REPORTS OF THE OTAGO MINING COMMISSION, AND OF THE COMMISSIONERS ON GOLD FIELDS WATER SUPPLY.

Appendix to the Journals of the House of Representatives, 1871 Session I, G-18

G.—No. 18.

REPORTS OF THE OTAGO MINING COMMISSION, AND OF THE COMMISSIONERS ON GOLD FIELDS WATER SUPPLY.

PRESENTED TO BOTH HOUSES OF THE GENERAL ASSEMBLY, BY COMMAND OF HIS EXCELLENCY.

WELLINGTON.

1871.

G.—No. IK

His Honor James Maeandrw, Esq., Superintendent, and the Executive Council of Otago. Gentlemen, — Yonr Commissioners having concluded the investigation committed to them, so far as relates to that part of it which is likely to be dealt with by the Legislature during the next session, have the honor to report as follows : — They find the existing law so unsatisfactory and conflicting in many respects, and so interwoven with matters not strictly connected with purely mining legislation, that they have been led to search for a more intelligible and satisfactory precedent among the various mining statutes of other countries, ami particularly those of the Colony of Victoria, where greater attention and ability have been devoted to the subject than in any other gold-producing country. With the view of simplifying the task of legislation, and of separating the subject from other questions which might be matter of party dispute in the Legislature, your Commissioners recommend that the new statute should bo separated from some matters at present mixed up with Gold Fields legislation. Tho first is that of pastoral tenancy and agricultural settlement on Gold Fields. Your Commissioners believe that it would be well to dissociate these from mining law ; but at the same time, seeing that they involve large questions of policy, and affect important public and private interests, they recommend that those parts of the existing Acts should not be repealed or altered, unless, or until, the Legislature sees fit to enact a comprehensive measure on the subject, at least equally favorable to the interests of settlement. The question of mining on Native Lands has been mixed up with mining legislation, and, though referring to the same industry, it deals with it under circumstances so entirely different from those existing mother j>arts of the Colony, that it may bo regarded as a different subject. Your Commissioners anticipate tho greatest difficulty in getting a measure passed by the Legislature, generally adapted for the mining industry of the Colony, while the subject is mixed up with the special contracts and financial arrangements of the Province of Auckland. Your Commissioners strongly recommend that the new mining statute should not be applicable to those parts of the Colony where the Native title has not been extinguished. Knowing the difficulty, and even danger, of striking out a new policy in dealing with one of the great industries of the Colony, the time, care, and ability already bestowed on the subject in the Colony of Victoria, would seem to justify your Commissioners in recommending that the path marked out by legislation there, should chiefly be followed in legislating, with such alterations as may be necessary to make it applicable to the circumstances of the Colony, or suggested by later experience ; and, believing that the development of Gold Mining is of such importance to the Colony, that it would justify the Legislature in sanctioning for that purpose an invasion of the stricter rights of private ownership, and seeing that in making such a recommendation they are supported by the precedents of the immemorial custom of the tin-producing portions of England and other European Countries, and also by recent legislation in tho Colony of Victoria, they recommend that the Legislature should take steps to enable Gold Mining to be carried on upon private as well as upon Crown Lands, and that the miner should have the authority and protection of law for his operations and rights, over all Crown Lands within the Colony, and not merely within portions proclaimed and set apart as Gold Fields. Having spoken of the above principles, which ought, in the opinion of your Commissioners, to guide the draftsman in preparing a new Act, and Pailiament in passing it, the subject of Mining Legislation divides itself into two principal branches, namely—lst. The tenure of Mining property, involving the whole question of the rights and obligations of miners ; and 2nd. The administration of Justice with relation to those rights and obligations. Referring to the first branch of the subject, your Commissioners find that, under the existing law, the whole matter is in a confused and unsatisfactory state. The operation of the Stamp Laws is attended with considerable hardship and inconvenience to the general public, and more particularly to the miners, but the harshness of their operation is modified by the locun penitenti.ee left for those who, by accident or neglect, may have failed to comply witli their provisions, and the payment of a penalty, in most cases, cures the defect caused by want of attention to the provisions of the statute. But the miner, while he suffers even greater inconvenience from the Stamp Acts than the general public, is burdened with another revenue law (the Miners' Right), far more unjust and bivrdensome in its operations than the Stamp Act, and the neglect of the provisions of which deprives him at once of the means of defending his rights ; it is not the mere pecuniary burden of being compelled to take out a Miner's Right which weighs upon the miner, but the fact that neglect to do so involves the loss to him of all his property and rights, which constitutes the hardship. This is a view of the question which has already forced itself upon the consideration of Parliament, and by Section 5 of "The Gold Fields Act Amendment Act, 18G9," an attempt was made to provide a remedy. Your Commissioners recommend that the matter should be the subject of careful consideration, and that provision should be made for protecting thft revenue (should it be considered necessary henceforth to raise revenue in this way), by means of moderate penalties or otherwise, not involving s'ich grave forfeitures. They arc also of opinion that Miner's Rights should be made available for the occupation of Crown Lands throughout the Colony, without regard to the Province in which they may have been originally issued ; that Miners' Rights should be issued, for terms of years, and consolidated Miners' Rights for the use of public and private companies. In fact, they considered that the provisions of Sections 3 to 23 inclusive, of the Victorian Mining Statute of I 865 should be adopted, with certain additional provisions rendered necessary by the

REPORT OF OTAGO MINING COMMISSION, 1871.

