D.—2.

CONCLUDING REMARKS AND FORECAST. For the purpose of ascertaining the results of working the capital cost of the lines open for traffic has been taken at £20,692,911. This amount includes the sum of £765,762, representing the cost of the lines formerly owned by the Midland Railway Company, and now incorporated with the Government railway system, also the sum of £15,612, cost of purchase of the Lake Wakatipu plant. The net earnings for the year (£741,917) gives a return of 358 per cent, on the capital cost stated above. In last year's Statement the capital cost of the Midland lines was given as £576,413, the amount they were understood to have cost the colony; but it has since been decided to alter the principle under which the value was assessed, and to put the matter on a definite and proper footing. With this end in view a revaluation has been made, taking as a basis the valuation fixed by the Royal Commissioners, plus capital expenditure incurred on the opened lines during the time they have been in the hands of the Government. The result has been to increase the assessed value to £765,762, which amount is incorporated in the sum of £20,692,911 stated above. The application of the electric-tablet system of train-signalling to our lines is being steadily extended. During the year 74 tablet instruments and 187 miles of line have been fitted up, and tablet working installed between Invercargill and Winton, Makarewa and Riverton, Wingatui and Ida Valley, Addington and Rangiora, Palmerston North and Woodville, Greymouth and Ngahere. Interlocked points and signals have been fitted at Burkes, Kensington, Caversham, Balclutha, Invercargill, Eyreton Junction, Kaitoke, Summit, and Auckland. Further considerable extensions of both the tablet and interlocking are in hand, and will be pushed on as rapidly as possible. Good progress has been made with the preliminary work in connection with the new station at Dunedin. Extensive alterations have been put in hand at Lower Hutt and Petone in connection with the straightening and duplication of the line between Wellington and Lower Hutt. The work will be pushed ahead as vigorously as possible. I propose to ask the House this session for the necessary authority for the duplication of the lines Auckland to Penrose, Christchurch to Rolleston, and Dunedin to Mosgiel. The balance-sheet of the Government Railways Superannuation Fund submitted to the House by the Board of Administration shows that the amount paid by way of superannuation during the year was £6,434 ss. 6d., granted to 184 members, retired voluntarily or by reason of their being medically unfit for further duty; £576 7s. was paid in respect to the widows and families of deceased members, and £244 4s. 3d. as refunds of contributions to the members who have left the Service from various causes before reaching the age at which they could be superannuated. The balance to credit of the fund at 31st March was £40,357 17s. 3d. It is very gratifying to me to be able to state that on the 30th June, 1903, the date on which the optional period for joining the fund expired, only sixty-six eligible members of the whole railway staff of the colony had failed to avail themselves of the right, and are consequently debarred from the benefits of the scheme, which is highly appreciated by the Railway Service. The Fund has proved a great boon to a large number of old and tried servants of the State, who have been able to seek that rest to which their age fairly entitles them, with the full knowledge that they have a certain income for the remainder of their days. With a view to giving greater facilities to long-distance passengers and reducing the time now taken to do the journey from the North to South Island, I have instructed that arrangements be made to put on an additional express train between Christchurch and Invercargill daily. Inquiries are now beingmade with a view to arranging the departure-times from the terminal stations at an hour that will best suit the convenience of the general public. It will be necessary to alter the time of departure of the present expresses so as to fit in with the running of the new service, which will commence on the Ist November. I regret that Mr. W. H. Gaw (Chief Traffic Manager), and Mr. A. C. Fife (Railway Accountant), have found it necessary to tender their resignations and to retire on superannuation owing to ill health. Both gentlemen have been connected with the Department from the very earliest days and served the colony zealously and with great ability and devotion to duty, and I desire to place on record my appreciation of their services.

VI