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Two-year-old Seedlings (details in Schedule 2). —All these trees have made wonderfully good growth, and about 90 per cent, of them are fit for transferring to plantations for permanent planting. Two- and Three-year-old Lined-out Trees (Schedule 2) are, on the whole, a first-rate crop Among the larch the death-rate is practically nil, and the growth made is remarkably even. The pines, too, made good growth, and with very few losses except amongst the Pinus Laricio, where the death-rate is about 10 per cent. The work of lining out the. above-mentioned trees was in progress from the 14th July to the end of August, and, except for occasional frosts, the work was completed under favourable weather-conditions. The health of all classes of trees is remarkably good. The two-year-old seedling Pinus Laricio are slightly infested by a pine aphis, but have not been injured thereby to any appreciable extent. A few small patches of two-year-old larch seedlings are injured by the grass grub, but this pest is far from being prevalent. It would appear that the grass grub thrives only on land that has become somewhat dry and consolidated, such as the two-year-old seed-beds, as it is not noticeable amongst the lined-out trees or this year's seedlings. If this assumption is correct, then the trouble may have been mitigated by the frequent cultivating to which the beds were subjected. Considerable improvements of a permanent character were effected during the year. A large building, comprising five compartments for vehicles, two loose boxes, and two rooms (each 12 ft. by 12 ft.), for use as a saddler's shop and an engine-room respectively, was erected. This building was much needed, and has been duly appreciated. A Tangye 4-horse-power oil-engine was installed for driving the oat-crusher, and the power has also been adapted to the saddler's sewingmachine and the grindstone. An addition of two rooms was made to the Nurseryman's cottage, and some small improvements made to the men's quarters. The drainage was placed in an up-to-date state by the erection of a septic tank, accompanied by the usual sanitary conveniences. Water-service. —This is now in very effective 'order. -A 2 in. supply-pipe was laid from the town main, and connected with the nursery reticulation, the old reservoir on the hill behind the nursery being now used for storage of water in cases of emergency. Standpipes, with fire-hoses attached, have been placed near the buildings. Seed-frames.—Two hundred seed-frames were erected with material that had been received from the Starborough Nursery, and all the seed-frames in use were painted on the iron parts, in order to prevent corrosion. A further area of 9 acres was ploughed and sown down in grasses and clovers for use as a horse-paddock. The results are very satisfactory. Two young mares were purchased during the year. A small packet of seed of Asclepias semi-lunata, a reputedly good fibre plant, was sown, but the results are unsatisfactory. This plant is a native of Uganda, and requires a hot humid climate for its successful, cultivation. The seeds germinated well, and the young plants were transplanted into rows, where since November they have made, on an average, 6 in. of growth. A rich peaty soil, plentj' of heat, and moisture are probably necessary for its best development. Good progress has been made by 2,000 young flax plants which were planted last spring. All the odd corners around the nursery are now planted up in this manner, and some of the first lot planted are now fit to cut from. The quantity of the flax used in the nursery for tying up trees during the planting season is very considerable, so that these flax plantations should, in a few years, be a valuable asset. Revenue received during the year amounted to £15 14s. Id.—refunds, £15 lis. 7d.; and sale of trees, 2s. 6d. The coming winter's work will consist in transferring about 4,500,000 trees to the Whakarewarewa and Waiotapu Plantations. Details of expenditure and values are appended. The following is a record of rainfall and temperature for the year :—

Month. Rainfall. Number of Days Rain fell. Highest Reading of Thermometer. Date. I Lowest Reading of i Ther;mometer. I Date. 1908. Inohes. 3-11 6-61 4-40 3-35 3-81 4-23 5-42 2-95 6-19 "Degrees. 75 68 63 58 62 68 74 79 85 Degrees. 29 25 24 23 23 27 28 37 34 April May 8'B'CT' June Julyg'wc 0 ' August 13 'fl September October November December 1909. 14 14 16 15 11 13 19 15 17 16th 3rd 14th 21st 31st 8th 10th 9th 20th 4th and 9th 22 nd 21st 28th 2nd 12th 31st 7th 9th January February March 3-47 0-14 8-42 12 3 16 84 84 87 24th 17th 8th 32 42 34 17th 27th 31st Totals 52-10 165