D— 2.

ANNUAL REPORT OF THE GENERAL MANAGER OF THE NEW ZEALAND GOVERNMENT RAILWAYS.

The Hon. the Minister of Railways. New Zealand Government Railways, Head Office, Wellington, 31st August, 1937. Sir, — Ī have the honour to report on the working of the railways for the financial year 1936-37 and in this connection have pleasure in drawing attention to the fact that the accounts for the year again show an increase in gross revenue in comparison with the previous year. The total revenue actually exceeded the estimate made in the report for the previous year by £94,951. The revenue for the year was £7,790,651, as compared with £7,004,316 in the previous year, an increase of £786,335 (11-23 per cent.). The net revenue was £90.3,808, as compared with £1,051,477 for the previous year, a decrease of £147,619. From Ist July, 1936, all salaries and wages were restored to the 1931 level, while the introduction of the forty-hour week as from Ist September, 1936, increased the expenditure still further. The expenditure under these headings amounted to £431,198. When allowance is made for this additional expenditure and for the fact that the infantile-paralysis epidemic which broke out in the South Island early in December, 1936, adversely affected the passenger revenue to an extent of not less than £100,000, it will be seen that the results of the year's operations must be regarded as very satisfactory. Further comments on the finances of the Department will be made later in this report under appropriate headings. FINANCIAL. On the 31st March, 1937, the capital invested in the lines open for traffic, including the steamers and plant on Lake Wakatipu and other subsidiary services, was £54,696,437, as compared with £54,253,059 on the 31st March, 1936, an increase of £4-43,378. The principal additions to capital during the year were on account of the following major works Papakura-Horotiu duplication, £19,749 ; Turakina-Okoia grade easement, £32,346 ; Wellington new station and yard, £218,752 ; Wellington-Paekakariki electrification, £73,542 ; and WellingtonJohnsonville electrification, £27,172. The financial results of the operations for the year ended 31st March, 1937, were as follow :— Year ended Year ended 31st March, 31st March, Variation. 1937. 1936. £ £ £ Gross revenue .. .. .. .. .. 7,790,651 7,004,316 +786,335 Gross expenditure .. .. .. .. .. 6,886,793 5,952,839 +933,954 Net revenue .. .. .. .. .. 903,858 1,051,477 —147,619 Interest charges .. .. .. .. .. 2,309,754 2,300,051 + 9,703 Excess of interest charges (at 4J per cent.) over net revenue 1,405,896 1,248,574 +157,322 Renewals, Depreciation, and Equalization Reserve Accounts. During the year the sum of £204,412 was charged against revenue for renewals, and the amount expended from this account for track renewals was £206,480. The credit balance at 31st March, 1937, was £748,467. The sum of £615,125 was charged against revenue on account of depreciation. The position with regard to the Equalization Accounts is as under :—

ii—l 3. 2.

IX

Credit Balance r , , „ ... Credit Balancp Account. broughtforward at 31st March from 1936. 193b-37. 1936-37. 1937 £ £ £ £ Slips, Floods, and Accidents .. .. 102,753 19,800 68,406 54,147 Workers'Compensation .. .. .. 45,217 39,997 40,997 44,217 Insurance .. .. .. .. 93,198 11,177 5,916 98,459 241,168 70,974 115,319 196,823