KAURI-GUM INDUSTRY. REPORT ON THE ADMINISTRATION OF THE KAURI-GUM INDUSTRY AMENDMENT ACT, 1914, TOGETHER WITH A STATEMENT OF ACCOUNTS IN CONNECTION THEREWITH, FOR THE YEAR ENDED 31st MARCH, 1919.

Appendix to the Journals of the House of Representatives, 1919 Session I, C-12

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1919. NEW ZEALAND.

KAURI-GUM INDUSTRY. REPORT ON THE ADMINISTRATION OF THE KAURI-GUM INDUSTRY AMENDMENT ACT, 1914, TOGETHER WITH A STATEMENT OF ACCOUNTS IN CONNECTION THEREWITH, FOR THE YEAR ENDED 31st MARCH, 1919.

Presented to both Houses of the General Assembly pursuant to Section 5 of the Kauri-gum Industry Amendment Act, 1914.

R E P 0 R T. Office of the Government Kauri-gum Superintendent, Sir,— Auckland, 22nd October, 1919. In submitting this, the fifth annual report of this Department, it is not deemed necessary to make any reference to the special circumstances which gave rise to the setting-up of the Department, beyond saying that the work of the Department, which was begun in. November, 1914, has been continued during the present year, and has been beneficial to the gum-digger and the industry generally. For part of the year in some districts the Department, owing to the lack of demand for kauri-gum abroad, was the only buyer. After careful consideration it was decided that the best policy to adopt was to continue buying in the two main gum-producing districts, with a proviso that we should buy direct from the diggers, and only the gum dug from month to month. It may be explained that it was necessary to adopt this course as in some districts large accumulations of gum were held by diggers, chiefly Dalmatians. These accumulations we did not touch. Sales. During the year kauri-gum to the value of £18,847 6s. 4d. has been purchased by the Department, while the sales amount to £14,226 Bs. 6d. Up to tho end of March all gum sold went to America, but since that date several shipments have been made to the United Kingdom. Negotiations are now in progress for the appointment of a Government agent in London to handle all European business. When these arrangements arc completed, and with ample shipping space available, it is probable that a big export trade with the United Kingdom will be established. Early in the year a partial embargo was put on the importation of all. fossil resins into the United States of America. As in the previous year, America constituted practically our only market, and how hard this restriction hit the kauri-gum trade may be gauged by the fact that the total export for the year was only about one-half that of the previous year, and less than one-third of the pre-war yearly export. Owing to so many gum-diggers being absent on active service, and owing to the fact that men of Austrian nationality had been to a great extentjcalled up for service on public works under Government supervision, the. output was not large; but even under these conditions it was found necessary in the interests of the gum-digger and those dependent on the, industry to purchase 80 per cent, more gum than in the previous year, although our sales were only a little more than half those of that year. Full details of the expenditure under the various headings are given in another part of the report. The Act of 1914 authorized the Minister to raise the sum of £50,000. Up to the present time a sum of £47,000 has been so raised. On the 31st March, 1918, the cash in the Public Account to the credit to the Kauri-gum Industry Account was £20,755 Bs, 7d., and at the 31st March, 191.9, the amount was £3,291 18s. sd.

