D.—2.

I lie use of electric power for lighting and services is being extended as opportunity permits, for it is generally recognized that this is of benefit to passengers, gives increased transport output, and also provides better facilities for the staff, resulting in economy in operation. The Johnsonville electrification has shown how popular multiple-unit electric traction is with the travelling public, and extension of this system of traction oil suburban areas must be given careful consideration in the future. It may here be pointed out that, with electrification, power is drawn entirely from the hydro-electric supply, with a consequent conservation of coal and oil for other purposes. STANDARD OF SERVICE. One of the most important features of railway administration—that associated with the standard of service rendered—has been given special attention in all its aspects. The conditions of employment have been improved, and members of the Department have been encouraged to take a keen interest in their work by such means as correspondence and special tuition classes in the various phases of railway working, by improved facilities for recreation in railway centres, and by the widespread dissemination of railway infoimation upon staff matters, as well as by the institution of Staff Tribunals to investigate matters affecting the welfare of members. CO-ORDINATION OF ROAD AND RAIL SERVICES. The co-ordination of road and rail services for the transport of passengers, commenced in a small way fourteen years ago, and greatly accelerated during my term of office, is reaching a point of stability, with the almost complete cessation of competitive running on parallel routes between principal centres, and a consequent over-all reduction in the cost of transport operation along the routes affected. The Department has recently purchased the Rotorua Motor Transport Co.'s plant, and lias taken over its Rotorua—Opotiki and Rotorua—Wairakei routes, as well as the local sight-seeing services previously operated by that company. This purchase completes the Department's passenger connections with railheads serving the important Rotorua tourist area in which the Government is directly interested, and eliminates some wasteful local competition. The goods traffic operations of the Department have been further extended during the year by the purchase of services operating on the following longdistance routes : between Auckland and Morrinsville ; Wellington and Martinborough ; Christchurch and Nelson ; Christchurch and Kaikoura ; Christchurch and Timaru; Timaru, Waimate, and Oamaru; and Dunedin-Oamaru-Kurow and Ilakataramea. The effect has been to facilitate better co-ordination and interlocking of goods-services as between road and rail in those areas. GENERAL IMPROVEMENTS. Improvement-works upon the railways have been prosecuted vigorously on a carefully arranged plan designed to keep each progressive development in any phase in step with the forward movement required under the Government's policy for modernizing the whole system. The sequence of requirements following the initial proposal to introduce heavier locomotives —e.g., stronger bridges, heavier rails, longer sidings, larger turn-tables, quicker and more ample coal and watering facilities—has its counterpart in the range and variety of improvements called for when more, larger, and better passenger-cars and goods-vehicles are provided. Thus the year has seen expenditure approved upon a wide range of works coming under these categories. TRACK IMPROVEMENTS AND ADDITIONS. The railway policy of track improvements and additions has been vigorously continued during the past year under considerable difficulties. Exceptionally severe weather conditions caused flooding, washouts, and erosions in every district to a quite unusual degree, particularly during July and August of last year and in February of this year. Another handicap was the necessity for carrying on repair and improvement works and at the same time facilitating the running of the many additional trains required to handle Centennial traffic.

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