INDUSTRIES AND COMMERCE REPORT

Appendix to the Journals of the House of Representatives, 1906 Session II, H-17

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Session 11. 1906. NEW ZEALAND.

INDUSTRIES AND COMMERCE REPORT

(28th August, 1906)

THE MINISTER OF INDUSTRIES AND COMMERCE, HON. SIR J. G. WARD, K.C.M.G.

Presented to both Houses of the General Assembly by Command of His Excellency.

Department of Industries and Commerce, My Lord, — Wellington, 28th August, 1906. I have the honour to submit to Your Excellency the report of the Department of Industries und Commerce for the year ending the 31st March, 1906. I have, A-c, J. G. Wahd, Minister of Industries and Commerce. His Excellency the Governor of New Zealand.

In presenting my fifth annual statement it becomes my pleasant duty to draw attention to the eminently satisfactory prices realised for this country's produce on the markets of Great Britain and elsewhere during the past year. The prices obtained for wool, butter, cheese, and hemp have been such as should give the greatest encouragement to the producers, whilst in the case of frozen meats and other leading export lines the prices compare favourably with previous years. The increased prices, although there was a falling-off in the volume of certain lines exported, has brought the value of the country's exports up to a sum far beyond that ever previously recorded. The value for the year 1905 shows an increase of £907,599 over the previous year. There are not lacking indications that prices for the present year will be in most cases well up to last year's, especially as regards butter, hemp, and wool, and altogether the future of producers of these lines may be regarded as particularly bright. Competition, however, is exceedingly keen, and if the position of this country's produce on the markets is to be maintained every effort must be made to keep up and improve the quality of the produce, and also to place it constantly before the traders and consumers of other lands. Good work has been done by the present Produce Commissioner in London, but the magnitude of the work now required in supervising the arrival and distribution of produce, and the opening-up of fresh channels of trade, is too great a task for one man. In view of the very much enlarged producing-capacity of the country, and the growth of exports, I am of the opinion that the time has come for the strengthening of the commercial staff in London. Special efforts should be made to bring New Zealand produce under notice of the many importers in the large manufacturing centres of the United Kingdom, who would be glad to become direct importers if they were made acquainted with the exact modus operandi now adopted by London houses, which, to a large extent, control the export trade of this country. It is gratifying to know that merchants in Glasgow, Manchester, Liverpool, Cardiff, Bristol, and other large centres of population in the Mother-country are turning their attention to New Zealand produce, and are anxious to make direct commercial and financial arrangements with the colony. This is largely due to the Department's representation at produce and other exhibitions held in the United Kingdom. The intelligent representation of this country's commercial interests, not only in the Mother-country but also in Canada, the United States, India, Japan, and throughout the East, could not but materially benefit exporters by developing fresh markets for our produce. I—H. 17.

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The policy of keeping the produce of the country before the traders and consumers of Great Britain by means of exhibitions has been extended during the year under review. Exhibits of a more comprehensive nature than hitherto have been shown at the Indian and Colonial Exhibition, London, the Colonial Produce Exhibition, Liverpool, the Royal Horticultural Society's Show, London; and a permanent exhibit has been established at the Crystal Palace. The cost of representation at these exhibitions is small, and results have been in every way satisfactory. Arrangements have been made for a very large exhibit, principally of New Zealand tinned meats, at the Groceries Exhibition, to be held in the Agricultural Hall, London, in September. In view of the Chicago scandals this Exhibition is particularly opportune to further introduce New Zealand tinned goods to the British consumer. A pamphlet showing the rigid methods of inspection adopted in New Zealand to insure that tinned goods reach the consumer in a perfectly healthy condition has been prepared, and will be freely distributed at the Groceries Exhibition. The question of exhibiting on a fairly comprehensive scale at the Irish International Exhibition, to be held early in Dublin, is now under consideration. The proposed renewal of the South African subsidised steam service has engaged the attention of the Government, but owing to the tenders for a new service being considered too high the Government did not see its way to accept any of the offers made. The subsidies required were excessive compared with the volume of trade to be expected from the service. The Tyser Company has now decided to establish a service calling at South African ports, and the steamers despatched by this company should fill the requirements of New Zealand shippers for the time being. Unless there are full cargoes offering in New Zealand, this company's steamers will call at Australian ports to complete loading. Where a number of Australian ports are touched, the voyage will unfortunately be prolonged so as to make arrivals in Africa rather indefinite. I am pleased to be able to state that the West of England steam service, arranged by contract with the New Zealand and African Steamship Company, has proved of great benefit to this country. The monthly sailings for months past have comprised full cargoes of frozen meat and general produce, chiefly for Cardiff, Bristol, Liverpool, Manchester, and Glasgow. The demand for New Zealand produce in the provincial markets of Great Britain may be considered very satisfactory, and the extension of trade in this direction will, no doubt, be great. With a view to getting into more direct trade connection with our great sister country of Canada, a steam-service contract between the Canadian Government and the New Zealand Government on the one hand and Messrs. Alley and Co. on the other has been entered into. The contract provides a two-monthly cargo service for a period of one year between New Zealand ports and the western ports of Canada. Efforts are now being made to convert this service into a refrigerator one, as it is hoped considerable trade may be done with Canadian western ports in frozen meats, butter, &c, at certain periods of the year. So far, full cargoes have not been shipped by these steamers, but it is expected that when the exporters and merchants of the two countries concerned get into closer touch better results will be accomplished. The question of opening up trade with the East has engaged the attention of the Government, and, in view of the large quantities of produce identical with that which New Zealand could supply now being imported by Japan and other Eastern countries, there is little doubt that, given suitable shipping facilities, a valuable trade may be worked up in this part of the world. The Australasian exports to Japan for 1904 amounted to £439,906. Included in this amount is the item, Wool, £233,919, and as the total quantity imported into Japan is £637,694 c.i.f., it will be seen that Australia has secured over a third of the whole trade in this commodity. Hemp and jute total £6,464 18s., and, as the former is not produced in Australia, it is only reasonable to conclude that the imports of this product originate in New Zealand. Australia has five direct lines of steamers to the East, and some call at Manila and Singapore with large consignments of produce. Trade with Australia and China is increasing, and in the report furnished by the New- South Wales Intelligence Department I note the item, " Exports from Australia and New Zealand," £72,166. The trade with China is still in its infancy, and I look forward to a great expansion of "trade with this Empire. At the close of 1904, thirty-six ports were opened for trade, Shanghai, Hankow, Canton, Tientsin, and Newchang being the principal. Hong Kong exported to China in 1904 goods to the value of £20,574,897, a large quantity of which was imported from the United Kingdom and the British colonies. The present condition of the hemp-market calls for special attention. I am pleased to note that the demand for this commodity is increasing and extending year by year. Recently to the list of regular buyers have been added large rope-manufacturers in Germany, France, and Japan. Many of these buyers, however, find the utmost difficulty in obtaining supplies, due to two causes —firstly, that the supplies are not at present sufficient to meet demands, and, secondly, that the American, Canadian, and British operators have booked orders months ahead, absorbing practically the whole output. The want of sufficient supplies is therefore losing to the colony profitable trade, and disappointed would-be buyers must turn their attention to other fibres for the purposes of manufacture. To maintain a stable trade continuity of supply is essential, and, for the purpose of assisting an industry which provides so much employment for unskilled labour and is so profitable to this country, I am of opinion that immediate consideration should be given to the planting of some of the waste lands of the colony with the best qualities of Phormium tenax. Already inquiries are being made from Commonwealth States and the United States of America regarding the obtaining of supplies of plants for the purpose of producing the fibre in these countries, which will ultimately come into competition with New Zealand I regret to find that the blending and " faking " of colonial butter by British traders is likely to become a serious menace to the New Zealand trade. The quality of New Zealand butter and the low percentage of moisture which it contains make it specially adaptable for the purposes of the blender and " faker." Producers and exporters in this country do not appear to realise

