1).—2.

is one of the most difficult railway sections in the country. So impressed have I been by the obvious advantages of this form of suburban transport that I propose to introduce a similar form of transport to work the suburban traffic on the Wellington-Paekakariki Section of the North Island Main Trunk line as soon as the necessary vehicles can be obtained. After this is done, and after obtaining further data on the comparative economic costs and utilities of the various types of transport, the desirability of extending the use of electric multiple-unit trains on other suburban routes will be given consideration. STANDARDIZED SUBURBAN TRAIN ACCOMMODATION. A further step in the standardization of passenger-train accommodation in suburban areas was taken in February last, when all trains on the Wellington suburban lines were given one-class accommodation only. The very small proportion of ordinary or season ticket passengers using the first-class cars or compartments on these services showed that much unnecessary haulage was being provided to maintain the two-class accommodation on these trains. I thought it better to standardize on one good type of car, than to continue the old, uneconomic arrangement. The result has been a saving in haulage and maintenance costs and an all-round improvement in the service given to passengers in the suburban areas concerned. I expect to develop this system still further and to apply it in other suburban areas during the present financial year. TRANSPORT DEVELOPMENTS. The inter-relation of the various branches of the railways has its public reaction in the efficiency and volume of transport output. The year just ended has shown the beneficial effect of station, track, rolling-stock, signal, and siding improvements, in the better time-keeping of trains, despite the increase in the total volume of traffic handled ; and the personnel of the Traffic Branch deserve credit for the skill and efficiency shown in the use of the better facilities now provided to help them in the prosecution of their work. CONFIDENCE IN THE FUTURE. All the foregoing facts indicate that the railways are steadily settling into better shape to deal with the increasing requirements of the public. To show how the traffic position is improving I mention the fact that in the past three years the number of passengers using the railways has increased at the rate of a million a year, and in the same period the work performed in the transportation of goods has also increased. As previously mentioned, I am looking to the railways also to help importantly in the Government's programme for increasing New Zealand's industrial production, and for this purpose it is my aim to ensure that the railways' programme of modernization and extension is well balanced on every side of their many activities and in every district throughout the Dominion—- interlocking all the parts to make the whole great railway machine work smoothly for the good of the public and in effective and helpful co-ordination with the rest of the Dominion's transport. I am looking ahead with a view to keeping the railways up to the standard necessary for dealing with the unfolding of the Dominion's productive capacity, and I am pleased to say that at the present time there is every assurance that the railways will be well equipped for the purpose. SIMPLIFIED RAILWAYS TARIFF. As announced in December last, a simplified tariff was under consideration and, after careful investigation of all possible reactions from what was really a very necessary but also very difficult matter to arrange, I was able, on the Ist July of this year, to bring into operation the promised tariff revision. The main feature of the simplified tariff is that it introduces a system of rating that has long been pressed for by commercial interests by reducing the number of classes for general merchandise from four to two.

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