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sions, which will be dealt with in this year's Financial Statement. I have also given instructions to materially improve the train services on the Auckland and Hurunui-Bluff Sections. Forty-five minutes has been taken off the Christchurch-Dunedin express trains, and additional mixed and goods trains run in various parts of the district. A new time-table will be brought into operation on the Auckland Section, under which a daily express train will be run between Auckland and Eotorua, and improved services on other lines on the section. In June, 1901, their Eoyal Highnesses the Prince and Princess of Wales, then the Duke and Duchess of Cornwall and York, visited the colony, and travelled by railway between Auckland and Eotorua, and Lyttelton and Dunedin. The passenger traffic to the centres visited by the Eoyal party was exceedingly heavy; the whole of the railwaj r arrangements were, however, made and carried out in a highly satisfactory manner, reflecting the utmost credit upon the General Manager and his staff. In view of the reductions contemplated in fares and freights, and the fact that a considerable portion of the revenue for the past year resulted from circumstances of a non-recurring character, I estimate the revenue for the year ending the 31st March, 1903, at .£1,875,000, and the expenditure at .£1,300,000, and in doing so I feel that, in gauging the year's operations I am if anything erring on the side of safety in my estimate. It is only reasonable that, with the natural development that is going on in the interior of our country and the activity that must from year to year prevail in the conveyance of our natural products from the interior to the sea-board, an increase in traffic should be looked for. In the outline that I have placed before you I am naturally anticipating that the conditions which have so far led to the material growth of our traffic cannot be expected to retrogress in the direction of a shrinkage that would justify a further reduced estimate than that which I have given. The usual reports and returns are attached hereto.