D.—2

VII

The expenditure for 1918-19 includes the full war bonus granted to the staff in 1916, the extra war allowance granted to the lower-paid married members in 1917, and the extra war bonus granted to the staff as from Ist October, 1918. The increased expenditure in the Traffic Branch, Head and Departmental Offices, resulted mainly from regulation scale increases, and the bonuses and allowance referred to above. The increase in the Locomotive, Branch is due to increases in salaries and wages, war bonuses and allowance, and the enhanced cost of fuel, stores, and materials for repairs and upkeep of plant and appliances. The increased expenditure in the Maintenance Branch is due to increases in wages, war bonuses and allowances, and the advance in the cost of materials. The expenditure per mile of railway was £252, against £240 last year. The sum of £29,271 was expended in the Maintenance Branch and charged to capital under the head "Additions to open lines." These comprise additions to workshops, station facilities, water services, locomotive depot, engine-shed sidings, stockyards, tablet installations, telegraph and telephone installations, bridges, and purchase of land. In the Locomotive Branch £56,438 was expended in the provision of additional rolling-stock, tarpaulins, Westinghouse brake, and workshops machinery. The rolling-stock in respect of which the charges were incurred under the head " Additions to open lines" included one locomotive, one carriage, thirty-nine bogie and 104 four-wheeled wagons, and 600 tarpaulins completed on the 31st March, and fourteen locomotives, thirty-eight carriages, twelve brake-vans, 136 bogie and 745 four-wheeled wagons, and 1,350 tarpaulins incomplete but in hand on that date. The operations in both the Maintenance and Locomotive Branches were greatly hampered by the inability to obtain the necessary materials from overseas, and shortage of suitable labour. Lack, of these essentials has resulted in further delaying the progress of many important works which have been authorized. Price of Coat,. Notwithstanding the increases in the price of coal recorded in last year's Statement, further increases have taken place during the year now under review. A. substantial advance in the price of New Zealand coal, ranging from Is. to 2s. per ton, was made in November last, and the freight on Newcastle coal was increased from Is. 6d. to 4s. 6d. per ton as from the Ist March last. The effect of the steady rise in the price of coal since the outbreak of the war is seen by the .fact that although there was a decreased consumption of 23,803 tons during the past year as compared with the year ended 31st March, 1914, the expenditure on bituminous coal alone during the year under review was £135,490 greater than that of 1914, when the pre-war time-table was in operation. With respect to the future, the indications all point to the probabilities of the price of coal and rates of freight being further advanced during the coming year. Coat, Shortage. Inability to obtain regular and adequate supplies of coal to meet the needs of the Department has again been one of the. greatest difficulties the Department has had to contend with, and notwithstanding the restrictions imposed solely for the purpose of reducing consumption and conserving the existing stocks of coal, the position is far from being satisfactory, and the future is looked forward to with considerable anxiety. The revision of the time-tables, which the Department hoped to be in a position to undertlake in tin-, near future, with a view to restoring some of the train services that were cut out as a war measure for the purpose of releasing men and effecting a saving of fuel, has had, therefore, to be further postponed till some future date; and, having regard to the serious and increasing difficulty experienced in maintaining coal-supplies sufficient for the present restricted time-table, the prospect of giving effect to the Department's desire to re-establish the pre-war services is not a promising one. Railway Refreshment-rooms. The system of substituting dining-rooms at, suitable stations for dining-cars on trains has proved most beneficial, giving increased seating-accommodation for passengers, and meeting public requirements in respect of meals and refreshments better than was possible in dining-cars. The patronage has. steadily increased, and to such an extent that the present accommodation and facilities are at times severely taxed, especially during holiday periods or when large numbers of troops are travelling. Railway Improvements. The amount expended during the year iv connection with works authorized by the Railway Improvement Authorization Act, 1914, and charged to capital account was £79,375. in my special report of 1914 I definitely stated that the works included in the scheme of improvements outlined therein were urgently necessary to enable the requirements of the railway business to be dealt with satisfactorily, and for that reason it was most desirable that they should be put in hand and completed within five years. Since. 1914 the revenue has increased by £945,000, or nearly 20 per cent., and there is every indication that a further material increase will follow the cessation of hostilities and closer settlement of the land. The Department has been confronted with very great difficulties during the war period in providing for the business it has been called upon to handle. No one acquainted