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the same being £2,020, which, added to the direct profits earned by the races, will equal £7,728, or nearly 21 per cent, on the cost of construction. If I state the position of the Waimea—Kumara by itself, it will show a direct profit equal to 4i per cent, for last year on its cost of construction; and, apart from this result, a large revenue is received indirectly by the State from the steady population, which these works are the motive-power of sustaining in employment, and whereby a large amount of dutiable commodities are annually consumed. The cost of water-races paid direct by Government is £467,834, and through local bodies £33,426, amounting in the aggregate to a total cost to the colony at the end of last year of £501,260. During the last four years, since the moneys voted for the purposes of these works have been under the control of the Minister of Mines, works have been undertaken to the value of £44,527, of which £35,513 have been paid. The liabilities on the 31st March last were £6,964, and the value of such works authorized arid constructed during last year was £10,429. Drainage- and Sludge-channels. Subsidies have also been given by the State towards the construction of drainage- and sludge-channels where a heavy expenditure was necessary, and when it was found that the carrying-out of such works would not only relieve but facilitate the water-races in performing their functions, and thus aid in developing large areas of auriferous ground. Now, the total cost of the latter class of works, with their expansions and diversions, up to the end of last year amounts to £20,259, which includes the subsidy contribution authorized towards construction and repairs of £14,509, and of which £7,514 have been paid. The works of this nature constructed and in progress during last year may be estimated at £10,459. I cannot leave the subject of water-races, their tributaries and contingencies, without pointing out how intimately they bear upon the interests of the respective counties in which any of them may be situated, inasmuch as each county is benefited indirectly per se by the revenues produced by such works according to the mining operations that may be initiated and encouraged by the facilities they afford. An increase in the number of miners' rights and in the quantity of gold produced in any district are two only of the many advantageous results to be looked for from having an abundant supply of water for mining purposes. I have come to the conclusion that all such works ought to be under the direct control of one or other of the local bodies, as I feel sure that any arrangement of the kind would tend to make them more valuable to the districts concerned, as well as to the county or borough, whichever body might be the administering one. With that view, I have already been in communication with the local bodies, and negotiations are still pending. Should any agreement be arrived at it would only be upon the understanding that the moneys necessary to repair or complete any of these works should be estimated and fixed, and be forthcoming from the State from time to time over a reasonable period, and beyond this liability the responsibility of the Government would cease altogether in respect to any such work that may be handed over to a local body. I consider that the more this proposal can be acted upon the more will communities have the system of local government strengthened, and the people will be enabled to control and manage the most important works, not alone for the benefit of themselves, but also of their respective districts. Roads and Tracks. I think it will be universally admitted that roads and tracks are most necessary, and therefore the fundamental works, for developing the vast mineral wealth of the colony, and for promoting its settlement. It is primarily by such means that the country becomes opened up and pioneer miners and settlers have an opportunity of entering the primeval forest to prospect for and work the mineral deposits, or become settlers and cultivators of the soil. There are large areas of land—to the extent of several hundred thousand acres —in the southern part of the Middle Island, on a large portion of which I have evidence that minerals abound, and that there are tens of thousands of acres well fitted for settlement, much of which would readily be occupied if there were roads, or even decent tracks, dividing and intersecting different blocks of the country; and until provision is made on a sufficient scale to do good, practical work of this kind, we will have only ourselves to blame if that part of New Zealand remains a terra incognita. Let me impress upon the minds of honourable gentlemen that the bulk of our mineral lands are of a hilly or mountainous character, and in many districts covered with exceedingly dense forest, with undergrowth of scrub; and without a track upon which a packhorse can travel it is abso-