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that if large quantities of New Zealand's best output are to be utilised by the illegitimate trader, it is only a matter of time before New Zealand butter will lose its individuality on the markets of Great Britain, and the reputation and standing achieved after years of care and thought will have been lost. Then, when keener competition comes from the productions of Siberia, Canada, the Argentine, &c, and come it surely will, New Zealand will be less able to successfully compete than if its individuality had been maintained. By exporting large quantities of saltless butter the New Zealand producer is undoubtedly playing into the hands of the butter blender and "faker." Representations have been made to the Imperial Government with a view to securing legislation to prevent blending and " faking " of New Zealand butter. The Select Committee set up by the Home Government to inquire into the question, I regret to find, while recommending the suppression of the " faker," considered that the practice of blending butter was a legitimate industry. I am pleased to note that a further reduction has been made in butter freights. The weekly cables from the Higli Commissioner prove of great service to producers and shippers, and it has been found necessary, owing to frequent requests, to enlarge these considerably. Every week particulars are cabled dealing with the mutton, lamb, beef, butter, cheese, hemp, and cocksfoot, markets, and fortnightly the current quotations are cabled of kauri-gum, New Zealand wheat, oats, beans, and peas. Particulars of each wool-sale are also cabled, together with the condition of the respective markets. The contents of these cables are immediately published throughout the colony. From this end, as soon as the shipping companies have completed the correct totals of a ship's cargo, the principal particulars' are cabled to the High Commissioner, and a copy of the full manifest is also forwarded by the first opportunity. The figures forwarded by the Department are then published in British trade papers—which gives considerable prominence to New Zealand produce. The British Board of Trade Intelligence Branch is in regular communication with the Department. Inquiries regarding opening of trade between the Mother-country and New Zealand are frequent, and the best information obtainable is forwarded to those seeking it. During the year Mr. R. J. Jaffray was deputed by the Board of Trade to visit Australia and New Zealand, and on his arrival here was afforded every assistance desired, by the Department. A matter that is receiving the attention of the Department is that of navy and army contractsForms of tenders regularly reach me inviting tenders from New Zealand shippers, but it is unfortunate that insufficient time is allowed to submit offers from here. Representations to this effect were made to the High Commissioner in 1904, 1905, and twice this year, who in turn passed them on to the authorities. Up to the present no improvement has been manifested, and lam again urging the claims of New Zealand with the Admiralty and War Office.

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APPENDICES.

APPENDIX I. FIFTH ANNUAL EEPORT OF THE SECRETARY OF INDUSTRIES AND COMMERCE. Department of Industries and Commerce, Wellington, 21st August, 1906. g IR I have the honour to submit herewith the departmental report for the year endingfthe 31st March, 1906. I have &c The Hon. Sir J. G. Ward, K.C.M.G., T. E. Donne, Secretary. Minister of Industries and Commerce, Wellington. I am pleased to report that the records for the year under review show that for the most part the prices obtained for the produce of New Zealand on the oversea markets have been of a very satisfactory nature. The prices realised are greatly in advance of the previous year, with the exception of those for frozen The advance in the price of butter has been particularly marked, 117s. per hundredweight being obtained for shipments disposed of on the London market in December, 1905, as against 104s. for the corresponding periods of the previous year. An advanced price was maintained till February, 1906, when, owing to large quantities of blended or faked butter coming on to the market, the prices for New Zealand butter suddenly dropped to 1065., but even this reduced price compares favourably with 102s. for February, 1905. From the schedule of average monthly prices, to be found on page of this report, it will be observed that the lowest monthly average price for butter during the year under review was 945. in May, 1905, as against 86s. for May, 1904, and the highest, 1175., in December, 1905, as against 104s. in the same month in 1904. There has been a steady advance in prices since April last, and the prospects for the coming season's turnout are of the best. A large number of factories have already sold at a considerable advance on last year's sales. The advance in the price of cheese has also been considerable. The season opened at an average of 61s. per hundredweight, against 50s. for the previous year. In March, 1906, the price rose to 645., the highest price for the previous year being 545. New Zealand hemp is steadily growing in favour, and the range of trade considerably extending. A large quantity has recently found a market in Germany, Belgium, and Japan. Since July last there has been a steady increase in demand, and an upward movement in prices. In July the quotation was £29 10s. per ton in London, at the close of the year the prices reached £33, and the increase has since been steady and the market firm. The shortage of the Manila crop has had its influence on the markets, but there is no doubt that the compulsory grading, and the improvement in the method of preparation of the fibre has also had much to do with the more favourable reception of the New Zealand article. Some better method is, however, required in attaching grader-tabs. Those at present used are so easily moved as to be open to very grave abuse. The demand for hemp is at present so great that many wouldbe buyers are being disappointed, and a valuable footing lost through this country's inability to supply all requirements at a reasonable and yet remunerative figure. It seems to me that there is an opening for an industry of large dimensions in connection with the hemp trade. Much of the swamp lands of the colony could be made very highly remunerative if systematically planted with flax-plants of the best varieties. If the markets for hemp are to be enlarged, and those already secured held, there must be a regular and continuous supply, which can only be insured by scientific cultivation of this valuable plant. Demands have recently been received from some of the Australian States, and also from America, for seeds and plants for cultivation in those countries. I would recommend the question of prohibiting the export of either seed or plants for the consideration of the Government. Tow, which has in the past been regarded as a waste product in the hemp industry, and could be disposed of at only 50s. to 60s. per ton, is now in much greater demand, present quotations for this article being £8 15s. to £9 per ton f.o.b. The wool-growers of the colony have had a particularly fortunate year, the prices London market being greatly in excess of those received for many years past. The market at the close of the season was firm, and there are good prospects of the coming year's clip being keenly competed for by manufacturers. The average prices realised for New Zealand mutton, lamb, and beef have been hardly maintained. Large cargoes of the two former lines are being shipped regularly to the west coast of England every month, as well as the large shipments to London direct. I am pleased to note that the frozen-rabbit industry is again on the upward move, the Manchester and Liverpool markets taking the bulk of the New Zealand shipments.

