McIvor Timber and Firewood Co. Siding

Parliamentary Standing Committee on Railways
Proposed Purchase of the McIvor Timber Tramway, near Tooborac

The following information is an almost complete transcript from the actual report which was ordered for printing 26 July, 1927. It is included here for the purpose of completeness as it provides details of traffic handled during the siding's life, as well as equipment and assets at its end. The original document, if you require it, was from - accessed December, 2016.

Extracted from the Votes and Proceedings of the Legislative Assembly
Tuesday, 12th July, 1927

19. McIvor Timber Tramway, near Tooborac - Purchase of: Motion made, by leave, and question - That the question of the purchase by the State of the McIvor Timber Tramway, near Tooborac, be referred to the Parliamentary Standing Committee on Railways for inquiry and report (Mr, Tunnecliffe) - put and agreed to.

Members of the Parliamentary Standing Committee on Railways.
(Fifteenth Committee)

The Hon. A. E. Chandler, M.L.C., Chairman.
The Hon. G. C. Webber, M.L.A., Vice-Chairman.
The Hon. A. Bell, M.L.C.
J. D. Deany, Esq., M.L.A.
A. E. Lind, Esq., M L.A.
R. H. Solly, Esq., M.L.A.

Approximate cost of report: Printing 250 Copies - £17/0/0.

The Parliamentary Standing Committee On Railways, to which the Legislative Assembly referred the question of the purchase by the State of the McIvor Timber Tramway, near Tooborac, has the honour to report as follows:-

Description Of Tramway:

1. The McIvor tramway, 22 miles in length, branches off the main railway system at a junction point named "McIvor," approximately three-quarters of a mile on the down side of Tooborac railway station. There are a number of dead-end sidings on the line as under-

The Parliamentary Standing Committee's list of McIvor Timber Company's Forest Sidings

Parliamentary Standing Committee's list of McIvor Timber Company's Forest Sidings

The lengths of siding at these points and at the junction give a track mileage of 25 miles 51 chains as compared with a route mileage from the junction to the terminus of 21 miles 58 chains 71 links, or approximately 22 miles.

2. The tramway is the property of the McIvor Timber and Firewood Co. Pty. Ltd., which consists of eleven shareholders, four of whom, Messrs. H. H. Schlapp and J. L. Reilly, Melbourne; Mr. N. M. Hedges, Perth; and the West Australian Goldfields Firewood Supply Ltd., Kurrawang, hold approximately 35,000 of the 42,000 shares of the company. The tramway was constructed by the company in 1906, and has been operating practically continuously since that date.

3. The line is used almost wholly for the carriage of outwards timber. At the commencement of operations the company established sawmills at a number of points adjacent to the line, but later found it more profitable to take these mills out and buy the timber from the cutters at so much a truckload or other measurement basis. In addition to the timber a fair amount of charcoal is transported over the line. The inwards goods for the settlers are usually carried free by the company from Tooborac to any point along the line.

4. The company is at present operating the line by a "W" class locomotive, which was purchased some fifteen months ago from the Railways Commissioners for £1,500: This engine is stated to be rendering good service and quite adequate for the traffic requirements. In addition, at the junction the plant of the company comprises an old Baldwin locomotive, ten trucks, eight trollies, two travelling tanks, various tools, a blacksmith's shop, drilling machine, sawmiller's plant, two portable engines, nineteen drays, three log-jinkers, a 21-ton railway weighbridge; also a six-roomed house and office, oil store, stables, and sundry other assets. The line, which is unfenced, is laid for 15¾ miles of its length along the side of the road, the sleepers, ballast, and rails all being above the surface of the roadway; about 1 mile 10 chains is la1d on a tramway reserve leased from the Government; 1¾ miles on Forest Reserve ; and about 4 miles 10 chains (including 1¼ miles of a spur line) on privately-owned land.

5. In 1906 the company entered into an agreement with the McIvor Shire to construct a portable tram line at a rental of 2s. 6d. per annum for fifteen years, the company having the option of renewing for a further fifteen years at the end of that time. 1921, however, on the lapsing of the original agreement there was no renewal, but the company pays a yearly rental of £1 6s. lld. to the McIvor Shire. In this connexion it is interesting to note that the company is merely a tenant of the McIvor municipality and has no transferable rights to dispose of regarding the operation of the tramway. The private land-owners are paid yearly rentals of £1, £2, £1~, £1310s., and respectively. addition the sum of £18 4s. per annum is paid to one of the private holders for a water-right.