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different mode of mining pursued in Otago, from that usual in Victoria, namely, " ground sluicing." The additional provisions referred to are—l. To give the miners a right to use, to a reasonable extent, unoccupied Waste Lands of the Crown for the discharge of the debris arising from sluicing operations, and a provision for exonerating them from necessarily fouling streams and rivers, in following that mode of mining. Your Commissioners do not pretend to say that such a liability does or does not arise under the existing law, but assuming that it does, it is evident that the Colony, or some large part of it, might be suddenly paralysed by some individual setting the law in motion to stop one of its leading industries. The question of the tenure of mining property is of the greatest importance, aud should receive the most careful consideration in framing a new statute. Upon making the subject clear, well-defined, and intelligible, depends the security of mining property, and the consequent willingness or unwillingness of capitalists to invest money in mining enterprise, either directly or by way of mortgage. The system of tenancy by mere occupancy, adopted by mining custom in California, and to which effect has been given by the decision of the Courts, is well worthy of the gravest consideration. Before concluding this branch of their report, your Commissioners desire, to call attention to the necessity of providing some convenient mode of registration and transfers of mining property. The present law is cumbrous and expensive. The mode, effect, and form of transfer of mining property, whether absolutely or by way of mortgage, ought to be fixed by the statute, and some method devised wdiich will be at once simple and secure. As regards securities over mining property, your Commissioners .suggest that something akin to the Agricultural Produce Liens Act, with local registry offices and well defined districts might be suitable to the requirements of the case. Water Rights. This important branch of mining law has received the gravest consideration from your Commissioners, and has been the subject of much debate, particularly as regards one point. In the existing statute and regulations a reservation is made of two sluice heads of water to be allowed to flow down each stream when required for general use. The Courts have decided, in the few cases brought before them, that this is of the nature of an exception, operative on the demand of any person who might be able to say he required the two sluice heads to flow down. Your Commissioners by a majority have decided that such an exception creates an element of insecurity in the tenure, which operates very unfairly as regards those who have invested their capital or labor in constructing water races. That there is no object of public policy to be served by taking the water from those who have expended capital in diverting it with the view of carrying on mining, to give it to others who may have expended little or no capital, and who do not propose to use it in a way more beneficial to the State than the parties from whom it is taken. Your Commissioners are therefore of opinion that no such exception should be made in Licenses henceforth to be granted ; but they are most anxious to guard themselves from recommending any interference with existing rights or the decisions of the Courts. They believe that the gravest injustice might be perpetrated by an enactment having a retrospective effect; and would desire that in all cases where their recommendations may seem to affect existing interests, the attention of the law officer or other persons having the duty of drafting the new statutes should be carefully directed to the necessity of avoiding giving any retrospective effect to them ; but at the same time where existing water rights have not been affected by the exception, or when the temporary use for which the exception has been brought into operation shall cease, they desire to recommend that the owners of water races may be afforded an opportunity of bringing their tenure under the operation of tho new law. This matter has engaged the particular attention of your Commissioners, because it has been the subject of litigation. Your Commissioners recommend that the tenure of water rights should be by a License for such term of years, not exceeding ten, as may be required by the applicant, at a certain annual rent, or a fixed amount payable by way of premium, having regard to the particular circumstances of each case, and also with a right of renewal of such Licenses from time to time as required. They are also of opinion that such a License should give to the holder the necessary authority to cut, construct, and use water races and divert water, or either, without, and independent of, a Miner's Right. They are also unanimously of opinion that the valuable right to construct races through private lands, first conferred by the " Gold Fields Act of 1865," should be retained, and that for the puposes of this part of the Act mining claims, mining and agricultural (but not pastoral) leases should be deemed private lands to entitle the owners to come under the provisions of the Act, and obtain reasonable compensation for damage done to their property. ' They also consider that this invasion of the rights of private property being based on public grounds, namely, the encouragement of a great colonising industry, it is desirable to give the owners of water races a ri<dit to the land itself and the adjoining land to the distance of seven feet on each side of a water race, or a space fourteen feet wide on any part of which the race might be placed ; and that, in all alienation of land from the Crown, a reservation should be made to the extent and effect above mentioned, and not a mere easement over the land, extinguishable by any lache of the Licensee. That, in fact, such reserves should be made in the same way as roads are now reserved, so that they might henceforth remain as public water ways available for private individuals desirous of prosecuting gold mining or other important industry. They are also of opinion that the right to divert water should not be confined solely to the gold miner. The moist climate and plentiful streams of New Zealand leave abundance for the supply of all branches of industry without any serious encroachment upon the enjoyment of riparian property. They suggest that Licenses for the diversion of water for industrial and domestic purposes should be <*iven as freely as they are for gold mining, having due regard to the interests of each respective industry. Business Licenses. The law regarding carrying on business on the Gold Fields is in a very unsatisfactory state. As it is understood and acted upon in Otago, not only has the vendor of merchandise to pay the license fee. but it is exacted from the agriculturists selling the produce of their own land. The publican and the hawker, who have to pay heavy license fees before they can carry on business on the Gold Fields, have the additional burden of the business license imposed. Neither the blacksmith nor the carpenter, though selling nothing but his labour, has been allowed to escape. Again, your commissioners have to draw attention to the more liberal provisions of the A'ictoria Statute, and strongly recommend them for adoption.

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G—No. 18.

