D.—2.

BRANCH LINES. The operating revenue from branch lines amounted to £407,920, as against £379,911 last vear an increase of £28,009 (7-37 per cent.). Goods revenue shows a substantial increase of £26,161, compared with 1938-39, whilst passenger revenue increased also to the extent of £1,670. The increase in revenue from passenger and goods traffic is primarily due to the 10-per-cent. increase in fares and rates. ~ Compared with the preceding year operating expenditure increased by £17,468 (3-13 per cent ) the total expenditure for the year amounting to £575,282. Increased costs in connection with the maintenance ot way and works, and locomotive-running were the main factors responsible for the increase m expenditure. T*? HnC " feeder V i alue "° f branch - lille traffic > the operating loss on branch lines was £103,802. Interest charges amounted to £387,026, making a total loss of £490,828, as against a loss of £541,405 for the previous year, a decrease of £50,577. Of the total revenue of £407,920, the South Island branches earned £273,818, or 67-13 per cent Jhe increase over the previous year in the South Island was £12,839, or 4-92 per cent while the improvement in the North Island amounted to £15,170 (12-76 per cent.). ISOLATED SECTIONS. The results of operations of isolated sections were as follow :— Kaihu. Revenue amounted to £3,127, a decrease of £867 compared with 1938-39. Expenditure decreased by £2,851, making the operating loss on the section for the year £6,788, as against £8 772 last year. Goods traffic shows a sharp decrease of £1,068, due to a decline in log traffic. Other classes ot traffic show small increases. Gisfcorwe.—Revenue amounted to £28,037 and expenditure to £32,527. These figures show a decrease of £2,913 and £1,046 respectively compared with the previous year. Reduced metal traffic also reduced receipts from passenger and parcels traffic, were the main causes of the decreased revenue.' decrease in expenditure was brought about by lower locomotive transportation charges. the operating loss on the section for the year was £4,490, as compared with £2,623 last year hv rr 3 t0 £10 ' 015 ' as againBt m ' l43 last y° ar - Expenditure increased i 'id • . ■ decrease in revenue was brought about by the less quantity of wool carried w ne the increase m expenditure was primarily due to heavier way and works maintenance charges.' the operating loss on the section for the year was £13,502, compared with £11,130 last year • tot,ltr/4™ VenUe amounte „ d to £43,040, an increase of £6,374 (17-67 per cent.). Expenditure totalled £49,029, an increase of £4,776 compared with 1938-39. With the exception of parcels, all classes of traffic contributed to the increase in revenue. The principal increases in expenditure were in respect 01 locomotive and traffic transportation charges. tiJ"' °P era ti n g I° BB 011 the section was £5,989, as compared with a loss of £7,587 in 1938-39 • : of f, - r;?® ven V o amounted to £97,098 and expenditure to £81,822. These figures show an increase of £2,870 and £2,593 respectively compared with the previous year. Improved coal and timber traffic was responsible for an increase of £2,116 in goods traffic. Miscellaneous revenue also shows an increase. An increase in way and works maintenance charges was the main item responsible tor the increased expenditure. I he operating profit on the Westport Section for the year was £15,276, compared with £14 999 in the previous year, an increase of £277. STORES BRANCH. An analysis of the amount expended in connection with the purchase of stores during the vear is as under:— b •>

The decreases enumerated above are chiefly due to a diminution in the quantities of materials purchased tor use in connection with construction programmes. The main reductions are in respect ot purchases made within the Dominion and in imported materials from the United Kingdom and Australia.

21

I Value of Purchases Variation, j made, Year 1940. 1940 with 1939. To merchants, manufacturers, and others in New Zealand .. 1,056,529 6 9 -201 497 17 u Through Trade Commissioner in Australia .. .. 93,938 14 6 - 85'904 9 7 through High Commissioner in London .. .. .. 1,211,419 12 11 —609 218 1 2 Material manufactured in Railway Workshops .. .. 397,252 11 9 — 2 957 14 1 Coal and coke. 721!827 17 10 - 15,' 631 19 6 ivianutactured and used material received from other branches, 114,518 19 0 + 45 741 14 8 &c. Timber from railway sawmill and stores used .. .. 51,806 8 2 + 2,676 10 0 Totals •• •• •• -• •• £3,647,293,10 11 -£872,791 17 7* * Net decrease.