6. The company's method of operation has been to pay first of all a royalty to the owner of wood ; then to pay the cutter so much for cutting ; then so much a truck for carting. When the wood was valued it was dumped on the side of the line, and the company paid for what they considered was there; and when taken in to the junction and blocked (i.e., cut into firewood blocks 1 foot long) an adjustment regarding the quantity was made if necessary.

Nature Of The District Served:

7. The district traversed by the McIvor tramway comprises a comparatively narrow strip of alienated land surrounded almost entirely by the Moormbool and Warrowitue (or Kilcorran) forests. Taking the area defined by the Railway Department as tributary to the proposed line, there are 191,500 acres, of which 84,000 acres are forest reserves, leaving 107,500 acres privately held, but this embraces land in the parishes of Gobarup, Cornell, and Redcastle, which are separated from the line by the Moormbool Forest, approximately 3 to 6 miles in width at those points. For the first few miles from the McIvor Junction the soil, which is of silurian formation, is a light sandy loam interspersed with some ironstone gravel, and generally unattractive for agricultural purposes, while further north, except for occasional small patches, there is very little improvement.

8. The is used almost solely for grazing sheep. The trees have been cut for firewood, the has been converted into charcoal, and the stumps are still standing in the paddocks. There is a good clean growth of native grasses, and the land is so well adapted for wool-growing and the soil so comparatively light for agriculture that it is unlikely any change will occur in farming operations of the district, whether the tramway is removed or allowed to remain.

Forest Areas and Timber Production:

9. McIvor Timber and Firewood Company was originally formed to supply box timber for firewood for the Melbourne market, and also 5-ft. wood for the Bendigo mines, and the reason for the company operations is, according to Prince, the company's manager, that practically all the firewood in the district is exhausted. Mr. pointed out that alongside a Government line there would be very little timber in the paddocks, because successive over a long period of years would have been cleaned out, whereas with the McIvor tramway, although main supply was practically exhausted, a lot of timber could be got from the areas that had been cut over, where a certain quantity of cull timber may have been left. '!'hat timber would need to be rung, and to stand for four years at least drying before cutting. It was stated that if the Forests Commission were to immediately kill all the timber for :firewood near the line the company would not be induced to remain ; if the Commission had, however, killed the timber in 1923 it would have been fit for milling to-day.

10. At Redgate, in the northern end of the Warrowitue or Kilcorran forest, the Committee inspected some reforestation work which had been carried out under the Commission. Timber suitable only for firewood was removed before it made much growth; all faulty seedlings and suckers were taken out, leaving only a growth that would become suitable for telegraph poles, piles, piles, and sleepers. So far as the supply of firewood is concerned from this source, Mr. Prince stated that it would be a hopeless proposition. Its only value to the tramway would be to supplement the revenue by the limited quantity of b13tter~class timber forthcoming in later years. Without the firewood revenue that would be of no use as a means of affording sufficient revenue to justify a continuance of the line.

11. The falling off of mining at Bendigo considerably restricted the output of firewood by the company, cutting it down by about half, and since the placing of the Yallourn briquettes on the fuel market there has been a further decline in the company's firewood output.

12. The principal timbers growing in the Moormbool and Warrowitue forests are red and white ironbark, grey, yellow, and red box, redgum, golden and black wattle. The whole of the forest area has been operated on for the last 40 years, and the mature trees fit for sleepers and piles have been cut out. Mr. Code, Chairman of the Forests Commission, considered that there was an abundant supply of green firewood which would require cutting and drying, and also a supply of dead firewood. In his opinion, after ringbarking the trees should stand for six or seven years at least before being properly dry for cutting into firewood blocks. He was aware that lesser periods were stated to be sufficient, but he did not agree with those views. The Commission now had about 2,000 tons of firewood cut and stacked in the district for drying purposes; they had tried unsuccessfully to sell it last year after three years' drying, the reason for refusal being that it was too green.