Mining Leases. Your Commissioners are of opinion that to further encourage the investment of capital in mining enterprise, the Governor should have the power to grant leases of auriferous and mineral lands to an extent not exceeding 40 acres in each lease. They are also of opinion that in this Province, at least, the rent of £2 10s per acre per annum is excessive, and ought to be reduced to .£1 per acre per annum. This consideration weighs with them the more, because valuable mineral land, or wdiat may hereafter prove to be such, is freely alienated for ever at the price of £1 per acre. The provisions of the Victorian Statute, subject to the restriction as to the area, and the giving of section twenty-eight a more general applicability to the discovery of deep leads, under all circumstances, accord with the views of your Commissioners. Local Legislation, Mining Board. Your Commissioners have agreed, and their opinion would seem to be justified by the action taken by the Government on the present and previous occasions, that it is necessary to have some permanently constituted body to legislate on such details of mining law as may well be regulated by bye-laws. They are of opinion that such a body should not be left to be constituted by the mere will, evidenced by petition or otherwise, of perhaps a small section of the mining population. If the institution be a good one, it should be compulsory and permanent. They are well aware of the defects of the first attempts in the Colony of Victoria to give effect to a system of local legislation, and desire to be taught by that experience. They consider that such bodies should bo constituted on a large basis ; that the number should not exceed one for each Province or County ; that a certain number,—but never tin; whole of the members—should retire annually : in short, they consider that the provisions of the Victorian Mining Statutes of 1865, with such modifications as may be necessary to make it suitable to the circumstances of New Zealand in the way above-mentioned, is exactly in accordance with their views. Administration of Justice. No part of the A^ictorian Statute has received more full consideration than that part which relates to tbe administration of justice. The manifest defects and imperfections of the Act of 1866 in this respect lnis been a source of complaint, as well to those who have had to administer the law, as to tho public. A ludicrous instance of the carelessness with which the Act was passed, and the absurd consequences which have arisen from its blunders, the 68th Section may be referred to, which enacts, " Every such AVarden shall have power in every case brought before him to make such decree or give such judgment as shall be just, without regard to any rule of law or the practice of any Court of Equity, and to award damages and reasonable costs or direct, payments to be made to either party." This Section is evidently taken from the Victorian Statute, Section 101, which enacts, inter alia, " and in the exercise of its jurisdiction every Court of Alines may make such decree in the nature of an award as may be just and without regard to any rule of law affecting the form only of relief or to the practice of any Court of Law or Equity." The Section of the New Zealand Act referred to has been made the basis of many decisions in the Wardens' Courts, and of an assumption on the part of the Wardens that they had a general equitable jurisdiction which is nowhere expressly given by the Act; and it is only recently, and since some of their decisions have been reviewed by the superior Courts, that they have partially refrained from making orders requiring the performance of acts and assumed duties by persons who had not been brought before their Courts. Curiously enough, this statutory blunder has heen the subject of amendment in "The Gold Fiells Act Amendment Act, 1867 " (No. 2), Section 8. Taking into consideration the great amount of existing machinery for administering justice, your Commissioners do not think it desirable that the subject be further complicated by the establishment of new tribunals. There seems to be nothing in the management of Gold Fields or in the nature of mining tenure requiring a large equitable jurisdiction to be given to inferior Courts. Your Commissioners are of opinion that the Resident Magistrates' Courts have already nearly all the powers necessary for adjudicating upon those matters of dispute which ordinarily arise amongst miners. That power should bo given them to try cases with Assessors, similar to the provisions regarding trials in tho Wardens' Courts of Victoria. The Wardens' Courts would therefore cease to exist in New Zealand, and a great deal of complication and unnecessary difference in practice in the administration of justice would be avoided. Regarding Assessors, your Commissioners are of opinion that the miners would be quite willing to act in that capacity without payment, in cases brought before the Courts, if provision were made for preparing lists from which names could be taken in rotation. A gricultural Settlement. The Commissioners have given this subject their most careful consideration, and are warranted in stating that the Argicultural Leasing Regulations, on the whole, have proved most beneficial in the settlement of bona fide farmers and settlers on the soil. It is, however, true, that instances have occurred, where capitalists have secured large tracts of valuable land by means of dummies, and by the mere fencing of land, using same as grazing paddocks only. The Commissioners have suggested regugulations which, it is believed, will prevent monopoly and evasion of the law, by compelling occupiers to crop 20 per cent of the land taken up by them, before they can acquire a legal estate, and giving them two years to comply therewith. The Commissioners also recommend the reduction of rent payable under leases, believing that such reduction will prove an incentive to settlement on the waste lands of the Crown. The Commissioners also recommend that miners should be permitted to occupy three acres of land for cultivation purposes, under their Minei-s' Right, as the existing regulations, permitting the occupation of one acre, have proved most advantageous, and is calculated to cause the miner to settle permanently. While admitting the great importance of agricultural settlement, and the necessity of giving proper facilities therefor, yet, on the other hand, we desire to record our opinion, that in no case should lands, required for mining purposes, be leased for any other purpose than mining, and the officer administering 2

