship experienced by farmers, a large number have resorted to transport as a means of livelihood. Competition from this service has assumed alarming proportions, and the Administration is finding it extremely difficult to retain an adequate measure of support from primary producers and country storekeepers, owing to the exceptionally low rates charged by these carriers, whose operating costs are naturally very low—donkeys are employed in the majority of cases.
8. 65. The increase in these competitive services must be attributed to the difficult conditions to which the farming community is to-day subjected, but with the prospect of a return to better times it is hoped that this competition will cease.
9. 66. On the whole the road conditions have improved, but many roads still remain in a very unsatisfactory condition, the provincial authorities having been hampered by lack of funds.
10. 67. Financially, the road motor services have paid their way, the year 1932-’33 having ended with a surplus of £4,789, which represents an improvement of £1,452 over the previous year.
11. 68. Like other services, the earnings of the road motor services were affected adversely by the prevailing depression, but effective steps were taken to keep down working costs, as far as possible, in consonance with the drop in revenue.
12. 69. An outstanding feature of the year’s working is, that in spite of the severe drought experienced in many areas suitable for dairy farming, the quantity of cream conveyed is the highest on record, the figures in this respect being 959,115 gallons, compared with the previous record of 944,780 gallons.

1. 70. In regard to the Administration’s tourist service, as was naturally to be expected, bearing in mind the factors which occasioned stagnation everywhere throughout the world, the flow of visitors from overseas registered a shortfall in the year 1932-’33 as compared with the figures for the preceding year.
2. 71. The number of holiday and business visitors for the year 1932-’33 totalled 6,701 as against 7,953 for the previous year—a reduction of 1,252.
3. 72. In spite of this reduction, however, it is pleasing to record that, financially, a slight profit, corresponding more or less to the results obtained for the preceding financial year, was obtained for the year 1932-’33.
4. 73. There are abundant indications that the Kruger National Park is being recognized more and more, as an outstanding national travel asset. To-day, not only is the interest of South Africans growingly centred on this wild life sanctuary, but prospective holidaymakers in America, Great Britain, and elsewhere are indicating, by their enquiries, the rapidly increasing cognizance taken of the park throughout the world.
5. 74. Conditions in the area are continually being improved—the comfort and convenience of visitors thus being advanced, and it is safe to predict that as the years progress, the park will prove an even more powerful magnet, whereby sight-seeing tourist traffic from overseas is largely attracted.
6. 75. The Drakensberg National Park and holiday playgrounds thereabouts are likewise steadily advancing in public popularity, so much so, indeed, that at certain periods of the year, the available hostel accommodation is taxed to its utmost.
7. 76. In its publicity literature, the Administration kept the Kruger National Park and Drakensberg holiday fields well in the lime-light.
8. 77. The Administration, through its publicity and travel department, co-operates widely and harmoniously with a large number of tourist agencies throughout civilised countries in all parts of the world.
9. 78. This measure of collaboration is consistently registering an upward trend, and a solid basis of working continues to be laid, which must, in years to come, yield results of great importance to South Africa.

1. 79. To summarize the foregoing, the position is that at the 31st March, 1933, the Administration is faced with an accumulated deficit of £3,694,482
2. 80. This deficit has been financed from the Administration’s general balances, and the question of its liquidation is a matter to which I will refer at a later stage.
3. 81. In the meantime I would just like to say that the period covered by the three financial years ended March last, has been one of almost unprecedented decrease in the earnings of our railways, and a period of the greatest anxiety to those who were in control and were responsible for their administration.
4. 82. Revenue in the last of those 3 years was lower than the year 1929-’30 by no less than £6,630,457. This speaks for itself.
5. 83. It is true, that we are now faced with an accumulated deficit of comparatively large proportions, but notwithstanding this, I am sure honourable members will agree, that everything which it was humanly possible to do, to cope with the position, was done by the management, under the exceptionally able guidance of our late Minister of Railways.

84. Turning now to the

for the year 1933-’34, I propose to deal first of all with the estimated expenditure; then with the estimated revenue; and finally with the difference between the two; that is with the estimated net result.

