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The erection of the following new buildings was in progress at the end of the year : Christchurch (Chief Post-office), Dunedin (store and workshops), Invercargill (Chief Post-office), Katikati (post-office and quarters), Lower Hutt (post-office), Mosgiel (post-office and Postmaster's residence), Mount Albert (automatic exchange), and Te Kuiti (post-office). Major additions to the Auckland Chief Post-office building and the Ponsonby automatic exchange and major alterations to the Auckland (Newmarket) store and workshops buildings were in progress at the end of the year, as well as alterations to the Chief Post-office building at Timaru. The post-office buildings at Katikati and Tarawera were destroyed by fire on the 12th October and the 27th October, respectively. SUGGESTIONS BO ART). Some 201 suggestions for the better working of the Department were received from officers during the year, and six awards, involving a total sum of £19, were made for meritorious proposals. POST-OFFICE HOURS: HALF-HOLIDAY. In view of the urgent need for conserving man-power following the enlistment of a large number of the Department's officers, it was found necessary early in the year to introduce a half-holiday (generally a Saturday) at all but the principal post-offices. POSTAL SERVICES. POSTAL CONCESSIONS TO MEMBERS OF ARMED FORCES, ETC. A further reduction was made in April, 1940, in the postage rates on parcels for members of the armed forces overseas, irrespective of destination. The rates were reduced from Is. 6d. to Is. for a 3 lb. parcel, and from 3s. to 2s. for a 7 lb. parcel. Additionally, provision was made for the acceptance, in exceptional circumstances, of parcels up to 11 lb. in weight. Following negotiations with the United Kingdom and the Commonwealth Governments, a 9d. air-mail rate was introduced in November for letters not exceeding half an ounce in weight addressed to members of the armed forces overseas, subject to the condition that such letters are despatched by the Empire (including trans-Tasman) air service. In February, the concession was extended to include air-mail letters addressed to members of the British merchant service overseas. The usual fee for the redirection of parcels has been waived in respect of those addressed to members of the armed forces redirected within the Dominion or to an overseas destination. INLAND MAIL-SERVICES. Contracts covering the performance of inland mail-services in the South Island expired on the 31st December last, and the services were relet for a further term of three years as from the Ist January, 1941. The number of rural boxholders continues to increase. At the end of March, there were 33,383 boxholders, representing an increase of 897 compared with the number as at the 31st March, 1940. OCEAN MAIL-SERVICES. Notwithstanding the disturbed conditions occasioned by the war, frequent mail exchanges were made throughout the year with Great Britain, Australia, the United States of America, and other overseas countries. A small mail for the Middle East and a few mails for Great Britain were lost in transit through enemy action. It was particularly unfortunate that among the mails lost was a large portion of the Christmas postings both from New Zealand to the United Kingdom and from the United Kingdom to this country. AIR MAILS. Inland. The volume of correspondence despatched by the inland air services showed a steady increase during the year. This can be attributed to two main factors —the operation, since November, of the Auckland-Wellington-Dunedin service on the basis of five trips weekly instead of thrice weekly, and the decision of Government that correspondence for despatch by air on the trans-Tasman or transPacific air services be given air transmission on the inland services when there would be acceleration in transit time. For the twelve months ended 31st March, 1941, the weight of letters carried on the inland air services was 44,645 lb. In addition, 5,688 parcels were conveyed by the services. Empire Air Service. Increasing use was made during the year of the Empire air service. Unfortunately, the Egypt - United Kingdom section was suspended on the 10th June, 1940, following the outbreak of hostilities with Italy. To maintain a connection with the United Kingdom, arrangements were, however, later made to despatch mails by air via Egypt to Capetown and thence by sea to the United Kingdom. So far as New Zealand is concerned, the Empire air service is used principally for the forwarding of correspondence to the New Zealand Expeditionary Force in the Middle East. With a cheap rate in operation for letters sent by this service to members of the armed forces overseas, the volume of such correspondence increased rapidly. During the year approximately one million letters were despatched to the New Zealand Base Post-office. The service provided a regular and rapid means of communication, the transit time for air mails to and from the Middle East averaging approximately twelve days,

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