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by this drainage should bear a portion of the cost, and I will, if possible, have this principle recognised by the Native owners. If this can be attained in no other way, I propose to lease the land in question for a long term at a low rent, and plant it with cocoanuts. While on this point I would suggest for your consideration that the local administration could hardly put money to a better use than in leasing and planting the waste lands, for within seven years the rental value would have increased as many fold, and the Government would also derive the benefits incidental to increased exports. I shall be glad to receive your authority to plant the Island of Takutea. Ido not propose to spend more than £100 in any one year, but as the island is a valuable property, and, if planted, will be a source of revenue, the sooner this work is undertaken the better it will be for the Group. As the hard labour will for the most part be performed by prisoners, we have only the cost of rations and supervision to meet. THE GOVERNMENT SCHOONER. In Appendix F I submit for your information a report on the Government schooner by Mr. Blame, who has for the last two years managed everything in connection with the boat. The earnings of the schooner during the past year have been such as to warrant the belief that she will develop a trade of her own. It must, however, be borne in mind that many of the traders are so bound to the Union Company that they cannot use the schooner to any extent, and therefore her earnings are due for the most part to the support accorded to her by the Cook Islands Trading Company and to the Niue trade. To this last-named island the existence of a Government vessel is of the utmost importance, for the four trips made in each year, calling at Niue both ways, keep up communication with Auckland, and secure trade that would otherwise go to Sydney via Tonga. The schooner is at present under charter to the firm of Grice, Sumner, and Co., of Melbourne, to carry workmen and stores to and from Maiden Island. This will probably prove a valuable addition to her ordinary trading cruises, inasmuch as one of the trips will take place during the summer or hurricane season, when there is nothing doing in this Group. It is not advisable that these migrations to our own islands should be discouraged, for it is a well-known peculiarity of the Polynesian that, though he will work well when away from loafing relatives, he will not work on his own island. I may say that the good houses of Aitutaki are entirely due to the labour of Maiden Island, and it is by no means uncommon for whole families to go to Maiden for no other purpose that to obtain timber and iron for the family mansion. Above all, the labour of Maiden Island keeps the people away from Tahiti, where they contract loathsome diseases and drink every penny they make. SURVEYS AND LAND TITLES COURT. I have the honour to submit for your information a return of surveys made and cases heard in the Land Titles Court during the past year. From this return it will be seen that revenue to the amount of £553 9s. has been earned by the Court and Survey Department, and that of this sum £135 9s. 6d. has been paid voluntarily into the Treasury. I say "voluntarily" for the reason that we do not ask suitors in the Court to do more than pay the ss. hearing-fee. It has been our policy to impress upon the Native owners that the payment of fees was a small matter as compared with the settlement of land disputes, and that cur only aim was to confer upon the true owners a title that could not hereafter be disputed. Under these circumstances I have assured the Natives that no fees will be demanded for the next two years, that the money in question will remain a first charge upon the land, and that with such security it was not our intention to press for payment at any time. I would also draw your attention to the fact that very small fees are the rule in these two Departments of the local Government. The hearing of a case may take two days, but will only cost the applicant ss. So also if the block of land be small, 10s. is the usual survey charge. In New Zealand such charges would be held to be absurd, but 1 submit that the result of the first year's work shows that these fees have been well considered and sufficient. Aitutaki. During the winter of last year the Court sat for two months at Aitutaki, during which period 104 blocks of land were surveyed and the titles thereto finally defined and settled by the Court. In this island the lands have been most minutely subdivided, and in the neighbourhood of the port this has become an absolute evil, forasmuch as the sections in some cases do not exceed half an acre, and to this small plot there are probably five owners with equal rights. This minute subdivision of the Aitutaki lands is, if possible, a greater evil than the want of certainty in the tenure of Makea's people in Avarua, since the latter is, in many instances, more apparent than real. They are indeed liable to be turned off, Hut it never happens, and it would be my duty to intervene in favour of the tenant unless good cause could be shown by Makea for her action. In Aitutaki each family has ample laud for its support, and all well planted with food-producing plants, such as bread-fruit, oranges, and cocoa-palms, but the family has seldom more than an acre or two in any one place, and as they have, as a rule, from ten to fifteen such plots all over the island they are quite unable to look after their more remote properties. The Natives of Aitutaki appreciate the titles conferred by this Court, for they have for many years suffered annoyance from bogus claims, and from the eccentric decisions of the Native Courts —decisions that, whether right or wrong, had force only so long as the Judge lived or held office. In some instances I found that whole families had died out, and that very distant relatives had seized on the lands and held them to the exclusion of others with perhaps equal rights. These lands have been in dispute for the last sixty years, and have again and again been the subject of litigation in the Native Courts, but the muna of these Courts has been so small that in no instance has a decision been regarded as final.