1. 85. Dealing then with the estimated expenditure, I would invite hon. members to refer to the printed Estimates of Expenditure from Revenue Funds, which were laid on the table a few days ago, from which it will be seen that the expenditure for the year is estimated to amount to £25,716,281 made up of:—Railways, £24,320,418; harbours, £1,298,270; steamships, £97,593. Total, £25,716,281.
2. 86. Compared with the estimates for the previous year, this represents a decrease of £350,371 sub-divided as follows:—On account of railways, £253,328; on account of harbours, £83,388; and on account of steamships, £13,655. Total, £350,371.
3. 87. Before going into detail, I think it would be as well, at this stage, to mention two factors which require to be borne in mind when making a comparison between the two sets of estimates, because they affect such a comparison in its entirety.
4. 88. The two factors are:—Firstly—the additional expenditure provided in the estimates for 1933-’34, by reason of the discontinuance of the temporary wage deduction; secondly—the benefit derived from the decision to cancel the Administration’s annual payment to the Treasury for interest on capital expenditure from pre-Union revenue.
5. 89. It so happens that the additional expenditure involved is practically nullified by the savings in interest charges, with, however, this distinction, that while the additional expenditure brought about by the discontinuance of the temporary wage deduction affects almost every individual wage account, the saving on account of reduction in interest payments affects only one account, namely, the net revenue account.

1. 90. The decrease of £253,328 under railways, is made up of:—
   Net revenue account, £324,996; subsidiary services, £117,535; betterment fund, £50,000. Gross decrease, £492,531. Less increased expenditure on account of—Transportation services, £239,203; leaving a net decrease, as I have mentioned, of £253,328.
2. 91. The increase of £239,203 on account of transportation services consists, in turn, of:— Increases under—Maintenance of way and works, £95,326; running and traffic expenses, £120,942; superannuation, £117,505; or a gross increase of £333,773. And the decreases occur under—General charges, £5,689; maintenance of rolling stock, £56,978; cartage services, £31,903—£94,570; or a net increase of £239,203.

1. 92. The increase of £95,326 contemplated under maintenance of way and works, is brought about, principally, by the provision made for the cost of additional sleepers, rails, and other permanent way material required for renewals of the track, and also to cover the cost of enlarged fishplates, the introduction of which, it is claimed, will result in reduced track maintenance costs in the future.
2. 93. In this connection, it may interest hon. members to learn that after rails have been in the track a number of years, the fishplates become loose, due to wear on the contact surfaces, the ends of the rails at the joints, under the constant hammer blows of the wheels, become dipped and, eventually, do much damage to engines and rolling stock.
3. 94. The “dipped ’ joint is a source of annoyance to passengers, and a source of expense to the Administration, as a track with “dipped” joints requires very much more attention and maintenance than a track that is uniformly level throughout.
4. 95. The Administration’s engineers, however, have developed a method of treating these joints, which, by bending up the end of the rail until it is straight, and inserting new fishplates, suitably enlarged, to take up all the wear, secures a marked improvement in both smooth running and maintenance costs.
5. 96. It is hoped, that if this method proves as successful as is anticipated from trials already made, rails will be kept in the track considerably longer than they are at present.
6. 97. The Administration has also been experimenting on repairs to points and crossings by electric welding, and, from the experience gained so far, it is hoped that fairly substantial reductions in maintenance costs in future will flow from the result of these experiments.

98. The increased expenditure provided for under running and traffic expenses is occasioned mainly by the discontinuance of the temporary wage deductions.

1. 99. The train and engine mileage for 1933-’34 is expected to be less than that provided for in the original estimates for 1932-’33, by 3,170,760 miles or 6.01 per cent.
2. 100. This lesser mileage has been brought about by an intensive curtailment and reorganization of train services in every possible direction, commensurate, of course, with the requirements of the public, and approximates the actual train and engine mileage of the year just completed (1932-’33).
3. 101. Cognisance has not been lost of the fact, that the traffic to be handled during the year 1933 ’34, is expected to exceed that of the previous year. The bulk of this additional traffic is, however, expected to flow in the direction in which trucks had, of necessity, to be run empty, or only partially loaded, during 1932-’33. On this account it is anticipated that the train and engine mileage estimated will be sufficient to transport all traffic offering.

102. Under traffic expenses, provision is made for additional expenditure on account of the Administration’s contribution towards overseas advertising.

103. In connection with the increase of £117,505 provided for under superannuation, the late Minister in introducing his estimates last year, intimated, that staff, who were found to be spare, were being allowed, in certain circumstances, to relinquish their appointments and receive the benefits to which they were entitled. This resulted in increased expenditure from revenue funds under the head of superannuation, which, of course, has its counterpart in a reduction in the wages vote under other heads.

104. As already intimated, the estimates for railways provide for decreased expenditure, totalling £94,570, under general charges, maintenance of rolling stock and cartage services. These decreases are arrived at after making provision for additional expenditure, due to the discontinuance of the temporary wage deductions, and, but for such additional expenditure, the savings would be much greater.

