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was expected. The fall in exchange also made a great difference. The expenses of salaries of Engineering Staff, Store, Accounts and Indoor Offices, Medical and Consulting Engineers' fees however are only 4·1 per cent, of the total works expenditure for the year and 5·1 of the expenditure to date. This percentage compares very favourably with similar expenditure on other Railways. The total cost of superior supervision to date including quarters and office expenses is only 6·8 per cent. of the total expenditure.
Arrangements were made early in December and one sub-divisional office was closed on the 1st January, 1909, the services of one assistant engineer having been dispensed with. It may be possible to make further reductions on the staff charged to this Main Head of the Estimate later on in the year. The amount of reduction will depend greatly on the health of the staff as during the rainy season malarial fever places many of the staff on the sick list for several days at a time which throws extra work on those who are well. It would therefore be highly imprudent to reduce the staff prematurely and run the risk of bad work being done especially as any reduction would represent such a very small percentage of the total expenditure.
The cost of general management and supervision is given below in percentages of the total expenditure for the year:-
Salaries of all Engineers (C.R.E., D.E. & A.E.s) and Chief Storekeeper with their indoor staff of clerks, cashiers, etc., 3·15 per cent. Salary of Railway Medical Officer, ·14 Consulting Engineers' salary and Home Office expenses, *50 Accounts and Audit Office, *35 4·14 per cent.In addition to the above there is the out-door staff of Inspectors of Works, Overseers, Timekeepers, etc., whose pay is charged direct to the works on which they are employed. The salaries of these men amounted to 5·21 per cent. of the expenditure during the year. Considering the difficult nature of the work and scarcity of labour and contractors with any knowledge of Railways, I consider the above percentages extremely good, as they compare well with other Railway construction, even in easier country.
It was found difficult to obtain good foremen: those sent out from Home though they knew their work well were often troublesome to deal with. The cost of getting them out from Home made it possible for them to behave very badly before they could be dismissed and they in many cases took full advantage of this. One assistant engineer can be got for the same cost as two foremen and I certainly think in China that it pays to have more assistant engineers with shorter sections and fewer European foremen.
There are very few departmentally paid coolies on the work now. These are mostly at Beacon Hill Tunnel and consist of the skilled labour driving engines, keeping the plant in order and sharpening tools, etc. All the rest of the work is on petty contract or piece work rates.
The cost of labour varies very much with the place. The highest wages have to be paid at Taipo. Ordinary blacksmiths and fitters are paid eighty cents per day at the South Face of Beacon Hill Tunnel, ninety cents at the North Face and a few get one dollar per day at Taipo. Carpenters get from seventy to eighty cents per day and blacksmiths hammer-men forty to fifty.
It is very difficult to say what the ordinary coolie earns. In the tunnel nearly all are on piece work. The highest wages are paid to the coolies who work the drills at the heading faces and these earn over one dollar per day. The rates are gradually reduced till those working outside get about forty cents per day.
The average number of coolies employed per day on the Beacon Hill Tunnel throughout the year was 1,533 and about 1,711 on the rest of the line North of the Kowloon Hills.
GRAVES W. EVES, Chief Resident Engineer.
9th March, 1909.