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by means of a rough stone dam of largo proportions, formed by heavily blasting the stone walls, otherwise water would have to be brought a long distance at a very considerable expense. The terrace was worked years ago, and has been from time to time since, but has not been considered payable, and only becomes so now by the use of an hydraulic, by means of which the first party of three men setting in obtained about 323 oz. of gold for about seven weeks' labour ; and then, of course, at the opening of a claim a considerable allowance must be made for lost time, although this party had tho advantage of races already cut, and some facilities in tho way of tracks. Should the payable ground prove to extend as far as expected, water will probably be brought on to it, but raco property in tho district has been hitherto so unprofitable that it is likely to be left to the miners themselves to do it. Meanwhile, the available water might, I think, be used at a higher pressure, and more effectually by the use of iron piping instead of canvas hose. On the Omaru River three parties are at work bringing in separate races; and as the ground yields good prospects, and is favourably situated for sluicing, good results may be expected. The ground is about five miles up the river, between tho two branches, a terrace standing high above tho river, and the left-hand branch having a rapid fall enables the minors to bring water on to the ground, with a moderate amount of labour. Ground up this river was worked years ago, but sluicers without hydraulics, and would not then pay; but the improved method of working now adopted will put through so much greater quantity of dirt, as can scarcely fail to make the ground payable. On the beaches between the Waiko and Gillespie's Beach, the small parties at work have improved their races, so as to ground sluice and work in dry weather; whereas heretofore, dependent on tho rain, they have only been able to work in tho wet. Of course the results have been greatly increased, and the men are some of tho most well to do in the district. On Gillespie's Beach the minors havo decreased to about fifty in number. The ground being generally of a poor description, although payable, anything fresh is always likely to induce some miners to abandon this beach. There aro two races on tho beach, but a largo quantity of water is not sold, but tho greater part used by tho shareholders. In the dry weather, when the water would havo been saleable, there was such a small quantity in the raco that none could be spared for sale. The shareholders in tho larger race work in two parties of four men each; in the smaller one in four parties of two men each; and it is remarked that tho smaller parties are the most successful. However the beach is likely to be worked for years to come, although it is not probable that any rich claims will bo opened. Up Arks River, six minors arc working the beaches on the river, sometimes washing on a face, and sometimes just fossicking, and generally speaking make small wages, if not more. Part of them, this winter, will go back to tho ranges, in the expectation of striking something. At the Karangarua, North Beach, a party of six are working with the water of a raco brought in from about three miles up the river. They have a plentiful supply of water, but rather low, so that it is scarcely available for tho whole of the North Beach. The ground has not come up to the expectations of the party, but has paid wages. At Hunt's Beach there arc about twenty miners, who during tho past year have generally earned small wages. Most of the parties have water races for working their claims, one party lifting water by means of a water-wheel. At Bruce Bay there aro about four Europeans engaged in mining as well as four Maoris, but nono of the workings have proved very profitable. To tho southward, during tho past year, a good deal of prospecting has been done inland, as far as the head of tho Clark (tho junction of seven small streams). Also about eight miles up'the Lonsborough (stated to be a large river), and on tho Haast, to the mouth of the gorge, where brands on a tree were observed, showing that tho crew of the " Nugget" cutter prospected there about nine years ago. In all these parts the colour of gold could be got, but nothing approaching payable. I regret to say that the water races at the Haast have proved unremunerative, and altogether tho prospect in this direction is gloomy ; but as I believe there is a good deal of land fit for cattle there is a likelihood of its being stocked on the completion of the tracks South of Bruce Bay, undertaken by tho County Government; and a better knowledge of the country will then be obtained through the cattle opening the bush aud the stockmen occasionally looking after them, whilst prospectors would obtain their provisions with far greater facility than at present. By some it is considered that the Government should give direct assistance to prospectors by providing funds for provisions ; but I think that the assistance would be far more likely to attain its object if given in the shape of a road provided inland, and water-right regulations on a more liberal scale. I think that miners should be able to register at least as much water as they would be likely to use for sluicing if they were purchasing tho water from an extended head race company, say, in ordinary parties not less than a head per man. The value of water would then be a handsome premium on prospecting ; and it must not be overlooked that some prospectors spend more time, sometimes years, looking for ground and water, than suffice to bring in as long a race as would enable them to register a right under tho extended scale. The tracks round tho Bluff, formed by the County Government, have beeu of great service; but, unfortunately, no provision has been made for keeping them in repair, and parts of them have fallen into bad, in some instances dangerous, condition. There are still a large number of public-houses in the district; in all, fourteen licensed houses, or about one to every twenty-two male adults of the population. I bclicvo that, in the present circumstances of the district, tho number could with advantage be reduced ; and I consider that, were tho license fees reduced, that result would be obtained with advantage to all parties. The revenue would not be reduced, and the fewer taking licenses would be perhaps even better able to pay the fees as well as to provide better accommodation than now, whilst at the same time I believe there would bo less unnecessary drinking thau at present. From the present prospects of ,the district, the current year may reasonably be expected to be a prosperous one. I have, &c, The Under Secretary for Public Works, Wellington. Edward J. Tizard, Warden.