C.—l.

will equal in number the present population of New Zealand. In this early stage of development it devolves on the Government to undertake the charge of many establishments in connection with the springs and scenic attractions of the country, hence are there several establishments which are carried on by the Government. Eotorua is the largest of these, and here several improvements and repairs have been made during the year, which are more particularly described in Captain Turner's report, to be found in the Appendix. There has been some trouble for two years past in connection with the level of Eotorua Lake, which in summer-time is now much lower than formerly, due directly to the action of the eruption of Tarawera in 1886, when a new outlet channel from the lake was formed, which has from time to time enlarged. The level of the lake is intimately connected with the supply and temperature of some of the hot springs, and hence it may become necessary in the near future to regulate the outflow from the lake—which, it is believed, may be done at no very great expense. The baths at the Sanatorium have been kept in repair, but the action of the acid vapours in the destruction of the material of which the buildings and all connected with them are formed is beginning to deteriorate them very much, and will soon necessitate many renewals. The whole of the pavilion buildings devoted to baths begin to have a dilapidated and out-of-date appearance, which is the contrary of inviting to the invalid. It seems certain that the buildings and baths will shortly have to be renewed in more permanent material, and a better style of bath, in accordance with modern ideas, be adopted. The drainage-works for the principal part of the town were completed last year—all but the motive-power in connection therewith—but a contract is now in progress for supplying the power, and for lighting the town, buildings, &c., by electricity. The source of power is the fall on the Taheke River, about thirteen miles from Eotorua. Mr. R. Hay, the engineer in charge, contemplates the completion of these works within a short time now. Under Mr. Matthews's direction the Sanatorium grounds and park have been very greatly improved and extended, and are at the present time really beautiful. A large bowling-green has been added to the attractions of the place, and a band rotunda is building, which the local town band will make use of weekly, or as occasion arises. The Pukeroa Park and Kuirau Eeserve have been improved by planting, path-making, and fencing. In a few years these places should prove of great attraction ; and, moreover, in the Kuirau Reserve are hot springs of great volume and heat, which in the future will, without doubt, be utilised for baths. The Whakarewarewa Eeserve has also been kept in order, and, as the trees already planted begin to show, this should form a very attractive place, situated as it is around the largest geysers we have. Taupo is another place where thermal action is exhibited on a large scale, but here the springs, &c., are mostly under lease to private individuals. During the last year arrangements have been made for re-erecting the A.C. bath, which is a very popular one with the public. At Tokaanu, south end of Taupo, where are valuable hot springs, now secured to the Government under the Native Townships Act, it is proposed during the ensuing season to erect some bathshelters. At Te Puia, near Waipiro, Waiapu County, a township has been laid out surrounding the hot springs, and not long ago it was offered for lease under the Native Townships Act, when a few allotments were taken up. Nuhaka Hot Springs, in northern Hawke's Bay, continue to attract a considerable amount of attention, and now that the accommodation-house has changed hands it is to be hoped the complaints in reference thereto will cease. This is a very pretty place, and when the baths .have had more attention given to them will increase in popularity. Now that the beautiful lake of Waikare-moana is attainable by wheeled traffic, its advantages as a recreation-ground will be more and more appreciated. To encourage this the Government have had plans prepared for an accommodation.house to be built on a charming site, but the tenders received for its construction are not considered satisfactory at present. The other large thermal-spring establishment under Government control is Hanmer, in the Middle Island, which is very largely resorted to now by those in search of health and recreation. The number of visitors increases from year to year, which has necessitated the erection of further accommodation at the Sanatorium building. Bight new baths have been added, fitted up in the modern style, and thirteen new rooms added to the accommodation-house. The natural gas which arises within the grounds has been confined and laid on to the bath-buildings and the Sanatorium, and general improvements have been made all round. Details will be found in the Appendix. The following table shows the progress of the Eotorua and Hanmer establishments during the past five years :

The above figures exclude the free baths. The visitors who stayed at the Sanatorium, Hanmer, numbered 324 : this is exclusive of the numerous visitors to the private establishment situated near the springs.

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1896. * 1897. 1898. 1899. 1900. Place. Number Number Number Number Number of Fees. of Fees. of Fees. of Fees. of Fees. Baths. Baths. Baths. Baths. Baths. Rotorua Hanmer 28,906 7,781 £ s. d. 502 17 0 240 4 8 33,158 9,627 £ s. d. 631 0 6 290 4 9 46,668 11,436 £ s. d. 747 0 0 354 4 7 48,868 14,540 £ s. d. 711 0 0 413 1 2 51,507 14,065 £ s. d. 914 14 0 457 17 4