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Dr. Maclaurin's Salt Vacuum Process for cleaning Gum. This process was briefly described in my last annual report, when it was mentioned that tests with a miniature plant had been made in Wellington. A plant sufficient for testing the gum on a commercial scale has been set up in Auckland, and satisfactory results obtained. Up to the present time about 100 tons of gum have been treated by the process. Samples of the cleaned gum have been sent abroad, and it is hoped to make a trial shipment shortly. So far as my experience goes, I am convinced that the Maclaurin process is the only satisfactory one for thoroughly cleaning gum, and separating dirt and foreign matter from it. With the various devices for dealing with gum-bearing soils which arc now being tested, and which give a good prospect ol producing gum at a very much lower cost and in larger quantities than heretofore, the scope of this process becomes much wider. Kauri-peat Swamps. For many years much speculation has taken place as to the value of kauri-peat and the possibility of distilling oils therefrom. Attention has been drawn to this matter in my previous reports, wherein such information as was available was published. During the last year or so much investigation has been done by private companies, and considerable sums of money have been expended. It is hoped that the extraction of oils from the kauri-peat swamps on commercial lines will very soon be an industry established on a satisfactory basis. With a view to encouraging the development of the industry, legislation was passed in 1915 under which the Governor-General may from time to time, by Order in Council, set, apart any area of Crown, land situated in a. kauri-gum district for the purpose of promoting the systematic recovery of kaurigum and other valuable products contained therein, provided that the total area set apart under this section shall not, exceed tit any one time an area of 10,000 acres. The Land Board is empowered to dispose of, by way of lease, any land so set apart in areas not exceeding 3,000 acres. The period of the lease is twenty-one years. It is proposed this year to extend the term of the lease to forty-two years. Only one such lease has been granted, and that to the New Zealand Peat Oils (Limited), who have been granted an area of 3,000 acres situated near Kaimaumau, in the Mongonui County. The lessees have to pay a low rental and also a royalty on the kauri-gum, oil, and other valuable products obtained. This company has done a considerable amount of work, particulars of which have been referred to in previous reports. The work done during the past year is briefly summarized by the secretary as follows : — " Peat and its Products. —There has been considerable progress since the last report, and the company is well satisfied with the position as it has so far developed. Several tons of peat from the Government swamp and 250 gallons of crude oil, retorted at Kaimaumau under the supervision of Mr. F. J. Hagger, J.P., have been sent to London and have passed through experts' hands with very favourable results. 95 gallons have been fractionated there, and gave the following results : Light oil (spirit), 4f gallons ; medium oil (carbolic), 10 gallons ; heavy oil (creosote), 21} gallons ; resinous tar and pitch, 22 gallons ; water, 31 gallons ; loss in handling, 3 gallons : total, 95 gallons. " The percentage of water will be noticed in oil from which it had previously been run off. In this case, as in the crude oil supplied to the Northern Steamship Company, which ran one of their boats to Whakatane in record, time, there were no proper appliances at Kaimaumau for completely taking out the water. The oil was fractionated by Messrs. Thos. Crow and Sons at their Barking works. " The peat-water was found to contain methyl alcohol, acetone, acetic, acid, and tar residues— lubricating-oil, paraffin, kauri-gum resins, anthracene, and pitch. Chemists further made an analysis of these fractions. " The oils and. other products from peat are approximately the same as those from coal, but the fact that kauri-gum essential oils are brought over and incorporated in the peat, oils places them in a special position. The peat is picked over for marketable gum, but a considerable amount of gumdust is present when the peat is retorted, and undoubtedly enriches the oils. There is much further research work to be done in this connection, and it may be some, time before the company will receive the full benefits of refining. The by-products will_be limited and primary until refining is carried out locally. In the meantime there should, be a fair return for the crude and semi-crude products. " A further treatment of kauri-peat in London has lately yielded 64| gallons per ton of peat, this being from a sample which showed 10 per cent, of kauri-gum, from strata which will give a good number of tons of similar stuff in the 3,000-acre swamp held by the company. " Briquettes have not hitherto been a success in this country, but those made up from the products of the company's retorts give excellent results : (1) They ignite more readily by far than coal; (2) they keep alight more persistently ; (3) they burn steadily ; (4) they give off a good heat. Such briquettes should have a higher value than coal on account of being good fire-lighters. Incidentally an almost ideal coke-furnace lighter has been made and used. " The quantity of residue—charcoal or coke —amounts to about 8 cwt. per ton of dry peat, and tests are being made to ascertain the value of this as a fuel and gas-producer under different treatments. There are solid grounds for believing that this charcoal will prove a considerable asset. " The layer of kauri timber in the Kaimaumau swamps was expected to hamper the cutting-out of peat, but a very fine tar has been made from the roots. This tar is being analysed in order to ascertain the more valuable oils that can be extracted before using it for roofing-material, caulking deck's, &c, for which it is found to be a very superior article. The tree-trunks can be sawn into caseboards.