105. The amount provided in the estimates for the contribution to renewals fund on account of depreciation, represents 7½ per cent. of the estimated revenue for the year. This conforms to the principle introduced last year, that when the contribution, calculated on the estimated life of the assets, amounts to more than 7½ per cent. of the revenue, the contribution shall be limited to 7½ per cent. of the revenue.

1. 106. A reference to the estimates of expenditure under the head of subsidiary services discloses that decreases are reflected which total £117,535.
2. 107. Reduced business and general economies in working permit of provision for less expenditure than was provided in the estimate for last year.
3. 108. This decrease in expenditure has its counterpart in a reduction in the revenue anticipated to accrue on these services during the financial year 1933-’34.

1. 109. Under net revenue account, it will be observed that, compared with the estimates of last year, provision is made for a net decrease of £324,996.
2. 110. Actually, provision is made under this head for increases to cover:—Interest charges on additional capital met from loan funds, £16,790; interest charges on increased superannuation and other fund balances, £36,530; additional miscellaneous net revenue charges, to cover, principally, the cost of withdrawing assets which have served their purpose and are no longer required, £52,545; or a total increase of £105,865.
3. 111. But this increase of £105,865 has been more than offset by a saving, with effect from the 1st April, 1933, of £430,861 in interest on capital payable by the Administration to the Treasury.
4. 112. The amount of £430,861, mentioned, represents the railway proportion of an amount of £459,840, being interest at 3½ per cent. per annum on an amount of £13,000,000 odd, expended on capital works out of revenue prior to Union.
5. 113. Despite this relief, the Railway Adminitration is still called upon to meet a charge for interest on capital of nearly six million pounds per annum, a figure which is constantly increasing as additional assets are brought into service.
6. 114. I mention this figure, in passing, to indicate to hon. members the extent of the “standing charge,” for interest on capital alone, that the Administration has to face each year.

115. For the betterment fund, a contribution of £50,000 is provided. This is only half the i sum contributed last year, but, taking into account the balance standing to the credit of this fund, it is considered that the amount provided will be sufficient for the anticipated expenditure on betterment works, for the current year.

1. 116. Coming now to harbours, it will be noticed that provision is made for a total decrease in expenditure of £83,388.
2. 117. In this decrease, provision is made for a reduction of £28,979 on account of interest on capital. This is the harbour proportion of the annual amount of £459,840, waived by the Treasury.
3. 118. The balance of the decrease is due to economies effected in connection with the maintenance of assets and operating expenses.

119. In regard to the Administration’s steamships, there is a decrease of £13,655, brought about, principally, by a reduction in charges at the various overseas ports of call.

1. 120. I mentioned, at the outset, that the total expenditure for all services for the coming year is estimated to be £25,716,281 and that, compared with the estimates for last year, this represents a decrease of £350,371.
2. 121. In order that hon. members may appreciate the full magnitude of the alterations that occur in the estimates now before the House, I will briefly summarise the most important of the causes responsible for the decrease of £350,371 in the expenditure.
3. 122. First of all, the decreases amount to £1,322,000, the details being:—Non-payment of interest on capital met from pre-Union revenue, £459,800; changes in personnel and reduced staff, £416,600; reduction in overtime payments and travelling expenses, £53,500; reduced requirements of running stores and equipment, £42,400; reduced requirements of other stores, stationery and printing, £53,700; non-recurring expenditure on washaways, £50,700; reduced contribution to betterment fund, £50,000; reduced expenditure on jetties, wharves and floating craft, £44,600; reduced expenditure on subsidiary services and steamships, £150,700. Total decrease, £1,322,000.
4. 123. On the other hand, it has been necessary to provide for increases totalling £971,600 on account of:—Discontinuance of temporary wage deductions, £401,600; superannuation payments from revenue, £119,700; increments to staff, £150,100; increased requirements of rails and sleepers—for maintenance of track, £110,600; interest on additional loan funds and fund balances, £54,600; decreased recoveries from new works, £46,900; electric traction power, £21,400; overseas advertising, £8,900; contribution to renewals fund for additional harbour assets, £5,200; withdrawal of assets from service and other miscellaneous expenditure under net revenue account, £52,600; total increases, £971,600; leaving a net decrease of £350,400.

