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General Statement of Receipts and Expenditure for the Year ending the 31st December, 1904— continued.

John Rennie, Chairman. H. H. Pitman, Steward. Examined and found correct.—J. K. Warburton, Controller and Auditor-General.

OTAGO. Sir, — Education Reserves Office, Dunedin, 23rd May, 1905. In accordance with Order in Council of the 15th December, 1878,1 have the honour to forward herewith the report of the School Commissioners for the Otago Provincial District for the year ending the 31st December, 1904. During the year the Commissioners leased fourteen reserves for agricultural purposes, nine for pastoral purposes, and forty-one town sections in various parts of the provincial district. The area of the agricultural lands was 2,234 acres, leased to twenty-six tenants at £369 Is. 9d. per annum, or an average of 3s. 3fd. per acre ; the area of the pastoral land was 1,677 acres leasedto seven tenants at £77 lis. 3d. per annum, or ll T \;d. per acre ; and the area of the town sections, 10 acres 1 rood, leased to thirty-nine tenants at £27 2s. 6d. per annum. The Commissioners' rent-roll now contains 890 tenants. The total area of the endowments vested in the School Commissioners of Otago is 390,253 acres, and the present annual rent is £13,724 6s. 3d. The particulars of the holdings are as follows : Under pastoral lease 258,671 acres, and the present annual rent is £1,832 6s. lid. ; under agricultural lease 128,860 acres, at £10,975 2s. per annum ; under town and suburban lease 2,722 acres, at £916 17s. 4d. per annum. The sum of £39,649 12s. Id. is invested on mortgage over freehold securities bringing in £1,822 6s. Bd. per annum, or £4 lis. lOd. per cent. In addition, the sum of £2,800 is in the Bank of New Zealand on fixed deposit. In the selection of securities the Commissioners have been careful to choose such securities as could be profitably added to the endowment in the event of the land falling into their hands under power of mortgage, and in each case a valuation has been made by a competent valuer, showing a margin of one-third over the advance. During the year the sum of £768 was received on account of repayment of loans. Of the sum of £4,575 18s. Id. shown in the statement of receipts and expenditure as rent in arrear on the 31st December last, the sum of £2,843 15s. lOd. has since been collected. As explained in former reports the rents are debited half-yearly in advance, and the greater proportion of these, which become due in the last half of the year, are rarely paid until after harvest in the following year. Of the sum of £1,431 9s. lOd. shown in the statement of accounts as expenses of management, £29 9s. appears on the other side under the heads of costs received for preparation of leases by the Commissioners' staff, and office rent (£10), and should therefore be deducted from the expenses of management. The sum of £76 12s. lid. was paid to the Government for train fares, stamps, and telegrams. The sum of £770 1 Is. Id. was expended in the permanent improvement of the endowments by tile draining and river-protection. During the past year the absolute necessity for a closer inspection of the agricultural holdings having made itself manifest to the Commissioners, they decided to appoint a ranger with a practical knowledge of farming, for the purpose of making a periodical and systematic inspection of each holding, and ascertaining whether the cropping conditions of the leases are being strictly adhered to. To do this he has been furnished with pocket-maps and field-books, in which he shows a plan of each field on the farm, and gives detailed information regarding the crops so that the rotation provided for in the leases can be insisted on. As the holdings are scattered over nearly the whole of Otago and Southland, their proper inspection is necessarily a work of some magnitude, and adds very considerably to the cost of management, but the Commissioners are already satisfied that the extra expense is fully justified. The Commissioners take this opportunity of referring to charges that have been brought against them from time to time by a certain section of their tenants in the Waikaia, Wendon, and Wendonside districts, which contain a considerable area of the education endowments, that the Commissioners have hindered settlement by their mode of administering the reserves, the principal complaints being— first, that the term of the Commissioners' leases is too short; second, that valuation for improvements

Primary Eaucation Estate. Total. Liabilities. Iteward's salary, December, 1904 lwaiting appropriation in purchase of land Total liabilities £ s. a. £ 45 264 s. a. 0 0 5 11 309 5 11