13. Before the stoppage of most of the Bendigo mines large supplies of fuel were obtained from this district, but now practically all those supplies are obtained from the Bendigo forest, 4 to 8 miles distant. The Forests Commission was approached three years ago by a representative of the Mcivor Company, who pointed out that it would be advisable to ringbark a lot of the timber in the district. Mr. Code informed him that the Commission had been ringbarking timber for years--the useless culls in the forest. Within the last three years the Commission has ringbarked some of the trees which are regarded as fit only for firewood over a1i area of approximately 12,000 acres in various parts ·of the forest. Taking the whole forest area of nearly 120,000 acres, he considered that on a conservative basis it would contain 12 tons of firewood to the acre. ·within about 6 miles of the tramway line, however, the best of the dead timber has been taken by the McIvor Company in its operations during the last 20 years. On the 12,000 acres already ringbarked the average would be, say, 10 tons, or approximately one small truckload per acre. The Commission has about 60 men now employed in the forest, improving, ring barking, and cleaning out blocks, which will then be closed for a term of 30 or 40 years, and the young timber allowed to mature. The royalties received by the Forests Commission during the last three years from the McIvor Company have averaged about £2,023 per annum.

Charcoal Supplies:

14. There are 33 charcoal burners employed along the route of the line, and the business, which has been conducted for many years by Messrs. Enticknap and Co., has recently been taken over by Mr. J. Jeffrey, of Bendigo. The charcoal sent away from the Mcivor line during the last three years amounts, according to Mr. Jeffrey, to 8,055 ~on~, o~ a~ average of 2,685 tons per annum, or, roughly, 50 tons per week. The charcoal from this d1stnct 1s stated to be of excellent quality, and is sent to Bendigo, Melbourne, and various parts of the State for use in power plants. This industry is peculiarly beneficial to a district, inasmuch as it not only affords work tor the men employed in connexion with it, but also causes the land to be cleared at no cost to the owner (generally, as a matter of fact, bringing in royalties), and improves the grazing capacity of the area.

15. Mr. Jeffrey has taken over 102 retorts, of which only 80 are at present in operation, the burners working on a piece-work basis, being paid by the ton for burning, bagging, and loading into trucks on the McIvor tramway. Freight is charged by the Mcivor Company to the junction at Mcivor amounting to £1 13s. per 11-ton truck, or £2 l7s. 3d. per 16-ton truck; these charges as well as the main-line freight charges are paid by the purchaser. Mr. J Jeffrey stated that if the line were pulled ~p he would be obl1ged to shift the retorts nearer to an existing railway, ~,s cartage costs by motor lorries or horse teams would be heavy for long distances. A number of charcoal burners were at work near Gisborne and Woodend, and he had in mind other suitable areas in the event of the McIvor line being removed. The royalty paid to private owners for clearing up their land and converting the timber debris into charcoal was a half-penny per bag, but the Forests Commission charged 2d. per bag~ with the result that the private owners got the benefit of the cleaning-up operations. Furthermore, the Forests Commission, Mr. Jeffrey stated~ would only permit charcoal-burning for three or four months in the year in the forest areas.

Financial Position Of The McIvor Timber Company:

16. The company, which is in voluntary liquidation, shows in its last balance-sheet liabilities amounting to £33,636, made up of Capital Account £21,000 (42,000 shares at 10s.), General Reserve Account £6,896, Assets Revaluation Account £3,502, and Bank Overdraft £2,238. The assets were represented by permanent way, rolling-stock, working plant, and buildings to the extent of £16,239, firewood stocks £7,039, sundry debtors £4,349, Commonwealth Government Debentures £5,294, and various smaller items amounting to £295. The Profit and Loss Account for the same year shows a loss of £229.

The actual profits and losses resulting from the company's operations since 1906 were as follow:-

McIvor Timber Company's Profits and Losses.

McIvor Timber Company's Profits and Losses.

17. The dividends and bonuses paid to shareholders, together with the rates per cent. and the total amount distributed, were as under, viz.:-

McIvor Timber Company's Dividends.

McIvor Timber Company's Dividends.

McIvor Timber Company's Bonuses.

