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runs (one only occupied), and two temporary grazing licenses. Selectors have not yet had time to effect improvements. Any report now would probably mislead. Settlement on Crown Lands under " The Land Act, 1892," and Amendments. Lease in Perpetuity and Occupation with Right of Purchase. —There are 254 holdings. In the northern portion, including the Sounds, and in South Marlborough the Crown tenants under these tenures are progressing every year. In the Sounds the introduction of oil-launches and the advent of telephone communication have improved the state of living and afford a considerable deal of comfort not before enjoyed, whilst in the south portion road facilities have gradually clinched the settlers to their land. Comfortable homesteads now are found where not long since one would have been considered a dreamer if he had foretold of their presence in a few years. There have been a considerable number of transfers, but I think in each case the Crown has secured quite as good if not a better tenant. In moving about amongst the settlers I could not but notice an air of contentment and a desire on the part of the lessees to make the most of their sections, clearing and fencing as far as their present means w-ould allow. I regret to say that these remarks do not apply to the north bank of the Wairau ; most of these tenants were away (their families on the sections) working as carters, shepherds, &c, and progress there is not so apparent. The estimated value of improvements effected during the past year is £9,395, nearly all having complied with the improvement conditions. There have not been any forfeitures or surrenders from this class of selectors this year (1902-03). The settlers depend mainly on sheep-rearing and wool, with a little dairying and cropping. Small Grazing-runs. —Both in North and South Marlborough the tenants under this form of land-tenure have had a successful year, owing to the sustained values for mutton and wool. For the reason that much of the back country of Marlborough is broken, and area is required for the profitable working of the land, this form of holding is both suitable and popular. In the Hundalee and Puhipuhi districts considerable areas of land have been cleared and grassed. Most of the land is on limestone formation, and exotic grasses, especially cocksfoot, have taken well. We have 111 tenants under this tenure. The estimated value of improvements put on the land during 1902-3 amounts to £7,765. This work has been done mostly on recently acquired holdings, the older and larger number having in previous years effected sufficient both to comply with their conditions of lease and for the economical working of the runs. Village-homestead Special Settlement.—The thirteen holdings under this system in Marlborough require little comment. The purpose for which they were set aside has been accomplished —namely, handy and suitable homes for people of small means. All have complied, and are occupied by the class of people for whom they were intended. Timber Industry. —There are twelve sawmills in operation in the land district, employing on an average 150 men, and cutting approximately 600,000 superficial feet of timber per month, a considerable portion of which is exported from Marlborough to Nelson and North Canterbury. The timber which is chiefly used consists of rimu, matai, kahikatea, totara, and black, red, and brown birch for railway-sleepers. lam glad to be able to report that forest fires have not been prevalent this summer. Mr. J. Rutland, Crown Lands Ranger, reports on the eleven sawmills in his portion of the district as follows :— Including the County of Sounds, there are at present eleven sawmills in this portion of the land district, eight of which are at work, two closed, and one just completed but not yet started. In 1900 Messrs. Harvey Bros.' sawmill, Clova Bay, was the only mill at work within the County of Sounds. This mill is now closed, preparatory to its removal to a new site. Three of the eight mills at work are in the sounds. Mr. Tugoald Bratli's mill, Crail Bay, is chiefly employed cutting railway-sleepers. The total number of sleepers produced last year was 9,106, of which 7,056 were taken by the Government, the remainder being sold as posts. In addition to these, Mr. Bratli turned out 20,200 ft. of mixed timber—rimu, white-pine, and birch. The mill employs nine men, including the proprietor. Mr. E. Pulman's mill, Resolution Inlet, only started within the last twelve months, was also employed cutting railway-sleepers. The average output when I visited Resolution Bay in February last was 150 sleepers per week. The mill employs five men, including the proprietor. Messrs. Pugh Bros.' mill, Nydia Bay, cuts mixed timber for the Picton market, where the firm has a timber-yard. The total output for the year ending the Ist March was 160,000 ft. The average number of men employed during the year was six, but the firm has at present nine men working at the mill. The mill about to be opened, above referred to, is on Messrs. Beech Bros.' land, at the head of Kenepuru. This, with Messrs. Harvey Bros.' mill, will bring the total number up to five. This revival of the timber industry shows what has been lost through the destruction of the timber along the shores of the Sounds. Mr. Cates, Long Valley, Kaituna ; Messrs. Smart Bros., Wakamarina; and Messrs. Nees and McLean, Rai Valley, are still steadily cutting for the Wairau market. Mr. Cates's mill employs, ten hands, including the proprietor, the average output being about 10,000 superficial feet per week. Messrs. Smarts' mill employs nine hands, including the proprietors ; the total output for the year ending the Ist March was 387,933 ft. This timber is taken to Blenheim by a traction-engine, which seems to work well, and so far has not been the source of any trouble on the roads. Messrs. Nees and McLean's mill employs eight men, and cuts on an average 15,000 ft. per week. Three wagons are employed taking the timber to Blenheim. During the last twelve months another mill has been started in the Rai Valley by Mr. Robertson, timber-merchant, of Nelson. The mill employs ten men, and cuts 100,000 ft. of timber per month, all of which is taken overland to Nelson.