a.—i

5

2 mods 3;| perches ; (3) Pani Karauria, 626 acres 2 roods perches ; (4) Tv Tiaki« tai, 1,412 acres and perches. The area in No. 3a No. 6 will have to be lessened by the 172 acres 3 roods added to No. 3a No. 5, and the areas taken off the three owners, Morehu Turoa, Erena Karauria, and Maraea Aorangi, as follows ! The area of Morehu Turoa will be reduced by 62 acres ; that of Erena Karauria by 16 acres 1 rood ; and that of Maraea Aorangi by 94 acres 2 roods : making their interests in No. 3 No. 6 as follows : Morehu Turoa, 2,200 acres 2 roods perches; Erena Karauria, 572 acres 1 rood 13J perches ; and Maraea Aorangi, 1,081 acres 3 roods 13| perches. The land granted out of 3a No. 6 is far more valuable land than Paparewa for pastoral purposes; and the part given to Mrs. Donnelly and her coowners in Paparewa is the most suitable part for building purposes. (3.) As to the Disposal of the Balance of the Estate. The Government have purchased, according to the returns furnished to us, in all 5,414 acres 1 rood 14 perches. We think the Government should acquire for the purpose of European settlement the following blocks, namely: Waimarama 3a No. 4, No. 3a No. 3, No. 3b. Interests in some of them have been acquired. If it cannot acquire them without legislation, then legislative authority should be asked for. Regarding the Okaihau and Waipuka Blocks, the Government have purchased several interests in these blocks. There are some of the owners who have no land left to maintain themselves or their families if they sell their interests in these blocks, and we therefore recommend that the Government should cease purchasing in these blocks until we have had an opportunity of finding out —(1) what land is left to the owners ; (2) what area of land suitable for settlement such owners have ; (3) whether the owners could profitably utilise their lands. The two largest owners in No. 3a No. 6 —viz., Morehu Turoa and Maraea Aorangi—wish to get land for sheep-farming if the lease to Miss Meinertzhagen is not carried out. We recommend that the balance of this block be leased to them. There are 6,317 acres 2 roods 26J perches in the block, adding 172 acres 3 roods to No. 3a No. 5. Of this area Miss Meinertzhagen would, we recommend, receive 4,680 acres. The balance would be 1,637 acres, and Morehu Turoa might have 1,000 acres and Maraea Aorangi 637 acres 2 roods 26J perches on the same terms as Miss Meinertzhagen—the division-line to be agreed on between them or fixed by us. The only question that we have left over is what ought to be the terms and conditions of Miss Meinertzhagen's lease. In our opinion, the lease should be of 5,000 acres for twenty-one years, Miss Meinertzhagen paying the usual rates and taxes. (2.) That, as to the 320 acres on which the woolshed and sheep-yards are, they should be allowed to be used by Morehu Turoa or her tenants of Block No. 3a No. 6, by Maraea Aorangi and her tenants of the same block, and by Erena Karauria and her tenants of the same block for sheep purposes in the proper season and at the proper times ; that Miss Meinertzhagen should keep the fences and sheds, woolyards, &c, &c, in proper repair and condition. If there ever arose any dispute as to the use by these parties of the dip, &c, the Maori Land Board could adjudicate. (3.) As to the rent, the law has laid down a rule which we do not feel warranted in departing from—namely, that it must be 5 per cent, on the capital value. In our general report we propose to submit for consideration whether the present modes of leasing Native lands should be continued. From the evidence given before us we have no hesitation in saying that we consider £7 an extreme value for such land. It may be that in the midst of what is termed a land " boom " the land might fetch more on sale, but we doubt if any prudent lessee would undertake to give more than 7s. per acre for such land, seeing that there is no provision for payment for improvements. We therefore, because of the rule laid down by the statute, think that the extreme rent of 7s. per acre should be imposed. We consider, however, that it is an extreme rent, and we are very doubtful if it would be profitable at that rent unless present prices or prices near to them for wool and stock are maintained. Miss Meinertzhagen would therefore be entitled to pay £1,638 for 4,680 acres. As to the sheep-paddocks and site of woolshed, &c, amounting to 320 acres, as she has only a partial use of that land, and has to maintain buildings and fences thereon, we think that she ought only to pay half-rent for that area—namely, 3s. 6d. per acre. This will make her total rent £1,689. In order that it may clearly appear that we