McIvor Timber Company's Bonuses.

18. It will be noted that, although the balance-sheet shows losses of £1,011 a.nd £229 respectively for the years 1925 and 1926, there were dividends declared for those years at the rates of 20 and 18 per cent., absorbing £1,200 and £1,680 respectively.

19. Originally 21,200 debentures were issued at £1 each, carrying interest at 6 per cent., but these were all later redeemed from profits. The company also issued 12,000 10s. shares, making a capital at that time of £27,200. Further sums were advanced, at interest, by Mr. Schlapp and other shareholders, making a total liability of about £34,000. To-day the company's position is that it has paid £17,880 in dividends and bonuses to the shareholders; it has paid off £21,200 in debentures; it repaid its loans; and it has its assets still unrealized. Two or three years ago the capital of the company was written up from £12,000 to £21,000. Mr. Schlapp explained in evidence that the reason for this was because the Income Tax Department would not allow what had been written off at various times for depreciation, &c., and tax had to be paid on the larger amounts; the company had written off more than was allowed by the Department, and, as it was decided to wind up, these amounts were written back in this manner.

20. A comparison of the balance-sheets for 1924 and 1925 discloses that in the latter year the Capital Account was increased by distributing 20,000 new 10s. shares amongst shareholders from the Reserve Funds, while the 12,000 old 10s. shares originally issued were increased in the same way to 22,000, thus raising the number of 10s. shares issued from 12,000 to 42,000 - that is, a free gift of 30,000 shares was made to the holders of the 12,000 shares. This accounted for £15,000 of the £21,606 profit shown for 1924. Then, with the sale of some Commonwealth Government Debentures, a General Reserve Account and an Assets Revaluation Account were also credited with £10,398 and the assets written up correspondingly, the value of the permanent way, rolling-stock, &c., being increased from £9,659 to £16,837.

21. The company offered to sell to the Government for £15,000, that price including all equipment. The Committee inquired the bed-rock price the company was prepared to accept for the track only (without plant or equipment) and was informed that £12,000 was the minimum price that could be accepted, this also being subject to certain provisos regarding storage and yard accommodation.

22. The line has been kept in fair running order by the company, but it has now reached a state where some reconditioning must be carried out. The amounts spent from revenue on the maintenance of the line for each year since its construction have been as follow, viz. :-

McIvor Timber Company's Maintenance Costs.

McIvor Timber Company's Maintenance Costs.

The total expenditure has thus been £14,606, or an average of approximately £696 per annum. The amount shown in the foregoing table for 1918 was for a half-yearly period in order to change the ending of the financial year.

Railway Department's Views:

23. There are two ways of viewing the proposal that the Railways Commissioners should take over and operate the McIvor tramway: One is that it should form part of the main system and use an engine and vehicles interchangeable with the rest of the Department's rolling-stock; the other is that it should be treated as an auxiliary light line, left in a condition not greatly superior to that in which it is at present, and be operated with the "W" class engine and trucks now in use on the line.

24. The Railways Commissioners are emphatic in their view that if the line is to be run by the Department it should be brought up to the standard prevailing elsewhere on the system, and their reports have been framed on this basis. Mr. Prince, the manager of the company, and Mr. Schlapp, Chairman of Directors, are equally emphatic that the line should be treated merely as an auxiliary line and run with light rolling~stock and the "W" class engine now employed. Commenting, in evidence, on the idea of treating it as portion of the main line, Mr. Prince stated:-

"If the Railway Department regard this as a main-line proposition it would be a useless affair. I would not recommend your Committee to take this line over to do that. If they are going to do anything to make this line more than an auxiliary line, I would say 'No.'"

Mr. Schlapp did not see any necessity for such a heavy engine as the "Dd" class proposed, having regard to the traffic to be dealt with.

25. Mr. J. Montgomery, Inspecting Engineer of the Way and Works Branch, Victorian Railways, valued the line and equipment at only £4,615, as compared with the company's estimate of £21,100, the two respective valuations being as follow, viz.:-

McIvor Timber Company's Assets Valuation Estimates.

McIvor Timber Company's Assets Valuation Estimates.