1. 124. Turning now to the estimates of revenue for the year 1933-’34—
2. 125. If hon. members will refer to the green book, they will see that we anticipate a total revenue, from all sources, of £25,852,395.
3. 126. This is estimated to be derived from—

1. 127. Dealing first with the amount pertaining to railways, it is estimated that £22,168,000 will be earned in respect of transportation services alone.
2. 128. This figure of £22,168,000 is based on a weekly average return of £425,000, and this figure corresponds to the weekly average anticipated when the estimates for last year (1932-’33) were framed, but, compared with the actual earnings of that year, is an increase of, per week, £29,700.
3. 129. In providing for this increase of £29,700 per week, over the actual earnings of the past year, we are guided by the upward trend that has already taken place in earnings during the last three months, an improvement which, there is reason to believe, will continue throughout the year.
4. 130. Increased activity is indicated in a number of industries, particularly in gold and coal mines.
5. 131. Naturally, this will have its reflex in the earnings of the railways, and it is felt, therefore, that we are not over-optimistic in allowing for a return equal to an average of £425,000 per week.

132. In regard to the subsidiary services, it is anticipated that the revenue to accrue during 1933-’34 will slightly exceed the actual revenue earned during the year just ended, and provision has been made accordingly.

1. 133. For harbours, the revenue anticipated is based on a weekly average of £23,100 which, compared with the corresponding actual earnings for the year 1932-’33, represents an increase per week, of approximately £2,500.
2. 134. The revival in trade that has taken place justifies the opinion that harbour earnings for 1933-’34 will exceed, to the extent indicated, those of the previous year.

1. 135. Compared with the year 1932 ’33, a slight improvement in the revenue to be derived from our steamships during the current year is anticipated.
2. 136. The estimates provide for the operation of three units. On outward voyages the principle will be observed, as in the past, of assisting the South African coal export trade as far as possible.
3. 137. The possibility of using the S.S. “Dahlia” for the conveyance of South African cattle to Europe, is expected to be a feature of outward voyages.
4. 138. On return voyages, the vessels will be employed partly in transporting cargoes of Government material from Europe and elsewhere, and partly for the conveyance of private cargo to South Africa and other suitable points en route.

1. 139. Coming now to the estimated final results for 1933 ’34, that is, the difference between the estimated revenue and expenditure, hon. members will have noted that, for the year ending 31st March, 1934—revenue is anticipated to amount to £25,852,395, and that expenditure, to earn that revenue, is estimated to amount to £25,716,281, and so we expect that the year 1933 ’34 will result in a surplus of £136,114.

1. 140. If this surplus is realized, then the accumulated deficit, at the 31st March, 1934, will be £3,558,368.
2. 141. As previously intimated, this deficit has been financed from our general balances. It will continue to be so financed until such time as it is found possible to liquidate it from future surpluses in working.
3. 142. Faced then, as we are, with having to wipe out this accumulated deficit of just over £3,500,000, from future surpluses, hon. members will appreciate, I am sure, that our policy must necessarily continue to be one of extreme caution.

1. 143. Having indicated the financial prospects of the ensuing year, I will now deal with other matters of a relevant nature.
2. 144. First of all, I want to refer to the several funds controlled by the administration.
3. 145. The renewals fund had a credit balance at 31st March, 1933, of £4,218,091, against which there are, at the moment, definite commitments totalling £1,073,008.
4. 146. The figures I have quoted indicate an improvement in the financial position of the fund, compared with the credit balance at the corresponding date of the previous year, when it was £3,364,005 and the commitments £1,537,365.
5. 147. The prospect of increased traffic and the consequently greater use of our assets will, of course, result in increased calls on the renewals fund, to keep such assets up to their full revenue-earning capacity, but it is considered that such calls can be met without any financial embarrassment.

1. 148. The balance at credit of the pension and superannuation funds at 31st March last, was £17,910,317, the respective balances, due to the different, funds being—

1. 149. The interest derived from the investment of these fund balances with the public debt commissioners averages a little more than 4½ per cent.
2. 150. During the financial year which ended on the 31st March, 1933, the administration paid from revenue funds, on account of pensions and gratuities, £ for £ contributions, and contributions towards the liquidation of the deficiencies of the pension and superannuation funds, the total amount of £1,215,656.
3. 151. This was greater than the amount for the previous year, by reason of the larger numbers of staff retired before the statutory age of superannuation.
4. 152. Many servants who were retired before the superannuation age, availed themselves of the opportunity of commuting a portion of their pension. In this connection a special Act (No. 16 of 1932) was passed, authorizing the Administration to advance from the superannuation funds, such sums as may be required, from time to time, to pay the commuted portions of annuities, which are chargeable to revenue. These advances are repaid to the funds in monthly instalments, during the period between the date of retirement of the servant concerned, and the date upon which he attains the prescribed age of superannuation.
5. 153. This arrangement avoids the disturbing effect that would take place if the lump sum payment formed a charge against the accounts of the year concerned.

