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of the busy season for all classes of railway business compelled the Department to reluctantly intimate its inability to agree to the further decrease of the number of trained and experienced hands until after Easter. The Department nevertheless fully realized the vital importance of releasing more men at the earliest moment, and with that end in view has carefully revised the train time-table and submitted to the Government proposals having for their object the release at regular intervals of drafts aggregating 1,000 additional railwaymen if that number was-able to satisfactorily pass the military tests. The scheme, which necessarily involved curtailment of train services, received a great deal of close attention. All services have been co-ordinated to ensure as far as practicable the least inconvenience to the users of the railways. The ability of the Department to maintain the normal train services up to the end of the financial year in spite of the depleted staff was to a great extent due to the loyal and cheerful service of all grades of the Railway employees. With the continued enlistment of the staff for military service to the extent above indicated the curtailed train service under contemplation can only be undertaken satisfactorily during the summer months, when the live-stock and grain traffic entails much special running, by the most complete and loyal co-operation of all members of the Railway service. The effort required when the business is heavy in the summer will entail longer hours and considerable sacrifice on the part of all concerned, and specially upon the depleted staff in the traffic working and running branches; but the manner in which the staff have met their obligations in the past leaves no ground for doubt that they will carry out ungrudgingly their share of the extra obligations thrown upon them on account of the war, and perform their duties cheerfully as a national service. I have, &c, E. H. Hiley, The Hon. the Minister of Railways. General Manager.

MAINTENANCE. Mr. F. W. Mac Lean, Chief Engineer, reports as follows : — I submit the following report on the Maintenance Branch for the year ended 31st March, 1917. The track, buildings, structures, and appliances have been maintained in good order and repair. Permanent-way. —The relaying during the year has been as follows : — Main and branch lines, 53 lb. and 56 lb. steel and 70 lb. iron rails relaid Miles, with new 701b. materials ... ... ... ... ... 21| Branch lines, 401b. relaid with new 551b. material ... ... ... 1\ Branch lines relaid with second-hand material removed from main line ... 1 Total relaying for the year ... ... ... 30 The amount of relaying is much below the average of recent years, but as fresh supplies of rails have not been available the existing stocks have had to be conserved. It seems unlikely that further supplies of relaying-material can be obtained at an early date, and the amount of relaying will probably have to be curtailed still further in the ensuing year. . Sleepers. —92,4l9 new sleepers were placed in the track during the year. In addition to this a large number of serviceable second-hand sleepers were used in renewals. Ballasting. —239,oo2 cubic yards of ballast were placed in the track during the year. The scarcity of labour has prevented more of this class of work being carried out. Slips and Floods. —Towards the end of 1916, and in February, 1917, heavy rains in the Auckland Province caused numerous slips and washouts in the W 7 hangarei, Kaihu, Kaipara, Main Line, and Thames Railways, and consequent delays to traffic. The greatest trouble was experienced in the Kaipara district, in the northern part of which the railway was closed for about a month. It will take a considerable time for the railway-works to be restored to normal conditions. In November the Whangamomona Branch had to be closed for five days owing to extensive flooding and slips. Slips and washouts were also experienced in the Gisborne, Picton, Otago Central, and other districts. Over 9,000 tons of rock have been used in strengthening the river-protective works on the Midland Railway. In August and September heavy storms did considerable damage to the protective works at Oamaru foreshore. Every effort was made to carry out repairs expeditiously to minimize inconvenience to the public. Bridges. —These have been maintained in good condition. A number of bridges have been strengthened for the running of heavier engines. This work has been delayed owing to the difficulty of obtaining structural steel. Water-services. —These have been maintained in good order Additional storage has been provided and improvements effected at a number of stations. Wharves. —The widening of George Street Pier, Port Chalmers, has been completed.

ii—D. 2.