D.—l.

The demand for telephone-exchange service has shown little diminution during the year, the net gain in subscribers totalling 6,814, as against 7,546 for the previous year. The grand total of telephone stations (main and extension) in the Dominion on the 31st March, 1941, was 228,346, which is 10,477 in excess of the previous year's figure. The whole of the equipment for the new automatic-telephone exchange at Gisborne, which was ordered in October, 1938, has been received, and the installation work is nearing completion. It is expected that this exchange will be cut over to automatic working in July, 1941. Practically the whole of the automatic switching-equipment ordered in 1939 for exchanges in the Auckland metropolitan area has been delivered, and a ■comprehensive programme for the extension of the automatic switching system in that area is being proceeded with as rapidly as possible. The first stage of this programme comprises the installation at the Auckland Central exchange of one thousand lines of equipment specially designed to deal with heavy traffic loads, such as groups of business telephone connections, which were cut into service in April, 1941, in replacement of temporarily arranged equipment; and the replacement of the existing switching apparatus in the Devonport and Onehunga exchanges by modem 7a2 type rotary equipment which will be brought into commission in June, 1941. Additional equipment comprising two hundred individual lines has also been installed at the Mount Eden exchange ; and at all main exchanges in the area the old type friction-driven registers have been replaced by 7a2 registers and link circuits. Additional switching-equipment was also provided during the year at a number of other automatic exchanges throughout the Dominion, and new magneto telephone-exchanges were opened during the year at Parakao and Hanmer Springs. DEVELOPMENT OF TOURIST RESORTS. The expenditure for the year ended 31st March last was £21,575, as compared with £24,892 for the previous year. The expenditure during the year under review included extensions to the Rotorua electric system, additional store-room accommodation and the installation of freezing plant at the Chateau Tongariro, formation of roads and tracks in the Rotorua district and in the Tongariro National Park, also the completion of construction work on the reservoir for the water-supply system at Rotorua. LANDS-IMPROVEMENT. Activities under this vote consisted mainly in the continuance of works which were in hand during the preceding year, although a number of miscellaneous improvement works were also undertaken in cases where urgent remedial or protective measures were considered necessary. Sand-dune reclamation in the North Auckland, Auckland, and Wellington districts was continued, and in the two first-mentioned districts tidal-fiat reclamation was undertaken for the purpose of bringing into use what would otherwise remain as waste areas. Willow-clearing from rivers and streams and drainage of waterways and swamp lands were also features of lands-improvement work carried out during the year. The water-supply scheme for the Hauraki Plains East district was completed, and a similar undertaking in the Awatere County is approaching completion. In order to improve flood conditions in the Manawatu River, a contract was arranged for excavating the Whirokino Cut, near Foxton. This new channel is so designed as to conform to any major control scheme which may be adopted in respect of the Manawatu River flooding.

XXII