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the law should ever bear this in remembrance when dealing with applications for agricultural leases. AYe also consider that advertising applications for agricultural leases is an unnecessary tax on the applicant, and should be dispensed with, substituting therefor the posting of notices on a board in the AVarden's office. In conclusion, we strongly recommend that suitable blocks of land for agricultural purposes, with grazing rights, should be thrown open throughout the Gobi Fields for selection under the leasing regulations. Taxation. The oppressive, taxation under which the mining industry labors has been considered by your Commissioners. In addition to the Custom's duties, to which the miners contribute more than any other class of the community, owing to their supplies being chiefly derived from importation—the stamp and other duties and taxes, which they share in common with the rest of the community, they have to pay the gold export duty—a tax upon their labor and upon the employment of capital, which is felt the niore seriously the larger the capital which is employed, a tax upon the gross produce, without regard to the cost of production. The impolicy of this tax has been fully recognised in the neighboring Colonies, and led to its abolition. Your Commissioners recognise under present circumstances the difficulty of reducing a tax upon which the revenue of the other Provinces and of the County of Westland so largely depends ; but trust that some provision for its gradual reduction and final abolition will recommend itself to the Legislature as a matter of good policy and sound political economy. The Miners' Right is another special tax which tho miners are required to pay, and without receiving, under the present law, any compensating advantage. Your Commissionei-s are of opinion that the time has arrived for a reduction in this charge by one-half, especially as the issue of Miners' Rights tor terms of years would prevent any immediate falling off in the revenue. The rents charged for Mining Leases have already been referred to in this report, and in connection with them the amount of deposit required from applicants is felt to be ;i hardship, especially as delay always occurs in refunding such part of it as may be' repayable. The fees charged in the Courts on the Gold Field are considered too high, and capable of considerable reduction. The Stamp Duty creates very great inconvenience to the miners, especially in localities remote from distributing offices; and your Commissioners are of opinion that a uniform charge of one shilling upon all mining transfers would probably briug in quite as large a revenue, be more convenient to the miners, and lead to fewer evasions of the law. Your Commissioners cannot conclude this branch of their report better than by quoting the conclusions of Dr. Raymond, in his report to the Secretary of the Treasury of the United States, where, after an able review of the relations of Government to mining, he concludes as follows :— "1. The assertion of any right of royalty in the precious metals is unfounded in nature, and unwise in practice. The most enlightened nations have abandoned the idea of anything more than a general supremacy of the State over mining, in the interest of the people. "2. The benefit derived by Government from the mines must bo indirect. No tax for revenue should be laid on mining any more than on agriculture." Other portions of the same work amply illustrate the impolicy of fettering mining with restrictions, and burdening it with taxation. Gold Fields Officers. Your Commissioners are also of opinion that it would conduce to the better administration of justice, and tend to make the officers better acquainted with their duties if, instead of being permanently located in one district, they were removed from one district to another, at intervals of not more than three yeai-s. So strongly has tbe advisability of this coui-se been urged upon your Commissioners, that they recommend that immediate effect be given to it in this Province. Chinese. The subject of Chinese immigration is a matter which ought to receive consideration from the Legislature, involving, as it does, grave political and social questions. The jiresence of a limited number in the Colony is not a matter of great importance, although not beneficial, as they eventually leave the Colony, taking with them all the money tbey may have saved, and rarely settle as colonists. But if no check be imposed, they may come in such numbers as may lead to serious difficulty, and check the influx of European immigrants. On these grounds your Commissioners desire to call the attention of the. legislature to the subject. Water Supply. The consideration of the question of water supply having been referred to your Commissioners, they have arrived at the conclusion that they concur in the suggestions made by His Honor the Superintendent, that money should be advanced by way of loan ;is one means of making the provisions of Part 111 of the Immigration and Public Works Act available in Otago. They, however, desire to suggest that, while part of the available funds may well be expended in the encouragement of private enterprise, yet care should be taken that the construction of large works of general advantage may not he imperilled by the dissipation of the funds in many small schemes. They are also of opinion that such a modification of the Act as would permit part of the funds to be employed for the construction of drainage and sludge channels, and other works of utility on the Gold Fields; and that great care .should be taken in the administration of the Act not to interfere injuriously, by competition or otherwise, with private enterprise. Gold Fields Secretary. The Commissioners desire to express their approval of the intention of the Provincial Council to amend the Provincial Executive Ordinance, with the view of providing for the Office of a Gold Fields Secretary, who shall have the responsible management of matters specially appertaining to the Gold Fields ; and they believe that, in the event of the office being filled by a gentleman of knowledge and experience, it will tend to promote the mining interests materially.

Or.— NO. 18.

Mint This Commission recommends to favorable consideration tiie advisability of urging upon the Colonial Legislature the establishment in this Colony of a branch of the Imperial Mint. They are aware that the gold procured in tho Colony differs in quality, not only in districts, but in gullies, yet the miners receive a uniform price. A mint would remedy this evil, and secure to the producers of the precious metal the actual value as established by tho Imperial Government, and all civilized nations. They are awaro that the establishment of a mint would cost a large sum of money in the first instance, and it would take a number of years before the mint could be brought into operation ; they, therefore, recommend, in the meantime, to favorable consideration the desirability of the establishment of an assay and melting office in the Province, where miners and others could bring gold, for the purpose of being melted and assayed, and the Government could then undertake to forward the gold to the neighbouring colonies for coinage,— the shipper paying all expenses, and the Government guaranteeing payment by a written document. This system, your Commissioners beg to state, is in existence in America where the gold is received and melted at the Government assay office at New York, and coined at Philadelphia. In conclusion, your Commissioners desire to state that the large scope of the enquiry entrusted to them, and the limited time at their disposal, have necessarily rendered their report less complete than they could have wished, and it has been found impracticable to comprise within it, all the various points which have arisen during their sittings. Your Commissioners beg therefore to refer to the various resolutions, recorded in the minutes of their proceedings, for further elucidation of their report; and they recommend that these should be printed and attached to the report, and that copies should be sent to the members of the General Assembly and Superintendents of the Provinces. John* Mouat, Chairman. Thomas Luther Shepherd, M.H.R. J. B. Bradshaw, M.H.R. Charles F. Roberts. John Thomas Gwvnne. John Kinaston. James Ritchie. AVilliam Henderson. James Marshall. James Watson.