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The cocksfoot-seed market in London during the last season was in the producer's favour, and as high as 58s. per hundredweight for 17 lb. bright clean-dressed seed was realised, against 535. per hundredweight for previous crop. The new crop opened at 48s. per hundredweight nominally, but buyers are not keen to do business until the American crop prospects become known. In cereals good shipments of oats are going forward to the United Kingdom, and the same remarks apply to seed-peas, the growing of the latter from seed sent from England giving general satisfaction. Kauri-gum shipments are regular, nearly every outgoing steamer taking a good consignment. The prices realised in London auctions are well maintained, and there is a keen demand for good parcels. It is also gratifying to note that amongst the sundry articles on all ships' manifests such lines as tallow, hides, casings, tinned meats, kidneys, poultry, sheep and rabbit skins, pelts, pork, veal, leather, meat-extracts, hair, oleo, timber, &c, are to be found, which tends to show that the country has a British market for all its products, together with a growing foreign connection, as many lines shipped go forward to London only to be transhipped to the Continent of Europe or America. High Commissioner's Cable. The weekly cable dealing with the Home markets has been regularly received from the High Commissioner, and immediately published for the information of exporters and producers. Arrangements have been made whereby the information received in this manner has been enlarged with a view to extending its usefulness to those interested. I attach hereto a schedule showing the average prices realised for our principal exports for years 1904-6, on a monthly basis.

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HIGH COMMISSIONER'S CABLES. Table showing the Average Prices realised Monthly in London for the undermentioned Principal Lines of New Zealand Produce during the Years 1904-5-6.

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Month. Lamb, pe] Pound. Mutton, Canterbury. Mutton, per Pound. , per r Pound. North Island. Beef, per Pound.* Butter, per HundredHindquarters, weight. Cheese, per Hundredweight. Hemp, on Spot, per Ton. Cocksfoot, per Hundredweight. .Canterbury. North Island. 1904. 1905. 1906. d. d. d. 6 6* 4J 1904. 1905. 1906. d. d. d. 5| 6J 4J 1904. 1905. 1906. d. d. d. m h h 1904. 1905. 1906. d. d. d. 44 4| 31 1904. 1905. 1906. d. d. d. 34 3J 3§ 1904. 1905. 1906. s. s. s. 98 101 114t 1904. 1905. 1906. S4 S. S. i 52 51 62 1904. 32 10 1905. £ s. 31 0 1906. £ e. 32 0 1904. 1905. 1906. s. s. s. 52 50 53 January February 6 6£ 5J 5J 6 5J 4J 4| 4J 44 44 4 34 3J 3§ 99 102 106 49 52 60 32 0 30 15 33 0 52 51 54 March 5| 6 5§ 5 51 5J 44 4f 44 44 44 41 34 34 34 96 106 103 '' 50 54 64 31 5 30 0 32 10 52 51 57 April} SJ Sg 5 5 5i 4J 4f 4J 44 44 41 4 3 34 3g 88 103 100 46 58 66 32 0 28 10 32 0 52 53 58 May 5J 5J 4| 54 5| 4§ 4f 4| 3J 44 i at 31 34 3J 86 94 101 41 54 63 31 10 27 10 31 10 52 53 48§ June 5f 5| 4J 51 5J 4f 44 4f 31 4 4 3| 34 3| 3§ 87 97 104 42 52 65 30 0 26 0 32 0 54 53 47 July 5| 5| 5J 5i 5J 41 4J 44 31 4 4 34 5 3g .. 90 101 106 '■ 40 55 64 30 0 27 0 34 10 53 53 46 August 51 5J .. 5f 5J .. 4| 4f •• 44 4 4| 31 .. 94 None 41 54[j .. 29 0 28 0 53 53 .. September 5f 5 5| 41 .. 4g 4 4 3| .. 31 34 98 j 43 None .. 29 10 29 10 52 53 October 5} 41 .. 51 44 .. 44 31 4 34 .. 31 3g .. 95 New season. 103 114 43 . .. 48 29 10 30 10 51 51 November 5f 4J .. 5S 4 .. 44 3| .. 41 34 .. 21 3§ .. 31 0 31 0 50 51 December 6J 4J .. 6 4.. 4| 31 44 34 .. of 34 104 117 50 61 31 0 31 10 50 51 * Beef forequarters average Id. per pound less than hindquarters. + The butter market was allected in 1906, in the first place by the heavy fall in February, owing to the importations of blended butter from America and the Continent, together with the British productions; bul during June, 1900, and up to the preset period a steady advance has been experienced, due largely to the faci of a poor season being experienced in England. 1 Siberian b tter, new season's make, reaches London about April 5 The new crop of cocksfoot is quoted on London market in May. I Nominal.

