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The sowing of conifers occupied the greatest part of October, which month, as will be seen by referring to the records of rainfall attached, chanced to be the driest one during the year. The weather conditions were excellent for the sowing of seeds, and the work on that account progressed expeditiously. Quantities and varieties of seeds sown are embodied in Schedules. The crops on the whole are very good. The several species of pines germinated well and evenly, and have since made good progress. Larch is not as thick a crop as was grown the previous year, but this is accounted for by the seed being poorer in quality than usual. The two species of Eucalypti which were sown in December made splendid progress, the crop from 6 lb. of seed being estimated at 250,000. Owing to the difficulty in procuring seed of Acacia melanoxylon, this was not sown until January, and the crop is consequently rather backward. This tree, however, is very hardy, and it is hoped that they will be large enough to transplant by next spring. The wet weather experienced during November, December, and January caused much labour in removing seed-frames from seed-beds, and in weeding, in order to prevent the seedlings from " damping off," and although the efforts made in this direction were not entirely successful yet no serious loss of trees occurred. The pines suffered the most in this direction, although the larch were also affected to a small extent. Amongst the lined-out trees remarkably fast growth was obtained owing to the almost continuous rains. Larch is especially noticeable in this respect. This crop numbers over a million trees, and it is estimated that they have made an average vertical growth of 1 ft., and many of them over that. The two-year-old trees in seed-beds have also made such good growth that it was found necessary to " wrench " these on three occasions in order to retard their growth. In consequence of this, these trees have splendid roots, and a large number of them can be safely transferred to the plantations during the coming winter. A few beds of larch were attacked with grub, as well as a brown beetle, which has retarded the growth somewhat besides causing the loss of a considerable number of trees, but with this exception the two-year-old seedlings are very healthy. Owing to the autumn of 1906 being somewhat cold, the crop of Eucalypti and Acacia melanoxylon did not make their usual good growth, and in consequence the number of these trees which were fit to moss was comparatively small. From April to September the number of trees mossed was 86,500 Eucalypti and 18,000 Acacia melanoxylon. As the spring of 1906 advanced, however, the trees started into growth, and a start was made to moss them in December. The results were not encouraging in the case of the Eucalypti, and it would appear that " mossing " these cannot be done successfully when the sap is active. With the Acacia melanoxylon, however, the results' were better, and very few deaths occurred. The total of trees mossed during the year was 169,750, and the cost per thousand was 12s. 6d. During winter the sizing of seedling trees was proceeded with continuously for about three months. The number of trees thus dealt with was about three millions, and the work of sizing and counting these and bundling about 50 per cent, for sending direct to the plantations cost on the average 2s. 3d. per thousand. The lining-out of the smaller trees was proceeded with in August, and occupied the whole of that mouth ; the number lined out being a million and a half, and the cost on an average 2s. 4d. per thousand. Of the number lined out, about a million were larch which had been lifted out of the one-year-old seed-beds, these being nice sturdy plants from 4 in. to 6 in. in height. The general improvement scheme has progressed fairly well during the year. The whole of the original enclosure is now broken up for nursery purposes, the remaining portion of 1 acre having been •graded during the year. Water-pipes were laid through an area of 2 J acres in order to extend the seed-sowing plots. The main entrance road, which is the outlet for the surface water on a catchmentarea of about 10 acres, was provided with concrete channels and several culverts in order to prevent " scouring " during heavy rain. These so far have been very effective, having mitigated the trouble previously experienced in keeping this piece of road in order. In November last the temporary occupation was obtained of about 30 acres of land divided from the original block by the Puarenga Stream. Some 12 acres of this was laid off for nursery purposes and partly fenced, while of the remaining portion, about 8 acres, was cleared of the heavy growth of manuka and fern and sown down in grasses and clovers for the horses. It is intended to lay off the remainder of this land for the horses next spring, as hitherto the want of grass has been much felt; besides this, a danger of fire will always exist as long as the natural growth is left in its present condition, and a paddock of grass will insure safety for the plantation on that side. This experiment of autumn-sown paddocks has been attended so far with encouraging results; the seed germinated well, and grasses and clovers have since made good headway. Much information has been given in previous reports about the Catalpa speciosa or hardy Catalpa, and the merits of this tree have interested many farmers throughout the colony. The difficulty of obtaining seeds or young plants of this species true to name, and the disappointment caused to many planters through spurious and inferior varieties having been sold as the true hardy Catalpa, was overcome by the Government deciding to dispose of the stock cf Catalpa speciosa from this nursery to farmers and others last winter. The price charged for them—viz., 2s. 6d. p«r hundred—was imposed merely to cover the cost of lifting, packing, and carting to the railway-station; and parcels of trees were despatched to 195 persons in various parts of the colony. 47,120 trees were thus disposed of, and the revenue received for same was £58 18s. That the Catalpa will thrive in- certain districts throughout the colony is highly probable, and when the results are obtained from those persons who secured supplies from here last winter the Department will then be in a position to give reliable advice to those who contemplate planting this reputedly valuable tree. So far only two letters have been received since the trees were distributed, and both are very encouraging. One of these was from a gentleman in Pukerau, Southland, who stated that the Catalpa had grown nicely with him, except in exposed situations, and requesting a further
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