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cars, with seating-accommodation for 9,768 passengers; 81 brake-vans, 2,845 four-wheeled and 212 bogie trucks, with a carrying-capacity of 28,755 tons. The number of tarpaulins has been increased by 2,542. 248 locomotives, 543 carriages, 161 brake-vans, 5,390 wagons, and 6 travelling cranes have been fitted with the Westinghouse brake, 709 vehicles with Pintsch gas, 395 second-class cars with cushions, and 269 with lavatories. The average number of men employed was 8,782, against 8,875 for the previous year. The difference in the number of hands employed is due to the completion of non-recurring work for other Departments in hand at the end of last year, which gave employment to a considerable number of casual hands taken on for specific jobs. Railway hands proper have increased by 307, made up as follows: Traffic, 183; Maintenance, 74; Locomotive, 50. These figures represent men taken on owing to increased business and opening of additional lines. During the year 197 members of the permanent staff resigned, 194 retired on superannuation, 47 died, 28 were retired, 40 were dismissed, and 550 engaged. Ten appeals against decisions of the Department were heard by the Eailway Appeal Boards, two of which were allowed and eight dismissed. Thirty-one members of the Second Division were promoted to the First Division during the year. The sum of £2,363 has been paid as compensation and compassionate allowances to members retired from the Service and the relatives of members deceased, of which sum £1,198 was paid under " The Workers' Compensation for Accidents Act, 1900." The Lake Wakatipu Steamship Service, which was acquired by the Government in November, 1902, has been worked in conjunction with the railway system. An all-round reduction of 25 per cent, has been made in the rates charged by the company. The service has been conducted with punctuality, and the greater facilities of cheaper rates are much appreciated by the public. I would like, however, to state that the controllers of hotels and boardinghouses in the Lakes District should do all in their power to help the Eailway Department to increase the numbers visiting that beautiful and attractive country, and the adhering to a reasonable tariff will greatly conduce to this. Several minor improvements have been made in the boats, and I am pleased to be able to record the fact that the year's transactions, which are more fully dealt with under the head of " Revenue," have been satisfactory. Fifty-eight miles of main line were relaid with 70 lb. rails, and sixteen miles and a half of branch line with the 521b., 531b., and 561b. rails taken up out of main line. New stations were opened at Dannevirke, Kaiapoi, and Fairfax during the year. These afford the necessary facilities for carrying: on the business of the Department and meeting the convenience of the public. The new Railway Offices, situated in Featherston Street, Wellington, were opened by His Excellency the Earl of Ranfurly in November last. The structure, which is a handsome one, is furnished with all the conveniences for the proper conduct of the business of this important State Department. Particular attention has been given to hygienic requirements and fire protection. By the removal of the railway staff to the new Railway Offices a considerable portion of the Government Buildings was released, and became available for occupation by other Departments, whose staff had previously been located in rented offices in the city. REVENUE. The revenue for the year amounted to £2,180,641, and exceeded the estimate by £180,641 and the gross revenue for the preceding year by £206,603. The net revenue, £741,917, was £111,294 in excess of that for the preceding year. These figures include the receipts from the Lake Wakatipu steamship service for a full year, whereas the receipts of the previous year included five months' business on the lake only. The difference in the gross earnings for the two periods specified is, however, comparatively small, amounting to £2,595 only, and does not affect the result of the year's working to any appreciable extent. Passenger revenue shows an increase of £75,551 ; season tickets, £3,411 ; coaching traffic, £22,879; goods and live-stock, £104,068; miscellaneous, £3,113; while rents have decreased by £2,419. The receipts per train mile amounted to 91-75 d., against 87"00 d. for the previous year.

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