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" There is every reason to believe that peat and its products will be a valuable addition to the industries ol New Zealand; but there is still much, work to be done both by the chemist and the engineer before it can be established on a solid basis. Test work has been going on in Auckland since the beginning of the year, and the company has now two retorts on the premises ol the Auckland Gas Company under the supervision of Mr. James Lowe, A.M.1.C.E., engineer and manager. Analyses are being conducted by Professor F. P. Worley, D.Sc. (Lend.), of Auckland University College. The company is also much, indebted to Dr. ,1. S. Maclaurin, the Dominion Analyst. Our High Commissioner, Sir Thomas Mackenzie, has kindly furnished much valuable information in regard to peatworks at Dartmoor and other places in the United Kingdom ; and statistics and useful data have been obtained from the Governments of Canada and the United States, as also from savants and firms in Russia, Sweden, Denmark, and Italy." In regard to the extraction of oils from kauri-peat : Work has been carried on by private enterprise, at different times during the past thirty years. Probably up to the present time £25,000 has been expended in these investigations, and I think the time has come when the Government should offer a fairly substantial bonus for the encouragement, of this industry. In my opinion, there has been enough preliminary work done to show a good prospect of a, payable industry being established. As before pointed out, the companies which have been carrying on the work have been labouring under great disabilities owing to no research work having been done in the past; especially have they been working under great difficulties during the past live, years owing to the general disorganization caused by the war. With reference to the suggestion that the Government should offer a bonus : J. have conferred from time to time with Dr. Maclaurin, Dominion Analyst, who for many years past litis taken a very keen interest in the industry and the work of this Department. Dr. Maclaurin has gone into the matter very fully, and makes the following proposals as to the conditions under which the bonus should be offered :— A. A bonus of £1,000 for the best plant and process for the production and refining of oil from kauri-peat. No plant and process shall be considered eligible for the bonus unless the plant is capable of treating at least 5 tons of dry peat per day, and unless it has produced at least 50,000 gallons of crude oil (free from wafer) and 5,000 gallons of refined light oil suitable for use as a substitute for petrol in the light-oil engines ol motor-cars. B. A bonus of 3d. per gallon of crude oil (free from water) on all oil produced by the (lis filiation of kauri-peat: Provided that-the total bonus shall not exceed £2,000, and that no bonus shall be paid to any person or company whose plant has produced less than 20,000 gallons. In the event of the total production of oil exceeding 160,009 gallons, the bonus shall be divided among the persons or companies manufacturing the oil in proportion to the amounts produced by them. C. A. bonus of 3d. per gallon of refined light oil produced from crude kauri-peat oil, and suitable for use as a substitute for petrol in the light-oil engines of motor-cars. In the event of the total production of oil exceeding .80,000 gallons, the bonus shall be divided among the persons or companies manufacturing the oil in proportion to the amounts produced by them. D. No bonus shall be paid under B and C unless the Government is satisfied that the area being worked is suitably situated for the transport of products, and that it contains sufficient kauri-peat yielding not less than 25 gallons of oil per ton of dry peat to produce at least 1,000,000 gallons of crude oil free from water. Of course, these proposals are only tentative, and in the event of the Government agreeing to the recommendation it may be deemed advisable to fix the bonus on a more liberal scale, and with probably a, time-limit fixed. Dr. Maclaurin has drawn my attention to the fact that a bonus was offered for the production of mineral oil in 1910 on the following lines: The bonus offered amounted to £10,000, and was payable on the following conditions : ((/.) £2,500 to be paid on proof being submitted that not less than 250,000 gallons of marketable crude oil had been won ; (b.) £2,500 to be paid on proof being submitted that not less than 500,000 gallons ol marketable crude oil had been won ; (c.) £2,500 to be paid on proof being submitted that not less than 1,000,000 gallons of marketable crude oil had been won ; (il.) The balance of £2,500 to be paid to the person or company who first produced by his or its refining plant 500,000 gallons of refined mineral oil. Improved Plants and Processes for Gum-digging Operations. During flu- last, lew years much time and thought have been given in the gum-producing distrii Is to the evolving of processes and plants designed to deal with the gum-bearing soils more speedily than at present, and at the same time not only to recover a greater percentage of small gums, but also to grade gums recovered mechanically according to size and weight. This work has been carried, on purely by private enterprise, and large sums of money have been expended in this direction. At present the output of kauri-gum is very much below what it was in years before the war. During the war a large number of gum-diggers left on active service, and many of those who have returned will not go back on the gumfields again, preferring some calling which gives greater scope for ambition and a more constant and certain recompense for the labour expended.

