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.

[11] The economy gradually improved and in 1895 the Liberal Government of Premier Richard Seddon appointed Alfred Cadman as the first Minister of Railways.

Paeroa, Taumarunui, Ohakune, Taihape, Marton, Feilding, Palmerston North, Levin, Wellington Thorndon and Lambton, Masterton, Woodville, Dannevirke.

Hastings, Napier, New Plymouth, Stratford, Hāwera, Aramoho, Whanganui, Nelson, Christchurch, Ashburton, Timaru, Oamaru, Dunedin, Milton, Gore, and Invercargill.

[17] Non-essential rail services were curtailed as more staff took part in the war effort, and railway workshops were converted for producing military equipment, on top of their existing maintenance and construction work.

The section was electrified at 1,500 V DC, due to the steep grade in the tunnel, and included its own hydro-electric power station.

Gordon Coates, on 24 October 1922, as Minister of Public Works, in introducing his Main Highways Act, said, “I say the day will come when it will be found that through the use of motor transport certain railways in New Zealand will be relegated to a secondary place altogether, and probably will be torn up, and we shall have motor traffic taking their place.”[22] Section 12 of that Act allowed for government borrowing and Section 19 required local councils to provide half the cost of road improvements.

The reports only significant change was the proposal of a Cook Strait train ferry service between Wellington and Picton, to link the two systems up.

They were not well suited to New Zealand conditions: they had overly complex valve gear, were too hot for crews manning them and too powerful for the wagons they were hauling.

[3] In 1933 plans for a new railway station and head office in Wellington were approved, along with the electrification of the Johnsonville Line (then still part of the North Island Main Trunk).

[43] As part of attempts by NZR to win back passengers from private motor vehicles, the same year the first 56-foot carriages were introduced.

Garnet Mackley was appointed General Manager in 1933, and worked hard to improve the standard and range of services provided by the Department.

This led to the coining of the phrase "KB country" to describe the area, made famous by the National Film Unit's documentary of the same title.

The war created major labour shortages across the economy generally, and while considered "essential industry", railways were no exception.

His successor, H.C. Lusty, terminated the contract and entered into an agreement with General Motors for the supply of 40 EMD G12 model locomotives, designated by NZR as the DA class.

On 3 November of the same year the 8.798 kilometres (5.467 mi) long Rimutaka Tunnel opened, greatly reducing transit times between the Wairarapa and Wellington.

On 6 October 1952 the Kinleith Branch, formerly part of the Taupo Totara Timber Company Railway, was opened to service a new pulp and paper mill at its terminus.

The line was primarily built to service the Tasman Pulp and Paper Mill in Kawerau, with several loading points along its length.

[47] The line's success led to several Taupo Railway Proposals being put forward, with extensions of the branch being mooted at various times.

[49] The service was very successful, leading to criticism, when the Wellington–Lyttelton overnight ferry was withdrawn, that NZR was competing unfairly with private operators.

Before the Aramoana was introduced, NZR could not compete for inter-island freight business, and the rail networks of both the North and South Islands were not well integrated.

[50] In 1968 the "Blue Streak" refurbished railcars were introduced to the Wellington–Auckland run, having failed to raise patronage between Hamilton and Auckland.

[51] In 1970, a red, black and white corporate logo designed by Barry Ellis was introduced and a new Passenger Division was established.

[54] NZR introduced its first purpose-built container wagons, the UK class, for the growing traffic that was quickly changing freight patterns.

In reaction to this, the government attempted to control inflation by fixing prices; in 1972 it was decided that NZR could only charge for its services at no more than 1971 rates, despite rising fuel and labour costs.

This change took effect from 1977,[55] and greatly increased competition for NZR on key routes between larger centres within 150 km of each other—routes such as Auckland–Hamilton, Hamilton–Tauranga, Wellington–Palmerston North and Christchurch–Ashburton.

[58] The SRA's system introduced in 1986 was largely based on TMS,[58] with NZR providing training, software and consulting during its implementation.

[60] Following the increase in distance for road transport licensing in 1977, NZR General Manager Trevor Hayward published a pamphlet entitled "Time for Change".

[55] While Hayward was not against road transport deregulation, he was in favour of greater investment in NZR to meet freight requirements and shutting down uneconomic services.