D.—2,

The average late arrivals of the principal trains was as follows :— Mins. Mins. For long-distance passenger trains ... ... 1*18 against 1 79 last year. For suburban trains ... ... ... ... O57 „ 0-78 „ For long-distance mixed trains ... ... 1'25 „ 171 „ The record is all the more remarkable by reason of the fact that it includes all delays, from floods, slips, and every other cause arising, throughout the year, and it furnishes a complete and effective answer to the statements that are frequently made anent the late running of the trains. The traffic continues to maintain that buoyancy for which it has become remarkable during the past few years, and has again very largely exceeded that of any previous year. Notwithstanding the heavy passenger traffic induced by the festivities occasioned by the visit of their Royal Highnesses the Prince and Princess of Wales (then the Duke and Duchess of York), the departure of two South African contingents, and the occurrence of two Easter holiday periods in the fiscal year 190'2, the number of passengers carried last year exceeded that of 1902 by 219,254, and gave an increased revenue of .£832. The coaching and goods traffic also show large increases under each of the respective headings, grain alone excepted. This latter item shows a decrease of 94,969 tons. The increased revenue derived from coaching traffic amounted to £7,712, and from goods traffic to £87,061. A noticeable feature of the year's business has been the increase in livestock and mineral traffic; the increase in cattle being 19,003 head ; pigs, 6,685 head; sheep, 1,096,473 head; and minerals, 160,633 tons. The increase in sheep is unprecedented in the history of our railways. The rolling-stock has been increased by 10 locomotives, 45 bogie cars, 13 bogie brake-vans, 2 Fell incline brake-vans, 537 wagons, and 391 tarpaulins, all of which have been turned out of the Railway workshops. 221 locomotives, 437 carriages, 137 brake-vans, 3,804 wagons, and. 5 travelling cranes have now been supplied with Westinghouse brake, 636 vehicles with Pintsch gas, 373 second-class cars with cushions, and 232 cars with lavatories. The number of lavatory cars now in use represents 40 per cent, of the bogie-car stock, and further cars are being fitted. With- a view to meeting the demands of the traffic for greater tractive power on the Rimutaka Incline, two of the heavy goods-engines, Class B, have been converted to tank-engines, and, together with one Class W engine, have been placed on the run between Cross Creek and Summit. These engines have proved a great success on the incline. There are now nine locomotives available for use on that portion of the line —viz., 6 Fell, 2 We, and 1 W — which gives ample margin of haulage-power. The highest tonnage yet hauled up the incline in one day was 2,000 tons. This was taken without a hitch, and without calling the full available engine-power into play. The average number of men employed was 8,875, as against 8,313 for the previous year. During the year 164 members of the permanent staff resigned, 35 died, 66 were retired, 32 were dismissed, and 509 engaged. Two appeals against decisions of the Department were heard by the Railway Appeal Boards, one of which was allowed and one dismissed. The sum of £3,250 has been paid as compensation and compassionate allowances to members retired from the service and the relatives of deceased members of the service during the year. Eight members of the Second Division were promoted to the First Division during the year. Extensions of the railway system amounting to 56 miles were opened for traffic during the year. They comprised Mangaonoho-Mangaweka 9J miles, extension of Main Trunk line to Auckland; Waipara-Scargill 14J miles, and Riverlands-Seddon 13 miles, extensions of South Island Main Trunk line; Stratford to Toko Branch, 6| miles ; and Grisborne to Kaiteratahi, 13 miles. The opening of these lines has had a very beneficial effect on the localities served, and there are already indications that considerable traffic will ultimately result therefrom.

II