REPORT OF THE COMMISSIONER ON GOLD FIELDS WATER SUPPLY. - (Laid on the table of the Otago Provincial Council, June 5, 1871.) The subject of water supply upon the Gold Fields of Otago having been referred to me by the Executive Government, with the object that I should ascertain in what direction advantage might be taken of the provisions of the "Public Works and Immigration Act, 1870," I desire, before suggesting the alternative systems under which Government assistance might rationally be applied to the construction of public works ; and indicating in detail the works which may practically be effected—to remark that, geographically and physically, the circumstances of the Otago Gold Fields preclude the possibility of any general application of the scheme as developed in Part 111. of the Act, the proposed subsidy being strictly confined to " works for supplying water," while no provision is made for the construction of sludge channels in deep ground, or the rendering auriferous country accessible by means of roads and tracks. I would, therefore, urge upon the Government tbe expediency of recommending to the General Assembly such modification of the law, as may render this and future subsidies available for the general encouragement of mining enterprise, to be appropriated pro rata to the population in the several districts according to their special requirements. It will be seen by the evidence attached, that this view is borne out by skilled and intelligent witnesses, residing in the Mount Ida and Wakatipu Districts ; in which the mere supply of water is not the grave desideratum, but where enterprise is cramped and population retarded—in the one case by the want of capital to construct large works, equally important in mining with " water races and reservoirs;" and in the other by the impossibility, owing to the want of communication, of the higher auriferous land. The printed questions hereto annexed, and marked A, show the basis upon which the investigation committed to me was conducted, and tbe whole of the evidence, oral and literal, ranges itself under the eight heads there indicated. The digest appended, therefore, affords in itself an intelligible and complete Report as to the opinions expressed by witnesses examined, who, I may say, include intelligent men of all classes upon the Gold Fields. It will be observed that I did not confine my inquiries to the mere local aspect of tbe scheme—the works urgent, desirable, or possible in the several districts—but took a far wider range, and endeavoured to obtain (and I think have succeeded in obtaining) the views of the miners upon the policy of the measure itself; whether it is desirable to assist mining enterprise by subsidies ; and if so, in what way such subsidies should be applied, and the works, if construcced by Government, managed and maintained ; and whether it would be practicable, where labor is scarce, to obtain the assistance of the miners themselves in the construction of the works, sustenance money only being paid and the balance, at the ordinary rate of wages, taken out in water. It will be seen that little or no difference of opinion exists upon the question of principle, whether or not mining enterprise should be subsidised by the Government. Public meetings at Clyde, Cromwell,

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Lawrence, Alexandra, Teviot, and Orepuki ; the Miners' Committees at Naseby and Lawrence, and the local Commission in the AVakatipu District have affirmed this without a dissentient voice. It may be taken, then, as proven, that the policy of the measure is approved by the miners themselves. The manner in which the subsidy should be applied and made available, opens much more debatable ground ; and, as might have been expected, contradictory opinions are expressed. The Act would appear to provide for actual purchase or construction of the works, with contingent liabilities for maintenance ; or for a guarantee of interest at 6 per cent, to contractors for construction. In both these cases the question of management is left open, and it is one, the practical solution of which is by no means easy. All the witnesses seem to feel this, and those who, without qualification, recommend that the works should be kept in the hands of the Government, fail to indicate any plan by which this could be reasonably carried out. It would necessarily entail the keeping up of a large and expensive staff, and could hardly prove satisfactory to the miners—certainly it would be a source of constant embarrassment to the Government. The price of water being regulated by the supply ;on the one hand there would be agitation to reduce the price to a minimum : on the other, the cry of interference with private interests. Legal proceedings are almost inseparable from the possession of water race property, owing to the thousand and one causes well understood upon the Gold Fields—AVhat, then, would be the position of Government—constantly in its own courts for laches, wilful or otherwise, of its employes t Again, there is the consideration of apportioning the supply equitably where demand is in excess of supply—ls it to be " first come first served ?' How long is a grant to stand, and under what circumstances renewed ? The witnesses whom I have alluded to as being in favor of works being retained in the hands of the Government have either not thought out these points, or have declined the responsibility of entering into particulars. The matter bristles with difficulties, and although it does not lie within my special functions as Commissioner to advise politically, I desire to warn the Government not to endorse, without consideration, the opinions of the majority of the witnesses upon this point. Assuming that Section XXX of the Act is sufficiently elastic to admit of the appropriation of the subsidy in other ways than by actual construction of the works by the Government, or direct guarantee to the contractor ; or in view of the modification of the scheme in the direction of a more extended application, it is desirable now to consider the various modes suggested in which the subsidy might be rendered really available for tbe purposes proposed, with due regard to self-maintenance of the works and economical administration of tbe public funds. The evidence points to two practical ways of dealing with the question—namely by Guarantee and Loan ; and these resolve themselves really into the carrying out of one principle, the encouragement of private enterprise. I may premise that in no case have details been in any way fully entered into—a mere sketching in of the outline being all that had been attempted. It is therefore difficult to form a very just conclusion from premises so incomplete. The system of guarantee meets with the approval of many of the most experienced and competent witnesses. It is suggested that companies should be formed, either for the purchase and amalgamation of existing rights and works or the construction of new ones, interest being guaranteed to the shareholders at a rate proportioned to the nature of the security. Those in favour of assistance by way of loan propose that the money should be advanced to individuals or companies upon tho security of the work, at a moderate percentage, provision being made for the gradual extinction of the principal by means of a sinking fund. It appears to me that either or both these plans are practicable, and possess many advantages over that of construorion and management of works by the Government; and with regard to assistance by way of loan, I would point to the admirable working of the Drainage Commission Act in England, which is based upon analogous principles. Great care would be necessary that advances should not be made unless all the circumstauces were satisfactory ; in the case of a company, its constitution ; in the case of individual borrowers, their character and positions; and the feasibility of the particular scheme, would have to be taken into account in each case. I believe the existing Gold Fields staff' fully competent to perform the duty of supervision, advising the Government through the responsible head of their Department. Although not borne out by any weight of evidence, two other schemes have been proposed—both of which contemplate the separation of the management from the construction. The Government are to construct, and there their function is to end. Some witnesses suggest that the works should be handed over to a Local Board ; others, that the right to their use should be sold annually by public auction. I fail to see that these propositions are supported by any valid reasoning, while both are open to very grave objections. The efficiency of maintenance, and the security of the creditor would be alike imperilled ; whilst equitable distribution of what should be a public benefit would bo impossible. Before quitting this branch of my Report, I would call attention to an argument used by the advocates of the guarantee or loan schemes as against Government construction and management; namely, that all interference with existing rights would be avoided. This is a matter of no slight importance, and universally upon the Gold Fields I found great anxiety expressed as to how far these rights were likely to be affected. I hardly see how they could be secured under a system of the supply of water at minimum rates from Government races or reservoirs. Opinions, I may add, were also freely expressed, that works conducted by the Government, were certain to bo unproductive of revenue ; and that it was not just that the community should be taxed for the benefit of a necessarily limited number of claim-holders. I will now proceed to consider, seriatim, the various schemes which have been suggested, or have suggested themselves to me, following the order of AVarden's Districts. The digest of the evidence, as well as the evidence itself, will be found arranged in the same order. Wakatipn. My personal knowledge of this district induces me to form the conclusion that any system of extensive reservoirs and head-races is not practicable, except at an expense far beyond what tho district could reasonably expect as its share of the subsidy ; nor, if constructed, do I think such a system could be beneficially utilised. This, I may explain, results from the broken character of the country, and the

