8.—6

XI

This matter is worthy of your serious consideration, and it is the intention of the Government to ask for an appropriation to defray the extra cost that would be entailed in subsidising a mail-steamer to insure regularity and low freights. Details in connection with the matter, and the amount required, will be ascertained. No commitment, however, beyond existing arrangements will be entered into prior to the House having authorised the necessary expenditure. TEADB WITH THE ISLANDS. It is not my intention in a Financial Statement to go into the question of the future of the Cook and other Islands. It is well known that the residents of the Fiji Islands are no longer content to remain a Crown colony. They are favourable to and have moved in the direction of annexation to New Zealand. Large questions are involved, valuable interests require attention, and the greatest care and examination must be exercised, seeing that important interests are involved in connection with a large and powerful native people, whose wellbeing must be considered and safeguarded. The British Government in May last, wisely and in the interest of the islanders, established a protectorate over the Tongan and Savage Islands. At the beginning of this year the Cook Islands Government and Arikis requested annexation to Great Britain. On my visit, the majority of the European inhabitants presented a petition to me asking for annexation to this colony. This in due course was forwarded to His Excellency the Governor, and there the matter at present rests. Setting aside the larger issue involved, honourable members will notice an item on the estimates of £5,000, advance to the Cook Islands Government for the purchase of an auxiliary oil-engine schooner. In submitting this proposal I desire to point out that this colony, whilst assisting the Cook Island Government and island residents, will reap a collateral advantage, and the advance will be at the same time well secured. We are doing a considerable trade with the islands, and we have for years been paying the salary of the Eesident Agent; yet no advantage, commercial or otherwise, has been sought or obtained. New Zealand has no tropical country of its own, and we must look to these islands as one of the markets for our produce; and in return we shall take their fruits, coffee, copra, cocoa, &c. We are at the present time subsidising a mail steamer to carry the mails to the islands, but what is required is a vessel to act as a tender to collect the fruit at the various small islands, to bring it to Earotonga, and then to ship it on board the large steamers; this would secure a lower rate of freight and be a means of insuring the fruit coming to market in New Zealand in good order. One of the conditions imposed would be that preference should be given to the distribution of New Zealand goods and products. Our trade with the islands, with very little effort, can be considerably increased by this reduction of freights, and that from the islands can also be materially augmented. They would take our flour, butter, preserved and salt meats, tinned milk, and biscuits. On my late visit to the islands I learned with regret that the merchants and importers of this colony had been somewhat indifferent in executing orders sent, and, seeing that the orders were as good as cash transactions, such indifference is incomprehensible. The freights and passages to the islands are high, and a reduction would benefit the shipping company by increasing the trade, and be at the same time an advantage to this colony and the islands. SAN FEANCISCO MAIL-SBEVICE. It will be in the recollection of members that the House of Eepresentatives authorised the Government to extend the San Francisco service for twelve months from the Ist day of April, 1900, on the terms and conditions then obtaining. The House further empowered the Government to enter into negotiations for a sixteen- or seventeen-days service once every four weeks, and an alternative service for every two or three weeks, also stipulating that at least one British-owned vessel should be employed in either service. The result of the negotiations was to be submitted to the House for confirmation this session, and not to have effect until approved of by the House.