P.—l.

INCREASES IN RATES ON INLAND PARCELS AND INLAND AND OVERSEAS PACKETS : REDUCTION IN " FRAGILE " FEES ON INLAND PARCELS. When railway charges, including railway parcel rates, were increased by 10 per cent, in December last, Government decided, in order that there would be no general diversion of parcel traffic from the Railways Department, to increase also the rates on inland parcels sent by post. On parcels in the heavier categories of weight the increases exceeded 10 per cent. This was justifiable, on the ground that the previous charges on such parcels, which for the most part require to be transported over long distances, did not cover costs. In 1936, when parcel rates were reduced, it was expected that the Post Office would obtain a reasonable proportion of short-distance traffic, an expectation that was not realized. A preponderance of long-distance traffic was offering —no less than 72 per cent, of the heavier parcels requiring inter-Island transit, and a large number also involving long transit by rail. Details of the changes in respect of ordinary parcels are as follows : —

Appropriate increases were made also in the special rates on parcels of cinematograph, films and on parcels that exceed in size the ordinary parcel-post limits. Previously, the rate for inland packets was the same as that for commercial papers and printed papers —i.e., -|d. for each 2 oz. Opportunity was taken to fix for such articles a minimum charge of 2d. up to 8 oz., the rate otherwise remaining unchanged. The overseas sample-packet rate was increased from Id. for the first 4 oz. and Jd. for each additional 2 oz. to 2d. and Id. respectively. In fixing a higher minimum rate for packets than for printed papers and commercial papers, New Zealand has followed the practice adopted in other British countries. The special fees payable on parcels of a fragile nature for the transit of which the senders desire the protection of. containers other than bags were reduced from Is. 6d. and Is. to Is. and 6d. respectively, the higher fee being payable on large parcels. " Fragile " fees were not included in the general reduction of parcel rates made in 1936 because of the extra cost of forwarding parcels in the heavy wicker hampers then in use. In the interval, these hampers have been replaced largely by lightweight cardboard cartons, a change which made possible the reduction in the fees. It is hoped that full advantage of the special service provided for the protection of parcels containing articles liable to damage in transit will now be taken by the public, many of whom are indifferent to the need for the thorough packing of such parcels. The new rates became effective on the 12th December. INLAND MAIL-SERVICES. The contracts for the inland mail-services in the Auckland, Hamilton, and Thames postal districts expired on the 31st December last, and were relet for a further term of three years as from the Ist January. A number of the services were improved either by extension or by an increase in the frequency of the trips. A large number of contracts were renewed with the previous operators, the terms generally being arranged by mutual agreement. In some instances it was necessary for the appropriate Transport .Licensing Authority to fix the payments to be made under the new contracts. Indicative of the continued popularity of the rural mail-delivery system, was the increase during the year of 2,054 in the number of rural boxholders. At the end of the year there were in the Dominion 30,900 boxholders, the highest number yet recorded. While the carriage of mails by road on the established routes between centres not served by rail is more or less a matter of routine, the provision of adequate mail facilities in the more isolated localities requires special consideration. It is the policy of the Department to extend the postal facilities in rural districts when this can be arranged at reasonable cost. In such cases the general practice of despatching the mails by the vehicle which conveys goods, newspapers, and passengers is followed. Weather and other conditions beyond control occasionally cause interruptions in the mail transport schedule. Exceptionally heavy floods experienced in the Hawke's Bay and Poverty Bay districts in April, 1938, interrupted the services in operation there. The most serious effect was the complete stoppage for a period of the conveyance of mails by road between Napier and Gisborne, necessitating the use of alternative routes, including air and sea services, between those centres. The driver of the mail-truck which left Gisborne on lie evening of the 24th April had to abandon his vehicle, which was completely isolated, and it was not until the 12th May that the final portion of the mail was recovered from the truck. Fortunately, the mails, though delayed, suffered little damage. Floods occasioned, by torrential rain in the Takaka Valley on the 16th September caused a slip which destroyed several chains of the main highway at Upper Takaka and completely interrupted road communication with the Takaka district. Mails were forwarded by sea the following day, after which it was possible, by transferring the mails across the slip, to resume the road services.

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Weight of Parcel. Old Hate. New Rate. s. d. s. d. Over 1£ lb. and up to 3 lb. . . . . 0 6 0 7 „ 31b. „ 7 lb. .. .. 1 0 1 2 „ 7 lb. „ 14 lb. .. .. 16 19 „ 14 lb. 21 lb. .. .. 2 0 2 4 „ 211b. „ 281b. .. .. 2 6 3 0