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year. The Department is holding good quantities of dry, well-graded stocks, and I look forward to clearing off the old losses during the present year and showing a profit on the whole of the operations since the inception of the Department. Kauri-gum Exports. For the year ended the 31st March. 192] the export was 6,131, tons, to the value of £524,701, this being the best year since the war both as regards tonnage and value. A very large proportion of the output was low-grade gums, but the exceptionally good prices received resulted in the average price per ton constituting a record. During the previous four years the average output was 4,140 tons, of the value of £267,009, an average, per ton of £64. This year the average per ton was £85. The following table gives particulars of the exports for the last twelve years :

Particulars of Kauri-gum exported from New Zealand from 1910 to 31st March, 1921, inclusive.

The Departmental Cash Account. Hitherto all amounts lying to the credit of the Department in the Public Account have carried no interest, although interest was still payable on the debentures raised to provide the cash. During the year a surplus of £18,000 was invested in 5-per-cent. inscribed slock, and a total of £400 os. Id. was payable on account of interest earned by this investment. Towards the latter end of 1920 the slump in gum set in, and, as stated in another part of I he report, most of the dealers and merchants pretty well ceased buying. The result was that the stock had to be realized on before the close of the year, to provide funds to make the necessary purchases of gum. Decreased Production of Gum in 1921. A great fall in the production of gum has taken place since the end of 1920. The exceptionally heavy rains experienced during January filled many swamps hitherto worked in the autumn and winter, and thus prevented the usual deep digging until next season. The lessened demand, with prices on a much lower scale, also played its part, but probably the principal cause is that hundreds of Dalmatian gum-diggers have left for their own country. Those leaving included many of the best workers. So far as all gums larger than chip size are concerned, the output for the next year or two is sure to be smaller than during the last few pre-war years.

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