1. 154. The balance outstanding at the credit of the betterment fund at the 31st March last was £110,928.
2. 155. As it is not anticipated that works chargeable against this fund will he of the same magnitude as in former years, it has been decided, as I have already stated, to reduce the contribution for the year 1933-’34, from £100,000 to £50,000.

1. 156. The Administration’s general insurance fund covers all insurable assets, except a few minor items, for which insurance is placed with outside companies.
2. 157. The credit balance of the fund at the 31st March last was £959,069, a decrease of £166,878 compared with the previous year, This decrease has been brought about entirely by the disastrous fire which occurred at Salt River recently. The fund’s liability in that connection amounts to no less a sum than £240,000.
3. 158. Viewed in the light of the total value of the insurable assets covered, viz., £41,000,000, this balance cannot be regarded as in any way excessive.

1. 159. The establishment of what is termed the rates equalization fund from railway and har bour revenue, as hon. members are probably aware, is permitted by the South Africa Act, and it has been the practice to contribute towards this fund from any surpluses that accrued from time to time.
2. 160. At the moment, however, there is no amount standing to the credit of this fund, the last balance having been utilized in part liquidation of the deficit in working at 31st March, 1931.

1. 161. The sick fund, which is maintained by contributions from the Administration’s servants, and by contributions from the Administration equal to 75 per cent. of the servants’ contributions, continues to show satisfactory financial results, the year ended 31st March last showing an excess of revenue over expenditure of £4,721.

1. 162. The capital and betterment estimates for 1933-’34 are, at present, under consideration.
2. 163. The extent to which future commitments can be entered into, must be governed by the funds available.
3. 164. The proposals, submitted by the officers responsible, will be subjected to the closest examination, and only those works which cannot be postponed, or those to which we are already committed, will be placed on the estimates.
4. 165. The proposals that are selected will be listed in detail and made available later on in the session.

1. 166. I will now refer briefly to some of the outstanding features connected with the operation of the railways and harbours, which, I think, will be found interesting.
2. 167. The improvement that has taken place during recent months in the operation of the gold mining industry, it is anticipated, will result in increased capital expenditure on the Witwatersrand in connection with shaft sinking, machinery, equipment, etc. There is also the probability of prospecting and opening up of low grade mines in the Klerksdorp, Barberton and Pilgrims Rest districts.
3. 168. The incidence of these operations should be reflected in increased traffic to be transported over the railways.
4. 169. In regard to coal, the quantity exported and utilized for bunkering has fallen away tremendously during the last few years, but there are already indications that an improvement may be anticipated for the current year with, of course, beneficial results to the railways, not only in respect of revenue for coal transported, but through the incidence of increased activities at the coal mines.
5. 170. Facilities were provided by the Railway Administration—on a guaranteed basis—for the conveyance of manganese ore from the Postmasburg district to Durban for shipment overseas, and, by those facilities, material assistance was given in the development of an important industry.
6. 171. The dispatch of ore from Postmasburg to Durban, for export, commenced in June, 1930, and substantial tonnages were forwarded for some months.
7. 172. Unfortunately, towards the latter part of 1931, quantities offered for transport were curtailed and, in October, 1931, were entirely suspended. Since that date only odd consignments have been transported for export.
8. 173. Various factors have contributed towards the inability of the Manganese Corporation to continue operations, and the prospects of their being able to do so in the near future are, at the moment, very problematical.
9. 174. As regards other minerals, whilst generally speaking, there are indications that an improvement over last year will take place in production and output, it is not possible to estimate, with any degree of confidence, the extent to which railway earnings will be affected by such improvement.
10. 175. In connection with the manufacturing industries, reports indicate that increased employment has taken place in the larger centres of the Union, and that a material increase in the Union’s export trade, particularly to the Rhodesian markets, may be anticipated during the current year.
11. 176. A distinct revival in trade has already taken place in general merchandise, and from reports received, there is every reason to believe that the improvement will continue throughout the rest of the year.
12. 177. Agriculture, particularly maize and wheat, has had a setback on account of the prolonged drought and the effects of the foot and mouth disease. For these reasons, no material improvement in this class of traffic can be contemplated.
13. 178. Increased traffic might, however, be expected to take place in respect of sugar and fruit, the indications being that the output for this year will show an improvement over last year.
14. 179. Under the auspices of the Agricultural Department, several consignments of chilled meat were forwarded during last year from Johannesburg for shipment to Great Britain. An experiment was made of conveying this traffic in ice-cooled trucks, and proved an unqualified success. The meat was conveyed in these trucks at a more or less uniform temperature of 32 degrees throughout the journey from Newtown to Table Bay docks.
15. 180. This means of conveyance has proved quite efficient for the purpose of transporting chilled meat over journeys up to 75 hours, and, indeed, the surplus of ice remaining in the bunkers at the end of each journey indicates that even longer journeys could be undertaken, without the necessity of replenishing the bunkers.
16. 181. The foot and mouth disease, to a certain extent, adversely affected this trade, owing to the restrictions applied to imports into the Union from Southern Rhodesia and the Bechu-analand Protectorate, and, on this account, it is difficult to forecast the volume of traffic that may be expected.
17. 182. It is, however, fully anticipated that there will be a marked development in the chilled meat export trade.
18. 183. Considerable quantities of chilled beef for export are now being dispatched from Bulawayo to Table Bay docks.
19. 184. The prospects in regard to the export of fruit this year are good, the preference given to Empire fruits in Great Britain being sure to result in increased exports to that market.
20. 185. I might also state that a new market is being developed in India for South African deciduous fruits, with good results.

