A.—3a

2

I think it right to put before you the very strong opinion held here that Cook Islands producers are discriminated against as compared with producers in New Zealand proper. It is contended that the Islands, though annexed to and forming part of New Zealand, are, in respect of Customs protection, treated as such only where it benefits New Zealand proper. The New Zealand producer has protection for everything he ships here : the revenue would increase by at least £3,000 per annum if he had to pay the same duty as outsiders. The fruitgrower in New Zealand proper has special tariff protection against the competition of outsiders, The fruitgrower in New Zealand Cook. Islands has no protection. He has to compete against fruit from the French Islands and everywhere else. This does not only affect shippers and traders. The better price the shipper and trader can get the better price the Native producer gets. It vitally affects the whole community. Cheap fruit for the people of New Zealand is eminently desirable, but the point made is that if fruitgrowers in New Zealand proper are entitled to protection, then the fruitgrowers here, being also of New Zealand, should get it too. Incidentally it is contended that the effect of a protecting tax on outside fruit would be to regulate the market, would enable much larger quantities to be profitably grown here than can now be done, and that the price to the consumer would not in point of fact be increased, because the increased output from here would fill the place of the foreign fruit shut out by the tariff. All this, of course, is highly debatable matter, and I am not prepared to express any decided opinion with my present somewhat superficial knowledge of the whole subject, but no harm can be done by laying before you the arguments I have indicated. As to the matters referred to in your letter of instructions : — Importation and Sale of Liquor. The law regulating the importation and sale of liquor will be found in sections 274 to 283 of the Licensing Act, 1908, of New Zealand. These sections take the place of and are practically identical with sections 19 and 28 of the Licensing Acts Amendment Act, 1904. Regulations under section 28 of that Act were made by His Excellency on the Bth February, 190G, and published in the Cook Islands Gazette of the 20th March, 1906. 'these regulations are preserved in force by section 2of the Licensing Act, 1908. By notification dated the 27th February, 1906, appearing in the Cook Islands Gazette of the 22nd May, 1906, the Hon. Minister in Charge notified that His Excellency had been pleased to appoint Mr. Stevenson (the Collector of Customs at Rarotonga) to be the officer at Rarotonga for the sale or supply of liquor under the provisions of section 22 of the Licensing Acts Amendment Act, 1904 (replaced by section 277 of the Licensing Act, 1.908). This appointment also is preserved in force by section 2 of the last-named Act. Mr. Stevenson, therefore, in his dual capacity of Collector of Customs and officer for sale or supply of liquor, has for over six years been in sole charge of all liquor imported by private persons under section 276 of the Licensing Act, 1908, or by the Government for sale under section 277. From a memorandum addressed by him to me recently I extract the following : — " All imported liquor is consigned to me as Collector of Customs, and on arrival is put into bond until duty and any other charges are paid. If the importer is a trustworthy person and does not indulge to excess I give him delivery of his case of spirits or other liquor if he so desires. Many of them, however, prefer to keep it in bond and come for it as they require it. There are only about a dozen men on the island who have this privilege. If I have the slightest suspicion that any importer will abuse the privilege of having a quantity of liquor in his possession I retail it out to him in quantities of one or two bottle of spirits weekly, and a dozen pint bottles of beer or half a dozen bottles of claret. If I find that any one is abusing it on such limited quantities I cut him off. " I have given this liquor business much thought, and I cannot see that the present system can be much improved upon, unless total prohibition is introduced. I would not recommend a schedule fixing the quantities to be delivered to any person in a stated time, because some persons who consumed very little would take advantage of the full quantity in the schedule and probably dispose of it. No doubt there are occasional cases of overindulgence on the part of one or two whites, but I think such cases are few and far between. 1 do all in my power to check such lapses if I can obtain any definite statement. " I attach a return showing the quantity of liquor imported and delivered to white people during the year ended 30th September. I do not think the quantity is excessive, taking everything into consideration. I maintain that as long as a person is not giving liquor to Natives, or abusing it, I cannot very well refuse him. It is not part of my duty to discourse on the evils of liquor, but to see that the law is fairly administered. I supervise all deliveries of liquor imported by Europeans myself. If liquor is sent to any of the islands of the Group it is sent to the Resident Agent, who has instructions to retail it out in such quantities as he thinks expedient." Mr. Stevenson in these remarks refers to privately imported liquor only. In referring to liquor sold under section 277 he says, — " During the last two years liquor has been sold only on the production of a medical certificate. When prescribing liquor as a medicine the Government doctors use form No. 1 attached, and Dr. Dawson, who is in private practice here and has no power to issue a certificate, uses form No. 2. I issue the liquor on his recommendation that it is to be used medicinally. I might state that I have accepted a few recommendations from Dr. Story, who was formerly in the Government employ, and who has occasionally required some stout for his family. As regards delivery, I handle all permits except those of the Government doctors. Permits coming from the Government Hospital 1 allow my assistant to give delivery. Tt is done under my eye, for we are in the office together.