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Royalties were paid on 104,548 tons of coal amounting to £1,280, and on gum taken from forest trees £75. The royalty on 3,515 tons of flax amounted to £436. The total sum from all miscellaneous sources amounted to £26,871, including the sum received from sales of timber. Timber. —7,650,915 superficial feet and two trees were disposed of from Crown lands, the sales of such realising £7,040; whilst the sum produced as State forest revenue, as the result of placing on the market 8,986,343 superficial feet, three trees, 300 posts, and five cords of firewood, amounted to the substantial sum of £5,882. Owing to the increased demand for timber and the good prices prevailing, a comparison with last year's figures establishes a conspicuously satisfactory result. Crown Lands Ranger Lusk reports: "During the past year the timber trade in the Auckland Land District has continued very active, though recent legislation in Australia caused a decided check to the exporting of kauri and kahikatea (white-pine). The Home demand, however, has been great, and is increasing, consequently there is no abatement in the desire of sawmillers to acquire Crown timber, and quite a number of new sawmills have been erected. The increasing price of kauri has caused considerably more attention to be paid to other milling timber, particularly rimu, which has hitherto been but little used for building purposes in the Auckland district. It is found that heart of rimu, especially that grown upon high land, is a very excellent building timber, and is especially valuable for decking of wharves and bridges. As much of this heart of rimu is very beautifully marked, there is no doubt that in the future there will also be a greatly increased demand for it by cabinetmakers. As most of the rimu and rimu sawmills are inland, the sale of the timber and the prosperity of the millers depends largely upon the expense of transporting the sawn timber to the centres of population, and sawmillers complain that the heavy railway charges swallow up nearly all the profit. In this connection, I may report that American sawmillers have offered to land good sawn timber from the Pacific Coast at less than it costs to cut and transport rimu from Rotorua to Auckland, the cost of freight across the Pacific Ocean being rather less than the railway freight. In connection with the subject of the northern kauri forests, I have to report that a new industry has been started during the past year, which may be termed ' kauri-gum farming.' I previously reported upon the operations being carried on at Hokianga, and will now only add that the leasing of the more inaccessible kauri forests for the purpose of gum-producing will have an excellent effect in checking or preventing the destruction of the forests by fire, as the lessees will most vigilantly guard against an enemy which would ruin their leaseholds for gum-producing. In this way the existence of some remains of the splendid kauri forests of the north may be much prolonged. In consequence of the past summer having been unusually showery, there has been little damage done this year to Crown forests by bush fires; still there has been some, for which roving gum-diggers are mainly responsible. I would again urge that provision be made for sowing all extensive burns with suitable grass-seeds; the cost would not be great, the return would be rapid and certain, the danger of future fires would be greatly lessened, and settlers would readily lease the grazing." Kauri-gum Farming (tapping or bleeding trees for kauri-gum). —The following is an extract from Crown Lands Ranger Lusk's report : " I have to report that, having examined the kauri-trees in the forest reserve to the north-west of Hokianga Harbour, I found them of good girth but generally short in the barrel, caused by the exposure to the prevailing westerly winds. This forest land being high and near the west coast catches a very frequent rainfall, so that the surface is generally wet, and thus the forest escapes any serious damage from fires. There is no way in which logs or sawn timber could be got to market at a reasonable cost for carriage, so that the value of the kauri, from a sawmiller's point of view, is very low indeed. The comparative immunity from the danger of fire and the low market value of the timber causes this locality to be particularly well suited for the trial of the new branch of the kauri-gum industry lately started. Having ascertained that the required number of good-sized healthy green trees were available within an area of about 120 acres, I laid off the section connecting it with the old survey of a tapit maori burial-ground, a corner peg of which an old Native pointed out to me. I had full opportunity while on the ground of observing the lessees' manner of working, and of learning from them what they considered the probable returns in weight and value of gum obtainable by their process from an average-sized kauri-tree. The first and most important point for consideration in regard to this matter is whether the periodical bleeding of kauri-trees will or will not weaken or kill them, and this question I am not prepared to answer with absolute certainty, but I am convinced that if the cuts made in the bark are of moderate size, about 4 in. long by 1-J-in. wide, cut clean through the bark and a very little way into the outer wood of the tree, the said cuts being kept 4 ft. apart each way— i.e., both in ascending the trunk and going round it—the operation not being repeated oftener than once in two years, then there is little or no risk of the tree being damaged, as nature evidently fills up such cuts and wounds. I have constant proof of this from observing the bark growing over the brands and distinguishing marks made on kauri trees for sale. The method adopted in procuring the gum is as follows : The operator throws a wooden plumb-bob attached to a fishing-line over a strong upper limb of a kauri-tree, and with that pulls up a stout soft rope long enough to reach over the branch to the ground. A loop at one end of the rope has a small seat or spreader in it. The climber puts his legs through the loop and sits on the spreader, holding the other part of the rope which has come over the limb to the ground. He places his feet against the tree, and, giving a spring, pulls sharply on the rope at the same time, and so pulls himself up several feet at each jerk. Whenever he wishes to remain stationary he takes a turn at the loose end of the rope round the end of the seat and his leg, then his hands are free to use a small sharp axe which he carries in his belt. With a swing he takes himself all round the trunk of the tree, and anchors himself at any point by means of a bent and pointed piece of steel attached by a short piece of line to the end of the seat. The operator can thus work with