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G.—No. IS,

scattered localities of the auriferous deposits, which, so far as ascertained, seem in most cases to lie in narrow strips in more or less isolated positions. The engineering difficulties with regard to the. reservoirs must consequently be serious, and the multiplication of the number of channels or races necessary for the collection and utilisation of the water would make the expense of their survey, construction, and maintenance enormously heavy. AVhile not prepared to advocate any extensive or costly system of water supply, I may state that there are many localities where works of more or less magnitude might be constructed, with a prospect of opening fresh ground and adding to the field of labor open to the miner. Government assistance in this way would best be made available by the advance of money upon the security of the works to companies or associated bodies of miners. The evidence, it will be seen, to a great extent bears out the views I have expressed, whilst entering into main' details not necessarily included in a Report. I may say generally with regard to this district that there undoubtedly exists large areas of auriferous lands which would become remunerative under a larger supply of water, and that there are sources available from which such supply could be obtained ; but, owing to the natural features of the country, and the character of the auriferous deposits, the supply •of water must of necessity be so divided that the cost of the construction of any complete system would be out of proportion to the result obtained. The works, to be effective of public benefit, would require to be numerous and very costly ; and, I believe, would be of less efficacy in encouraging enterprise than the opening up of tracks to tho outlying mining localities, many of which have been merely prospected, from the impossibility of communication during a great part of the year, and which would undoubtedly attract and support a large population, were it possible to reach them with horses, and so secure the necessaries of life. A modification of the provisions of the Act, such as I have already hinted at, in tbe direction of extending the application of the subsidy to the particular requirements of each district, would special!}' suit the circumstances of the AVakatipu. The Bunstan. In this district there exist vast areas of known payable auriferous ground, whose only limitation is resultant from the quantity of water that can be brought to bear upon them. The Dunstan Ranges, dividing tbe Manuherikia basin from that of the Lindis, from the furthermost spurs of Mount St. Bathans to the Dunstan Gorge—the Carrick Ranges, similar in formation to the Dunstan, and the large area from thence to the Bannockburn River, are all notably auriferous. The banks of the Clutha, so far as they have been tested with the available meagre supply of water, have been found everywhere payable, and present a field for successful enterprise perhaps unequalled in the Province. These, I may say, include the principal ground at present hardly available to the miner for want of water, and capable, with water, of supporting a population of man}- thousands. The district, rich as it may be considered in its area of auriferous land, is equally favoured in the number of practicable sources from which water can be obtained. Mr. Pyke, in his evidence, remarks : — " Emerging from the Dunstan Ranges in this direction (towards the Manuherikia) are three considerable " streams, the Lauderburn, the Spottsburn, and the Chatto Creek. In neither of these has the full water "power been expended ; and there yet remains a varying supply of from 20 to 40 sluice heads capable "of being diverted to mining purposes. But a larger and more comprehensive scheme than tho ap- " plication of these streams would extend to is necessary, if any solid and permanent benefit is to be " conferred upon the gold producing interests of the Province. Through the centre of the Dunstan " District sweeps the swift current of the Manuherikia River, having always a considerable fall, and " hurrying a large body of water to be mingled with, and lost in, the greater Clutha. I beg to suggest, "therefore, that a race to carry as large a body of water as can fairly be diverted, having regard to the " interests of the miners and settlers below, might be constructed from a point below the junction of " Dunstan Creek with this river. Its course should be toward and along the slope of the ranges at as " high a level as engineers may deem attainable, and in its course the surplus waters of the smaller " streams named in paragraph 3 could be absorbed as the race passed on." Upon the Carrick Ranges on the Bannockbmn side, as high as the snow line, the water from Coal Creek to the extent of some sixteen sluice heads is available. This for mining purposes represents a very much larger quantity, because the water after passing the claims at the highest level, would be available for parties lower -down the range. Mr. Baird, upon this point, remarks (see evidence): —"I am quite certain if ten. or " twelve Government sluice heads of water could be brought in to command this ground, it would afford " profitable employment for 400 or 500 miners, in addition to those already employed in the district." With regard to the banks of the Clutha, Mr. Pyke's suggestion as to the desirability of trying one of Mr. J. T. Thomson's water-lifting machines is worthy of attention. The only practicable method of working this ground is by means of the water of the river itself; and if so economical a machine as that invented by Mr. Thompson proves capable of doing the calculated work, " mining will be absolutely revolutionised" in the Dunstan, Wakatipu, and Teviot Districts. Appended will be found the paper read by Mr. Thompson at the Otago Institute, which gives a full description of this " simple contrivance for economising the current of large rivers for gold-sluicing, town supplies, and mill power." I would, therefore, indicate three'works which might, with advantage to the public, receive the assistance of the Government in the Dunstan District. 1. A large head race from tbe Manuherikia River, below the junction of the Dunstan Creek, proceeding along the slope of the range to the Dunstan Gorge. This would be a work of great magnitude, and would take time to complete. It would, however, be utilised all along its course, and would be available for mining almost from its head. 2. A head race from Coal Creek on to the Bannockburn Range. The length of this race would be, at the utmost, 24 miles ; and the cost of construction has been variously estimated at from ,1:5,000 to £12,000. 3. The trial upon the banks of the Clutha of one of Thomson's water-lifting machines. This, upon a small scale—say to lift one head of water, might, according to the inventor, be effected for £400.

