In taking over the position of General Manager of Railways, I do so with every confidence in the future of the service. The transport position has been considerably clarified in New Zealand during the last few months, and promises opportunities for further co-ordination of effort, in which the Railways, as the backbone of the Dominion transport system, must play a major part.

Having been directly associated with railwaymen all over the Dominion during my whole service with the Department, I know that they will stand loyally and solidly behind me in all efforts to carry out the spirit of the policy laid down by the Board, and that the public will receive from us the best service of which the members are individually capable.

Traffic Review.

The general trade position made it inevitable that railway business should suffer severely during the slump, and from the peak of 1929 the fall in traffic was very rapid. Although the decline has now slackened very considerably, it still continues. The figures published regarding reductions in quantity of traffic handled and revenue received must all be read with the fact of the slump in mind. It would have been far more pleasant to have kept the services running as usual, but it was unfortunately necessary to take action by reducing these wherever possible to the minimum required for carrying on the restricted business. The salutary effect of this action is seen, however, in the improvement in our position, so far as net revenue is concerned, by over £28,000 for the 32 weeks of the current financial year to the 7th November, when compared with the corresponding period last year. The situation has required a reduction in train mileage of approximately one million miles up to the 7th November when compared with the figure for last financial year.

The Board has been much interested to note the effect of the recent general reductions in fares. Whilst the period of their operation has been too short for any definite statement to be made regarding the ultimate effect upon revenue, it is pleasing to find that whereas the decline in passenger revenue was approximately £D40,000 per month during the current year up to the time of introducing reduced fares, the decrease per month during the last two months has been lessened to £30,000. There has been a still further improvement noted in the position regarding the number of passengers carried, the improvement compared with the first four months of this year amounting to over 100,000 in the November four-weekly period.

The Season's Greetings.

The Board desires me to express, on their behalf, through the medium of the Magazine, the Season's greetings to all clients and employees of the Department, and to convey their best wishes to all for a Merry Christmas and a Happy New Year.

In these seasonable greetings my Executive Officers and I heartily join.

General Manager.