26. In addition to the purchase price of £4,615 (assuming for a moment that the company were willing to sell at such a low figure), would be an immediate further expenditure of £12,435 required to put the line into a condition to carry ordinary rolling-stock of the Department and haul it at 10 miles an hour by a " Dd" engine, viz.:-

Estimated Cost To Put The McIvor Tramway In Suitable Order For The Transport Of Goods Traffic In Train Loads At Irregular Intervals - to be hauled by a "Dd" locomotive at 10 miles per hour.

McIvor Timber Company's Projected Running Costs.

McIvor Timber Company's Projected Running Costs.

27. It will be noted also that this expenditure does not include the item of £8,250 for regrading. The cost to the State on the foregoing basis would be £17,050, and in the estimates of annual interest charges and revenue which the Commissioners have submitted the interest has been calculated on this amount.

28. Mr. Montgomery made it clear that his valuation was not based on the operation of the line as a going concern. On this point he states:-

"The value of the line to the Department, in my opinion, depends on whether it is a paying concern or not, and from the fact that the company, which has worked line for 20 years, is desirous of selling out, it would appear that paying business is not offering. Therefore, I do not consider it correct to give the appraisal value, i.e., the actual present-day value, to the purchaser of the plant unit in situ.

The correct value to the Department is, I consider, the recovery value, or the net value remaining in the plant upon the expiration of its natural life, and is the salvage value, less the cost of removal to Melbourne. It may be contended that sawmillers' rates of £6 per ton should be allowed, minus cost of recovery and of freight to Melbourne, but the material may be held for years before a buyer at these rates can be found."

29. The various types of rails in the track may be classified as under, viz. :-

McIvor Timber Company's Available Rails.

McIvor Timber Company's Available Rails.

30. Attention is drawn to the fact that only earth ballast from alongside the formation has been used, and in regard to the sleepers, Mr. Montgomery reports:-

"The sleepers have practically reached the limit of their life, as approximately 75 per cent of the dogsp1ke holes have burst, and wedges have been used to keep the dogspikes up to the rail flange, and even then the gauge is anything from a ¼ to ½ an inch wide on the straight. Few sleepers, however, are broken, and they offer a good bearing on the formation."

31. Mr. J. H. Olsson, Chief Special Officer, Victorian Railways, also visited the district and reported that according to local information supplied there are 36 sleeper cutters and 33 charcoal burners in the district. There are 42 land-owners, but as some are included as sleeper cutters, the total adult male population would be approximately 100.

32. It was considered locally that if the Forests Department ringbarked the green over-matured timber at once in three years time there would be 450,000 tons of firewood available, besides 32,000 tons of sleepers, 50,000 tons of charcoal, and 2,500 tons of fencing posts. Mr. Rankin, local Forest Officer, was of opinion that the forest did not contain suitable timber for cutting square sleepers in payable quantities, but that a fair number of round-back sleepers were available, while dead and over-ripe timber within a distance of 3 to 6 miles from the tramway would provide at least 50,000 tons of firewood per annum for a period of ten years.

33. The present method of working the line is that trains are run as required; trucks are placed for loading on the down journey and are stated to be ready for picking up on the return journey the same day. The methods adopted are not in accordance with Victorian Railways safe-working principles. The load of the "W" class engine employed on the tramway is fifteen trucks, or approximately 225 tons, from the terminus to a point about 4 miles from Mcivor siding, where the load is divided and conveyed the balance of the journey in two trips. The corresponding loads for a "Dd" class engine would be approximately 320 and 160 tons respectively. Summarizing the position it was considered that if the Forests Department released all over-matured and dead timber in the forests, there would, with the timber available on private property, be a substantial traffic over a number of years. As the settled areas are almost entirely devoted to grazing, very little traffic, in Mr. Olsson's opinion, would be obtained from this source.

34. The total traffic carried over the line since its opening was as follows:-

Mcivor Timber Company's Siding--traffic By Rail 1mom 1907 To 1926 Inclusive.

McIvor Timber Company's Traffic Carried By Rail.

McIvor Timber Company's Traffic Carried By rail.

The inwards traffic consisted mainly of coal delivered at the Mcivor Company's siding for engine requirements and was not carried on the tramway as freight.

