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Sir. Ra,rotonga P Cook Islands, Bth May, 1911. I have the honour to report another satisfactory year's working. Revenue and Expenditure : The revenue derived from all sources amounted to £8,267 9s. 5d.. and the expenditure to £8,047 11s. 6d. The balance to the credit of the Administration, which stood at £4,437 Bs. Id. on 31st March, 1910, has been increased to £4,657 6s. The revenue exceeded that of the previous year by £611 16s. 9d. The principal increases are —Customs duties, £682 ; trading licenses, £133 ; Fruit Fumigation and Inspection Account, £194 ; High Court fees, £66 ; stamp-sales, £57 ; and rents, £37. The main decreases are —Land Court fees, £339 ; R.M. Court, Aitutaki, £47 ; interest, £22 ; arid liquor profits, £52. The total expenditure amounted to £8,047 11s. 6d., or £220 less than the receipts. Of this sum, £3,223 was spent on public works, and £135 on live-stock imported for the benefit of the island. Postal : The turnover in the Money-order Department at Rarotonga amounted to £21,032 6s. 9d., being made up as follows : 871 money-orders issued, £10,875 7s. Id. ; 627 money-orders paid, £9,925 11s. 2d. ; postal notes sold, £231 Bs. 6d. This is an increase of £5,511 over the preceding year. The amount of commission received by the New Zealand Government on money-orders issued was £51 Us. 3d. Stamp-sales amounted to £342 19s. Id., being an increase of £57 11s. Bd. over last year. Trade : The year proved to be a record one, the total oversea trade being valued at £174,544--imports £83,795, and exports £90,749. Imports increased in value by £16,058, and exports by £17,096, over the previous year. Owing to the Fiji hurricane in March, 1910, having destroyed all the banana-plantations, a strong demand set in for Cook Island bananas, and high prices ruled to the end of December. Fiji is again in a position to export to New Zealand, which is our only market, and, as a result, there lias been a considerable drop in values. The experience of last year shows that were a little protection afforded these islands it would not be necessary to wait for another misfortune in Fiji to give our growers a fair return for their labour and capital invested. Given a little encouragement, the Cook Islands could soon be in a position to supply the whole of New Zealand with bananas. Another drawback growers have to contend with is that the Fiji fruit arrives in Wellington on the same day as the Cook Island vessel arrives at that port. This causes a glut in the market, which is detrimental to both Fiji and these islands. Buyers are not, in many instances, able to make large purchases at one time, and in order to clear the market the fruit is sacrificed. Steamers engaged in the fruit trade should be timed to arrive, if possible, at regular intervals, thus obviating the clashing of shipments. Labour is another difficulty. Asiatics are prohibited in our islands, whereas in Fiji cheap Hindu labour is obtainable for plantation-work. The output of bananas for the year increased by 5,500 cases, but oranges decreased by L 775 cases. The export of oranges would have exceeded that of the previous year but for the fact that the Mauke Natives declined to accept the prices offered by the traders at the commencement of the season. The traders made arrangements for the steamer to call, but on arrival there was practically no cargo. No more calls were made during the season, and, as a result, the whole crop, with the exception of some cases transhipped by schooner to the steamer while loading at Atiu, was left on the island. In October last the San Francisco mail-steamers started running from Wellington to San Francisco, with Rarotonga a port of call both ways. Immediately the service began, inquiries were made from America for coconuts suitable for desiccating. Already there is every indication of the development of a good trade; the last steamer left Rarotonga with fully 100 tons of nuts. The principal imports from America are timber, carriages, flour, rice, harness, and prints. With regard to the imports for the year, nearly every item shows an increase—notably apparel, cotton piece-goods, drapery, boots and shoes, preserved meats, sewing-machines, and silks. Traders report that throughout the year trade has been exceedingly good, but owing to the decline in fruit and copra values there is now a considerable falling-off. This will affect our imports and revenue during the coming year. Attached please find financial and trade returns for the year. I have, &c, W. J. Stevenson, The Resident Commissioner, Rarotonga. Treasurer, and Collector of Customs. Sir,— Rarotonga, 15th May, 1911. I have the honour to inform you that I have audited the accounts of the Cook Islands Administration for the year ended the 31st March, 1911, and found them to be correct. I have also audited the books of the High Court and Land Titles Court, and find that all moneys received have been duly accounted for. I have, &c, A. G. Clarke, Auditor, An Officer of the New Zealand Postal Department specially deputed to audit the Accounts. The Resident Commissioner, Cook Islands Administration, Wellington.