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had commenced to purchase the freehold of their properties by deferred payments, but found themselves unable to meet the substantial payments of principal and interest during the early years of the term, availed themselves of the opportunity afforded by recent legislation to exchange to renewable lease, thus obtaining the relief of very much lower payments. There has been a fair amount of activity in the conversion to freehold of leases in the Native townships, but in these, as well as at Rotorua, influences appear to be at work endeavouring to secure modification of the terms of purchase originally agreed to, regardless of the fact that such attempts savour somewhat of a breach of faith with the Crown, which undertook the purchase of the Native interests 011 a basis of which the lessees were well aware beforehand. Tenants and Revenue. —The total number of tenants at the close of the year was 5,576, occupying an area of 1,063,873 acres, at a rental of £109,225 per annum. The receipts for the year amounted to £25-1, 931, which included £137, 962 of payments under the Discharged Soldiers Settlement Acts in respect of advances made. The arrears totalled £52, 227, owing by 1,275 lessees, an amount which indicates the extent to which the district has suffered from past financial and other conditions. The Land Board has, as in previous years, investigated all cases where circumstances indicated that assistance to tide over the difficulty could be given by means of postponement. In many of the cases, however, it appears to be questionable whether any real ultimate benefit would accrue from this course, the position of the tenants, the condition of their holdings, and the nature of their liabilities rendering recovery doubtful. The tenants are, however, fortunate in having the State as a landlord, which is prepared to extend the utmost possible consideration. It may be remarked that the above arrears include those owing by soldier tenants whose cases had not been finally dealt with by the Dominion Revaluation Board or the necessary adjustment of their accounts completed. Lands to be opened for Selection. —As indicated in previous reports, it is difficult to predict with any accuracy what lands can be offered during the coming year. A total area of 149,083 acres is already available for selection, but much of it is not attractive to land-seekers. Other lands which could be made available require the provisions of access at considerable expense, while the problematical chances of disposal under present conditions do not appear to justify such expenditure being incurred. It is clear, however, that, more particularly with the present heavy costs of bringing in undeveloped lands, new settlers cannot afford to be further hampered by lack of reasonable roading facilities, and unless these can be provided when the lands are placed on the market it is worse than useless to offer them at all. Land Board Work. —During the year meetings of the Board have been held on twenty-one days, the total number of items dealt with having been 1,911. This shows a further decrease in number, but the majority of the cases now dealt with present features of considerable difficulty, and necessitate very close investigation and. attention. Members of the Board take a keen interest in the work, and their knowledge of local conditions and of the requirements of the settlers is of great assistance to myself and the office. Mr. W. G. Hayward, the Crown tenants' representative, has been re-elected unopposed for a further term. Office-ioorJc. —The year has been one of exceedingly strenuous activity in the office, and I am pleased to record that the staff has spared no pains to keep the work up to date, and its willingness to work extra hours for this purpose has been most praiseworthy, and has considerably relieved the burden of a time of some anxiety and difficulty. The Field Inspectors in their duties are confronted with problems requiring much discrimination and hard work. That they have come through their trials most successfully is a tribute to their tact and industry. It is with very much regret that I record the retirement, at the end of January last, of Mr. J. G . Bendely, who for many years had occupied the position of Chief Clerk in this district. His work was always characterized by ability, throughness, and untiring energy, and the loss to the Department and this district especially cannot be over expressed. GISBORNE. (V. I. Blake, Commissioner of Crown Lands.) General Conditions of Settlement.—Once again the year has been one of very good condition as far as sheep-farmers are concerned. The prices for wool at the early sales were much higher than even those of last year, and the prices of fat lambs and breeding-ewes showed a corresponding increase. Prices of wool fell off somewhat at later sales, but even then the prices were very satisfactory. Most sheep-farmers are once again on their feet after the slump, which hit this district very hard. Bush-land holders did not experience a very favourable year. Rains were frequent, and opportunities for burning off were few and far between ; many men were quite unable to get a good burn. The frequent rains, while beneficial to pastures, interfered greatly with harvesting, and serious losses have been recorded in some quarters. Dairy-farmers had a good season, but butterfat-prices had a falling tendency. Once again attention must be drawn to the necessity for building up good dairy herds. Many farmers seem content to muddle on with the same old inferior stock, and a falling-off in cream cheques is the inevitable result. Particularly on the high-priced lands on the Poverty Bay and Opotiki fiats, a first-class herd is an essential if dairying is to be made to pay. A dairy-farmer's life is a strenuous one at any time, and it is difficult to understand why so many are content with a bare living, when careful herd-culling would, in many cases, give 0, comfortable one. The evil of inflated values is still in evidence. Particularly in Opotiki County farms have come back on the hands of the mortgagees through the absolute impossibility of making them pay at the prices paid for them. This evil is not confined to dairy farms : it is evident in sheep-country as well. One good result is that in many cases the mortgagee has had to resell at a normal price. Too often,