G.—No. 18.

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REPORTS OF THE OTAGO MIXING COMMISSION ANl>

Mount Ida. The Mount Ida District is very extensive, comprising the various diggings of Hogburn, Kyeburn, Hamilton's, Hyde, Macrae's, St. Bathan's, Serpentine, and Marewhenua. The evidence leaves no doubt that in all of these there are portions of auriferous land not commanded by the present water supply, and that for the existing works a larger supply is urgently required. As a rule, all the easily available streams have been already taken up, but no provision is made for tbe storage of waste water accruing in times of flood or even ordinary moist weather. Mr. Warden Robinson, Mr. Carew, and others, suggest that if Government races are constructed, it is to this waste water they should look for a supply, and state that by the construction of large reservoirs the present supply might from this source be doubled. I gather from this that what we may call the natural supply from continuous sources is absorbed and limited, or could only be procured from points far distant from the several workings, at the risk, probably, of interfering with new enterprises in their more immediate vicinity. The construction of reservoirs :it a heavy cost merely for the conservation of waste water would, I think be a hazardous experiment financially, nor can I in any case recommend the initiation of such works, unless there exists a constant feediug power from a natural supply of water. The principal workings in the district are in the neighborhood of Naseby, where there remains a large area of auriferous land unworked, and from natural circumstances, without a further and very extensive water supply, unworkable. The want of a main channel to carry off the tailings already severely embarrasses the present claim holders, and threatens the very existence of the Gold Field ; the debris from the ground worked silting up the gullies to an extent upon which the water available produces no appreciable effect. It is unnecessary for me to enter more fully upon this phase of the matter, general attention having been some time called to the existing danger, and able Reports as to the facts of the case by Mr. Pvke, Mr. Barr, and others, being in the hands of the Government. The information obtained in the course of my investigations, points to the possibility of a remedy for this very serious evil, by the bringing upon tho ground sufficient water at a high level to flush and keep clear an amply sufficient channel. I may here observe that the mere construction of a sludge channel without a large water supply, must inevitably prove a failure, it being simply a matter of time—and not a very long time—when it would be silted up, and the large expenditure incurred consequently wasted. The little Kyeburn, a stream which sends down a copious supply of water all the year round, is distant from Naseby only about seven miles, and it is probable a race from it could Ij3 brought in about twenty miles. Mr Robinson expresses his opinion that although such a race could not be made available for sluicing the high lying ground, it might be brought in at such an elevation as to "prove of inestimable value" in furnishing a supply of " flushing water" to sweep away the tailings, the constant accumulation of which is the most serious drawback to the success of mining in this locality. The same officer further remarks : —" A very great want at Naseby is that of a main channel to carry off the tailings ; in fact, this may be said to be the great want of the place. Various propositions have been made, but most of them have been looked upon as hopeless, because of the absolute necessity of a free and constant supply of flushing water to keep clear any channel which might be made." Mr. Carew, upon the same subject, says :•—■" A race from the Little Kyeburn in all probability could be consti ucted for £4,000 ; but it is a question to be solved by professional examination whether water from cither stream could bo brought in sufficiently high for sluicing any but the lower levels. It is inevitably necessary that at no distant period a channel must be constructed from the principal workings around Naseby, to impel the deposit, at low levels, of the rapidly increasing accumulation of tailings, especially from the Main and Roadie's Gullies ; and as flushing water will be absolutely necessary to work and clear the channel, it is the popular impression that the Little Kyeburn will be the most available source of supply." Taking into consideration tbe general circumstances of this district, and the proportion of the subsidy likely to be available, 1 should recommend the Government to confine any action they may immediately propose to the affording assistance in bringing in, if found possible on survey, a supply of water—say 10 heads at least—from the Little Kyeburn to the workings above Naseby, to be used as Hushing water only, for a main sludge channel. Mount Bcnger. The evidence from this district as to the presumable area of auriferous land not commanded by the present water supply is not satisfactory. It may, however, be taken for granted that the banks of the Molvneux throughout its course are payable Mr. Beighton states, " twenty miles of river bank, and of terrace ground and frontages," are, without doubt, auriferous. The remarks with regard to the trial of one of Thomson's water-lifting machines, which I made when reporting upon the Dunstan District, would apply equally in this case. The means of supply indicated by the local witnesses are of a necessarily costly character. Mr. AVarden Borton says, "at the source of the Teviot (14 miles from the mouth) a dam might be constructed, the formation of the country being highly favourable, which should hold all the water which at present flows down the river bed, and the greater part of which runs to waste. A dam would also have to be erected near the mouth of the Teviot, so as to raise the water to a .sufficient elevation to render it available. I think, by this plan, an addition of something like 150 or 140 ground sluice heads of water might be made to our present supply." Mr. Beighton suggests seven] sources of supply in addition to the Teviot River : amongst others, Benger Burn, about 8 miles from Teviot, on the opposite side of the Molyneux, which, he states, would command good ground at Moa Flat. With the information at my disposal, lam not prepared to make any specific recommendation. Should, however, the system of appropriating the subsidy by way of loan be carried out, I have little doubt that enterprises will be initiated which will commend themselves to the assistance of the Government. Tuapeka. , The evidence from this district seems perfectly conclusive as to the existence of a considerable area of auriferous ground capable of being made reproductive by means of water supply. The banks of the

THE COMMISSIONERS ON GOLD FIELDS WATER SUPPLY.

G—No. 18.

