D.—2,

With, a universal forty-hour week the objective of the Government, I can see no reason for differentiating fares charged as.between, say,fthe 8 a.m. and the 9 a.m. worker. Actually, the effect of the Government's legislation in this matter may be expected to make the hours of office workers and others synchronize to a greater extent than has been the case in the past. lam consequently investigating a scheme that will give all workers travelling regularly to employment the benefit of the lowest fares applicable to the suburban area concerned. RAILWAYS CONSTRUCTION POLICY. Trie Government's policy in regard to the completion of new lines (upon which work was stopped by the previous Government, following recommendations of the late Railways Board) is one which will make the railway system, within a brief period, much more homogeneous than it is at present. The Westport-Inangahua and the Dargaville-Tangowahine lines are cases in point where rail-heads were left "in the air " within a few miles of their objectives. Other lines, such as the NapierGisborne and the Parnassus-Picton, will open up rich productive areas for development, and will give access to markets never previously available to producers. The working railways must therefore prepare for the changes which the completion of these lines will bring about. BRIGHTER RAILWAY PROSPECTS. The railways are in a better condition to give service and their prospects are brighter than has been the case for many years. The increase in revenue of over £240,000 since the end of the financial year to which this report refers is satisfactory evidence of the increased business now coming to the Department. The Government desires to have the railways fulfil their proper function as the principal transport agency of the people, and, after accepting the portfolio of Railways, I took the earliest available opportunity to see for myself the lines under my control and to gain an understanding of the many ramifications of this great State business. Already, by making use of the rail-car " Maahunui," just recently built in the Hutt Valley Workshops, I have been able to travel over the whole of the railways of the North Island (with the exception of three small branches) in less than a fortnight and to examine the route of certain unfinished lines. I hope to make a similar comprehensive tour of the South Island lines at an early date. The tour put me in touch with the principal problems facing the railway system at the present time, as well as with the many local requirements, and I had valuable opportunities to meet the users of the railways in their own territory and to see the staff at work, as well as to gain first-hand knowledge of the public outlook upon transport generally and upon the service they receive and desire from the national transport system. RAIL-CARS TO ELIMINATE MIXED TRAINS. The disadvantage of " mixed" trains from the viewpoint of the travelling public has always been realized, but nothing very effective has yet been done to improve the position. I am, however, satisfied that their elimination is a matter of urgent necessity before the system can be modernized, and as soon as the necessary arrangements can be made " mixed " trains will cease to be a feature of railway transport in New Zealand. Orders have already been placed with the Railway Workshops injthe Hutt Valley for supplies of rail-cars which will be put into operation as soon as possible in suitable localities, and when this is done appropriate passenger time-tables will be inaugurated providing for frequent passenger services. The separation of goods traffic from passenger traffic will be of benefit to both ; prolonged stops at stations, inevitable under the fluctuations of goods traffic requirements, will be avoided, and goods trains will be operated more expeditiously and with greater economy. This reform will assist in a very real way to make the railways serve the transport requirements of the people, particularly in country districts, to a much greater

III