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Company. No doubt these proclamations would strengthen my hands, but I doubt whether it would be safe to make any radical change until the matter of the proclamation has been embodied in a statute, for if the point were raised it would be difficult to show that Crown lands existed within the Pacific. With respect to furnishing details as to the management of each lagoon, I have the honour to submit for your consideration that in a new matter, such as this, the fewer regulations by which we are bound the better. Whenever an Act is passed making the lagoons Crown property, I propose to go north and consult the Councils and the principal traders as to the steps to be taken and regulations made, and by this method hope to establish a system suitable to all. I would, however, add the following to the proclamation : — " The Kesident Commissioner shall embody all approved resolutions of the Island Councils into regulations for the better government of the pearl-fisheries, and may add thereto such other regulations as he may find necessary after consultation with the traders and Council as aforesaid. " The words ' foreigners ' and ' alien ' shall mean any person other than a natural-born or naturalised subject of His Majesty." I have, &c, W. E. Gudgeon, Resident Commissioner. The Hon. C. H. Mills, Minister for the Islands, Wellington.

I Enclosure. Schedule to Proclamation. Penrhyn Lagoon. All of the inland sea or lagoon enclosed by the reef and islands of the Penrhyn atoll, excluding only the islands within the reef. Commencing on the south side of the Taruia entrance; thence south-east and east to the Omoka Village ; thence by the shores of the lagoon east, north, and west to the Village of Te Tautua; and thence west and south by the island known as Mqrokai to the point of commencement. ManiEiki Lagoon. All of the inland sea enclosed by the reef and islands known as Maiiihiki. Commencing at the Village of Tauhunu; thence by the shores of the lagoon to the Village of Tukao; and thence by the reef and islands along the shore of the lagoon to the point of commencement: excluding, however, all the islands within the lagoon. Aitutaki Lagoon. All of the waters of the lagoon enclosed within the barrier reef of Aitutaki. Commencing on the shores of the lagoon at the island of Mama; thence north by the reef to the ship-passage opposite the Village of Arutanga; thence to the stone wharf of that village; thence west and north by the coast-line of Aitutaki to the Village of Vaipae; thence by the coast of Aitutaki and the barrier reef to the point of commencement: but excluding all the islands within the reef. W. E. Gudgeon, Resident Commissioner.

No. 167. Sir,— Niue, 2nd April, 1904. I have the honour to submit to you herewith a statement of the Niue Island revenue for the quarter ended the 31st March. You will gather from it that the total receipts from all sources for the period amounted to £369 7s. Id., and the disbursements to £449 145.; the expenditure on roads accounting for the greater part of this sum. Full particulars of this item have already been forwarded to you, via Sydney, on the 11th March. The cash balance in hand is £661 9s. 6d., and I have remitted £359 ss. 3d. to the Bank of New Zealand to credit of Niue Island Account. The credit balance in bank on the 31st ultimo, as closely as I could arrive at it without the pass-book, was £399 os. 10d., and the total funds to credit of this island on that date amounted to £2,117 7s. 3d., to which interest due and proceeds of stamp-sales in Auckland have to be added. A considerable sum will have to be refunded, being difference of duty on tobacco paid before advice of the reduction reached Niue, and after the Order in Council had been made. I have written to you for instructions regarding this refund. I have, &c, C. F. Maxwell, Resident Commissioner, Niue. The Hon. C. H. Mills, Minister of Trade and Customs, Wellington. 9—A. 3.