9

G. —7

Owing to growth of willows and other causes, the streams no longer carry off the water, and a considerable area is flooded throughout the winter. This entails a substantial economic loss to individual settlers and to the State. Notwithstanding that the Government has agreed to subsidize the scheme to the extent of over £5,000, the Board finds itself unable to borrow on the security of its rates the £8,000-odd needed to make up the estimate of £14,000 required. We suggest that, in the public interest, every consideration should be given in the direction of devising means to enable this and similar drainage schemes to function. Afforestation. Considerable areas appear to us to exist in the district which are not suitable for farming under present known 'methods. These areas, if acquired at a sufficiently low price, could, in our opinion, be used for afforestation, which among other advantages would afford a means of employment for Native labour. Milling-timber. The third matter mentioned in Your Excellency's Commission is— 3. The position of the Native lessors of the said lands with regard to milling-timber upon the lands leased or in respect of rights granted to cut timber thereon. Very little was said to us upon this subject. No lessee or licensee appeared. In two cases Native lessors made complaint. In the one case the complaint was that the lessee was merely using the place for the purpose of cutting the timber and was not attempting to farm it. The Native lessor was advised that in such case her remedy was to determine the lease for breach of covenant, and that the Maori Land Board would take action on behalf of the owners if suitable arrangements were made. This related to Rangitoto-Tuhua 61 J. The other complaint was as to Rangitoto-Tuhua 60c 2, which is vested in the Maori Land Board. The question as to the powers of lessees to cut and sell milling-timber on their leaseholds has been the subject of much litigation. After a decision of the Court of Appeal of New Zealand against the lessees, the matter was finally determined by the decision of the Privy Council in Porou Hirowani and others v. Gardiner (21st January, 1927), holding that lessees were entitled to cut and sell timber without any payment to the lessors. Prior to that decision lessees were in a number of instances paying royalty to the lessors for timber disposed of. That was the position in Rangitoto-Tuhua 60c 2. Since the decision the lessees are not paying royalty. The law being settled, no remedy exists short of legislation arbitrarily varying the contract embodied in the lease. But where any lessee has made substantial profit out of timber he should not be afforded any future relief or assistance unless upon the terms of his bringing into account the profit so made. As to the rights granted to cut timber, difficulties have occurred in the past mainly over the payment of royalties. Owing partly to the laxity of the Natives themselves, they have not always received their royalties. Financial troubles of licensees or grantees have sometimes brought about a similar result. The Maori Land Board, however, is alive to the position, and special precautions are now taken to ensure payment. It is worthy of consideration whether section 14 of the Native Land Amendment Act, 1924, should not be amended so as to cover all timber or other agreements relating to indigenous usufructs. Question No. 7. 7. The position with regard to Native lands situated in the same district and vested in the Maori Land Board. Our remarks on this question are largely covered by our previous comments and suggestions. It has been submitted that restrictions as to improvements and residence have militated against the demand for vested lands. (See page 3of Mr. Phillips's statement ; sections 250 and 251 of the Native Land Act, 1909.)

2—G. 7.