D.—2

VIII

for manuring farm lands, agricultural produce, empty butter and fish packages, manures, bricks, clay, coal, scrap-iron, racehorses, hunters, polo ponies, and hounds, abolition of extra charge for goods conveyed on certain branch lines, and lower rates for conveyance over port lines of goods from centres to ports. The concessions have included many articles of every-day use by all classes of the community. The regulations have been drawn up, and are interpreted on a more liberal basis than heretofore; and the results of the year's working show conclusively that the people of the colony recognise and appreciate the efforts that have been made to induce traffic and to popularise and make the railways the principal and indispensable medium of inter-communication between the various portions of the colony. In continuation, therefore, of the policy enunciated in 1896 —viz., that a 3-per-cent. return having been secured from the railways, reductions should be made in freights on New Zealand products—the Government has determined to make further concessions. These will embrace reduction of passenger fares on Kaihu Section, rates for small lots of dairy produce, butter, poultry, eggs, bacon, cheese, manures and wool, the abolition of the charge as for an additional five miles on all traffic passing over the Eimutaka Incline, and continuation of free carriage of lime for manuring farm lands. The value of the proposed concessions is estimated, to be £30,000. It is considered that the time has now arrived when a daily mail-train service should be inaugurated between Wellington and New Plymouth, and, with this end in view, I have given instructions that, commencing on the Ist November, mail trains shall run daily between Wanganui and New Plymouth, thus securing a through daily connection between Wellington and New Plymouth;. the speeds of the mail trains will at the same time be accelerated, so as to very materially shorten the journey-time between the stations named. The railway traffic has increased so rapidly and enormously during the last six years that it has in many places practically outgrown the carrying capacity of our lines, which were originally intended as the pioneers of settlement, and were not built to successfully cope with a business such as now exists in many parts of the ctJony. There is every indication that the business of the railways will still continue to increase very largely, and it is, therefore, imperatively necessary that steps be at once taken to make provision for dealing with the trade of the colony in an efficient manner. This can only be successfully and economically accomplished by equipping the lines with the latest safetyappliances and practically reconstructing, and in some cases duplicating, the lines. A considerable portion of the rails in different parts of the colony require replacing with heavier metals to admit of the use of engines of the most powerful type. In my last year's Statement I indicated the lines that would first require to be duplicated, and also the amount of funds necessary to enable the work of improving and strengthening the lines and structures being undertaken and carried out in a comprehensive and satisfactory manner, and I would again urge that serious consideration be given to the question of providing funds for the works indicated, which are matters of vital importance to the colony and its railways. Notwithstanding the fact that the workshops are kept busily engaged in building rolling-stock, and that a very large number of operatives are employed at the work, the capacity of our workshops is not equal to the requirements of the business of the railways, and it has become abundantly evident that the workshops must be considerably enlarged in order that the building of rollingstock may be retained in the colony and the stock itself be turned out with greater expedition. The fact that the New Zealand railways are composed of so many small and isolated sections renders their successful management a matter of some difficulty, and adds very materially to the working-expenses, and thereby affects the result of the working of the railways as a whole. It is therefore very desirable, in the interests of the colony, that where possible these small sections should be joined up and made into continuous lines. The Kawakawa, Whangarei, Picton, and Nelson Sections- are cases in point. Bach of these sections has its own resident officer in charge, and in addition special officers are required to make frequent visits at very considerable cost. The possible