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Men of Austrian nationality were called up for service by the State on various public works ; and it is worthy of note that many of them, even if permitted to do so, show no disposition, to return to gum-digging after having enjoyed regular hours and good wages in the place of long hours, arduous work, and uncertain prices in the gum industry. Taking into consideration the higher cost of living on the gumfields, the more; or less isolated life, and the hard work necessary to make other than a mere existence, it is not a calling that men will be attracted to. It is chiefly due to the free and independent life, and the fact that a man is his own master, that so many men are engaged in the industry at all. All things considered, the important consideration in regard to the kauri-gum industry to-day is the necessity for an increased and regular output. Unless the alien is again given the right to return to the gumfields and to " pothole," burn, and desolate the country at will, it would appear that the chief hope of increasing production lies in the field of labour-saving devices and plants enabling the digger to turn over more ground and to recover a larger percentage of the gum than hitherto. A Bonus recommended. • . I recommend that a substantial bonus should be offered for, say, the best three plants for dealing with, kauri-gum-bearing soils and the recovery of the kauri-gum contained therein. These plants should be capable of being turned out cheap enough to be within the reach of the diggers ; and special consideration would be given, to plants capable of being worked by two or three men, and which could be moved about from one place to another without much expense. In this connection it has been deemed advisable to make a short summary of existing patents dealing with the matters here discussed. Complete specifications and drawings of the inventions summarized are filed at the Government Kauri-gum Office, 7 Hobson Street, Auckland, where they may be inspected free of charge by any bona fide inquirer. Copies of any specifications and drawings relating to patented inventions may be had on application to the Registrar of Patents, Wellington, on payment of a small fee to cover the cost of copying. Summary oir existing Patents. No. 36483, F. V. Raymond (23 figures, 44 claims). —Consists of the adaptation or application of buckets operated on an endless link chain, pipes in which operate the force of suction or an adjustable mouthed grab to the raising or lifting of gum soils. No. 36431. F. V. Raymond (8 figures, 14 claims). —Relates to means of treating anel separating kauri-gum-bearing soils by moans of chutes. No. 37667, F. V. Raymond (11 figures, 12 claims). —Consists of meohanioal devices for soparating soil and foreign matter from tho gum. No. 37917, J. S. Maclaurin (no drawings, 11 claims). —Consists of placing kauri-gum and impurities in a salt solution having a higher specific gravity than tho gum, but a lower speeiiie gravity than the impurities, and in removing the air-bubbles which would otherwise prevent tho impurities from sinking. No. 38059, F. V. Raymond (20 figures, 40 claims). —Consists of treating kauri-gum-boaring soils by passing soils over plates, screens, meshes, flumes, and the like, by the action of running wator, and methods of mechanically dealing with timber found therein. No. 39091, F. V. Raymond (1 figure, 9 claims). —Relates to the application of heat for the purpose of separating kauri-gum from tho impurities among whie-h it is found, and also for drying and grading the gum. No. 39575, F V. Raymond. (1 figure, 6 claims). —Relates to the drying of kauri-gum by compressed air. Ne>. 