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four days between Gore and Clinton. The railway bridge over the Mataura River at Gore has been planked, and made available for dray traffic. Locomotive. —The engines, carriages, and wagons have received careful attention, and are in good order. One engine was damaged by falling through a breach in the road during a heavy flood, but it has since been repaired. I made my first official inspection of the Greymouth, Westport, Nelson, and Picton Sections in the month of May last. Greymouth Section. This line carries a large mineral traffic, and leaves a fair balance over working expenses. 34,462 tons of goods and minerals were conveyed over the line during the past year, against 21,446 tons for the previous year, showing an increase of 13,016 tons. The facilities provided for working the traffic are very defective; the want of sufficient accommodation is one of the.chief causes of delay and expense. Coal staiths should be erected without delay, as the existing mode of shipping this article of traffic is both tedious and expensive, and is a source of general dissatisfaction. Reductions in the staff have been effected, which will result in a saving of £500 per annum. Twenty additional wagons have recently been placed on the line, which is now fairly supplied. The engines, carriages, and wagons are in fair working order. The line has been kept in good running condition; since it wras opened for traffic, curves have been eased, embankments widened, and a large amount of ballast laid. Although the line has only been opened a little over two years several rails have already had to he replaced in consequence of wear. Westport Section. The traffic on this section is very light: between Waimangaroa and Ngakawau it was so trifling that it was deemed expedient to close the section entirely, which effected a saving of £864 per annum. The opening of one or more of the excellent coal mines in the district, which may shortly be expected, will create a large and profitable traffic over a portion of the line. Nelson Section. This section is kept in good order ; the embankments have been widened; and, although not long opened for traffic, a considerable amount of bridge-work has had to be renewed, some of the stringers and sills being quite rotten. The engines, carriages, and wagons are also kept in good condition. A third engine is much needed, which I purpose sending from Christchurch, immediately on the arrival of the engines shortly expected from England. A mixture of Grey Eiver and West Wanganui coals is the fuel used on the engines on this section, and with satisfactory results. The traffic, though light, is steadily on the increase ; the number of passengers carried during the year was 40,811, being an increase of 8,225 over the previous year, and, although the tonnage of goods carried is much higher, the total revenue is somewhat lower for the same period. This is accounted for by the great reduction in rates which took place at the beginning of the financial year. The staff on this section has also been slightly reduced. Picton Section. On this section the traffic is very light: in fact it does not cover working expenses. The receipts for the past year were £4,991 6s. lid., as against £5,731 4s. 5d., showing a decrease of £739 17s. 6d. The rates now charged are considerably below those of the year previous. Another cause for the reduction in receipts is attributable to the destruction of the bridge over the Opawa Eiver, connecting the railway terminus with Blenheim. The extension of the line into the latter will no doubt tend to give more encouraging results. The line is in fair working order. Some important alterations have recently been carried out, grades lowered and curves eased, which were done by the permanent hands. A slight reduction in the staff of this section also has been effected. General. A new office, that of Steward of Eailway Eeserves, was organized on the 15th of December, last, the duties of which are immediately connected with the leasing of reserves and surplus lands, cottages, refreshment rooms, book-stalls, advertising at stations, grain store, coal and timber sites collection of rents, and such other matters as do not strictly come within the province of the Traffic Department. The increase in revenue from these sources since the creation of the office up to the 30th ultimo amounts to £725. Contracts for the delivery of goods were entered into during the year at Dunedin, Invercargill, and Christchurch. At the two former stations similar contracts existed previously, and were found to work remarkably well. At Christchurch the system was commenced on the Ist of September, and has since given very general satisfaction. Tariff. Several alterations have been effected in the tariff during the past year. The changes generally have been the placing of goods in a lower class, as under : — Hay, Straw, and Chaff.—From double rates, Class E, to Class N, 6s. per truck for five miles; each additional mile, 7d. per truck to fifty miles. Class E. —In quantities less than two tons to be charged Class A, altered to Class D. Class F. —In quantities under two tons, Class B, altered to Class D. Classes F and G. —Each loading and unloading reduced from 6s. 3d. to ss. Ships' Goods, Lyttelton to Christchurch, reduced to ss. 6d. per ton, A, B, C, D. Pigs, Sheep, Goats, &c.—-After first ten miles, reduced from 9d. per truck per mile to sd. Through Passenger Traffic Complaints are of frequent occurrence, and with some reason, at the slow speed of the trains and the oscillation of the carriages, but it should be borne in mind that these railways were built, and allplant, stock, &c, ordered, for a slow speed, fifteen miles per hour being considered the maximum. 10— E. 1.