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In addition to assisting Dr. Wohlmann, Dr. Craig undertakes the treatment of all Maoris in the district. I would like to point out that this Department is bearing the whole cost of the free treatment of Maoris, with the exception that the Justice Department pays a portion of the original cost of the medicines supplied. An extra nurse has been added to the Sanatorium staff. Owing to the want of accommodation in the building, it has been found necessary to provide rooms for the Matron, nurses, and clerk outside the main building. This has been done at a minimum cost by removing and renovating small buildings already in existence. The main building has been kept in good repair, and some additional furniture and fittings necessary for the comfort of the patients and staff added. A small mortuary has been built in order to provide, in case of death, for the immediate removal of a body from the wards of the Sanatorium. The fees collected for accommodation in the Sanatorium and doctor's consultation fees for the year 1902-3 amounted to £1,306 13s. 3d., as against £1,294 Is. for the previous year. There was a decrease in the accommodation fees, and an increase id the doctor's consultation fees. The decrease in the accommodation fees is chiefly due to the lessened number of female patients applying for treatment; while a large number of male patients had to be refused for want of accommodation, the women's ward was seldom fully occupied. MINERAL DEINKING-WATEES. It has been deemed advisable to regularly convey drinking-water from the " Soda Springs" at Te Aroha to Eotorua, and this is being sold at a charge just sufficient to cover cost of transport and handling. When the tea-house building is completed various mineral drinking-waters will be vended there at a small charge. BATHS. The increase in the number of baths taken may be regarded as a fair indication of the increased popularity of Eotorua. During the year 1902-3 a total of 94,846 baths were taken (including 15,042 free to returned Contingent-men and Sanatorium patients), giving a revenue of £1,874 ss. 7d., as against 80,003 baths and a revenue of £1,522 os. 4d. for the previous year, showing an increase of 14,843 baths and £352 ss. 3d. revenue. Since this Department took control, two years ago, the revenue from this source has nearly doubled. The Pavilion Bath buildings erected in 1882 are fast decaying, and it has been necessary to expend considerable sums during the past year to improve their appearance and keep them fit for occupation. The proposed new building, for which plans and specifications are being prepared, cannot be put in hand too soon. As previously pointed out, the present buildings, independently of their decaying condition, do not provide anything like the necessary facilities for modern balneological treatment. The proposed new building will appear somewhat expensive at the outset, but it has been designed with a view to filling requirements for many years to come—keeping in prospect the very rapid growth of the traffic to Eotorua. The plans provide for an attractive exterior as well as an eminently useful interior. Dr. Wohlmann's report (Appendix No. 1) deals very fully with this subject. In order to provide for massage treatment, a new building has been erected, and fitted with the most modern appliances, and two skilful operators appointed (a masseuse and masseur). The water for these baths is supplied at high pressure by unique hydraulic machinery, designed and fitted by Mr. E. C. White, electrical engineer in charge of the Government Electrical-power Station at Okere Falls. BOTOBUA GARDENS. The gardens and recreation-grounds, which now rank as the finest in the colony and are one of the great attractions to the district, have been extended and improved during the past year. The Queen's Drive has been extended some chains, and a number of new paths laid down, sixty garden-seats have been added, and also a very large number of trees, shrubs, and floweringplants. The aviary has been improved and the number of native birds increased. This feature of the grounds has proved very interesting to visitors. Owing to the large amount of pumice in the subsoil, many parts of the gardens need frequent top-dressings, and as the soil for this purpose has to be carted from some distance the cost of general maintenance is considerably increased. The reserves at Pukeroa, Kuirau, and Hamurana, together with the various Government enclosures in the township, have been kept in order as usual by the gardeners. A site near the shore of the lake has been prepared for the new bath-buildings shortly to be erected. The fees received for the use of the playing-grounds amounted to £47 7s. as against £36 12s. Bd. for the previous year. As an additional attraction to these gardens, two bands of musicians have been engaged, each to play twice weekly during the summer months. In one brass band all the performers are Maoris; the other is a European band. During last season open-air concerts were successfully organized by this Department's local staff in conjunction with the townspeople. TEA-HOUSE. In December last a marquee was erected as a temporary tea-house on a site near the tenniscourt and bowling-green in the Sanatorium-grounds, and furnished with the necessary tables and chairs, prettily dressed Native girls acting as attendants. The marquee was very largely patronised by both visitors and residents, the receipts up to the end of March—a little over three months —amounting to £144 19s. lid. An attractive building is now being erected to serve as a tea-house, mineral drinking-water depot, and general lounge-room. A wide verandah, where visitors can rest, read, and get refreshments, sheltered from the heat of the summer sun, is a feature of this building. I anticipate that it will prove not only a pleasant retreat in the summer season, but also a financial success.

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