39579, F. V. Raymond (3 figures, 10 claims).—Consists of improved methods whereby kauri-gum-bearing soils may be expeditiously treated mechanically. No. 39579, F. V. Raymond (3 figures, 10 claims). —Consists of spraying tho kauri-gum-boaring soils, which softens the bulk and separates the various particles. Tho mass is then dried, and by use of fans of varying power particles of different specific gravities are sucked up and forcod by air-currents into settlings-rooms, resulting in a grading or sorting being performed. No. 40439, V. Do Vally (4 figures, 5 claims). —Consists of a pump feir lifting gum slush from kauri-gum-boaring swamps, in combination with a perforated rotating cylinder provided with boaters, and a conveyer or conveyers for beating and convoying the gum through the cylinders to a receptacle. No. 40702, H. A. Pyke (12 figures, 2 claims). —Consists of putting kauri-gum and impurities contained therein in a receptacle containing water, heated or cold, capable of withstanding internal pressure, which, is applied at about 30 lb. to tho square inch or more. Tho result of this treatment will be to precipitate tho foreign matter and some of the gum. After treatment in this manner the wheile is transferred to another receptacle containing water heatod to a suitable temperature, with the result that the gum will float and the foreign matter sink. No. 39580, F. V. Raymond (5 figures, 0 claims). —Relates to obtaining samples of soils by means of mechanically operated slotted hollow spear rods with a view to locating deposits of kauri-gum. No. 39618, F. V. Raymond (2 figures, 7 claims). —Improvement and extension of methods and apparatus described in No. 39580 above. No. 39463, C. Suttio (4 figures, 0 claims). —Consists of an agitating-vessel with beaters affixed to a revolving shaft, for breaking up gum-bearing soils to dissolve tho soluble-, earth and matter therein, and for separating the solid content thereof, such as wood and gum particles, and of grading the same into different sizes. No. 39547, C. Suttie (0 figures, 4 claims). —Consists of a revolving cylinder for screening kauri-gum and its impurities. No. 39574, W. R. Cookburn and W. J. F. Jenkins (2 figures, 3 claims). — Relates to the mechanical extraction of kauri-gum from the soils in which it is found, by means of a horizontal or inclined cylinder in which is operated a spiral brush, in conjunction with a bowl with perforated sides, said bowl being mounted so as to be capable of rotation about its vertical axis, and being located within a non-rotary casing. Jets of water are used in the reducing treatment. No. 39926, 0. Suttio (2 figures, 5 claims). —Consists of the, use of a number of leiosoly lying lines of chains connected to a base to move along a surface among the material to bo operated on. The rubbing or disintegrating effect on tho material can thus bo done without seriously abrading the gum. No. 39932, F. V. Raymond (10 figures, 15 claims). —Consists of the washing of gum-bearing soils by agitation within a vessel of reciprocating perforated plates and frames carrying cross-bars set at various angles and inclinations for the purpose of separating the gum from the impurities. No. 39576, F. V. Raymond (4 figures, 9 claims). —Consists of mechanical moans for reducing gum soils to a state that will enable them to bo easily raised and delivered to a soreening appliance. Jets of wator are directed on the soils, which may bo further pulvorizoel anel disintegrated by appliances such as a movablo frame, or by the use of tines, harrows, and the like. When tho soils arc sufficiently reduced thoy are raised to the screening appliances by any suitable form of elevator.

