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The output of the sawmills of the colony during 1903-4, as far as can be ascertained, amounted to 372,000,000 superficial feet. It is reasonable to suppose that the requirements in future years will greatly exceed these figures. Dealing with the subject merely from the economical aspect, I would desire to again draw attention to what I have advocated regarding the necessity for afforestation, as the more I read the more deeply convinced I am of the pressing need for more extensive operations being undertaken to provide adequately for the rapid diminution of our indigenous timber-trees, and the comparatively near approach of the time when the want of timber and the greatly enhanced cost of pfocuring supplies will be demonstrated to the detriment of local industries dependent thereon, and the great loss and inconvenience caused to the people of New Zealand. Putting on one side the older countries, there is ample evidence of the interest and anxiety which is displayed in the United States, and even in the earlier settled parts of Canada, on the subject of afforestation of portions of those countries for the purpose of providing for a continuous supply of timber suitable and sufficient for the needs of the nation, and also for other obvious reasons. Planting on an extensive scale has been undertaken in various localities by even railway companies, as it is evident from the reports that no substitute for railway-sleepers can be found comparable to timber. It will be admitted that this colony should never be allowed to drift into the position of having to look for its supplies of timber to other countries, which, at the best, are very distant, and in all probability will have, in the interests of their own inhabitants, to prohibit the extensive exportation of timber. I have therefore to recommend that the operations of the Forestry Branch of this Department in tree-planting be conducted on a scale at least equivalent to the estimated requirements. In submitting this recommendation, I desire to point out that much of the afforestation necessary to meet the future requirements of the colony could be effected upon some of those areas of waste lands which are not well adapted for settlement purposes. Experiments already carried out at Waiotapu, between Taupo and Rotorua, have demonstrated the suitability of such lands for the purpose. In addition to bringing the land into a state of productiveness, which, under present circumstances, does not appear possible in any other manner, it is fair to assume that the prolonged growth of trees on these poor areas would have a most beneficial effect in consolidating and enriching the soil, and preparing it for adaptation, if necessary, to the various requirements of the agriculturist and pastoralist of another generation. There are also several districts in the South Island where extensive tree-planting could, with great advantage, be undertaken. Few realise the important influence which forests, scrub, &c, have exercised, and, indeed, are still exercising, in fitting New Zealand for occupation and utilisation by man. There is evidence that the open country in Auckland, Canterbury, Otago, and other districts was at one time forestclad ; doubtless the growth was largely due to climatic conditions, especially the humidity of the atmosphere. Granting these premises, it is easy to conceive that these extensive forests and other rank growth protected the surface of the country, and assisted materially in various wellknown ways to form and enrich the soil. They also minimised floods and ameliorated their destructive effects, conserved the rainfall, and distributed it gradually and evenly throughout the seasons. How far climate and forests are interdependent, and especially the extent to which forests affect climate in some respects, are moot points; but there is no question as to (he necessity for maintaining a due proportion of the area of a country under forest. New Zealand cannot afford to ignore the lessons of the past, as represented by the altered conditions, physical or otherwise, to be seen in Spain, Asia Minor, Palestine, Persia, and northern Africa, which, according to competent authorities,* are due to the destruction of extensive and luxuriant forests contemporaneous with rich and fertile plains and valleys, large cities, dense rural population, copious production, great commercial enterprise, wealth, and national power. In parts of the countries referred to " the desolation is so complete that man can scarcely support himself." Numerous examples of similar results following forest-denudation in various parts of the world are available. New Zealand, owing to its physical conditions —viz., high mountain-ranges dominating narrow plains in close contiguity to the ocean, and a copious rainfall, would be peculiarly susceptible to the disastrous consequences which would inevitably result from the destruction of our elevated forests. These latter, especially in Auckland, Hawke's Bay, Wellington, Marlborough, and Nelson, must be conserved, and should include Crown as well as all interspersed Native and freehold areas.

* Capt. Campbell Walker (late Conservator of State Forests, New Zealand); Yon Humboldt; Mr. N. H. Egleston (see article in Harper's Monthly, April, 1882) ; Mr. E. J. F. Law, commercial attache to H.M. Embassy at St. Petersburg, in article in Edinburgh Review, January, 1893; Dr. John A. Warder, in speech before Ohio Agricultural Convention, 1880 ; and innumerable forestry reports from other countries.

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