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Advice of Exports shipped from New Zealand. Arrangements have been made with shipping offices throughout the colony to furnish me with copies of their steamers' manifests as soon as completed, and this enables me to cable the High Commissioner at the earliest possible moment details of produce shipped. The Produce Commissioner in London then disseminates the news through the various trade journals in the United Kingdom, and this not only advertises the colony but gives trustworthy information to the many who are interested in New Zealand shipments. Freights on Produce. Keen competition is now being experienced in the country between the rival shipping companies at present trading between New Zealand and the United Kingdom. Freights have been much affected, and it is difficult to get any reliable quotation which will hold good for any length of time. The producers of the country are at the present time enjoying exceptionally low rates of freight on both farm and dairy produce. The question of butter freights has again been renewed, and rates have been adopted greatly in favour of the producer. Instead of about 2s. 6d. per box, as formerly, the steamers under contract to the National Dairy Association are quoting—butter to London, 2s. 2d. per box, ship paying coastal freight; butter to west-coast ports of England, Is. 9d. per box exclusive of coastal freights. Another line of steamers quotes —butter to London, Is. 9d. per box, ship paying coastal freight; butter to west-coast ports of England, Is. 9d. per box, ship paying coastal freight; and gives the shippers the option of having their butter mailed to destination at ship's expense from the first discharge port. The freight on cheese is unchanged at |d. per pound. Coal-export. With the exception of British Admiralty orders, there has practically been no export of New Zealand coal. During the current year about thirty thousand tons of Westport coal will be shipped to Garden Island, Sydney, for the use of H.M. navy. Considering the fact that the cost of the coal landed on that island is about double the price of any other, it is a great testimonial to the quality of the New Zealand product that it is used by the navy. The quantity contracted for is not a great one in comparison with that of two years ago, when the Admiralty was taking away large cargoes for the China Station in anticipation of hostilities. Still, in face of the cost, the quantity contracted for may, I think, be considered satisfactory. Butter-adulteration. In previous reports issued by the Department the butter-maker's attention has been drawn to a fraudulent system prevalent in the United Kingdom, and also on the Continent of Europe, of using the choice butter exported from New Zealand for " faking " and blending purposes. The matter has also been brought under my notice by the Produce Commissioner in London, who points out the losses that will accrue to the colony if this pernicious trade is allowed to continue unchecked. My opinion relating to this blending of butter is fully confirmed by a cable received from London at the beginning of February last, which contained the ominous news of the collapse of the butter-market owing to large quantities of adulterated butter being placed on the Home market by American and Continental blenders. It is to be deeply regretted that for the fourth time the British Government has failed to pass the Sale of Butter Bill, thereby neglecting to prevent the sale of waterlogged and blended butter, the sale of which was declared by the then President of the Board of Agriculture to be an absolute fraud on the farmer and the consumer. Faked or manipulated butter is sold all over Great Britain and Ireland, and there is no difficulty in purchasing it in at least two shops or stores in any fair-sized town. I have ascertained on good authority the enormous profits made by these blenders, and it is estimated that some 200 tons of this faked or waterlogged butter is made daily, at a profit of about £12 per ton, or equal to £14,000 per week. The butter manufactured by New Zealand factories is of the best class that the blenders can secure for their purpose. It is free from excessive moisture, with a minimum of salt: thus the New Zealand product is his prey. Careful thought and consideration lead me to advise that the best way to prevent any butter getting into the hands of the blender is to follow the lead of our sister colony Canada, and have representatives attached to the High Commissioner's office in London, who would not only watch our interests in the way of honest trading, but go straight to the retailer all over the United Kingdom and induce him to give our butter a trial, and assist him in making arrangements so that he can got regular supplies. If this system were adopted and carried out by reliable officers under the control of my Department, there would be very little butter, if any, available'for the use of the colony's enemy the butter-faker. There seems to be only one method of restricting the fakers' and blenders' operations from this end, and that is to prohibit wholly or largely restrict the exportation of saltless butter. It seems to me that absolute prohibition would, in the end, be a wise policy to pursue. If the faker should be permitted to continue his practice, the time is near at hand when to the consumer New Zealand butter will cease to be known, and the large sums of money and the great labour expended in working up a market will have been to no purpose; and in the days of the keener competition to follow New Zealand's produce will be so little known as to be unable to compete successfully, except as far as requirements of the faker and blender are concerned, should they then exist. The present position seems to me fraught with considerable danger to the trade, and I regret to say that many exporters are playing directly and knowingly into the hands of the " faker " for a possible immediate gain, with the risk of bringing ultimate disaster to the trade.