11

Tuapoka and Waipori Streams, and the tract of country extending from Gleuore towards Table Hill and AVaitahuna, are localities indicated by all the witnesses as being capable of furnishing profitable fields of labor to the miner, if provided with water. Even in those localities where private enterprise has already constructed races and reservoirs of considerable magnitude, the supply is yet inadequate and costly. The present supply is derived from the sources of the Tuapeka, Beaumont, Waipori, and AVaitahuna Streams, which have all been diverted, at high levels, to the various existing workings. The limited capital and rude engineering of the miner has not enabled him to tap the trunks of the streams, but has confined them to the small branches, plenty of fall along the course of the race being essential to enable them to overcome engineering difficulties in an inexpensive way. An abundance of water is, therefore, left available for diversion by more skilful engineering, and the use of appliances not necessarily very expensive, but not readily at command, and requiring more mechanical and scientific knowledge than that generally possessed by those who have hitherto undertaken the construction of races and reservoirs. It will be seen from the evidence that two principal schemes have recommended themselves to the favour of most of the witnesses examined. One has already been the subject of a survey and report by an experienced Engineer, Mr. John Millar, F.S. A. The copy of his report—which is appended hereto—sufficiently shows the nature of the proposed work ; but I venture, with some diffidence, to suggest that the mode proposed by Mr. Millar might not be incapable of modification in the direction of less costly and equally efficient works. The testimony of all the witnesses who possess local topographical knowledge indicates that not only can a fair supply of water be obtained, capable of being brought on to a large area of auriferous ground, but that it would not to any great extent interfere or compete with private interests. Should the Government decide upon constructing works themselves, I may mention this as one of the most important, and probably reproductive works which have been brought under my notice. The work next in importance is the bringing water upon that large tract of auriferous land lying between Waitahuna and Glenore, and known as the Table Hill District. The evidence of tlie value of this land for mining seems conclusive, but no satisfactory testimony was adduced to show that there is any source of supply sufficiently ample to justify any specific recommendation. But taking into consideration the extent of proved auriferous land, and the fact that the nature of the deposit is such that without a large supply of water its riches in all probability could never be developed, and also that without an actual survey by a competent professional man, it is impossible to ascertain the practicability of the work, I would suggest that this is one of those cases of sufficient importance to justify the employment of an engineer to make a survey and report. Other schemes of supply to various parts of the district are recommended by the witnesses. All of them are of considerable local importance, and should the Government decide upon utilising tho subsidy by directly assisting private enterprise, many of these would be taken in hand, and a great impetus given to the mining of tbe district. Switzer's. I was unfortunately unable personally to visit this district, and have had, therefore, to depend for information entirely upon the evidence forwarded to me through the Warden, whose report is annexed ; as well as replies to the printed series of questions, arrived at after full discussion at a select meeting of all those " whose opinions on the subject might be considered valuable." From these I am enabled to gather the following facts : —That a large quantity of payable auriferous iand exists, amounting to upwards of 20,000 acres, situate on the terraces ou either side of the Waikaia, for a distance of 12 miles or more. An unlimited supply of water can be obtained from the AVaikaia Eiver, the Dome Creek, the Argyle Creek, and Gow's Creek. Orepuki. The information at my disposal, relative to the Orepuki Gold Field, does not lead me to the conclusion that any special work for water supply commends itself at present for construction. A public meeting was held upon the 18th of April for the purpose of obtaining the opinion of the miners upon the questiou : the resolution arrived at expressed a favorable opinion of the scheme generally. It appears there is in this Gold Field an auriferous area, seven miles by four, which has been proved in various places, but that only one square mile has been worked for want of water, while the present workings depend upon an intermittent supply. The sources available are the Wai Mea Mea, and another large creek to tbe westward with tributaries, distant ten or twelve miles probably ; also the Orama, to the west, fourteen miles distant;- the Rariako, Oneweia and feeders to Lake George, on the «ast, from five to twelve miles. The quantity of water available from these might be calculated at about thirty sluice-heads. The expense of construction of the races alone, would probably be not far short of £200 a mile. In conclusion, I would desire to state that, in any recommendation which I may have offered as to specific details, I have steadily adhered to one principle—that in no case should any works for the supply of water be initiated, unless satisfactory evidence exists that there is a sufficient area of auriferous land available ; as well as a permanent source of supply within the limits of the possible expenditure. Chas. E. Haughton. QUESTIONS RELATIVE TO WATER SUPPLY UPOX GOLDPIELDS. I.—AVhat is the principal character of the mining in the portion of the district in which you reside ? ll.—ls the supply of water from existing sources sufficient to meet the requirements of the miners 1 lll.—Will you state whether there exists in your neighborhood payable auriferous land not com< nianded by the present Water Supply ; and if so, give an approximate idea of the area 1 TV. —ls the water supply derived from artificial sources, in the hands of men mining their own ground, or is it, or any part of it, held as a separate property, and let to the miners, and if so, at what price per regulation head 1

G.—No. 18.

12

REPORT OF COMMISSIONERS ON GOLD FIELDS WATER SUPPLY.

V.—Granted that tlicre exists sucli auriferous land, do you know of any source or sources from which water could be obtained to command it. If so, state locality or localities ; and, approximately, distance or distances ; quantity of water available; and nature of the country with regard to probable cost of construction of the race or races? VI.—Having read Sections XXVI., XXVII., and XXVIII. of the Immigration and Public Works Act, 1870 ; do you think the proposed system of subsidising the Water supply of the Gold Fields is one likely to promote the interests, and consequently increase the number of the European miners. VII. —Should it be decided upon undertaking the construction of the works indicated, are you of opinion that, when completed, they should remain in the hands of the Government; the water being let at a minimum price per head to cover maintenance and expenses; or can you suggest any other practicable arrangement ? VIII.- —In districts where labor is scarce and dear, would it be practicable to obtain the assistance of the miners themselves, in the construction of the works, the men employed receiving sustenance money, and taking out the balance of their full wages in water?