1. 186. During January this year, there was a heavy demand for rolling stock on account of the large quantities of wool, maize, wheat, forage, and lucerne offering for transport, otherwise no difficulty has been experienced in meeting all requirements for trucks throughout last year, the supply of vehicles being in excess of the demand. Although 400 new wagons were ordered during the year, they were merely to replace wastage.

1. 187. The Administration is continuing the policy of catering for passenger traffic by means of rail cars, on sections where the volume of traffic does not justify the expenditure of running a frequent service of passenger trains. There are 25 rail cars operating on 22 services. These cars are of 150 h.p. or less, and it is not the intention to proceed with the construction of any more comparatively light cars of this type, until some experience has been gained of the performance of the two high power cars now under construction. These will be 300 h.p. and 450 h.p., respectively, and it is expected they will be handed over by the Administration’s workshops for service towards the end of the present calendar year.

1. 188. Due to lack of expansion and curtailment of services, no new road motor vehicles were purchased during the last financial year.
2. 189. In this connection, the Administration is keeping in close touch with the development of other than petrol vehicles in other parts of the world, especially the experiments which are being conducted with crude oil machines.

1. 190. Motor repair shops have been established at Johannesburg, Kimberley, Cape Town, Port Elizabeth, East London, Durban and Bloemfontein. These shops, where practically all repairs to motor vehicles owned by the Administration are undertaken, are functioning very satisfactorily, and have been the means of materially reducing the cost of reconditioning plant.
2. 191. A large percentage of worn parts are reclaimed from vehicles sent in for overhauling, and these, after having been reconditioned, are made use of when effecting repairs to plant.

1. 192. During the financial year 1932-’33, the 1929 programme of new railway construction was finished, by the completion of the Dordrecht deviation, 8½ miles in length, which was opened for traffic on the 19th October last.
2. 193. The entire work on the Mimosa-Alicedale deviation, which covers 19½ miles, is expected to be completed during the current financial year, including the four bridges over the Bushman’s River.
3. 194. On the Kleinstraat-Matroosberg loop line, which extends for 7½ miles, the earthworks, the concrete work and the fencing are well advanced, and the whole work will probably be completed towards the end of this financial year.
4. 195. In terms of the agreement entered into with the S.A. Iron and Steel Industrial Corporation, the construction of the Northam-Kwaggashoek line extension of 28 miles is to be completed to coincide with the commencement of operations at the iron and steel works. The construction is now well in hand. It is expected that the work will be completed by the beginning of next year.
5. 196. In connection with the Point-Congella relief line, which consists of 1¾ miles of double track, in order to ease the unemployment position, arrangements have been made with the Labour Department, to finance the employment of between 300 and 400 European labourers. This work involves a certain amount of reclamation and is not expected to be completed during the current financial year.
6. 197. In order to facilitate the use by the Railway Administration of the unemployed relief labour offered free of cost by the Department of Labour, authority was given for the work to be commenced in September last, on the construction of a loop line from Germiston to Elsburg. The line in question is purely a local traffic facility to relieve the congestion in Germiston station yard. The construction was authorized by Parliament during last session under Act No. 3, 1933. Rapid progress is being made, and it is anticipated the line will be ready for traffic operations before the close of the current financial year.