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I am firmly impressed that it would greatly assist New Zealand if an office were opened m the City of London,' thereby bringing the country in touch with the markets of the world and the centres of commerce and shipping. Samples of the colony's products could be on exhibition, all commercial inquiries dealt with, and this office would be the headquarters of the Produce Commissioner, his stall, and any commercial agents that may be appointed. Canada is reaping the benefit of its City office ; Newfoundland has followed its lead, and other colonies are also represented; so it appears to me that time should not be lost in establishing a New Zealand office on a similar basis to those of its contemporaries. Board op Trade Inquiries. As Corresponding Secretary in New Zealand for the Commercial Intelligence Branch of the British Board of Trade, lam called upon to answer many inquiries on commercial questions. Questions come forward by each mail from all classes of manufacturers not only through the London office of the Board of Trade, but direct from principals interested. In answering these, great care is taken by this Department to gather the best and most reliable information to place manufacturers and others in the United Kingdom on the best possible footing should they contemplate trading with the colony. - Board of Trade. The Government, during the year, was advised by the Secretary of State for the Colonies that the Board of Trade was sending throughout the colonies Mr. Jaffray, whose mission was to secure general information for the benefit of the British manufacturers. Mr. Jaffray was in New Zealand during April and May, and addressed the various Chambers of Commerce and Industrial Associations on trade matters. Trade with Canada. An agreement has been entered into between the New Zealand and Canadian Governments jointly with Messrs. Alley and Co., of Vancouver, by which a direct service of steamers from New Zealand ports to Vancouver, 8.C., has been arranged. The two Governments have jointly agreed to subsidise the Alley Line for a sum of £10,000 each, and for this sum (£20,000) the contractors will supply for one year a service of cargo-boats sailing every alternate month, the Governments concerned having the option of extending the contract for a further period of two years. . Itfis hoped that shippers will generously use the service thus provided. Through freights are quoted*by the local agents in New Zealand by which cargo can be delivered to any part of Canada on a fair basis. The contractors have the option of calling at Honolulu should sufficient inducement offer. South African Steam Service. The subsidised service to South Africa was carried out with due regularity up to the departure of s.s. " Kent "on the 31st October, 1905. This sailing completed the three-years contract with the New Zealand Government. The New Zealand and South African Steamship Company was approached regarding their intention of continuing the service, and I regretted receiving an intimation from them that they could not renew the contract on the terms hitherto existing. Further tenders were then called, biit without success —the only tender received was a joint one from the Shaw, Savill, and Albion Company and the New Zealand Shipping Company, but the large amount of subsidy asked for placed the matter beyond favourable consideration. There is a feeling all through business circles in the colony that something should be done to keep the connection now established between New Zealand and South Africa by medium of direct service. Petitions have been lodged in this Department and letters from leading shippers are to hand asking for the assistance of the Government in the matter of conveyance of our produce on equal terms with our Australian competitors. The position has now been met to a large extent by the establishment of a direct service by the Tyser Line, without assistance from the Government. This service will be of great benefit to exporters. There is, however, a possibility of the arrivals in South Africa being somewhat irregular owing to the steamer calling at a number of ports in Australia. The delays en route will, of course, chiefly affect frozen produce. The freights charged by the Tyser Company are at very reasonable rates. The following table shows the cargoes taken by the final sailings under the contract :— Summary of Cargo shipped by Undermentioned Subsidised Steamers to South African Ports.

Steamer. 5 J 6» o . DC - to © as >> e≤1 ° g w« III » £ °5 a t a) COM K^ vloravsbire .. Sanff-sh're *a rnshiref ■• Ayrshire isseX Grange £ent 904 ..I .. 394 1,385 200 J 40 1,104 200 10 ' 762 200 I .. 640 ..: 2io I io .. .. .. I Qβ 80 75 75 75 5'25 445 340 515 4 4 2 3 4 2 3,844 275 3,149 50 3,051 1,040 3,000 486 303 1,495 892 2,265 50 63 136 60 53 77 51 37 10 3,018 1,064 9,749 11,524 11,490 1,222 10,477 1,720 555 150 4,511 5,669 2,116 675 65

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Summary of Cargo shipped by Undermentioned Subsidised Steamers to South African Ports. — continued.

West-Coast-of-England Shipments. I am glad to report that the steamers trading between the colony and the west-coast ports of the United Kingdom under contract with the Government, are leaving the colony with large representative cargoes of New Zealand produce—in fact, the latest sailings have more than fulfilled the most sanguine expectations, the agents being in the happy position to inform me that they have regularly despatched full ships. Frozen-meat shippers 'particularly are using the service not only on account of saving rail and carriage charges by shipping via London, but because the meat arrives in so much better condition, having only a minimum amount of handling. I attach particulars of cargoes shipped during the last twelve months. It will be observed that the meat shipped in several boats averages about 90,000 carcases per first seven steamers on the list called at South African ports under Government subsidy. The large cargoes being carried have brought about competition in this service, and in June last the New Zealand Shipping Company and the Shaw, Savill, and Albion Company advertised that they were initiating a service on joint account. They announced that they were despatching the " Waiwera " in June and the " Wakanui "in July, and other steamers at regular intervals. These facts show that the service is a complete success, and one which is proving very beneficial to producers and shippers. The manifest of the " Waiwera " is included in the schedule attached :—

Shipments by Direct Service to West Coast of England Ports.

* This column includes poultry, tinned meats, bran, pollard, grass-seed, hemp, tow, kauri-gum, and general merchandise. + These steamers called at South Africa, via Fremantle, under subsidy to New Zealand Government. I These steamers sailed direct for west coast of England ports. § Despatched by the Shaw, Savill, and Albion Company (Limited). Trade with the East. As direct communication has been re-established between Australia and the East, I wish again to draw attention to the markets of Japan, China, and Manila. Eeference to the Shipping Gazette, in which authorised copies of Australian manifests are published, discloses the fact that heavy shipments of produce are being forwarded and carried by six different steamship lines to the East. Now that hostilities are ended, trade is increasing rapidly, and, in my opinion, an effort should be made to extend our trade relations in Asiatic countries. That a portion of the trade offering can be secured for New Zealand I have no doubt, and, further, I think it advisable to go into the matter of a direct service and try to include the main ports of Cochin- and Indo-China in the itinerary, the latter countries being large buyers of tinned produce, including meats, vegetables, and fruits. I believe the trade with China is capable of great expansion. Australia and New Zealand exported produce to the value of £72,166 10s. in 1904. Japan is now making great strides in the mercantile world, and to explain this I would point out that in 1903 the imports from Australia totalled £119,991 125., 2—H 17.

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Steamer. ll +3 ll COCC ID >i a •go tecs to a as ■ oo fe to Moravshire Banffshire Nairnshiref .. Ayrshire Essex Haversham Grange Kent 5,043 5,893 6,900 12,566 3,382 1,119 1,689 65 3,404 151 22 '. i 580 100 640 Ill 37' 281 1,921 2! 4! 63 250 849 372 284 19 142 4^907 388 ' 3,405 1,127 io * " Sundriee" tThe s.8. "N ' includes linseed, gi fairnshire" took a e! •ass-seed, m aipment of ] Dlasses, p: L0.900 sups igs, veal, sides pork, oatmeal, pollard, and fish, irftcial feet timber for Durban.

