7

A.—3

An area of land will Lave to be acquired by the Government, not so much as an experimental farm as for the purpose of supplying the European planters and Natives, free of cost, with young trees, which will contain varieties to come into the market after our supply has been exhausted. With this view I have written'to California to know what the cost would be of a suitable man. Up to the time of writing I have not had a reply. If the fruit industry, which is the life-blood of these Islands, is to be fostered, this is the only way to do it. At the present moment there can be no doubt that the old trees are going back in their bearing, but with pruning and budding they will be invigorated with new life. This subject is a most important one, and, whatever it may cost the Administration, it should, in my opinion, be proceeded with. New Zealand has no orange-groves except a few in the far north, and the experience gained on this subject by the Fruit Inspectors who are engaged in New Zealand must necessarily be very limited. I am quite sure that you will support me in this. I see nothing else for an increased output and a better class of fruit. The Fruit Inspector's time is fully occupied with other duties. It is proposed in the near future to erect cargo-sheds at the Islands of Atiu and Mauke similar to that at Aitutaki. When this is done it will be compulsory for all fruit to pass through the cargosheds, where it will be submitted to close inspection by the Resident Agents, whom it is proposed to appoint Sub-inspectors of Fruit, as indicated in my despatch No. Fl/1911/31, of 16th January last, and much improvement in the quality of the fruit exported from each of the islands named may be looked for. Copea. There were exported 1,462 tons of copra, valued at £25,767, during the year, 1,131 tons going to the United Kingdom. High prices for this commodity ruled for the greater portion of the year, but fell to some extent towards the end of the year. As a result of the establishment of the through San Francisco service a large trade in coconuts suitable for desiccating is rapidly growing between this Group and San Francisco. While this trade is a more profitable one to the planter than the making of copra, it will be the aim of the Administration to develop it in every possible way by seeing that only the best classes of nuts are shipped for the purpose. It may be pointed out that the shipping of coconuts gives greatly increased freight to the Union Steamship Company compared with what they would derive from the shipment of copra. This is illustrated by the following figures : — Freight, Rarotonga to San Francisco, on 4,500 coconuts (required to make £ s. d. 1 ton of copra) at £1 10s. per 1,000 . . .. 6 15 0 Freight on 1 ton of copra .. .. .. .. 1 18 6 Gain in freight by shipping nuts .. .. .. .. .. £4 16 6 Protection sought. It is necessary that this most important subject should not be lost sight of, and with that view I repeat the remarks contained in my first annual report, which were as follows : — Attention is drawn to the fact that the New Zealand Government protects its fruitgrowers by levying a duty of Id. on all imported plums, cherries, peaches, nectarines, medlars, apricots, quinces, tomatoes, and grapes. From the Ist January to the 14th July in each year the duty on imported apples and pears is Id. per pound, and |d. per pound for the remainder of the year. No such protection is offered to the fruitgrower of the Cook Islands, although a part of the Dominion of New Zealand. The staple fruits of these Islands are bananas and oranges, which are admitted into New Zealand free of duty, as is the case with the same class of fruit from the Australian Commonwealth, Fiji, Tonga, and the French Society Islands. The Cook Islands adopt the New Zealand Customs tariff, with one or two slight alterations, and, as a result, practically the whole of the trade of the Group is in the hands of the New Zealand trader and producer. New Zealand has a monopoly of the trade in flour, tinned meats, butter, and cheese, biscuits, and also fruit-cases ; all being admitted free of duty here because they are imported from New Zealand. Were any of the above products imported from Australia or America, the duty would be charged as enacted in the New Zealand Customs tariff. In addition to the above, almost every article of merchandise imported passes through the hands of the New Zealand trader, who undoubtedly makes his profit. In return, I think you will find, upon inquiry, the Cook-Islander receives practically nothing. Australia, Fiji, Tonga, and the French Society Islands Governments give no concessions in the way of preferential duties on New Zealand exports, yet New Zealand allows their fruits to bo admitted into the New Zealand market on the same basis as it does the fruit grown in the Cook Islands. It is not encouraging to the Cook Island fruitgrowers to send large shipments of sound fruit to New Zealand in the expectation of remunerative prices, to find, on the return of the steamer, that perhaps a boat has arrived from Fiji or Tonga two or three days previously and glutted the market. As fruitgrowing is practically the only industry, with the exception of copra, in these Islands, it is only fair to suggest that New Zealand should protect the industry in return for the protection which she receives from the Cook Islands. I would suggest that the New Zealand Government levy a duty on oranges and bananas imported from outside the Cook Islands from, say, the Ist March to the 30th September in each year. If this were done, an immense benefit would be conferred upon the Cook Island Group. Railway Rates. The following remarks under this head are extracted from my annual report of last year : — The fruitgrower here is not allowed the concessions given the New Zealand orchardist on fruit passing over the Lyttelton to Christchurch line. I cannot see the force of the objection raised by the