D.—2.

depot has been completed, and some of the new sidings have been laid. The construction of a new pedestrian subway at Falsgrave Street is in hand, and a contract has been let for the building of the new goods-shed at Waltham Road. In the Dunedin district the main line is being deviated and duplicated from Sawyer's Bay to St. Leonards. Grade easements are also being carried out at Bushey and Clarendon. GENERAL TRACK MAINTENANCE AND BRIDGE IMPROVEMENTS. During the last financial year about 40-3r miles of main lines were relaid. Of this, about 22j miles were relaid in 85 lb. rails. I may say that wherever relaying is required on heavy-traffic main lines the new 85 lb. standard rails are laid, replacing 70 lb. rails. Thirty-six main-highway level-crossings were eliminated by the Main Highways Board and Railways Department by the provision of overbridges, subways, or deviations. Similar work is in hand for the elimination of further level-crossings. The strengthening of bridges on the Midland Line between Rolleston and Arthur's Pass has been completed, and the Department's heaviest-class locomotive, the Kb, will be running on this line at an early date. I anticipate that the renewal of the Rangitikei, Waipawa, Wairau, Rakaia, and South Rangitata bridges will all be completed this year. These larger bridges are being renewed in steel superstructure on concrete piers. A start has now been made on the reconstruction of the Waiau Bridge. From the foregoing it will be clear to all that track improvements and related works on a very large scale have been undertaken as a basic feature in the modernization of our railways. EFFECT OF RAILWAY EXTENSIONS. But it is not merely the intensification of traffic on existing lines for which adequate provision must be made. The many important extensions of the railwaylines now in the hands of the Public Works Department and soon to become part of the working railways mean additional traffic to the existing lines as well as in the territories they open or link up. These include the Kirikopuni-Dargaville link of the North Auckland railway ; the Paeroa-Pokeno railway to put the rich Hauraki and Bay of Plenty districts into closer touch with Auckland; the Waikokopu-Gisborne portion of the Gisborne-Napier railway to link Poverty Bay with the main railway system of the North Island ; the Wharanui-Parnassus railway, linking the Picton Section with the South Island Main Trunk railway ; and the Inangahua-Te Kuba line to link the Westport Section with the main South Island railway system. MARKED IMPROVEMENTS IN THE ROLLING-STOCK POSITION. In view of the fact that our railways have, during the past three to four years, been called upon to carry heavy year by year increases in traffic it has been necessary to keep pace with the demands as far as is possible in the supply of an adequate number of locomotives, carriages, and wagons. Due to difficulty in obtaining material from overseas, there was unfortunately a lag in the putting into service of the additional equipment required, and at times the position in which the Department has found itself has been most acute. Every endeavour is being made to make up the leeway, and the workshops are working at maximum capacity with this object in view ; but, even so, it was realized some time ago that additional relief must be given in respect of locomotives and rail cars, and a limited number of completed units was consequently ordered from Great Britain. It is anticipated that during the coming financial year (year ending 31st March, 1940) the demands for transportation will be exceptionally heavy, but the additional stock that will be available will enable the Department to successfully handle the normal increase plus that due to the Centennial Year's celebrations The wisdom of the Government's policy of increasing the capacity of the railways to handle anticipated additional traffic, combined with its actions directed towards the improvement of production in the Dominion, is seen in the fact that at

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