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Summary. £ Cash and financial credits for the year 1922-23 .. .. .. 46,060 Estimated value, of prison labour employed on public works for which neither cash nor financial credit was received .. .. .. 21,968 Estimated value of prison labour employed on farms, industries, domestic work, &c. .. .. .. .. .. .. .. 25,412 Total value, of prison labour, 1922-23 .. .. ..£93,440 The above figures show that, while the gross expenditure for the past financial year was £123,360, the total value of prison labour during the same period was £93,440. Value of Agricultural and Works Policy to the Stale. In view of the fact that it was in my annual report of July, 1913, that the Department's agricultural and works policy was first declared, it will not be out of plaee to state briefly the results achieved during the ten years that have since passed. It must first of all be remarked that our agricultural policy was really the outcome of the earlier tree-planting policy of the previous administration. The use of prison labour for afforestation purposes clearly demonstrated the possibilities connected with the employment of prisoners on semi-free outdoor occupations and rendered the transition to the breaking-in and cultivation of land a fairly easy matter. Once this class of work was placed on a permanent footing and our farms were in actual operation it became apparent that in the interest of the prisoners themselves it was advisable to train them as agriculturists rather than to employ them on the simple and entirely unskilled work of clearing, burning, digging holes, and planting trees, year in and year out. Tree-planting has certainly created a State asset of considerable value, but as an occupation it was of little use to the State's prisoners. Our records show that between the years 1901 and 1920, the first and last years of tree-planting by prison labour, 15,932 acres of waste land, chiefly pumice country, were planted with 40,719,310 trees, and that the total labour value of the work, as estimated by the Forestry Department, was £65,435. It was not until the winter of 1912 that we were able to commence the development of our first property at Waikeria. Prior to the financial year 1912-13 the Department had practically no revenue —in fact, what might be termed the business side of the Department had received little or no attention. At the end of that year we were able to publish our first revenue return, the amount earned being £5,451. As each year has passed our cash receipts have grown, until on the 31st March last the Treasury returned our cash receipts and credits for the year at nearly £47,000. This sum added to the receipts for each year since and including 1.912 gives the handsome total of £207,500 actually earned and paid to the credit of the Prisons vote during the past twelve years. This sum by no means represents, however, the total value of prison labour to the State during the period under review. The Prisons Department has carried out many largo public works during that time for which they have received no financial credit whatever, but in recent years we have obtained estimates from the Public Works Engineers of the value of this work if it had been carried out by contract or by men employed on wages. Our return? in this direction only carry us back to the year ended 31st March, 1917, but the total amount saved to the Sfc.it'3 in those few years by the intelligent employment of prison labour has amountel to £125,337, while a rough estimate of the value of the work of this nature carried out between 1912 ani 1917, the first year we obtained the Public Works Engineers' figures, reveals a further State saving of £87,500. In addition to the value of the work of the prisoners as shown by the figures already quoted, it must not be overlooked that much of the work upon which they have been employed since 1911.-12 has been the breaking-in and development of lands for which no liuuuiil ere lit has been shown. TirJU work has, of course, a direct value to the State owing to the increase in the value of the lands dealt with. Taking into account the original value of those lands, and eliminating as far as possible the natural unearned increment, I can safely say that the work of our prisoners has placed an added value of fully £120,000 on Government and local bodies' (Invercargill) lands during the past twelve years. If the figures I have quoted are added together it will be seen that on a very conservative estimate the Prisons Department has had work to the value of £541,387 carried out by prison labour in that period. There is, of course, still other work, in the way of manufacturing boots and clothing for prison officers and prisoners, growing produce for rations, domestic work, &c, that all has a direct monetary value to the State, but the figures already given sufficiently indicate the success of the Department in inculcating the " gospel, of hard work " as the guiding principle of its administration. Development during the Year. The reports of the Inspector and Supervisor of Works, and those of the controlling officers, indicate clearly the progress that has been made in our different undertakings during the past twelve months. Our latest work, the development of land for settlement on the Hautu Block, near Lake Taupo, has progressed most satisfactorily, the report of the Officer in Charge showing in detail that our operations in that direction have been carried forward vigorously, so far at least as the weather and other adverse conditions would permit. The internal drainage, cultivation, and grassing of the reclamation areas at Invercargill have proceeded apace, while the farm and other work at Paparua (Templeton) and Waikeria have been carried on without intermission, when weather conditions were reasonably favourable. Our roadmaking and sawmilling operations at the Waikune Camp (Waimarino) have been much interrupted by the continuous rainfall, that part of the country well sustaining its reputation for excelling any other district in New Zealand for the amount of water