1. 198. The newly-electrified section from Masons Mill to Cato Ridge, which was opened in February, 1932, has, from an operating point of view, been an unqualified success. Owing, however, to the heavy decline of traffic on the Natal main line, the full benefit from the facilities provided has not been obtained, but there is no doubt that the scheme will amply justify itself when normal trade conditions are resumed.
2. 199. The mileage added to the electrified section in Natal, as a result of this extension, represents approximately 26 route miles, which brings the total length of railway line electrified in Natal to 200¼ route miles.
3. 200. An outstanding feature of the extension was the low construction cost of the railway portion of the work, i.e., the overhead equipment and track bonding. This amounted to approximately £1,348 per mile of equivalent single track, as against a cost of more than twice that sum for similar work on the Glencoe-Pietermaritzburg section constructed under contract. The reduction was achieved principally by the adoption by the Administration of a less expensive, but, as experience has proved, equally effective type of equipment.
4. 201. It has been decided to proceed with the electrification of the section of the Cape western main line, between Salt River and Bellville, which is approximately 10 miles in length. This is an extension of the Cape Town-Salt River section, which is already operated under electrification conditions.
5. 202. The operating efficiency of the line between Cape Town and Bellville will be considerably improved, and, being electrically operated, the local passenger service will provide quicker and a more attractive service. This should encourage additional passenger traffic.
6. 203. The capital expenditure in connection with the scheme is estimated at approximately £42,000, whilst it is anticipated there will be a saving in operating costs of approximately £16,000 per annum, as compared with steam working.
7. 204. Goods trains, through main line passenger trains, and local services to areas beyond Bellville, will continue to be worked by steam locomotives.

1. 205. The results of working the Cape Town-Simonstown section for the twelve months ended February last, show an improvement over corresponding period of the previous year, the loss amounting to £153,200, as compared with £178,000 for 1931-’32, or a reduced loss of £24,800 for the year.
2. 206. An interesting feature of the returns is that the passenger traffic on the Cape Town-Wynberg section reflected an increase, whereas, on the section Wynberg-Simonstown, the reverse was the case. The improvement on the former section was brought about chiefly by the elimination of road transport services in excess of public requirements, and the introduction of “feeder” bus services between specified termini and railway stations on the Mowbray-Plumstead section.

1. 207. Representations have been made, from time to time, in regard to the elimination of the level crossing at President Street, Germiston, over which there is a very heavy road and rail traffic.
2. 208. A scheme was formulated to provide a subway for pedestrian traffic, and as the Germiston municipality agreed to bear half the cost of the construction, the Administration decided to proceed with the work.

1. 209. As a result of the Johannesburg municipality having established a large modern township for natives between Canada Junction and Nancefield on the Canada-Vereeniging line, the Administration has built a new station, which is known as " Orlando,” to serve the township.
2. 210. A train service, to suit the needs of the new residents, has been introduced and will be increased as the township develops.

1. 211. In August, 1932, occupation was taken of the new station buildings, Johannesburg, and hon. members will agree that the structure is one of which we can be proud.

1. 212. In connection with refrigerator services, introduced for the conveyance of fresh meat, butter and other goods of a highly perishable nature, I may state that, owing to lack of patronage, the Oudtshoorn-Cape Town butter refrigerator services had to be reduced to once per fortnight at the beginning of the year, while the Darling-Cape Town refrigerator service was withdrawn in the middle of January last.
2. 213. In order to improve the facilities for the conveyance of cream in the Orange Free State, refrigerator trucks have been utilized with beneficial results, and all concerned have expressed themselves as being highly satisfied with the arrangement.

1. 214. With the object of assisting in the checking of the spread of the foot-and-mouth disease, the Administration co-operated with the veterinary authorities for the special cleaning of trucks working south from Mafeking.
2. 215. This disinfecting operation has been carried out since the end of January last.

1. 216. At the beginning of this calendar year, an alteration was made in connection with charges raised for the conveyance of tourists’ motor cars, and full advantage has been taken by the public of this concession.

1. 217. A considerable amount of thought is being devoted to ways and means of improving the conditions of rail travel for natives, and thus encouraging greater use of the Administration’s transport facilities.
2. 218. The services of inspectors are being used for the purpose of ascertaining requirements. Valuable suggestions have been received, many of which have been put into effect and will add to the amenities of travel.