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No. 39577, F. V. Raymond (3 figures, 6 claims). —Relates to the removal by scoops of the top layers of peat over the gum-bearing soils. No. 39732, C. Suttie (3 figures, 7 claims). —Consists of the use of a spiral chamber for the separation of solid contents, such as wood and gum particles, from the soil and the grading into different sizes. No. 40127, F. V. Raymond (2 figures, 4 claims). —Consists of moans to prevent tho slime water from the screening apparatus, in the working of swamps by bucket dredge, from returning to the paddock. No. 39927, W. R. Coekburn and l<\ Jenkins (3 figures, 1 claim). —Consists of a semi-cylindrical screen of fine mesh, in which is rotated a spiral wiper or brush of the same diameter as the internal diameter of the screen, said wiper or brush being mounted on a central shaft supported in bearings in or above the screen. No. 40128, F. V. Raymond (17 figures, 19 claims). —Consists of treating the gum-bearing soils in a vessel flume or chute the bottom of which may be plain or perforated, with a frame or set of frames arranged crossways in which are slats, bars, heavy wire, or tho like, the surfaces of said riffles being either plain, or roughened, or uneven. No. 40505, V. Silieh and N. Silich (2 figures, 3 claims). —Consists of a vessel container made narrower at the top than at the bottom, having a horizontal shaft mounted on bearings across its top carrying at its inner end a bevel gearwheel set to mosh with a bevel gear-wheel carried on upper end of a central vertical shaft, said vertical shaft being centrally plaoed within said vessel or container and having fixed to it at its lower end twei horizontal stirrers working slightly above a screen or sieve placed just off or above tho perforated bottom of said vessel. In use the, dirty water and fine soil passes out through the bottom, while the gum pieces and other material too large to escape are retained on tho screen. A note of warning must be sounded, however, in regard to gum cleaning and washing machines in general. Very little provision has been made so far by some of the patentees for the saving of gum-dust, which constitutes a very appreciable percentage of the gum content of the soils treated. In the case of one plant of which great things were expected the gum content of the, soil treated was ascertained after very careful tests, and it was found that the residue run to waste as useless contained a gum content of almost one-third that of the original sample in other words, one-third of the gum in the shape of fine dust was entirely lost. Kauri-oum Exports. For the year ended 3ist March, 1919, the export was 2,338 tons, ol the value of £152,299. During the last four years the average yearly output has been 4,198 tons, of the value of £263,388 ; whilst for the previous four years the average annual export was 8,187 tons, of the value of £460,890. It was only to be expected that there should be a great falling-off in the export so long as the war continued, but it is doubtful whether the old figures will be again attained, unless better methods of production are introduced. But this subject I deal with more fully in another portion of this report. The following table gives particulars of the exports for the last twelve years : —

