The Railways hopper wagon" href="http://www.railway-wagon.com/hopper-wagon-1.html">
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Department was formed in 1880 during the premiership of Sir John Hall. That year, the private Port Chalmers Railway Company Limited was acquired by the department and new workshops at Addington opened. Ironically, the first few years of NZR were marked by the Long Depression, which led to great financial constraint on the department.[5] As a result, the central government passed legislation to allow for the construction of more private railways. A Royal Commission, ordered by Hall, had removed plans for a railway line on the west coast of the North Island from Foxton to Wellington. Instead, in August 1881 the Railways Construction and Land Act was passed, allowing joint-stock companies to build and run private railways, as long as they were built to the government's standard rail gauge of 3' 6" 1,067 mm (3 ft 6 in) and connected with the government railway lines. The Act had the effect of authorising the Wellington and Manawatu Railway Company to build the Wellington-Manawatu Line.[6]
The most important construction project for NZR at this time was the central section of the North Island Main Trunk. Starting from Te Awamutu on 15 April 1885, the section - including the famous Raurimu Spiral - was not completed for another 23 years.[7]
The economy gradually improved and in 1895 the Liberal Government of Premier Richard Seddon appointed Alfred Cadman as the first Minister of Railways. The Minister appointed a General Manager for the railways, keeping the operation under tight political control.[8] Apart from four periods of government-appointed commissions (1889—1894, 1924—1928, 1931—1936 and 1953—1957), this system remained in place until the department was corporatised in 1982.[8] In 1895, patronage had reached 3.9m passengers per annum and 2.048m tonnes.[9]
NZR produced its first New Zealand-built steam locomotive, W class, in 1889.
Along with opening new lines, NZR began acquiring a number of the private railways which had built railway lines around the country. In 1886 the Waimea Plains Railway Company acquired. At the same time, a protracted legal battle with New Zealand Midland Railwayhopper wagon" href="http://www.railway-wagon.com/hopper-wagon-1.html">
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Company began, and was only resolved in 1898. The partially completed Midland line was not handed over to NZR until 1900.[10] By that time, 2,000 miles (3,200 km) of railway lines were open for traffic.[4] The acquisition in 1908 of the Wellington and Manawatu Railway Company and its railway line marked the completion of the North Island Main Trunk from Wellington to Auckland. A new locomotive class, the X class, was introduced in 1909 for traffic on the line. The X class was the most powerful locomotive at the time. Gold rushes led to the construction of the Thames Branch, opening in 1898.
In 1906 the Dunedin Railway Station was completed, architect George Troup. A. L. Beattie became Chief Mechanical Officer in April 1900. Beattie designed the famous A class, the first "Pacific" class in the world, and many other locomotive classes.[11]
The first bus operation by NZR began on 1 October 1907, between Culverden on the Waiau Branch and Waiau Ferry in Canterbury. By the 1920s NZR was noticing a considerable downturn in rail passenger covered wagon" href="http://www.railway-wagon.com/covered-wagon-1.html">
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traffic on many lines due to increasing ownership of private cars, and from 1923 it began to co-ordinate rail passenger services with private bus services. The New Zealand Railways Road Services branch was formed to operate bus services.
By 1912, patronage had reached 13.4m passengers per annum (a 242% increase since 1895) and 5.9m tonnes of freight (a 188% increase since 1895
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