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King. I have informed Mr. Maxwell as above, and as he has now been appointed Resident Commissioner of Niue, I will instruct him to send all Ordinances to me direct in future. The two Administrations will then be distinct in every way. I have, <fee, The Resident Commissioner, Rarotonga. C. H. Mills.

No. 134. Cook and other Islands Administration, Wellington, Sir,— 25th January, 1904. I am in receipt of your letter of the 22nd December suggesting that the house intended for the Medical Officer at Rarotonga, for which provision is made on the estimates, should be fitted up here and sent down to Mangaia for Mr. Large, Resident Agent there, and stating that you would then place a sum of £500 on the Cook Islands estimates to provide a good concrete dwelling for Dr. Gatley. lam unable to authorise this transfer of the money however, as the amount was voted for the specific purpose of a residence for the Medical Officer at Rarotonga. Your best course will be to send me a plan of what you consider will be a suitable dwellinghouse for Mr. Large and make provision for it on your estimates, and I will send you the necessary authority to expend the vote for the erection of the doctor's residence at Rarotonga. This can be built of concrete as you suggest, and the cost to the island Government will not be greater than under the scheme you proposed. I am aware of the difficulty Mr. Large is experiencing in finding a suitable residence, and probably the best solution of the difficulty will be to proclaim a piece of land, as you suggest, and have a house erected on it. I have, &c, The Resident Commissioner, Rarotonga. C. H. Mills.

No. 124.

No. 135. Sir,— Rarotonga, Cook Islands, 3rd February, 1904. In reply to your letter No. 174, of the 21st December, I have the honour to inform you that, as a general rule, we do not issue more than three bottles a week of spirits to any one, but in the case of trustworthy Europeans we may issue a case of whisky at a time for consumption in their own houses. In the case of those persons who cannot be trusted we reserve to ourselves the right to refuse to issue even so much as three bottles. I cannot say that the present system is a good one; it is merely a survival of the old arrangement made by Mr. Moss. That it is abused may, I think, be inferred from the fact that the general application is for the whole three bottles even in cases where there is reason to believe that the person holding the permit does not himself consume more than one bottle. There is, as I have said, no law here that really governs the sale of liquor, though I have passed two such laws —viz., " The. Sale of Spirituous Liquors Act, 1899," which I was unable to put in force for the reason that I had no trustworthy person to place in charge; and, secondly, the Publichouse Ordinance, that did not find favour in New Zealand. Under these circumstances it will be necessary to re-enact the first-named Ordinance, which, being based on the Gothenburg system, will probably suit, for it is expedient that there shall be some law governing the whole trade and establishing the principle on which we have always acted--viz., that there shall be no sales of intoxicating liquor to Natives. 1 have, &c, W. E. Gudgeon, Resident Commissioner. Hon. C. H. Mills, Minister for the Islands, Wellington, N.Z.

No. 123.

No. 136. Si R) — Rarotonga, Cook Islands, 3rd February, 1904. I have the honour to acknowledge the receipt of your letter No. 179, of the 21st December, 1903, on the subject of the retention of the "Countess of Ranfurly " as a Government schooner. It is true that we have hitherto succeeded in showing a substantial and increasing surplus at the end of each financial year, and that my letter of the 11th June, 1900, quoted by you, recognises that the cost of the schooner shall be refunded to the New Zealand Government. It is, indeed, an agreement that must be carried out; but, as I have already pointed out to you, the relations between these Islands and New Zealand have changed materially since that date, and I cannot now say that I think it expedient to retain the services of the schooner. I would prefer to sell the boat. The prudential considerations that affect my decision in this case are as follows: 1. That in the tropics we are at any time liable to devastating hurricanes, and therefore we ought to retain a sum of money in the Treasury equal to the expenditure of one year. 2. That we have hitherto derived a very large percentage of our revenue from the sale of stamps, and that we cannot expect these sales will continue to bring in the revenue that they have in the past. 3. That the Customs revenue collected at Rarotonga does not exceed £2,000 per annum, of which sum not less than £700 is due to duty on liquor. This also cannot be depended on, for it appears to me that we must introduce the Gothenburg system, and this will reduce our income by £300. 4. That, under the management of the present captain, the Government schooner cannot pay. Taking into consideration the possibility of a failure in the revenue, and, as I believe, the certainty that we shall always be called upon to find some £700 per annum to supplement the

No. 122.