1).—2

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Frankton Station-yard.—Extensive alterations were made to the yard during the year, considerably increasing the accommodation. Palmerston North New Yard.—This work, not being so urgent as other works in hand, has not yet been tackled on a large scale. Wellington Station and Yard.—The concrete retaining-wall for the reclamation was finished during the year, and good progress is being made with the reclamation. During the coining year it will be possible to make a start with the new goods-sheds and yard, which must be built before the new passenger terminal can be started. Christchurch.—The new marshalling-yard at Middleton was almost ready for use at the end of the year. Burke's-Ravensbourne Duplication. —Work was continued on the earthwork for this duplication during the year. Workshops. —During the year contracts were entered into for building new workshops at Otahuhu, Petone, Aldington, and Hillside. Siqnals, &c. —-Automatic colour-light signalling was brought into operation during the year between Westfield and Otahuhu. Traffic is now controlled by — Miles. Tablet system (single line) .. .. .. .. ..1,744 Lock and block (double line) . . . . . . . . . . 16|-Three-position upper-quadrant and colour-light signals—■ .. Single line .. .. ~ .. .. .. .. 126 Double line .. .. .. .. .. .. .. 33 Thirty-eight miles of poles and 550 miles of wire were erected during the year. Metallic circuiting was completed on several sections. £16,339 was spent on electric lighting during the year, and the adoption of the system of floodlighting for several big yards was decided on and the necessary equipment was ordered. During the year a large number of motors for working the machines in the various shops has been installed, and contracts were let for the supply of electric motors for the new workshops. HOUSING. During the year 300 houses were cut at the Frankton Junction Housing-factory, and 119 which had been cut the previous year were in stock on the Ist April, 1926. For the Department 237 houses were erected during the year, and for the Hutt Valley Honorary Housing Committee 122, making a total of 359 houses. Since the inauguration of the housing scheme the total number of houses erected is—Departmental, 965 ; non-departmental, 122 : total, 1,087. Hot- and cold-water services and baths have been provided in all houses, and, where available, electric light and sewerage have been installed. The total quantity of timber which passed through the big planer during the year was 5,894,100 lineal feet, averaging 18,831 lineal feet per working-day. In connecting with the various railway settlements 70| chains of roading have been done. STAFF. The total number of staff employed on the 31st March, 1927, including those engaged on works chargeable to capital, was 18,652, and the average number actually at work throughout the year was 18,458, as compared with 17,990 the previous year. The average number of men engaged on works charged to capital was 1,239, as against 1,058 last year. Sixty-seven members of the Second Division were promoted to the First Division, 299 members resigned, 137 retired on superannuation, 54 died, 62 were dismissed, and 523 engaged. The sum of £34,810 was paid under the Workers' Compensation Act during the year to members who sustained injuries in the course of their duties. The Board again desires to gratefully acknowledge the continued good conduct and the loyalty displayed by members in all ranks of the service, and particularly in connection with the manner in which their duties were performed during the visit to New Zealand of Their Royal Highnesses the Duke and Duchess of York. Throughout the year the relations existing between the management and the staff were harmonious, and no industrial troubles were experienced. Various alterations to the schedule of pay, regulations, and conditions of employment were made during the year, resulting in substantial benefits to the staff. The amended system of discipline foreshadowed in the report of last year has now been brought into operation, and is working smoothly. Under this system discipline by means of monetary fines is abolished, punishment, except in major cases, being inflicted by means of demerit marks. Good conduct of members is rewarded by merit marks, which act as a set-off against demerit marks. By this means members who, as the result of delinquencies have had demerit marks recorded against them, may by consistent good conduct purge their records of such demerit marks. It is confidently anticipated that the new system, which is in their interests, will be appreciated by members, and that they will give the Department their whole-hearted co-operation to ensure the success of the scheme.