Steamer. Carcases Carcases Crates Boxes Grain and Boxes Mutton. Larab. Rabbits. Beef. Flour. Butter. Cases Bales Super. Feet Sundry Cheese. Wool. Timber. Produce. * Morayshiref .. Banffshiref .. Nairnshiref • • Ayrstairef Essext .. .. Haversham Grange f .. Kentt Devon J Morayshire} SomersetJ Ayrshire} EssexJ Dorset; Dray Ion Grange J Fifeshirej: Oswestry Grange J Waiwera§ 732 1,337 4,722 4,253 4,630 10 4,698 7,249 15,139 29,012 23,122 20,749 12,576 5,782 47,526 24,730 26,581 3,984 3,350 210 450 1,500 74,294 84,882 99,550 84,579 49,840 38,578 20,106 9,034 66 15,724 15,154 8,755 9,165 2,484 8,651 200 801 816 553 2,063 1,897 640 632 4,146 3,304 3,459 7,939 7,170 5,692 4,670 1,900 3,949 8,899 580 6,536 7,970 10,898 400 150 9,547 8,660 12,611 9,312 626 4,786 447 3,130 11,432 11,056 4,660 3,457 2,194 2,723 1,483 223 2,077 386 792 397 2,346 4,261 1,380 374 1,611 2,446 1,365 976 315 165 ', 080 10,900 164,973 51,386 50,061 76,424 53,180 164,793 64,358 152,726 677 1,295 5,296 2,627 6,767 5,622 437 3,666 2,016 4,948 9,042 10,448 14,483 9,639 2,821 5,748 12,040 1,125 5,072 8,050 12,640 14',206

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and rose in 1904 to the sum of £439,906 2s. I attach a schedule of how this amount is made up, together with a report of trade with Manila and Singapore, and a schedule of some imports into China from other countries in which New Zealand might compete : — Schedule of Imports into China from other Countries in 1904, of a Class which might be Exported by New Zealand. £ 8 . d. Butter and cheese .. .. .. .. .. •.. .. .. 49,710 11 9 Cement (principally from Hong Kong) .. .. .. .. .. 40,023 6 3 Coal (1,250,619 tons) .. .. .. .. .. .. .. 1,024,087 9 2 Coke (10,084 tons)]|;j .. .. .. .. .. .. .. 20,177 12 11 Cordage (705,066 lb.) .. .. .. .. .. .. .. 16,428 17 1 Flour (62,529 tons).. .. .. .. .. .. .. .. 523,697 17 1 Leather (principally sole) .. .. .. .. .. .. .. 120,202 16 8 Leather, Manufactures of .. .. .. .. .. .. 56,756 14 7 Milk, condensed, in tins (246,678 doz.) .. .. .. .. .. 22,622 1 3 Soap .. .. .". .. .. .. .. .. .. 132,861 12 1 Timber, hardwood (1,861,723 cubic feet) .. .. .. .. .. 145,686 010 „ softwoods .. .. .. .. .. .. .. 218,311 3 9 Singapore Imports for 1905. Quantity. Value. Tons. f Wheat flour .. .. .. .. .. .. .. 17,647 208,124 Tapioca flour .. .. .. .. .. .. .. 3,474 28,950 Sago flour .. .. .. * .. .. .. .. .. 29,049 194,195 Coal .. .. .. .. .. .. .. .. 598,361 692,028 Tallow .. .. .. .. .. .. .. .. 44 1,220 Bran .. .. .. .. .. .. .. .. 39,948 135,472 Crushed food .. .. .. .. .. .. .. 2,107 15,660 Dried and preserved fruits .. .. .. .. .. ~ .. 66,095 Hams and bacons .. .. .. .. .. .. .. .. 18,243 Butter and cheese . , . . .. .. ~ .. .. .. 36,674 Fresh meat .. .. .. .. .. .. .. .. 28,133 Cattle .. .. .. .. .. .. .. .. .. 103,845 Condensed milk .. .. .. .. .. .. .. 103,410* 110,685 Statistics of Trade between Australia and Japan for the Years 1903 and 1904. — Australian Exports. 1904. 1903. £ a. d. £ a. d. Wool, tops .. .. .. .. .. .. 15,001 18 0 „ others .. .. .. .. .. .. 233,919 2 0 56,226 6 0 Wheat .. .. .. .. .. .. .. 59,613 12 0 74 0 0 Other grains and seeds .. .. .. .. .. 14,546 6 0 12 0 Flour, wheat .. .. .. .. .. .. 6,624 14 0 18 6 0 Lead, pig, ingot, and slab .. .. .. .. 29,392 8 0 29,859 6 0 „ sheet .. .. .. .. .. .. 2,172 14 0 2,673 4 0 Mercury .. .. .. .. .. .. 7 12 0 Tin, block, ingot, and slab .. .. .. .. .. 122 2 0 Antimony .. .. .. .. .. .. .. 14 8 0 Old iron and mild steel .. .. .. .. .. 210 0 Kitchen utensils .. .. .. .. .. .. 4 10 0 220 All other metals .. .. .. .. .. .. 12 0 0 177 6 0 Metals, manufactures of .. Animals—Horses .. .. .. .. .. 9,892 4 0 1,008 4 0 Cattle .. .. .. .. .. .. 142 10 0 25 10 0 „ Sheep .. .. .. .. .. .. .. 518 14 0 Manures —Ammonia sulphate .. .. .. .. 925 6 0 581 6 0 „ Animal bone .. .. .. .. .. 060 420 „ Others, not enumerated .. .. .. .. 9,433 10 0 3,131 14 0 Oils and waxes .. .. ~ .. .. .. 7,879 18 0 1,517 2 0 Oil-cake .. .. .. .. .. .. 040 Hides, pieces for glue .. .. .. .. .. 1,017 0 0 2,664 12 0 Lard, tallow, and grease .. .. .. .. .. 13,911 18 0 6,513 0 0 Flax, hemp, jute, and grass .. .. .. .. 6,464 18 0 7,431 0 0 Bones, animal .. .. .. .. .. .. 2,236 12 0 1,884 8 0 Furs .. .. .. .. .. .. .. 150 2 0 78 16 0 Hides, bull, ox, cow, buffalo .. .. .. .. 887 8 0 2 0 0 Leather, sole .. .. .. .. .. .. 3,313 6 0 167 0 0 „ cow, calf, and ox .. .. .. .. 55 6 0 others .. .. .. .. .. .. 24 16 0 Shells .. .. .. :. .. .. .. 40 10 0 28 6 0 Tortoise-shells .. .. .. .. .. .. 352 12 0 75 0 0 All other bones, horns, skins, teeth, &c. .. .. .. 1,753 18 0 695 6 0 * Cases.