35. During the same period the total tonnage of firewood carried on the railways of the State was:-

Statement Of Firewood Forwarded By Rail Over Victorian Railways For each Year 1907 TO 1926.

Timber carried on Victorian Railways.

Timber carried on Victorian Railways.

36. The foregoing figures include also briquettes, and deducting the 84,000 tons of briquettes railed during 1926 the firewood total of 627,697 tons is slightly less than the 1907 figure, when no briquettes were on the market.

37. The Committee heard evidence from the Railway Department on these reports, and especially on the proposal to continue the line as an auxiliary light line, with a "W" class engine, and with very little expenditure for maintenance. Mr. Prince, manager of the company, who has had considerable railway experience, estimated that a sum of £1,000 for sleepers, plus £500 for labour, should put the line in a condition suitable for carrying the traffic for the next five or seven years. The Railways Commissioners, however, were strongly opposed to any such proposal, and contended that it would be impracticable and uneconomical to use a "W" class engine, none of which are now employed in service, instead of a "Dd," even with the interest on the added cost of the "Dd'' and the strengthening of the line taken into consideration. They stated further that it was intended to work the line from Melbourne, as neither Wallan nor Bendigo was a suitable depot for this purpose, and it was not practicable for a "W" class engine to be employed in spare time shunting at either of those places.

38. The axle load of a "W" class engine is 8 tons as compared ·with 13 tons for a "Dd," their respective weights being 62 and 94 tons. Estimates taken out showed that to work the line with a "Dd" class engine would necessitate a train mileage of 6,520; with a "W" class engine the train mileage necessary to shift the same tonnage would be 9,736, or, roughly, 50 per cent additional. This difference of 3,216 train miles at an average rate of 10s. 10d. per train mile (the figure for the year ending June, 1926) would represent £1,742. The value of a "Dd" class engine is £7,500. Let it be assumed that the Railway Department could purchase the "W" class locomotive back from the Mcivor Company for £1,500. That makes the "Dd" £6,000 dearer, plus £12,435 for reconditioning the track to carry it, or a total of £18,435, on which sum the interest charge at 5¼ per cent would be £967. As the extra train mileage of the "W" class engine would cost £1,742, there is an advantage with the" Dd" of £775 per annum, beside a lesser maintenance cost. It should, however, be noted that no allowance has been made for reconditioning the track for the "W" class engine. Mr. Prince considers that £1,500 should be allowed for this purpose, while Mr. Montgomery thinks £9,935 would be necessary. If Mr. Prince's figures be accepted the annual advantage with the "Dd" would be £853, or, with Mr. Montgomery's figures, £1,296.

Estimated Annual Charges and Revenue:

39. The Railways Commissioners furnished the Committee with the following estimates of annual charges and revenue of the McIvor tramway, based on a service of trains being run only when full loading offers, a "Dd" locomotive being used at a speed of 10 miles per hour, viz:-

Estimated Annual Charges and Revenue.

Estimated Annual Charges and Revenue.

Views Of The Committee:

40. The Committee has inspected this tramway and the surrounding district, and also heard evidence from a number of witnesses regarding different phases of the proposal that the Government should purchase the line. The view expressed by one witness that the company had gathered the cream of the traffic and was now willing to sell the skim milk seems to some extent appropriate. At the same time it should be made clear the agitation for the purchase the line appears to have emanated not from the company, but from the local land-owners, who naturally would have the value of their grazing paddocks considerably depreciated by the removal of the line. From the State point of view, however, the retaining of a number of people at work in the district is to be considered also, and while this factor should not be expected to influence a private company contemplating discontinuance, the Committee has given it serious consideration in its deliberations on the matter.

41. Mr. Prince, the manager of the company, and Mr. Schlapp, the chairman of directors, were both called as witnesses, and the Committee wishes to record its appreciation of the disinterested character of their evidence. Every help and courtesy were afforded the Committee in its investigations. Mr. Prince stated frankly that he would not recommend the Committee taking over this line as a main-line proposition, and that it be regarded as only an auxiliary line and operated with a light locomotive. Mr. Schlapp acknowledged that the company was ceasing operations principally because the seasoned grey-box tributary to the line was practically all cut out.

