D.—2.

For the year ended 31st March, 1939, the amount paid by the Department for exchange on purchases made through the High Commissioner, London, was £369,040 14s. 7d. The Railways Department is also required to pay sales-tax on taxable items purchased in New Zealand, but it has not been possible to estimate, with any degree of accuracy, the total amount paid by the Department by way of sales-tax during the financial year under review. The total issues to all branches (including coal) for the year amounted to £3,628,487 15s. 5d., as against £2,809,282 9s. Bd. last year, an increase of £819,205 ss. 9d. A summary for six years showing the value of purchases and issues of stores (exclusive of coal) together with the value of stocks on hand (stores and coal) at the close of each year, is as under:

The increase ill value of stock during recent years has been brought about by several factors, the chief of which have been the great expansion in the Department's activities, including the heavy construction programmes and the increase in price of materials and the charging of exchange on all overseas purchases. Another factor having a bearing on the increase was the delay in delivery of orders placed in .1936 and 1937, whilst orders placed subsequently were delivered in practically all cases on due date with the result that there was an accumulation of material on hand at the close of the year which will be withdrawn for use during the current year. Comparatively few overseas orders are now being placed, and a substantial reduction in stores stock should take place during 1939-40. COAL-SUPPLIES. The following return shows the purchases of coal made during the last six years : — Tons. Tons. 1933-34 .. .. .. 381,596 1936-37 .. .. .. 433,795 1934-35 .. .. .. 422,334 1937-38 .. .. .. 544,222 1935-36 .. .. ..437,959 1938-39 .. .. .. 505,18'J Only New Zealand coal is used by the Railways Department, which has imported no coal during during the last seven years. Of the purchases of coal made in 1939, 284,419 tons were hard coal and 220,770 tons soft coal. The average consumption of coal per week during the year was 9,920 tons, an increase of 57 tons per week compared with the previous year. TIMBER-SUPPLIES. Several large orders for hardwood timber and sleepers were placed in Australia during the year. During the year the Department's supplies of native timber have been drawn from Mamaku Sawmill. At Maroa the Department's new sawmill is about to be brought into operation, all arrangements in connection with the erection of the sawmill buildings, &c., having now been almost completed. The Department's timber area at Pokaka has throughout the year been operated under license to private interests under the oversight of officers of the Department's Forestry Branch. FORESTRY BRANCH. The tree-planting and other work of the Forestry Branch has been continued throughout the year, a fairly favourable, if somewhat dry, season having facilitated the general operations of the Branch. During the year approximately 242 acres were dealt with by planting, blanking, and beautification, the areas receiving attention being distributed as follows :■ — Athenree : Blanking, 96 acres ; new planting, 4 acres. Whangarei: New planting, 44 acres. Maungaturoto : New planting, 11 acres. Foxton : New planting, 72 acres. Hutt: New planting, 10 acres. Kaiwarra and Trentham: Beautification, 5 •acres.

XXXI

Stocks on Hand. Year. Purchases. Issues. - Stores. Coal. Total. . £ £ £ £ £ 1934 .. .. 1,059,879 969,067 451,683 157,637 609,320 1935 .. .. 1,269,171 1,136,243 584,611 160,177 744,788 1936 .. 1,436,696 1,400,858 622,899 144,888 767,787 1937 .. .. 1,971,314 1,719,414 874,800 107,653 982,453 1938 .. .. .. 2,662,302 2,082,195 1,107,653 167,347 1,275,000 1939 .. .. .. 4,001,478 2,854,721 1,907,113 153,128 2,060,241