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Statistics of Trade between Australia and Japan for the Years 1903 and 1904.— Australian Exports. —continued. 1904. 1903. £ s. d. £ s. d. Books .. .. .. .. .. .. .. 32 0 0 13 0 0 Stationery .. .. .. .. 3 12 0 060 Biscuits .. .. .. .. .. .. 760 Butter .. .. .. .. .. .. .. 2,401 6 0 1,516 2 0 Cheese .. .. .. . •. .. .. .. 32 10 0 18 0 Confectionery and sweetmeats .. .. .. .. 28 12 0 55 8 0 Fruits (fresh, dried) and nuts .. .. .. .. 6 0 0 22 16 0 Ham and bacon .. .. .. .. .. .. 9 14 0 Mineral water and other beverages. . . . .. .. 2116 0 Salt, crude .. .. . . • • . . .. 2 14 0 Salted meats .. .. .. .. .. .. 200 2 0 Comestibles, in cans .. .. .. .. .. 102 14 0 All other comestibles .. ... . . .. .. 114 2 0 170 8 0 Wines .. .. .. .. • • •. .. 716 0 Scarfs and neckties .. .. .. .. .. .. 73 14 0 Woollen goods .. .... .. .. .. .. 014 0 Varnish.. .. .. .. .. .. .. .. 16 16 0 Other dyes, colours, and paints ... .. .. .. .. 7120 Woollen and worsted yarns .. .. .. .. 26 0 0 Coal .. .. .. ■ ■ • ■ .. .. 175 14 0 Coke .. .. .. •• •• •• .. 356 12 0 162 8 0 Timbers, lumber, boards, planks, &c. ~ .. .. 587 10 0 135 16 0 Drugs, chemicals, medicine, &c. .. . . .. .. 1,133 4 0 720 8 0 Porcelain and earthenware .. .. .. .. .. 1160 Instruments, scientific .. .. .. .. .. 2 10 0 040 Jewellery .. .. •• •■ .. .. .. 180 Soap, toilet .. .. •• •• .. .. 940 ~ washing .. .. .. ■. ■. .. .. 27 4 0 Toilet-water .. .. .. .. ... .. 12 0 0 Brushes .. .. ... ... ... .. .. 0 12 0 Sundries .. .. .. .. .. .. 14,263 0 0 1,067 2 0 Samples by parcel post .. .. .. .. .. 280 Travelling effects .. .. .. .. .. 150 12 0 Reimportation, Japanese goods .. . . . . .. 437 14 0 502 8 0 Total exports from Australia . . .. .. £439,906 2 0 £119,991 12 0 Wool Imported into Japan, 1904. Total 17,0] 9,911 lb. exported, valued at £637,694 c.i.f. From £ c. A Australia ... .. .. •• •• .. .. .. 233,919 2 0 Chinese Empire.. .. .. .. .. .. .. .. 182,678 10 0 Great Britain .. .. .. ■ • .. • - .. .. 118,224 V, 0 British India .. .. .. .. .. .. .. .. 62,456 1.6 0 Germany .. .. • •• .. •• .. .. 19,900 38 0 Belgium 11,712 4 0 Turkey .. •• ■• •• •• •• •• .. 2,467 2 0 France .. •■ ■■ •■ •■ •• •• .. 1,718 2 0 British Straits Settlements .. .. .. .. .. .. 132 14 0 United States of America .. .. . • .. .. .. 114 0 0 Other countries .. ..." .. .. .. .. .. 4,369 12 0 Total .. .. .. .. .. .. .. £637,693 2 0 Steam Service to Norfolk Island, New Caledonia, New Hebrides, Fiji, Tonga, Niue, and Cook Islands. After making exhaustive inquiries relating to a more comprehensive island service than at present exists between New Zealand and the Pacific islands, the Government decided to call for alternative tenders for (1) six-weekly, (2) four-weekly service, embracing the ports of Norfolk Island, Noumea, Port Vila, Suva, Tongatabu, Niue, and Rarotonga, making Wellington the terminal, but with Auckland as final port of departure on the outward voyage. One tender only was received for the service, at a subsidy of £12,000 per annum for a six-weekly service. The amount asked was considered too great and the tender declined. It is, however, hoped that a service may yet be obtained between New Zealand and New Hebrides, touching at Norfolk Island and New Caledonia. The following particulars of imports to and exports from New Caledonia are of interest : —