Particulars of Kauri-gum exported from New Zealand from 1908 to 31st March, 1919, inclusive.

Country to ,,, which exported. )08. it 109. If HO. It £ Tons. 263,375 3,514 ill. 1 .912. 11 913. Tons. United States of | 2,855 America, United Kingdom , 1,799 Germany .. 067 Canada . . 21 Austral in .. 155 Belgium .. 22 France .. 10 Austria-Hungary 1 Russia Netherlands .. . i Sweden .. j Italy .. Japan.. Hong Kong Argentina £ j Tons. 215,29P 5,127 £ 375,126 Tons. 4,149 £ Tons. 209,216 3,894 £ Tons. 232,566 3,995 £ 308,450 123,011 2,290 23,841 639 1,646 24 6,458! 149 1,572! 17 875 1 104 1 140,235 24,111 2,555 8,576 1,770 85 68 3,253 913 66 66 29 19 124 15 6 30 23 151,319; 2,378 28,016 1,142 7,087 9 4,465; 75 1,899 78 1,656 75 3,011 131 1,976 80 133, 55 720 ! 35 779 15 130,767, 2,468 34,062 1,053 I ,061' 40 2,559 30 3,990 123 5,774 : 37 3,968 159 1,859 2 1,206 42 803 35 417 15 25; 1 114,640 3,390 32,964 833 3,370 62 2,487 80 5,088 126 3,037 45 4,611 112 184 53 974 60 952 16 410 9 22 .. 187,547 27,880 4,018 3,933 5,120 3,995 2,617 1,725 2,495 420 300 2 "l72 8 '.'. Totals .. : 5,530 372,798 8,250| 552,698 8,6931 465,044 7,587 395,707: 7,908 401,305 8,780 549,106 Country to ,, which oxporteei. MB. 1st ,Tai 31st Ma nuary to 1st Aprl irch, 1910. 31st Mil il, 1910, to 1st April iron, 1917. 81st Mai il, 191.7, to 1st Aprl irch, 1918. 31st Mar ii, 1918, to rch, 1919. 914. 1! Tons. United States of 4,531 America United Kingdom 3,335 Germany . ■ 373 Canada .. 70 Australia .. 19 Belgium .. 34 France .. 42 Austria-Hungary 14 Russia .. 3 Nether-lands .. 8 Sweden .. 20 Italy .. .. 23 Japan.. .. 1 Hong Kong Argentina £ Tons. 310,200 3,312 £ 222,850 Tons. 974 £ 60,010 Tons. 3,158, £ | Tons. 218,214 2,310 £ 164,516 Tons. 1,371 £ 81,914 148,370 1,172 21,193 .. 2,114 56 I , 720 9 1,519 .. 3,599 5 329 .. 225 21 664 .. 560 .. 855 .. 96 .. 48,585 330 13,548 1,484 , 08,378 303 13,982 3-16 10,977 594 118 5 8,972 314 ■J 29 7,718 U929 i 1,982 18 1,577 '572 4!) ■15,588 4,820 430 2,118 50 i 3,440 .. 10 539 .. 506 8 Totals . . 8,473 497,444 4,575 279,133 1,433 300,271 4,636 82,844 4,862 304,852 2,338 152,299

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SneiMsAci-: i\ Weight oi-' Kauri gum. The question of moisture contained in kauri-gum, and the consequent shrinkage in weight, is one concerning which considerable difference of opinion exists. Gum as bought on the fields is liable to varying shrinkages according to the condition in which it is marketed. This shrinkage is easily tested by air-drying the gum and comparing the weights before and after drying. In the case of some gums, however, no matter how well they may be dried, there is an almost, continual loss ol weight, and it is this class of gum that 1 refer to. Samples of different grades were cased up in the store at Auckland, and subsequently tested for shrinkage. The following tabulation shows the result of these tests. Each sample was well air-dried before being eased up.

French Mission. When the French Mission was in Auckland opportunity was taken to invite the commercial representatives of the Mission to visit the Government kauri-gum store, and a full inspection was made of the stocks of gum and of Dr. Maclaurin's salt vacuum process lor cleaning kauri-gum. The representatives of the Mission were very'much interested in the work of this Department and in the Government operations in connection with the industry. Samples of the various commercial grades of gum. were despatched to France through the High Commissioner, and we have since been notified of their safe arrival by letter from General Pau. New Legislation. It is suggested during the present session of Parliament to make certain amendments to the Kaurigum Industry Act, dealing principally with the issue of gum-brokers' and gum-diggers' licenses, and the extension of leases granted, under section 3of the Amendment Act of 1915. Full particulars of these have already been submitted to you. The license fees are proposed to be altered as follows : In respect of every special license the lee shall be 55., as at present ; in respect of every ordinary license the fee shall lie £5 ; gum-buyer's license. £1 ; and gum-broker's license, £5. ft is proposed that a gum-broker's license shall authorize the holder thereof, acting as the agent of the purchaser or the seller, or both, to buy and sell kauri-gum. Operations of the Department. In another part, of this report it is stated that probably £25,000 has been expended by private individuals and companies in the investigation of the kauri-peat-oil industry. I think that lam well within the mark in stating that probably another £25,000 has been expended in connection with gum producing and cleaning devices ; but it was not until this Department was set up in 1911 that the Government showed any practical sympathy with such matters or with the kauri-gum industry generally. In spite of anything that may be said to the contrary by men in the trade in Auckland, the work of the Department has been highly beneficial to the industry and the workers engaged in it ; and although the Department owes its existence in a measure to the exigencies ol circumstances arising out of the war, it should be remembered that it was one of the recommendations of t' c Royal Commission which reported on the kauri-gum industry in June, 1914, that a special Department should be set up to take charge of the industry. Whatever good work may have been done in the past, now that the war is over and conditions are getting back to normal there is great scope for the Department extending its operations with benefit to the State and to the large body of men supported by the industry. I have, &c, R. P. Grbville, The Hon. the Minister of Lands, Wellington. Kauri-gum Superintendent.

