H.—2a

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removing rails to lay in new points, or do similar works, which might at any moment affect the safety of a train. It was long ago recognized by the Government that, with an increasing number of trains running, and the greatly-extended mileage of railways opened, if safety was to be secured a much stricter system must be brought into operation. That I claim to have established. Under the present regime extensive alterations have been effected on the railway, and in large station yards ; many miles of railway have been lifted and relaid ; bridges have been built; foundations of structures renewed ; tunnels enlarged, without either accident to trains or interruption of traffic. To place these works, as recommended by the Commissioners, in the charge of inspectors responsible only to a traffic manager, with the occasional reference to any Government engineer in the locality, would be simply to create so many independent heads for the maintenance of permanent-way. It has been proved over and over again that a traffic manager, not being trained to this branch of railway work, would leave it entirely in the hands of the inspector, who would practically be uncontrolled and irresponsible. Each inspector has his own ideas of how things ought to be done, and what supplies are required ; and, with each inspector independently following his own notions, the result will be confusion and want of uniformity, additional expense, and, worst of all, insecurity to the traffic. Under the head of " Stores and Contracts " the Commissioners state that " in the management of railway stores there is a want of system, supervision, and precaution so great that it can hardly fail to lead to the most objectionable practices and to serious public loss " —an accusation which would be truly alarming if it were anything more (which it is not) than rash and groundless assertion. With unlimited means of arriving at the truth the Commissioners fail to establish one single instance of the "objectionable practices" or the "serious losses" which are so confidently spoken of. "When tenders have been called for their supply," it is asserted, " matters have been so arranged as to produce very little competition. Sufficient publicity has not been given." What is intended to be insinuated in the first part of this paragraph I do not know, and until the Commissioners vouchsafe an explanation I am likely to remain in the dark; but I can fearlessly assert that, in the discharge of my official duties, there has been no arrangement or management on my part but what has been dictated by an honest desire for the welfare of the department which has been committed to my charge. Upon the point of " publicity " the Commissioners are so curiously in error that I can only conclude that, not having had time to investigate the matter, they have allowed their opinion to be guided by some newspaper proprietor who feels sore that his particular paper has not been made the medium of publicity. The fact is there is, so far as economy is concerned, too much publicity. I hold that ample publicity would be gained for the contracts by inserting the advertisements half a dozen times in the leading papers (say, two) of the principle centres of population ; but, under existing instructions from the Government in regard to advertising, much more is done in the way of publication than is absolutely necessary, and advertising becomes a very serious item of expense against our stores, and might be diminished not only without detriment, but with absolute advantage. The report goes on to say " that public officers have had the most tempting facilities offered them to gratify contractors by passing inferior articles, and we (the Commissioners say) had opportunities of seeing that they did not always resist the temptation." It is to be regretted that the Commissioners do not state what the " facilities " referred to are, in order that steps might be taken.to do away with such facilities ; but I cannot too strongly condemn the latter portion of this statement. It casts a slur upon a body of honorable men who have no opportunity of defending themselves. If the Commissioners have obtained evidence implicating one or more individuals I submit that the suspected persons should be accused frankly and boldly and placed upon their defence, and that a stigma should not thus, in the face of the public, bo placed upon a whole department most of the members of which, at all events —probably all —are guiltless of the wrong thus insinuated against them. As regards the purchase of stores outside the contracts, I admit that matters in this respect are not all that can be desired; but I have long been alive to the imperfections of our schedules of stores, and every effort is being made to render them complete. The Commissioners seem to forget that the railways of the colony are in their infancy, and are, with all their arrangements, necessarily in a progressive and growing state. The present schedules, compiled a good while ago, comprised, so far as could be ascertained, everything we then seemed likely to require ; but, as our business has increased and our operations have extended, new and unforeseen wants have arisen. Before the next tenders are called for the schedules will be made complete so far as our present requirements are concerned, but it must not be supposed that wo shall then have arrived at a condition of absolute perfection and finality. " Tenders have been accepted," the Commissioners state, "for bolts, sleepers, and other largelyconsumed articles at prices that should never have been entertained, and in consequence the cost of some of the lines in the colony haa been greatly and most unnecessarily increased." This remark is another illustration of the very limited knowledge which the members of the Commission possessed of the subject to which they devoted their labours. Surely the Commissioners should have known that the Working Railways Department has nothing whatever to do with the construction of railways, or with providing materials for such construction, and that in using this allegation as a stone to fling at me it was making a charge against me out of a matter with which I had not the remotest connection. I need not comment upon the remarks of the Commissioners in respect to the advantage of obtaining stores from England as compared with contracting in the colony, because in this matter I have always acted under Ministerial instructions ; but I may state that I have by no means made up my mind that the course indicated by the Commissioners would bo the most profitable one for the Government to adopt. I agree with the Commissioners that a reorganization of the Stores Department is desirable. lam not satisfied with the condition of the department; and, as you are aware, I intimated to you in my annual report that I had it in view to submit to you certain recommendations in this direction, not on account of any " waste " —which the Commissioners allege to exist, and fail to prove—but for reasons of quite a different nature. To take stock of the stores, as recommended by the Commissioners, would only cause a dislocation and interruption of bu&aess, and would serve no useful purpose, the operation