D.—2

8

were, however, distinctly disappointing, the resultant business being insufficient to recoup the cost of bringing the arrangements into force. In response to strong representations made respecting conveyance of fruit from Auckland to Wellington by express, special arrangements were made, on the assurance of those concerned, that the traffic would amount to about 5 tons per day. In actual practice it did not average 5 cwt. per day, a quantity altogether inadequate to justify the running of a bogie wagon. Similar experience followed the efforts made to foster the fish industry and meet the requests of fishermen for improved means of transport. The traffic did not expand, consequently the cost of operating became greater than the value of the business, and loss resulted. This will readily be understood when it is remembered that 56 lb. of fruit can be railed any distance over a connected railway for 6d., and 7 lb. of fish any distance for 6d. Consumers who deal direct with producers can obtain the benefit of these rates, and it is a matter of surprise that the producer and consumer do not, under such circumstances, get into direct touch and take advantage of the facilities provided to enable them to save the cost inseparable from dealing through intermediaries. During last session an Act amending the schedule to the Government Railways Classification was passed. I have since further reviewed the matter, and in accordance with the intimation given to the representations of the Railway staff last year propose to ask Parliament to further amend the schedule. The regulations under the Act have also been carefully considered and revised to bring them more closely into line with the regulations applicable to other branches of the Public Service so far as leave of absence and travelling-allowances are concerned. The amended regulations will be gazetted shortly, and in addition to other improvements will Gontain provision for the issues of a privilege ticket to a superannuated member of the Railway service and his wife once a month. The regulations also contain provision under which members of the Second Division may qualify for transfer to the Eirst Division if they elect to attend at stations in their own time or to utilize the opportunities that may be afforded them at other periods to acquire a knowledge of accounting and other duties appertaining to the First Division. I trust members of the Second Division will take advantage of the regulation which has been made with a view to giving greater scope for their advancement to positions in the First Division, it being fully recognized that men who have had practical experience in the Second Division and subsequently qualify themselves for promotion are as a rule decided acquisitions to the First Division. The advent of road motor-vehicles has materially altered the conditions that existed in respect to railway-crossings when horses and bullocks provided the principal form of traction. The high rate of speed at which drivers of motor-vehicles drive over the public roads and dash over railway-crossings is a menace not only to the occupants of the cars, but to other persons who are using the road and to trains running on the railway. During the past year there have been a number of accidents on railway-crossings, some, unfortunately, attended with loss of life and severe personal injury to occupants of motor-cars driven on to crossings in the face of approaching trains. As the use of the motor-car extends, these risks will increase; and, with a view to providing additional safeguards, I have given instructions for the designing of automatic signals for use on railway level crossings. It is quite feasible to provide such appliances, and it is proposed to instal them on the busier crossings only at the outset, afterwards extending their use to additional crossings after practical experience has demonstrated the reliability and usefulness of the appliances. Automatic appliances of every kind are, however, liable to fail occasionally no matter what care and attention, is bestowed on their upkeep. The interests of the State must be safeguarded in this respect before any expenditure is incurred in erecting automatic alarms. The necessary legislation will be introduced this session. In view of the indifference persons in charge of vehicles display when approaching railway-crossings, and their disregard of warning bells, sign-posts, and even the signals of crossing-keepers, more stringent measures will require to be adopted in the interests of public safety and heavier penalties be pressed for in future cases where breaches of the by-laws are committed. During the year I have made investigation into the causes that are responsible for the percentage of working-expenses to earnings being so high, and find that