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list, chiefly on small isolated blocks and miscellaneous licenses. The total number of holdings within the district is, on Crown lands, 1,040, occupying an area of 1,302,709 acres. This shows an increase of fifty-nine holdings during the year, held under various tenures, exclusive of land for settlements, which are treated separately in another place. : jFor the purpose of this report Marlborough may be conveniently divided by the Wairau River into two distinct portions, where quite different conditions often obtain.^The north portion, including the whole of the Sounds and portion of the Marlborough County, may be called generally " small-holdings country " ; the general characteristic of this portion is rather broken bush-clad hills, with some fertile flat valleys running into them. Within this northern portion most of our settlement takes place, generally under special conditions, because all the front country has been taken up long ago, leaving only the poorer and less accessible parts available for expansion of holdings. It is also within this portion that most of the timber is obtained, and this, I think, temporarily retards the clearing of the bush, for many of the mills are working on private property. I estimate that about 1,500 acres only of bush has been felled and burnt during the past season, although, owing to the unusually dry season, much standing' bush, chiefly birch and inferior^timber, has been^ destroyed. The settlers in these parts appear to be doing fairly well, owing to price of stock, wool, and other produce, but they have very much to contend with in the way of This especially applies to the Upper Wairau, Wakamarina, and Pelorus Valleys. In the west portion of this division the settlers have a harder time, because the land is poor and the weeds they have to contend with are, if possible, more numerous and vigorous. There is some gold being got in this portion as well as in the Wakamarina Valley, but I fear it gives a rather poor return for the labour expended upon it. The flax industry appears to be in a good sound position in Marlborough, and many of our settlers are obtaining a very welcome additional return for what was, until lately, only a waste part of their holdings. In some cases this amounts to nearly the rent they have to pay. The southern portion of the district (south of the Wairau) contains nearly the whole of the land for settlement, which is reported upon in another part, and most of the pastoral land in the district. It is chiefly open land, and although a very large proportion is high mountainous country, some of the plains are both extensive and fertile. This southern portion as a whole, but especially the eastern portion, has suffered considerably from drought; the recorded rainfall for Grovetown, which is the nearest meteorological station to Blenheim, was about 22 in. for the year, and for the spring months—viz., October, November, and December —was only 2| in. The southern limit of the country over which the drought extended was about the Ure River. South of this the rain, although less than normal, was sufficient to keep the pasture growing and green. The effect of this drought was, of course, felt most on the land where a considerable amount of cropping was done, but the crops in spite of this were fairly good ; but the shortness of feed, both locally and in Canterbury, in conjunction with the slaughtermen's difficulty at the freezing-works, had a very prejudicial effect on the price of stock, especially fat sheep and lambs. The hardness and dryness of the ground also, where it did not actually prevent ploughing, retarded the growth of the root-crops, and many of the settlers were consequently unable to hold their surplus stock, and had in many instances to sell them for a considerably reduced price. These remarks also apply to the Kaikoura district, where the feed was generally abundant; many of the settlers were cut off from their principal markets in Canterbury, because there was a shortness of feed in that district and a consequential lack of demand for store sheep. The progress made by the settlers in the Kaikoura district has been very marked ; the country which a few years ago was covered by dense bush is now in good grass, and the Crown tenants appear to be doing good service for themselves and for the cause of settlement in general. Lease in Perpetuity. —There is no doubt that in Marlborough the most popular tenure is lease in perpetuity. Out of the 1,040 Crown tenants who hold permanent leases there are 619 who hold under this tenure 195,395 acres. Occupation with Right of Purchase. —Only forty tenants this tenure 13,061 acres. Small Grazing-runs. —The area held by 122 tenants is 260,14"l acres, with an annual rent of £10,302 10s. lOd. Pastoral Runs. —The area held under this tenure by fifty-five tenants was 898,627 acres, yielding an annual rental of £3,889 13s. Occupation Leases under " The Mining Districts Land Occupation Act, 1894."—There were no selections taken up under this heading during the year, but several have been applied for, some of which were refused because they were in a State forest, and the others are awaiting survey. There were nineteen selectors, holding 1,161 acres and paying rent £31 4s. 4d. current at the 31st March, 1907. These holdings are generally situated up the Wakamarina Valley. Some of the selectors have made good use of their holdings and have kept them clear of noxious weeds. Others have only done a little work beyond getting a house to live in and enough land cleared to run a cow or two. Revenue. The actual revenue collected amounted to £32,985 15s. 7d.; miscellaneous items, £30 3s. The gross receipts were £33,015 18s. 7d., an increase of £2,033 12s. 9d. on last year's receipts. Rebate of Rent. Rebates amounting to £2,136 19s. sd. were granted. This and the good prices obtained for stock and market produce accounts for the small amount of arrears. Arrears of Rent. This amounts to £516 16s. lid (out of a total annual rental of £31,838 10s. 5d.), and is distributed among forty-one tenants, out of a total of 1,040 tenants.