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by the higher lambing percentages and the good prices for wool. The settlers are not by any means disheartened, and, having had a succession of seven or eight good years, they are in a favourable position as a rule to cope with one bad one. Settlement conditions have been very well observed, and the settlers' prospects are fairly bright and encouraging. Ranger Mackenzie, reporting for the Lakes district more particularly, shows that where there has been default in a few cases the settlers have either shown good and valid reasons for the default or have made good the deficiency. He states that notwithstanding the very dry season the district as a whole is in a fair state of prosperity. While a few places have suffered, in green crops especially, the graincrops in the Hawea district have seldom been better, there having been some very heavy yields. Sheep had come in from the high mountain country in good conditicn. The dry season had suited the Makarora Valley, where crops could scarcely be better. In that district, however, and also in West Wanaka, very little progress had been made in extending settlement. There was still a strong demand for land, and would-be settlers were looking forward to the falling-in of some of the large runs. The great question throughout the Wanaka, Hawea, Wakefield, and Cromwell districts was water. Settlers were willing to be taxed for this if obtainable. It was really wonderful what could he done in the Clutha Valley with irrigation over lard that was otherwise altogether barren. He had reported lately on the Cromwell Flat, and showed that water would be the main thing in the future for the general prosperity of that district. Mr. Mackenzie reports having visited all the holdings in his distiict, besides having furnished a large number of special reports on various matters, and had also undertaken a number of surveys, attended to office-work, &c. A fire had occurred in the Greenstone Valley, and although notices of warning had been posted up all round the district they seemed to have little or no effect in preventing fires. Rebates of Rent. Rebates of rent were granted to a total of 1,525 tenants during the year, to the extent of £2,924 4s. 3d., being more than the previous year by forty-four tenants and £460 17s. Bd. in amount granted. In ordinary Crown lands the number of tenants who participated was less by ten, but in land for settlements fifty-foir more, while the amount granted to ordinary Crown-land tenants was £16 17s. Bd. less and to land-for-settlement tenants £477 15s. 4d. more than in the previous year. The several tenures that participated in the rebate and the number and amount granted during the twelve months are as follows :— Tenure. Number of Amount granted. Ordir ary Crown lands— Tenants. £ s. d. Deferred payments .. .. .. .. 7 2 3 10 Perpetual leases .. .. .. 173 103 11 0 Lease in perpetuity (ordinary) .. .. 623 406 13 0 Lease in perpetuity (village homestead) 52 5 14 5 Lease in perpetuity (farm-homestead association) 14 12 1 8 Occupation with light of purchase .. .. 207 89 13 9 Total .. .. .. .. 1,076 619 17 8 Land for settlements .. .. .. 449 2,304 6 7 Grand total .. .. .. 1,525 £2,924 4 3 Aeeeaes of Rent. The amount of arrears in respect of ordinary Crown lands, exclusive of the current half-year, is approximately about the same as at the 31st March, 1906, while in land for settlements the number of tenants in arrear and the amount owing are a little more. Taking the gross arrears, inclusive of the current six months, into consideration, the number of holders in arrear is less by thirty-eight, notwithstanding tho increase in the number of tenants on the books, but the amount owing is £25 Is. 9d. more than in 1906. As stated in previous reports, small grazing-runs are conspicuous in these arrears, in consequence of there being no rebate under that tenure for prompt payment, there thus being no incentive for the lessees to pay until the half-yearly period has well advanced. A large proportion, however, of these are generally paid within the first three months of the period. Exclusive of the current halfyear, the percentage of tenants in arrear is 2 - 55 of the total number on the books, and the amount owing 2T2 of tha total annual rental. Including the current half-year, the percentages are : Number of tenants, 12'84 ; amount owing, 7 - 88. Under all the circumstances, therefore, these must be regarded as exceedingly small. Forfeitures and Surrenders. These are six more in number than for the pievious year, and embraced a much greater area and rental. The surrenders included the large areas comprised in the Blackstone Hill, Lauder, and Home Hills Runs, which were surrendered to be dealt with for closer settlement. Of thirteen forfeitures, nine were for non-payment of rent, and four for non-residence and abandonment. For the sixteen surrenders the reasons were various— subdivision, purchase of land, reduction of capital value, closer settlement, &c. Transfers. The transfers during the year have exceeded those of the previous year in number by thirty, and in area dealt with by 674,290 acres, the total being 229 transfers, and area dealt with 949,586 acres, In 1905-6 the total number was 199 transfers, covering an area of 275,296 acres,

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