J).—2.

The lowering of the freight level resulting from the elimination of the two highest-rate classes will have the effect of bringing the standard rates within measureable distance of the many local rates now operating, and it has therefore been possible to make provision for the elimination of many local rates. In some cases the transition from local rates to the standard charges will result in a slight decrease in the established transport costs, whilst in others the reverse position will obtain. Such variations will, however, apply only to goods conveyed to or from the specified points where local rates now operate. Any increases in costs incidental to the elimination of the local rates will be offset either wholly or in part by the application of the reduced-rate standard to the large volume of goods transported between points outside the existing local-rates areas and which are at present subject to charges at the standard rates. Having regard to the general conditions as they now exist, the reversion to stability in the matter of freight rates presents a problem of considerable complexity. Taking all factors into account, however, the revised scales incorporate many desirable features, and a more equitable distribution of the incidence of the rates will be achieved from their adoption. To the extent that the adjustments are designed to provide the community as a whole with the service of transport at a reasonable cost, and that there can be no suggestion of the parochialism which previously obtained in the manner of their application, the concensus of opinion must favour the new freight schedules. In order that the position relating to the tariff revision should be viewed in its proper perspective it should be borne in mind that the proposals apply solely to goods coming under the heading of general merchandise, which comprise approximately 8 per cent, of the total rail-borne tonnage. The lowerrated bulk goods, comprising, in the main, commodities essential to industrial development and representing approximately 92 per cent, of the aggregate rail-borne tonnage, are in no way affected by the adjustments. Bulk Travel Vouchees. The issue of season tickets to meet the requirements of those people making regular or extensive use of the train services is a well-established feature of railway operations. No similar provision, however, exists for travel by the road passenger services, which are now extensively operated by the Department. To correct this deficiency an innovation in the form of bulk travel vouchers has been introduced. These are available for purchase at rates representing a reduction in the ordinary fares for 2000 miles or over of travel to be completed within a period of twelve months. Although the vouchers are primarily intended to meet the requirements of those contemplating extensive travel by the Department's road passenger services, they will also be available for first-class travel by train on any occasions that holders may desire to use them for that purpose. Week-end and Special Excursions. Particular attention has been devoted during the year to the development of special day and week-end passenger traffic, and facilities have been provided by way of special trains and reduced fares to encourage usage of the railway for short-term recreational outings. This section of the passenger business has shown a remarkable expansion over a relatively short period of years, as evidenced by the fact that the figures for the past year —viz., 2,625,495 passenger journeys and £247,433 revenue — represent an increase of 45 per cent, and 88 per cent, respectively over the relative figures for the year 1932-33. Farmers' Excursions. There has been evidence of a revival of interest in the organized farmers' tours, which were successfully promoted by the Department some years ago but were not proceeded with in succeeding years on account of the unfavourable economic conditions. During the past year two important tours of this nature were accomplished by large parties of farmers from the Southland and Westland districts respectively. In keeping with the general objective of the tours the itineraries provided for visits to the principal scenic resorts and points of farming and industrial interest. Apart from the recreational value of the formers' tours the opportunity which they provide for observing the conditions obtaining in other areas is of definite educational value to the visiting farmers, and it is satisfactory that the two outings arranged last year were successful in every respect. New Zealand Centennial Exhibition. A matter of considerable importance to exhibitors of goods at the New Zealand Centennial Exhibition is the decision to provide free transport by rail for bona fide exhibits on both the outward and return journeys to and from Wellington. It is anticipated that the exhibits will comprise goods of a wide range and of considerable volume, and the concession will therefore represent a valuable contribution by the Department towards the national undertaking. WAY AND WORKS BRANCH. The following are. the principal features connected with the operations of the Way and Works Branch during the year : Permanent-way. —The re-laying carried out during the year was as follows : — Main Line and Branches — M. C. L. 70 lb. rails relaid with 85 lb. new rails .. .. .. .. 22 16 29 55 lb. rails relaid with 85 lb. new rails .. .. .. .. 1 16 10 53 lb., 55 lb., 56 lb., 65 lb., and 70 lb. rails relaid with 70 lb. new rails .. 13 58 10 55 lb. rails relaid with 55 lb. new rails .. .. .. .. 0 0 23 Relaid with 55 lb., 56 lb., and 70 lb. second-hand rails .. .. 3 26 34Total .. .. .. .. .. .. 40 37 6

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