H.—2o.

prisons. At these institutions a variety of industries is carried on, the principal of which are bootmaking and the manufacture of clothing for our own use and for other Departments, mail-bag making and repairs, the manufacture of soaps and floor-polish, and the manufacture of tobacco, enabling a number of inmates to be usefully employed. For the last few years the Department has been growing and manufacturing the whole of its own requirements m tobacco, and this has resulted m a substantial economy. Our industries, on the whole, are m a better position than at any time during the past four yeais. Farm cash revenue, although below the immediate pre-depression total, is gradually recovering, and for the year just passed reached approximately £21,000. The quarry business realized £13,700, and roadwork activity was maintained and earned over £11,000. The material drop in the number of prisoners during the last year has added considerably to our difficulties in maintaining a supply of suitable labour at the farms and camps. It has to be borne in mind that only men in whom a reasonable degree of trust can be reposed can with safety be detailed for this type of work. As indicated in last year's report, there has been a gradual curtailment of further land-development work at the Hautu and Rangipo Camps, where the aggregate area of land broken in and put into grass by prison labour is now approximately 7,000 acres. There are two factors to be considered in the use of prison labour on farm-development work. Firstly, there is the reformative value of work of this nature having regard to the stimulating effect of work under conditions of trust in the broad open spaces, and the fitting of men physically and vocationally to take up a useful class of work on release ; and, secondly, there is the economic aspect which has regard to the marketable value of the fruits of prison labour. The first objective is constant, being dependent mainly on the efficiency of the administration in the institutions, but the second, due to the serious drop in the prices of farm-produce in recent years and its resultant effect on land-values, makes it necessary to pause and consider whether it is desirable to pursue pumice-land-development work further. Unless land-values harden considerably it is questionable whether costs will be recovered when the land is sold for ultimate settlement, as was originally intended. It is quite certain, as prices are at present, these sub-marginal light pumice lands will not return labour-development costs, and it is for this reason, plus the fewer number of suitable men available that the Department has slowed up on further development-work and is now endeavouring to consolidate and subdivide the 7,000 acres already cleared. It is fortunate that this land-development scheme, for many years past, has been carried on out of revenue, so that it is in a somewhat different position from an enterprise upon which interest-bearing loan capital has been spent. As previously indicated, the cost factor is not the only consideration, and this point is well brought out by a Norwegian authority, who recently stated. " The work of prisoners and the varying profit resulting therefrom are not in themselves an objective, but a means to an end. It therefore follows that suitable and continuous work must be provided for the prisoners whether times are prosperous or depressed, whether the public treasury gams or loses as a result. The clearing and breaking-up of land is always a difficult and costly proceeding, but on account of its great public importance the State accords to such work, and also to the preliminary settling of the land, a considerable measure of economic support. This work therefore provides a practically unlimited field of activity for the employment of piisoners without at all entering into collision with private interests. Agricultural work is incontestably the most wholesome, both for the health and the spirit of the prisoner. This work, as well as clearing the land, is always of great importance from the viewpoint of political economy. _ Prison labour must be so organized as to include, in the first place, all the work required in the prison itself. The prisons should manufacture all the goods required by themselves in the line of movables, clothes, footwear, tools and utensils, &c., and also all building-work that can be done by the prisoners should be done. Legitimate objections cannot be raised against this practice. Likewise, and as justly, all the work required by the other different State Departments should be executed in the prisons (the State-use system). If such a system were operated methodically the result would be to create in the prisons the use of prison labour on a large scale, and the pecuniary yield arising therefrom could at the same time be regulated, the State making allowance for the financial means of each particular case." Punishments. Three floggings were carried out as part of the sentences of the Courts imposed on prisoners, 1 as part of the punishment imposed for an offence of robbery with violence and 2 as part of the penalty for sexual offences. In no case was corporal punishment administered for breaches of the Prisons Regulations, nor was it necessary to have recourse to any form of mechanical restraint m any of our institutions. Following the adoption of more humanitarian methods in treating prisoners the reduction in the number of infractions of penal discipline in recent years has been most marked. The great majority of prisoners adjust themselves to the restraint of prison conditions without much trouble, although in isolated cases a prisoner resents the necessary restrictions of the prison routine and persuades himself that the officials are hostile to him. These unfortunate individuals are their own worst enemies and require a great deal of tact, firmness, and understanding on the part of the staff m dealing with them. Society demands self-control, and these individuals have to learn that orderliness and discipline in prison are elements in the cultivation of habits in self-control.

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