D—2

goods-trains. The movement of coal, oil-fuel, and firewood, for example, requires the constant use of a considerable number of wagons, while, apart from the conveyance of railway stores and equipment, work trains engaged in construction and maintenance tasks make considerable use of track, wagons, locomotives, and staff. Further departmental train-mileage is involved at times of floods, landslips, and accidents. This departmental traffic is an important item in the railway transportation effort, but I do not think the fact has been brought to notice previously in the annual railway statement. To show its extent I would mention that in this financial year the departmental net tonnage was just over 1,000,000 tons. The traffic in railway coal alone was a major item, 433,385 tons being hauled in the North Island for an average distance of 72 miles and in the South Island 243,693 tons for an average haul of 166 miles. That these are substantial figures will be realized if it is remembered that the revenue-earning net tonnage was just under 10,000,000 tons. In addition to the conveyance of departmental traffic, maintenance and construction work trains were on the road for 25,224 hours this year. Subsidiary Services It is more convenient to deal with income and expenditure together when reviewing subsidiary services and, accordingly, my report thereon follows " expenditure," which is the next subject in this report. EXPENDITURE (WHOLE UNDERTAKING) The gross expenditure for the year, £20,596,740, was the highest ever recorded. It exceeded that of last year, which was also a record, by £896,146. Of the increase, railway operation accounted for £572,657 and subsidiary services £323,489. Complete details are given in Statements Nos. 2, 3, and 3a, but for convenience of reference the following table supplies a broad classification of the expenditure and provides a comparison with last year :

Each of the above items of expense, calculated as a percentage of the total expenditure -and also of revenue, is shown again immediately hereunder :

11

— 1950. 1949. Variation. Wages .. .. .. €oal and oil (loco.) Stores and material .. .. ... Depreciation and renewals Miscellaneous £ 12,241,334 1,791,064 3,246,020 1,668,559 1,649,763 £ 11,497,192 1,891,393 2,974,208 1,593,057 1,744,744 £ + 744,142 -100,329 +271,812 + 75,502 - 94,981 Per Cent. 6-47 5-30 9-14 4-74 5-44 Totals 20,596,740 19,700,594 +896,146 4-55

—- Expenditure. Revenue. Per Cent. Per Cent. Wages 59-43 62-64 Coal and oil (loco) 8-70 9-16 Stores and material 15-76 16-62 Depreciation and renewals 8-10 8-54 Miscellaneous 8-01 8-44 100-00 105-40