42. The Committee agrees with the view that the line not be taken over and worked as part of the main lines of the State. It has just recently considered the provision of a railway from Heathcote to Toolleen, or Heathcote to Mount Camel, and reported adversely on these proposals, although the nature the land to be served and the prospects for future development were much more promising than the case of the McIvor Tramway. With greatly-increased production from farms or the tapping of extensive areas of valuable timber, a paying section of the railway system might be fostered and developed, but there are very small prospects ahead for agricultural development along the route of the line between McIvor and the terminus at Cherrington, while beyond Cherrington timber cutters from Rushworth are working in the forest and carting supplies to stations on the Rushworth line.

43. In this connexion it may be pointed out that the estimated annual charges and revenue supplied by the Railways Commissioners show a loss of of only £1,707. While the book-keeping entries in regard to the line would be made on the basis of these figures, it should be noted that of the total revenue of £4,226, _the freight from the line itself amounts to only £1,170, the balance of £3,056 being credited to it by the Railway Department because it represents 40 per cent. of the tonnage brought over the line to the junction, and dispatched over existing lines. With the removal of the tramway a large part of this revenue would be received by the Railways Commissioners at existing stations and dealt with by them at very little cost over that incurred for dealing with the business of to-day.

44. It may be explained also that the reason the Commissioners have assessed a scrap value of only £4,615 for this line, and have allowed £12,435 for strengthening it and making it in a condition for safe working, is because they cannot possibly work the line in such a free-and-easy manner as would be permissible with any private company. For instance, the Railway regulations prohibit the attachment without special authorization by the General Superintendent of Transportation of a truck behind a guard's van, or the running of any kind of train unless a brake van is the last vehicle, and as the regulations are enforced by an Act of Parliament it means that an employee would be breaking the law (besides risking his position) in attempting to work the line in defiance of these and almost countless other regulations. A private company can make its own regulations, and is not controlled in that respect by an Act of Parliament. For this reason a line might very well show a profit with a private company when it would show a loss under the administration of the Railways Commissioners.

45. The Railways Commissioners are opposed to operating this line on anything less than standard conditions, and the Committee is not inclined to insist that they should be obliged to take it over and institute with it a new system of auxiliary light lines. It may be that with certain new-line proposals something of that nature may later be necessary, but the Committee does not consider it should apply in this case, mainly for the reason that a recommendation for such a skeleton line or auxiliary line should be made only where there are good prospects of development, so that in future, with a substantial accession of traffic, the line could be strengthened to the standard of the State and freely used with the ordinary engines and rolling-stock.

46. With regard to the suggestion of building this line up to the full standard straight away, and utilizing a "Dd" locomotive upon it, the Committee finds itself in agreement with Mr. Prince, the manager of the company, in deprecating such a course.

47. As to the line being taken over by the Forests Commission and worked as a light line, Mr. W. Code, Chairman of that body, expressed the view that the Forests Commission would sooner not have it, and preferred that the Railways Commissioners should own and operate the line. The Forests Commission has 8 or 10 miles of narrow-gauge line with a locomotive and rolling-stock in operation now near Erica, on the Moe-Walhalla line, and does not desire to embark upon a broad-gauge venture.

48. Under Section 16 of the Forests Act 1918 (No. 2976) the Commission has power to "construct and maintain roads, tracks, and tramways, and other works for the transport of timber, forest produce, and merchantable articles, and purchase land or charter and use vehicles and vessels with the necessary motive power."

It will be seen that this does not confer power upon the Commission to purchase a tramway (although they "may purchase sawmills"), and apparently a special Act of Parliament would be necessary, even if it were desired by the Commission to purchase the tramway. It is also conceivable, but it may be regarded as highly improbable, that the Forests Commission would at some future date extend a tramway or railway into this forest area. Even if that were done, however, it is safe to assume that it would penetrate the forest along a track offering much more timber freight than would be forthcoming along the well-culled, and almost-cleared route of the McIvor Tramway.