1. 219. Turning now to matters connected with the staff, the anxiety occasioned by the financial position of recent years has continued to have an effect upon the staff position.
2. 220. During the past year, many members of the staff were rendered redundant, owing to the restriction in the Administration’s activities, and, after providing for replacement of normal wastage due to deaths, resignations, retirements at age limit, dismissals, etc., there remained a large number of units for whom work was not available.
3. 221. Owing to the depressed state of the open labour market, the stagnation in the normal flow of promotion, and the hardship that would follow upon the retirement of comparatively young members of the permanent staff, the Administration decided that, as far as practicable, retirement should be made from amongst staff who were within measurable approach of the normal retiring age, the majority of whom were entitled to pension benefits of a more favourable character than their younger colleagues.
4. 222. A departure from the normal policy has been introduced in the grades of staff classified in the artisan pay schedules at the instance of the staff association representing their interests, on whose representations it was agreed in August, 1931, that the junior men in any grade, carrying redundant men, should be the first to be selected for retirement, subject to his being given an option to revert to lower grade work.
5. 223. For the purpose of applying the agreement, each workshop centre acts independently of other workshop centres in dealing with its redundant staff.
6. 224. At the end of March last, the total staff in the service of the Administration numbered 77,776.
7. 225. This represents a reduction of 8,634 compared with March of the previous year, and is made un of—

1. 226. The improvement that has taken place in the prospects for this year has enabled the Administration to relax certain of the staff economy measures which have been in force for some time.
2. 227. For instance, as from the beginning of this financial year—

1. 228. Whilst the Government would have liked to restore all the conditions affected by the economy measures taken, it must necessarily be guided in this respect by the state of the finances of the Administration, and the particular fact that there is a large accumulated deficit to be wiped out before normal working conditions can be accepted.

1. 229. Committees of enquiry were set up some time ago to investigate methods of working in operation in each of the various departments.
2. 230. The object of these committees has been to achieve elimination of unnecessary work and expensive methods of operation, the better use and control of staff employed, and the more efficient co-ordination of railway operation as a whole.
3. 231. These committees have accomplished very valuable work, and substantial economies have resulted.

1. 232. The Administration has actively pursued the ideal of having a fully bilingual staff, in order that the requirements of the public may be adequately served.
2. 233. Various facilities are extended to the staff to assist and encourage them in securing the necessary proficiency in both official languages, and it is pleasing to record that the response of the staff as a whole has been excellent.
3. 234. Each year reveals a distinct improvement in the situation, demonstrating that the efforts of the Administration in this matter are bearing fruit, and that the staff themselves are more and more appreciating their responsibility towards the users of the railways.

1. 235. In 1931, the head of the railway police was retired on pension. The Administration, as an economy measure, decided not to fill this post, being of the opinion that, under the decentralized system introduced in 1929, efficiency could be maintained without a chief inspector. This assumption has, however, proved mistaken.
2. 236. It was consequently decided to fill the vacant post by the appointment of Lt.-Col. A. A. Celliers, head of the Union Criminal Investigation Department. Col. Celliers will concentrate on developing the detective side of the railway police, which at present is weak.
3. 237. The post of appeals officer, vacant since 1931, was recently filled by the appointment of Advocate A. H. Broeksma, junior law adviser to the Department of Justice. Mr. Broeksma will also act as the departmental legal adviser to the Administration.
4. 238. He is at present investigating the existing system of disciplinary trials and appeals, with a view to co-ordinating such trials and speeding up the appeals.
5. 239. On account of Mr. J. R. More, the general manager, being absent on leave prior to retirement, Mr. T. H. Watermeyer was appointed acting general manager, and the position vacated by him was filled in an acting capacity by Mr. G. H. Whitehouse, who will continue to perform also the duties of chief civil engineer.

1. 240. For some years past, there has been a demand that we should take stock of the railway position by means of an extra departmental commission. The Government is of opinion that the time is opportune for such an enquiry. Steps will be taken overseas by the Union delegates to the World Economic Conference for the appointment of such a commission, capable of enquiring into and advising on all aspects of the South African railways and harbours.

1. 241. In conclusion, I wish to state that the financial year just completed has been even more trying than any previous period during the time of depression through which we have passed, consequently there has been a continuous strain on the staff of the railways and harbours.
2. 242. I am sure, therefore, that this House will desire once more to record its appreciation of the vigilance and unswerving loyalty which has characterized at all times the service of the Administration’s officers, and, in fact, all grades of the railway and harbours staff.

Fifth Order read: Second reading, Co-operative Societies (Further Amendment) Bill.

Sixth Order read: Second reading, Immigration (Amendment) Bill.