D.—l,

installation of water-supplies, electrical equipment, drainage systems, food cooking and storage appliances, and fire-fighting and miscellaneous services also represented undertakings of some magnitude, particularly where large concentrations of troops were to be accommodated. The progress of important national works the completion of which is fully justified and, indeed, necessary, has been affected by a shortage of men and material, a condition arising from the existing world situation. At the end of the financial year the total number of men employed on all works controlled by the Department was 14,797, a reduction of 4,734 compared with the number at the commencement of the year. Of the 14,797 men, 3,05.1 were employed by contractors working for the Department, 1,940 were employed by local bodies on public works subsidized through the Department, leaving 9,806 men paid directly by the Department. Included in this latter figure are 2,877 men employed solely on defence works. The release of officers and men for military service, a large number of whom volunteered, has been such that the remaining personnel has been called upon to work under extreme pressure in order to meet the many urgent demands of the present. I mention for the information of honourable members that at the end of the year 485 members of the staff and 1,912 workmen were serving with the overseas forces. Apart from the ordinary field companies of engineers, which included many Public Works Engineers, eight specialist engineering units have been sent overseas. The majority of the officers and men of these companies were drawn, from the Public Works Department; consequently it will be realized that the drain on the professional and technical staff of the Department has been very severe. The Government has also released from public works a considerable number of men who were required in essential industries related to the nation's war work. To some extent the shortage of materials, previously obtained from abroad, has been met by the use of substitute products manufactured in. New Zealand under the Government's plan for developing secondary industries. The main difficulty, however, has been to secure regularity in the supply of structural and reinforcing steel for essential works, with, consequent unavoidable delays in time schedules. By redesigning minor proposals wherever possible, the demand for imported steel has been reduced to a minimum. During the year under review the principal public-works activities consisted of the continuation of projects already in hand at the outbreak of war. One of the most important programmes is that relating to the extension of the hydro-electric-power supply. The demand for electric power has been increasing at such a rate that particularly in the North Island the output from additional generating units now being installed will be almost absorbed as soon as they can be brought into operation. Without the use of standby plants at peak periods the present North Island supply systems could, not meet existing demands. The urgency of providing additional supply will therefore be fully appreciated, especially in view of the industrial developments which are taking place. Unfortunately, the shortage of experienced men and the uncertain delivery of machinery and equipment from overseas have delayed the completion of some extension works which have reached an advanced stage. Railway-construction and irrigation schemes have been carried forward, and reasonably good, progress has been achieved under the prevailing circumstances. The erection of certain major public buildings lias been continued in order to provide much-needed, accommodation, and as structural operations are generally well, advanced it is hoped that most of these will reach completion in the early future. Expenditure on main highways and settlement roading, which shows an appreciable reduction on the previous year's figures, has been confined to the works already in progress or those which presented special merit and urgency. The estimates for the current year have been framed in keeping with the expressed policy of low-level public-works expenditure during the war,

VI