D.—2.

The traffic for the last twelve years has been as follows: —

Condition of Lines and Appliances. The lines, with all rolling-stock and appliances, have been maintained in good order. Various additions and improvements urgently needed have been made thereto from working-expenses. The plant has improved in value and efficiency, and renewals have been effected with heavier rails and more permanent materials. Additions to Accommodation and Appliances. We regret that the representations made in our last annual report and on various other occasions have not met with such response as the importance of the interests concerned requires. The funds provided from capital have been insufficient to meet the reasonable demands of the public for increased station accommodation and rolling-stock, and to extend the appliances and shop-room necessary for the economical and efficient maintenance of the railways without resorting to outside markets for the execution of work. It would appear to be preferable to make adequate provision for additions to those lines where the traffic and business justify and require it, in preference to expending funds in extending railways which cannot at present be expected to pay any interest on capital. For the present year the least provision which should be made to meet liabilities and pressing wants is £40,000. The practice of late years has been to make as many miles of road as possible, at the same time omitting to provide sufficient funds for the additional appliances and improvements needed to deal properly with the traffic and maintenance work arising therefrom, and from the natural growth of business throughout the system. The public is thus liable to suffer for the want of reasonable accommodation, while at the same time many thousands of pounds of capital are lying idle on extensions of railways which are almost or entirely unused. Future Prospects. The completion of the Otago Central to Middlemarch, the extensions of the Blenheim to Awatere, the Eotorua, the Helensville North, the Catlin's Eiver, and the Greymouth to Hokitika railways, will add not short of a million of money to the capital account, on which no interest is likely to be earned in the immediate future. While these lines will benefit the districts they serve, it is doubtful if they will pay the expenses of working, so that, although the colony on the whole is fairly prosperous, we should not expect the net result of working to improve much under the circumstances. Should the Manawatu Company's line be acquired by the colony, it will conduce to the more profitable and convenient working of the Government lines comprised between Taranaki, Napier, and Wellington. For the financial year ending the 31st March, 1892, we have estimated for a net revenue of £414,000 only. As there will be no Easter traffic during that year, and the grain and flax traffic will be smaller than usual, and extensive reductions in rates and fares have been made in pursuance of section 20 of the Government Eailways Act, we think this is as large a sum as should be estimated for. General. Acting- in accordance with the policy indicated»in last year's report—namely, to facilitate traffic in natural productions, and to give cheaper and better facilities for travelling, to such an extent as could be done without materially disturbing the finances of the colony—we have reduced a large number of rates, the most important of which are those affecting native brown coals and firewood.

2

Year. Miles. Revenue. Expenditure. Tonnage. Parcels, &c. Cattle, Sheep, &o. Passengers. Season-tickets. 79-80 80-81 81-82 82-83 83-84 84-85 85-86 86-87 87-88 88-89 89-90 90-91 1,172 1,277 1,319 1,358 1,390 1,477 1,013 1,727 1,758 1,777 1,809 1,842 £ 762,573 836,454 892,020 953,347 901,304 1,045,712 1,047,419 998,768 994,843 997,015 1,095,570 1,121,701 £ 580,010 521,957 523,099 592,821 655,990 690,026 690,340 699,072 687,328 647,045 682,787 700,703 1,108,108 1,377,783 1,437,714 1,564,793 1,700,040 1,749,856 1,823,767 1,747,754 ■1,735,702 1,920,431 2,073,955 2,086,011 No. 180,331 286,805 316,611 341,180 359,896 347,425 349,428 372,397 399,109 399,050 405,838 413,074 No. 285,209 300,704 343,751 477,075 686,287 729,528 858,662 942,017 940,209 919,392 1,008,575 1,348,304 No. 2,907,090 2,849,561 2,911,477 3,283,378 3,272,044 3,232,886 3,362,260 3,426,403 3,451,850 3,132,803 3,370,459 3,433,629 No. 5,077 6,499 7,207 8,021 9,036 8,999 10,717 11,821 11,518 11,817 12,311 13,881