D—2

Approximately 75 per cent, of the decrease in sheep took place in the Otago and Southland areas where road competition has been considerably extended. The Transport Licensing Authority has increased the number of lorry licences for services in competition with the railways and has also extended their areas of operation. It is an interesting commentary that in the Invercargill district the number of sheep and pigs carried in the year ended 31st March, 1946, was almost twice the number carried this year. The live-stock figures showed an increase of 28,191 head in the North Island and a decrease of 428,476 in the South Island. The effects of road competition will show up markedly in the investigation now being made into the economics of the continued operation of branch lines. Lime traffic decreased by 56,689 tons, from 710,422 tons last year to 653,733 tons this year, but on the other hand the traffic in artificial manures rose steeply in the North Island. Lime tonnage decreased in the South Island by reason of road competition in Southland. The total increase of artificial manures and their raw materials for both Islands was 158,154 tons or 19-18 per cent. —i.e., from 824,675 tons in 1949 to 982,829 tons in 1950. During the war years supplies of fertilizer were rationed, but with the restoration of the Nauru Island installations the situation has returned to normal. Coal tonnages and revenue and comparisons with last year are given in the following table :

The goods revenue is materially affected by the operation of road services in competition with the railways. There appears to exist a general impression that the railways are fully protected against competition by what is known as the " 30-mile restriction." It must be pointed out, however, that the provision that goods cannot be carried for more than thirty miles alongside the railway is one from which the Licensing Authority has full power to grant exemption ; he also has power to grant route licences for distances of over 30 miles, and both these powers are unfettered except for the right of appeal. At the present time large numbers of exemptions from the 30-mile restriction are in force and a substantial amount of competition with rail is carried on by route licensees,, the main competitive routes being : Auckland-Helensville. Auckland-Pukekohe-W aiuku. Auckland-Paeroa - Te Aroha. Auckland-Tauranga. New Plymouth - Hawera. Wellington-Levin and all intermediate points. Invercargill-Queenstown. Departmental Goods Traffic In concluding the goods section of my report, I should mention that a great deal of purely railway or departmental train-mileage is involved in the production of revenue train-mileage and that a large tonnage of departmental goods is conveyed on revenue.

10

Section. 1950. 1949. Variations. North Island main line and branches South Island main line and branches Nelson and intersection Tons. 857,551 1,269,688 3,866 1 Tons. 793,545 1,287,092 3,601 Tons. + 64,006 -17,404 + 265 Per Cent. 8-07 1-35 7-36 Total 2,131,105 2,084,238 +46,867 2-25 Revenue £ 1,627,695 £ 1,572,517 £ +55,178 3-51