The permanent way is roported to be in good working order, except on some o£ the branch lines, which, owing to the light L ness of thejrails and sleepers used in their construction, are becoming seriously im paired. A very large number of sleepers have required removal during ,the past four months, and it is worthy of note that they were chiefly American timber. These sleepers were only imported as an experiment, and at a time when the pres sure was great and the local supply wholly inadequate. ; The traffic returns for July, August, and September, show a considerable fall ing off compared with the corresponding period of last year. No doubt this is owing to the financial depression, but

much may be expected from the .: grain; traffic of- the approaching -. i season, which bids fair to be at -'"I prosperous one.., A good harvest,, and the % revival of fr^e'rysym atom's of .wh'icli are \,:"5 Star^" spec^ il * pl^ ddce h W fe * T3  lam S\ a p° s ay that we are extending '■"■] the use of New Zealand coal on our rail wrys, and after the expiry of existing contracts for the supply of Australian coal our arrangements will enable us •to dis pense to a large extent, if not altogether, thousand pounds a year, \" '" " -v: ' "■ -■•■-•' I find that the cost of railways open for traMc.at the end of the .^t.fESt. year is £8,600,41? 03 ' -4d, , inblulnsT ; ' " l £633,229 Os 4d for inter^sfc- tWo of opening. The gross traffic returns amounr to £1,729,955 3s U, 'from which must be deducted £1,250,897 5s 7d for working expenses .'and maintenance] ; leaving £479,047 1 18s for. '■ payment o of interest on , - the :■. loans ont .-^ -. of which these railways were'madq^/^ ?^Kd the past yea * the recei PJ? hare beW '-' ±-758,096. 85.2 d,, and the working expend £545,478 15s od, leaving tf Burp'lus of £212,617 13s 2d. .Thisamquritrepfeaeritfl 2.054 per cent, on, the, .average cost* of construction, leaving. 2. 946 ; per cent, tp\bp ;.tr supplied from other sources* Sir, wq'sH,"}/ believe that. New Zealand. is r a country ; ot .,'.(> such great, resources that in > the course oi .•;■'■•, ).'■ years even those railways wHich. are. 