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for settlement as they fall in. At present the number of licenses is about the same, but the area held is less by 160,730 acres, and the annual rental less by £1,315 14s. 6d. The following statement of the number, &c, of ordinary Crown lands held under pastoral license during the last six years shows the gradual shrinkage of revenue under this head : —

Inspections and Rangees' Reports. The Crown Lands Rangers' reports of their inspections continue to show a large excess of improvements effected over actual requirements, a fact that indicates satisfactory, steady, and substantial progress. The excess in value of improvements over statutory requirements in respect of holdings inspected the previous year amounted to £84,457. For the year just ended the amount stands at £66,625. The defaulters are mainly selectors whose land is of inferior quality, r and who cannot in consequence profitably expend what would be necessary to requirements. Peogress of Settlement. It has already been stated that throughout this district as a whole there are indications of the satisfactory progress of settlement. Some portions of the district are, of course, more prosperous than others, as the climatic and other conditions may affect the farmers' operations. The Rangers' general notes with regard to the three divisions into which, as suggested last year, the district has been nominally divided—viz., North, South, and Central —will furnish a fairly comprehensive view of the year's" progress and the present conditions and prospects of settlement in Otago. The information as to the number of lessees, area held, and value of improvements effected in the three divisions referred to is limited to lands held on settlement conditions, land held as pastoral runs and under miscellaneous leases and licenses not being]_included. In general outline the following is a resume of the Rangers' reports : — In the Northern division there are now 245 ordinary Crown tenants, holding an aggregate area of 230,855 acres, the improvements on which are valued at £44,132 ; also 468 land-for-settlement tenants, who hold 79,918 acres, with improvements valued at £100,231, making a total of 713 tenants, holding 310,773 acres, with improvements valued at £144,363. The Southern division now contains 627 tenants on ordinary Crown lands, with a total area of 118,613 acres, and improvements the value of which is estimated at £70,656; also 130 tenants under the Land for Settlements Act, holding 36,175 acres, with improvements valued at £31,847: making a total of 757 tenants, 154,788 acres, and improvements valued at £102 503. In the Central division, which comprises all Central Otago and the Lakes district, there are now 1,083 tenants on ordinary Crown lands, holding 500,596 acres, with improvements valued at £179,886, and. thirteen tenants under land for settlements, with 1,239 acres and improvements valued at £2,195 ; making a total for the Central division of 1,096 tenants, holding 501,835 acres, with improvements valued at £182,081. The grand totals for the three divisions are 2,566 tenants, 967,396 acres, and improvements valued at £428,947. The settlers in the Northern portion of the Otago Land District have not made great progress during the past year. Little or no rain fell between October and January, in consequence of which the grain-crops and the grass suffered rather severely. About the month of January the paddocks were very bare, and settlers were almost at their wits' end to provide feed for their stock. Many were, unfortunately, compelled to sell sheep and cattle, which, owing to the scarcity of feed, did not command anything like reasonable prices. The lambing generally was, however, above the average, and the price of wool very satisfactory. The root-crops are not by any means up to the average, and feed is still very scarce. In view of these facts it is to be sincerely hoped that a mild winter may follow, as if it should be a severe one the results might be serious. The Southern division which usually has a good average rainfall, has also suffered considerably through want of rain. Except in specially favoured localities, the crops have been very light and the grass backward. The root-crops, which, so to speak, hung in the balance for a long time, made fair progress after the middle of February. Some of the turnips will yet turn out fair, but they will not nearly approach, the average. The Central division, comprising all Central Otago, has been in much the same position as the Northern, the dry season preventing any material progress from being made. The sheep off the high country are in splendid condition, but the low-country stock are not in a fit condition to face a bad winter. The Central district suffers more or less every year from drought and prevalent high winds. Where irrigation has been possible the results have been magnificent, but as the quantity of available water is very limited the irrigated area is necessarily also limited. Speaking generally, the Crown tenants of Otago have made only moderate progress during the year. The comparative failure of grain and root crops has, however, been partly counterbalanced

Year. Number. Area. Annual Rental. 1901-2 1902-3 1903-4 1904-5 1905-6 1906-7 ... 237 237 226 213 216 216 Acres. 4,508,322 4,519,101 4,385,344 4,324,622 4,320,008 4,159,279 1 £ s. d. 29,313 8 8 28,832 4 2 27,876 15 10 27,427 14 6 26,919 14 4 25,603 19 10