A.—3.

While in Auckland last January the schooner was clocked and repaired under the supervision of Captain Champion. The expense of same was kept down to the lowest limit compatible with the efficiency of the vessel. I am pleased to say that the services, of the schooner are now being availed of to a greater extent than formerly by the traders of the Group, and if the vessel can maintain regularity in her movements there is a likelihood of her being used as a potent factor in the further development of trade in the Cook and northern Islands, with profit to the vessel herself. There is, however, a probability that the earnings of the vessel, as far as Niue is concerned, will be lessened next year owing to the slump in the hat trade at that island (which is apparently the reason for one or two trading firms ceasing operations there), and also to the fact that little or none of the Niue copra is carried to Auckland. In addition, there is also a probability that the vessel will only be required to go to Maiden Island once a year instead of every six months, as I am informed that less labour will in future be required to work at that island. This will be a loss not only to the schooner, but also to the trade in the Cook Islands generally, as, in addition to the amount paid by Messrs. Grice, Sumner, and Co. for the charter of the vessel, that firm pays in cash to their Cook Island labour a sum of over £1,000 per annum. The diminution in the earnings of the vessel as far as Niue and Maiden Island are concerned will, I think, be met in a great measure by the support to be given by the traders in the Cook and northern Islands. I have, &c, The Resident Commissioner, Rarotonga. E. Blame, Secretary. Addendum. As shown by the Profit and Loss Account attached, the total expenditure for the year has been £2,293 10s. 6d., while the total revenue received (eliminating subsidy, £350, and profit and loss, 1905-6, £52 2s. 4d.) has been £1,891 Bs. 2d. The difference, £402 2s. 4d., is accounted for as follows :— £ s. d. Loss on present year, 1905-6 ... ... ... ... 187 8 5 Paid insurance, 1904-5 ... ... ... • ... ... 70 16 9 ~ Profits and Loss Account, 1904-5 ... ... ... 138 10 10 Bad debts ... ... ... ... ... ... ... 564 £402 2 4 E. Blame. Government Schooner Department. Working Account of Schooner "Countess of Ranfurly," 1905-6. Or. £ s. d. Cr. £ s. d. To Passenger-fares .. .. .. 308 8 6By Profit and Loss Account, balance 1904-5 138 10 10 Special charters .. .. 573 0 0 „ „ bad debts .. 5 6 4 Freights .. .. •• •• 1,006 411 Benzine .. .. .. 146 6 0 Commission 3 14 9 Wages 850 8 1 Subsidy .. .. . • • • 350 0 0 Office expenses, Auckland .. .. 65 511 Sundry creditors .. .. 303 12 8 „ Rarotonga .. .. 43 8 0 Provisions .. .. .. 383 13 6 Miscellaneous expenditure .. .. 125 12 5 Outfit and repairs .. .. .. 446 19 8 Claims .. .. .. .. 17 3 0 Insurance, 1904-5 .. .. .. 70 16 9 Sundry debtors .. .. .. 101 14 5 Cash, Bank of New Zealand .. .. 118 12 1 Cash in hand .. .. .. 31 3 10 £2,545 0 10 £2,545 0 10 Rarotonga, 19th April, 1906. E. Blame, Secretary. Audited by me from Ist April, 1905, to 31st March, 1906, inclusive, and found correct. This certificate is subject to the exceptions contained in my letter of the 20th April, 1906, to the Minister in Charge of the Islands. —Perot Brown, Auditor. Profit and Loss Account in connection with the Working of the Schooner " Countess of Banfurly," 1905-6. j) r £ s. d. Cr. £ s. d. To Balance, 1904-5 .. • • • ■ 138 10 10 By Subsidy Account .. .. .. 350 0 0 Bad debts .. .. • ■ • • 5 6 4 Special Charter Account .. .. 573 0 0 Benzine Account .. .. ■■ 146 6 0 Commission Account .. .. 314 9 Insurance Account, 1904-5 .. .. 70 16 9 Freight Account .. .. .. 1,006 411 Wages Account .. .. .. 850 8 1 Passenger-fares Account' .. 308 8 6 Claims Account 17 3 0 Balance 52 2 4 Outfit and repairs .. .. • ■ 446 19 8 Miscellaneous Expenditure Account .. 125 12 5 Provisions Account .. .. . • 383 13 6 Office expenses .. .. •• 108 13 11 £2,293 10 6 £2,293 10 6 Balance carried forward .. • ■ £52 2 4 Rarotonga, 19th April, 1906. E. Blame, Secretary. Audited by me from Ist April, 1905, to 31st March, 1906, inclusive, and found correct. This certificate is subject to the exception contained in my letter of the 20th April, 1906, to the Minister in Charge of the Islands.— Percy Brown, Auditor.

13—A. 3.

107