49. There is a difference of opinion as to the better trees being ready for sawmilling. The local feeling is that many trees are ready now; the view of the Forests Commission is that those trees will not be fit for milling for some considerable time. As to the suitability of the trees for firewood purposes, the opinion in the district is that many trees are being preserved which should be ringbarked for firewood, the contention being that they will never be fit for anything else. The Forests Commission considers those trees too good for firewood, and holds that they should be left for milling purposes. The Committee's view is that, while the Forests Commission is in the main right as to much of the milling timber being immature, it might impress on its officers that they could be a little more liberal in their interpretation of what is a firewood tree, as distinct from a milling tree, and make more firewood available to cutters. 14

50. As to supplies other than firewood (which will become available during the cleaning up of the forest), the following extracts from Mr. Code's evidence make clear the remoteness of any substantial traffic in this direction viz:

The Moormbool and Warrowitue Forests in the Heathcote and Rushworth districts are practically cut out of the best timber for hewing rectangular sleepers. Only a limited number of men are now employed in this industry. . ."

. . . "In the course of improvement work the whole of the inferior timber is being converted into firewood, posts, sleepers, or for what it is best adapted. The blocks operated on will then be closed against cutting operations, and it will take at least 50 or 60 years to produce timber suitable for piles and sleepers, but similar timbers in the shape of telegraph poles may he taken out in about 30 years."

51. The company's valuation of its assets is £21,000, and it is willing to sell to the Government for £15,000, or, without plant and equipment, for a bed-rock price of £12,000. The valuation of the Railways Commissioners was £4,615 purchase price, plus an expenditure of £12,435 for carrying out improvements, or a total outlay of £17,050. Subsequently, on the assumption that the line might possibly be recommended by the Committee for use with a "W" class locomotive, the estimate for reconditioning the line was reduced from £12,435 to £9,935, or a total expenditure by the State of £14,550. However, investigation has shown that it would be more profitable to thoroughly recondition the line and use a "Dd " if it were intended to hand the line over to the Railways Commissioners. The estimates of the Commissioners were based on a capital outlay of £17,050. If any higher than this were necessary to purchase and recondition the line the interest on the amount would need to be added to the anticipated loss of £,1,707. Taking the company's "bed-rock" price of £12,000, therefore, as the purchase price instead of the Commissioners' scrap value of £4,615, it would mean that the loss for the first year's operation would be increased from £1,707 to £2,095.


52. In view of the foregoing facts, and particularly because of the small amount of development which has taken place and which may be expected in this area, that has been served with rail facilities for over 20 years past, the Committee recommends that it is not expedient that the Government should purchase the McIvor Timber and Firewood Company's tramway. In reaching this decision the Committee has not overlooked the benefit to the State by keeping its own people employed, but it feels that the heavy motor-lorries at present being used for the transport of firewood in the district will deal with the traffic offering by sleeper-cutters, and though some of the charcoal burners might be disadvantaged by an early removal to new areas, they are only anticipating something that would very soon become necessary. The land-owners who are receiving royalties from the charcoal burners, and whose land is being cleared, may suffer a slight depreciation in their land values, but, as compared with settlers in many other parts of the State, they are fortunate in having comparatively clean paddocks and a good growth of native grasses today where the soil would not have warranted an expensive charge for clearing the land in the ordinary way.


53. The following extract from the Minutes of the Proceedings of the Committee shows the division that took place during the consideration of this question :-

Wednesday, 2nd March, 1927. Mr. Bell moved, That this Committee recommends the Government to offer £8,000 to the Mcivor Timber and Firewood Co. for the purchase of the Mcivor Tramway Line with a "W" class engine. The motion lapsed for want of a seconder.

Mr. Solly moved, That the Committee recommends that it is not expedient that the Government should purchase the McIvor Tramway Line. The motion was seconded Mr. Webber, and the Committee divided.

Ayes: The Chairman, Mr. Lind, Mr. Solly, Mr. Webber. Noes: Mr. Bell.

And so it was resolved in the affirmative. A. E. Chandler, Chairman.

Railways Standing Committee Room, State Parliament House, }Melbourne, 3rd March, 1927.

(Minutes of Evidence and Plan are not printed.)

By Authority: H. J. Green, Government Printer, Melbourne.

Forest Line Map:
McIvor Timber forest line map.

McIvor Timber forest line map.

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