D.—2

Recently arrangements have been come to with the representatives of the Canadian Government railways and shipping service and of the Canadian Pacific Railway Company for a reciprocal interchange of advertising-matter. These arrangements provide that the Railway Department in New Zealand will display posters and distribute literature for these two corporations, and they will in return do the like for the Department. To take full advantage of these means of publicity I recently gave instructions for the preparation of a booklet of the folder type, for the purpose of advertising the New Zealand, railways, and when ready this will be widely distributed by these means. All the important shipping companies and tourist agencies with New Zealand interests have also promised to assist in the distribution, practically throughout the world, of this booklet, and any other literature which the Department may supply from time to time. By arrangement with the Tourist Departme»t the Department is also showing in railwaycarriages a series of views illustrating and advertising New Zealand tourist resorts. An exhibit of the work done by the Advertising Branch was displayed at the Christchurch Exhibition in November and December, and as a result a considerable amount of new business was obtained. After payment of all working-expenses and making due allowance for depreciation, a profit of £9,600 was obtained on the year's working. The expansion of the business necessitated additions to the equipment, the enlargement of the studio, offices, and shop, and additions to both, the indoor staff and salesmen. Refreshment Branch. The work of this branch was satisfactorily carried, out during the year, and its operations have been extended as opportunity offered, resulting in a higher standard of service to the public. Lighting Carriages. It was decided during the year to substitute electric for gas lighting on the Auckland-Wellington Main Trunk express trains, and an order for the necessary material has been placed with a British manufacturer for early delivery. Housing. Since the inception of the Architectural Branch, which has charge of the housing operations of the Department, the following important works have been carried out: — Cottages have been built as under : Wadostown, 4 ; Kaiwarra, 44 ; Petone, 1 ; Foxton, 3 ; Marton Junction, 20; Taihape, 10; Ohakune, 15; Taurnarunui, 17 ; Te Kuiti, 15; Frankton Junction, 33; Auckland, 3 ; Topuni, 1 ; Mamaku, 6 ; Lyttolton, 10 : total, 182. Other works.—Kaiwarra : Formation of roads ; drainage system for cottages. Marton Junction : Hostel for men. Frankton Junction : Office for Architectural Branch ; office for Stores Branch ; house-building factory; factory, timber-drying kilns ; factory, stacking-yards and trolly-roads ; sawmill buildings; sawmill stacking-yards and trolly-roads; factory and sawmill, fire-prevention service; factory and sawmill, drainage system ; electric substation and battery-charging buildings ; blacksmiths' shop ; timber-drying racks ; latrines for factory and sawmill ; sawmill log-deck;; sawmill sorting-table; sawmill loading-bank ; factory, installation of shaving-exhaust system ; factory, racks for storage of piping ; sawmill, overhead covering for live rolls and sorting-table ; Otira : Refreshment and dining room ; storeroom ; girls' hostel; men's quarters ; ftuming to carry creek water. Portable huts : Sixteen constructed. The machinery at the house-factory, which is of the very latest description and all designed with a view to labour-saving, has been gradually put into operation and tried out, with excellent results. The output has gradually gone up until it has now reached 30,000 ft. of manufactured material for house-building per day. It is expected to further improve on this to 40,000 ft. per day, which will be the equivalent of two houses all ready to put together. The rate of 30,000 ft. per day is in excess of tho estimated output of 400 houses per annum by the factory. Two weeks ago a start was made on the manufacture of materials for fifty houses. Already more than one-third of the factory work on these houses has been completed, proving beyond a doubt the capacity of the factory to do what is required of it. Settlements at the following places have been planned, surveyed, and laid out, including the construction of roads, drainage schemes, and recreation reserves, viz. : Frankton Junction, Te Kuiti, Taihape, Taurnarunui, Ohakune, Marton Junction, Foxton, Kaiwarra, Wadestown, Maungaturoto. The work of erecting fifty factory-out houses at Frankton Junction is also in hand, in addition to nine at Maungaturoto and four at Helensville. Refreshment-rooms, stores, and hostel are also in hand for Maungaturoto. Lands for the laying-out of other settlements have been inspected, and in some cases plans have been prepared. During the year twenty-two houses have been completed, one of which was constructed on the cut-to-fit principle, the timbers all being cut to template at the Department's factory at Frankton Junction. Refreshment-room, girls' hostel, men's quarters, and stores have been erected at Otira. A system of house-drainage has been carried out at Ohakune, and a complete sewerage system has been installed at Frankton Junction to serve the houses erected by the Department. Additional works of an extensive character have been carried out at the Department's sawmill at Frankton Junction, and an office has been erected for the Stores Branch at that centre. The house-factory

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