Grade. Dates of Weighings. Net Weights. Percentage of Loss at Last weighing. Remarks. Swamp chips .. 7/3/1910 3/8/1917 19/8/1919 Cwt. qr. lb. 1 3 16 I 3 11 1 3 8 3'7 It will be noticed that during the first seventeen months there was a loss of 5 lb. and during the next twelve months the loss was 3 lb., making a total shrinkage of 3'7 per cent, for the whole period. This sample was weighed once only anil showed, a loss of 49 1b. in about four years and a half, or 26'7 per cent. This grade was also weighed onoo only, the loss being 14J lb., or 8T per cent, in three years and a half. During the first two years and a half this sample lost 20ilb., and during tho noxt two years lost another 145 lb., a total loss of 16'8 per cent, for the period. For the first seventeen months a loss of 5J lb. was shown, whilst for the next two years the loss was only \! 2 lb., making a total shrinkage of 3:1 per cent, for tho three years and a half. During the three years and a half between weighings this grade lost 7 lb. weight, or 3'7 per cent. It is interesting to note that the loss on these black chips and on tho swam]) chips was identical. Swamp 3 30/3/1915 I 9/8/1919 1 2 15 I 0 22 20'7 Swamp nrrts . . 7/3/1910 19/8/1919 1 2 1 I 27 8'l Swamp 1 30/3/1915 3/8/1917 19/8/1919 1 3 13 I 2 20.', 1 2 53 10'8 Black nuts 7/3/1916 3/8/1917 19/8/1919 2 0 2 I 3 2fi I 3 23 3'I Black chips .. 7/3/1916 19/8/1.919 1 2 20 I 2 13 3'7

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Statement of Accounts (as required by Section 5 of the Kauri-gum Industry Amendment Act, 1914) for the Year ended 31st March, 1919. Receipts. 1919. Payments. 1918. £ s. d. March 31. & B. el. April 1. Balance .. .. .. 20,755 8 7 i Wages and bonuses to workmen, ovcr--1919. seers, and gum-buyers .. .. 2,045 10 3 March 31. Sales of kauri-gum .. 10,803 13 1(1 Machinery, plant, &c. .. .. 2,147 5 4 Final payments to gum-diggers and purchases of kauri-gum .. .. 18,227 17 5 Travelling-expenses of Superintendent, staff, gum-buyers, and overseers .. 170 0 6 Interest on debentures .. .. 5,679 1 0 Freights, &c. .. .. .. 4,477 511 Office expenses, administration, &c. .. 1,519 17 7 Balance: Cash in Public Account .. 3,291 18 5 £37,559 2 5 £37,559 2 5 Loan Account. 1919. £ s. el. 1919. £ s. el. March 31. To Balance .. .. 47,000 0 0 March 31. By Debentures issued under the Kauri-gum Industry , Amendment Aot, 1914 47,000 0 0 £47,000 0 (I £47,000 0 0 Examined and found correct. R. P. Grevillk, ROBERT J. Collins, Kauri-gum Superintendent. Controller and Auditor-General.

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