G—No. 17,

Colonial Museum, Wellington, N. Z., Sir,— 16th July, 1872. I have the honor to inform you, in continuation of the Report of the Flax Commissioners for 1.870-1, of the action that has been taken during the past year for encouraging the development of the industry. Distribution of Samples, etc., from the Exhibition, of 1871. On the closing of the Exhibition, which was held in the Colonial Museum, after the articles which were lent by the various European and Native exhibitors had been returned, the remainder of the collection was distributed in the following manner. Samples of the different kinds of machine and hand-dressed Phormium and the competing fibres were sent to the Museums at Auckland, Wellington, Christchurch, Dunedin, Nelson, Napier, and Taranaki. Careful selections of the different varieties of the prepared fibre, together with rope, cordage, mats, and other articles manufactured from it, were also sent to the Agent-General, and to the Public Museums at Melbourne, San Francisco, and New York. In accordance with a resolution of the House of Representatives, standard samples showing the various classes into which the fibre is divided by the brokers in London have been placed in charge of the Custom House officers at the following ports : —Wellington, Auckland, Christchurch, Dunedin, Nelson, and Invercargill. Packets containing samples of the foreign fibres which compete with Phormium have been distributed among the manufacturers in the different provinces. Live specimens of seventeen different varieties of the Phormium plant were transmitted to the Royal Gardens at Kew, and with a few exceptions reached there in good order. The distribution of the foregoing collections of Phormium, which were in each case accompanied by full particulars respecting their production, value, and other matters of practical interest, will, it is hoped, tend greatly to attract attention to the merits of this fibre in markets where it is only known by name ; while the distribution of the foreign fibres throughout New Zealand will enable the, producers to make themselves practically acquainted with the nature of those fibres with wliich they have to compete. With reference to the standard samples issued to the Custom House officers, it may be stated that from specimens recently received from London of the fibre now in the market, the same qualities which these standards represent still maintain their relative value, and they may be safely taken as a guide in classifying exports. Condition of the Industry. During the past year the demand for Phormium has steadily increased, but, owing to various circumstances a large number of mill-owners have unfortunately been compelled to suspend operations. One of the chief of these causes is the falling off in the supply of raw material within easy reach of the mills, owing to the destruction of the plants by the injudicious method of cutting the leaves, which was adopted before attention was sufficiently directed to this important subject. It is, however, established that five, six, or seven leaves will grow from each fan in the year, and that they reach maturity in from fourteen to fifteen months, so that if only mature leaves are cut, and the centre leaves are allowed to remain, an undiminished supply may be maintained for years ; and it is therefore hoped that the present dearth of raw material may be only temporary. It is very desirable, however, that the alleged deficiency should not depend on mere rumour, but that an official estimate should be obtained of the extent of flax land in the Colony, as erroneous statements on this point might create an unfounded distrust of the permanence of the industry. The high rates of freight, and incidental and shipping expenses, amounting on large shipments to 29 per cent on the highest prices realised for the fibre in the London market, as shown by account sales received by last mail, have also seriously retarded the production of fibre, so that at the present time the quantity exported is considerably less than might be profitabty disposed of. From the market reports, an abstract of which is given in Appendix IV., it appears that 52,727 bales of fibre, representing 8,788 tons, have been sold in London at public sales since 23rd April, 1870, up to 4th April, 1872, giving a monthly average of 360 tons for that period ; but that during the last three months the average has only been 154 tons. The price of the best qualities during the above period has shown a rise from =£30 to £40, while 80 per cent is of first and second class quality during the first quarter of the present year, instead of only 36 per cent., as was the case in 1870 ; and the opinions expressed by the brokers leave no doubt that the fibre is getting into more general use, and that it has now a permanent hold on the market. From the latest advices it appears that a supply of 300 to 400 tons a month can be readily disposed of, and that if still greater efforts be made to insure the careful cleaning, classing, and packing of the

GENERAL REPORT ON THE FLAX INDUSTRY, BY DR. HECTOR.