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some of the witnesses favoured the State paying a percentage of the actual outlay on grass-seed sown. lam afraid this would not be satisfactory, as a great deal of money might be expended in this way without any beneficial results. If compensation is given, it must only be given on the actual results, as shown by the increased sheep-carrying capacity, and not by the amount of money that may have been expended, judiciously or injudiciously. The means of increasing the sheep-carrying capacity of this class of country are various, and the best results are not always to be got from the sowing of different grasses. There is no doubt that certain grasses being sown on certain classes of this land will increase the carrying-capacity slightly; but on the dry, steep, warm north-west faces, where the regrassing is most important, I know of no grasses that I have tried or heard of being tried that have been successful in the slightest degree. In my opinion there is only one way of improving the grass on this the most important part of the country, and that is by fencing the land, and keeping all stock off during the summer months till the seed of the indigenous grasses falls. There arc no grasses that will improve this particular class of country so quickly and permanently as the grasses indigenous to the land that have been partially eaten out and destroyed through want of fencing to safeguard them at a critical time. Any practical hill sheepman knows that sheep —and more particularly merinos —if allowed to roam over a large scope of unfenced country, will almost starve, picking out the sweet roots of the different grasses on these sunny facings, rather than go on to the dark facings where there is abundance of juicy grass: and yet these sheep, if fenced on to these shady facings, do very well in the warm summer months, just when it is important that the dry sunny facings should be saved. Judicious fencing and light stocking are the two factors that will play the most important part in increasing the carrying-capacity of this country. At the same time it is most important that every means, in the way of experimenting with different grasses, should be tried to get the most suitable grasses for this class of country. Having stated that compensation for increasing the carrying-capacity of the different inns should be given, and shown some of the methods by which the carrying-capacity can be increased, the most difficult part of the question now arises—as to how this compensation can be given, and given in a manner fair and equitable both to the lessee and to the State. 1 do not pretend to have arrived at the correct solution of this most difficult problem, but I will give my views: I have no doubt they can be improved upon, and eventually, if the State is in earnest in this matter, I am quite sure thej' will satisfactorily solve the difficulty. For the first two or three years of the new leases the runs should be carefully inspected by a thoroughly competent man, who would note the number of sheep being carried on each run. ami whether it was being overstocked or understocked. His detailed report would then lie carefully filed for reference at the end of the lease. For the two or three years at the end of the lease the same mode of procedure would be adopted, and on comparing the two reports the lessee in occupation would be entitled to compensation in accordance with the increased carrying-capacity. I am aware that the system I have described has its defects; yet it may be the groundwork for arriving at a better solution of this most important question. I would also suggest that a further amendment be made to the present laws regulating the small-grazing-run system of tenure, and that is this : Where the present lessee is prepared to comply with the new regulations, if his present run is not subdivided he should have a preferential claim to a renewal of lease without competition at a fair revaluation; where the run is subdivided, the present lessee to have a preferential claim to the homestead block without competition at a revaluation. In my opinion it would serve no good purpose, but rather the contrary, to displace a tried and probably a good settler, and run the risk of getting a new man and probably a worse settler. Another amendment I would suggest is that the State have the right at any time, given one year's notice and full compensation for improvements, to acquire all or part of any run, if required for an}' other purpose than pastoral farming. My object in suggesting this is that I think some parts of the Mackenzie country offer great possibilities for successful fruit-growing in the near future. The general configuration of the plains lends itself to easy and cheap irrigation from the large rivers; and it is sincerely to be desired that the Government ma}', at an early date, do a little experimenting in this direction. Another necessary amendment, in a barren, treeless country like this, is that some inducement —compulsory or otherwise—should be given the tenants to plant trees. It might not be considered a great hardship to make it compulsory that some little annual tree-planting be done— say a minimum of one acre annually; and, by way of inducement to greater efforts, the State might find the trees free of cost to the nearest railway terminus. There is also a small percentage of the country that we have inspected that may not be considered as yet suitable for dealing with under the small-grazing-run system of tenure —land from which, for the present, the best results could be got by stocking it only in summer, and taking the shesp (or a large percentage of them) down country to winter. This, of course, would have to be dealt with under a special system of tenure, as the lessees of this country would preferably be men who held down-country farms, where they could keep their stock during the two dangerous months. I would suggest that this country also be let by ballot for fourteen years only, the only conditions being that a ring fence be erected during the first two years; that tree-planting in the same proportion as other tenures lie done; that compensation be given at the end of leass for all improvements, but no guarantee of right of renewal. This country should be leased optional to either system of tenure, and if a lessee were prepared to take it up under the first system of tenure he should have the preference. I may say, in connection with this land, that, although in its present state it is dangerous in bad winters, yet there is any quantity of land suitable for growing turnips and hay to save the stock during a heavy snowstorm, if the tenant is only willing to cultivate. The present lessee on this class of country should also have a preferential claim to a block at revaluation without competition.