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New Caledonia : Capital, Noumea ; distance from Auckland, 1,014 miles ; area, 7,650 milesV population, with dependencies, about 70,900 free and 10,500 penal. Imports, 1905, £429,066 ; exports, 1905, £442,815 : the imports include £145,593 of produce from Australia, or one-third of the total imports into New Caledonia, the principal items of which are as follows : — £ Flour 22,679 Wheat •• •• 15 > 114 Sugar 11,312 Oats and maize .. .. . • • • • • • • • • 8,148 Salted and tinned meats .. .. .. .. . • 7,152 Fresh and dried vegetables .. .. .. . • • • 5,316 Preserved and dried milk .. .. . • • • • • • • 4,761 Cheese .. .. .. •• •• •• - • ■• 3,954 Fish 3,924 Butter 3,825 Bran and fodder .. .. .. • • • • • • • • 3,757 Lard 2 ,998 All these lines New Zealand is able to export to New Caledonia and show a good margin of profit according to prices current at Noumea. The duties are very small and, all things being equal, New Zealand should secure a portion of the trade, particularly of such lines as hams, bacon, butter, oats, and timber produced in New Zealand are now being shipped through the agency of Australian houses. There are four lines of steamers trading between Sydney and New Caledonia, and the sailings average about four a month. Produce-brokers, merchants, and other likely shippers have been interviewed by this Department with reference to the support they would accord to a direct service; and I am led to believe that not only would produce-merchants support any subsidised service in the direction of sending commercial travellers to obtain business, but that warehousemen and colonial manufacturers would also be prepared to lay in or manufacture suitable stocks for tropical climates. The exports from New Caledonia, £442,815, consist principally of— £ Minerals — i.e., nickel, cobalt, chrome.. .. .. .. • • 354,800 Copra .. 21,789 Coffee-beans, raw .. .. . • • • • • • • • ■ 20,010 Indiarubber, raw .. .. .. • • • • • • • ■ 7,821 Sandal-wood .. .. •• •■ •■ •• •• 3,809 Mother-of-pearl shells .. .. ■ • ■ • • • • • 2,778 There is also a large amount of guano shipped. New Hebrides : Chief town, Port Vila ; area, about 3,000 square miles ; population, 100,000, mostly Natives, European population estimated at seven to eight hundred. The trade with the islands of the New Hebrides is at present held by Sydney and Noumea, and it is hoped that by touching at this archipelago with direct steamers from New Zealand some of the trade may be secured by the colony. Further than this, the Resident Deputy Commissioner of the New Hebrides wrote the High Commissioner for the Western Pacific asking His Excellency to bring under the notice of the New Zealand Government the advantages that would accrue to the colony in time if a direct service were instituted, either privately or by the Government. The Government of New Caledonia has intimated its intention of giving some assistance should a direct service from New Zealand be established. The question of providing a direct monthly service between Cook Islands and New Zealand has also been under consideration, but so far the negotiations have not been brought to a successful issue. There have been many requests for direct fruit-boats from Rarotonga owing to the delay in transhipment at Auckland, and the consequent deterioration of the fruit on arrival at Wellington and southern ports. It is estimated that Wellington and the south would take an average of about ten thousand cases of Cook Island fruit monthly, and, these Islands being under the administration of New Zealand, every effort should be made to assist the producers to increase their shipments to payable markets, which are open to receive consignments providing they arrive in good condition. Exhibitions. During th"c year a permanent exhibit has been established at Crystal Palace, London, and exhibits have been shown at the Indian and Colonial Exhibition, London ; Colonial Produce Exhibition, Liverpool ; and the Royal Horticultural Show, London ; details of which are given in subsequent pages of this report. I regard these Exhibitions as cheap and effective means of bringing this country's produce and manufactures under the notice of consumers and traders. The advertisement obtained is not confined to those persons who. actually visit the Exhibition ; a very much larger number of persons become acquainted with the produce and manufactures through the liberal reports of these exhibits given by the London and provincial newspapers and journals. The Permanent Court of New Zealand Exhibits at the Crystal Palace consists of— Dairy Industry Trophy ; tinned fish (New Zealand Canning Company); condensed milk (Underwood Milk Company) ; preserved fruits, jams, honey, vegetables, &c. (Kirkpatrick) ; tallows, oleo, oil, &c, in jars (Christchurch Meat Company) ; fleece wool, tops, &c. ; woollen goods—rugs, blankets, flannels, &c. (Mosgiel and Petone); grain, peas, beans, seeds ; flour, oatmeal, bran, pollard ; hops ; cordials, mineral waters, &c. (Thomson) ; hemp; rope, twine, &c. (Donaghy) ; leather; timber, veneers, fancy door (Auckland Veneer Company) ; kauri-gum (Mitchelson) ; gold-export obelisk;

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coai (Westport Company) ; phosphate rock (Ewing Company) ; stuffed trout; framed photographs (scenery, agricultural, meat-freezing, dairying, mining, &C.) ; oil paintings (Butler and SherrifE) ; literature ; iron-ore and ironsand ; Preserved Meats Trophies—dummy tins (Gear Company, and Christchurch Meat Company to arrive). It has been decided to add to and renew at intervals exhibits of cereals and other samples liable to deterioration, and by doing so add to the value of this advertisement of the country's products. New Zealand was well represented at the Indian and Colonial Exhibition, held in the Crystal Palace, London, in 1905, both by the Government and by private firms and manufacturers. The awards received are as follows :— Grand Prizes.—New Zealand Government : Completeness and excellence of general exhibits, trophy representing New Zealand dairy industry, butter, cheese, fleece wool, grain in sheaf, hops. Christchurch Meat Company (Limited) : Frozen meat, &c, slipe wool. G. G. Stead and Co. : Grain, peas. J. T. Griffin : Peas. Mosgiel Woollen Factory Company (Limited) : Woollen goods. Gold Medals.— New Zealand Government : Hemp, timbers, photographs, sport exhibits, agricultural and other publications. G. G. Stead and Co. : Grass-seed, clovers, vegetable-seeds, forestry seeds. J. and T. Meek : Flour, oatmeal, bran. J. T. Griffin : Barley, clover. Christchurch Meat Company : Preserved meats, &c, tallow, oleo, oils, &c. Gear Meat Company (Limited) : Slipe wool, tallow. Dalgety and Co. (Limited) : Scoured merino wool. Wellington Woollen Company: Woollen goods." Underwood Milk-supply Company (Limited) : Condensed milk. E. Mitchelson and Co. : Kauri-gum. Donaghy and Co. (Limited) : Rope, cordage, binding-twine. Auckland Veneer and Timber Company (Limited) : Door and veneer, ornamental cabinet. Frank Hyams (Limited) : Greenstone jewellery." May-Oatway Syndicate (Limited): "Safety" combined house-bell and fire-alarm. Michaelis, Hallenstein, and Farquar : Leather. Westport Coal Company : Coal. Ewing Phosphate Company : Phosphates. Silver Medals.— Gear Meat Company (Limited) : Preserved meats, &c. S. Kirkpatrick and Co. : Preserved fruits, jams, &c. J. T. Griffin : Beans. New Zealand Canning Company : Tinned fish. G. E. Butler : Oil paintings. Bronze Medal. —Thomson and Co. : Mineral waters. Liverpool Exhibition. Owing to the success that attended the Colonial Products Exhibition held in Liverpool last year, another was held in St. George's Hall, in the, same city, from the 30th January to the Bth February in the current year. In order to arrange a representative New Zealand exhibit, fresh stocks were sent from the colony to supplement those taken from the New Zealand Permanent Court at the Crystal Palace, London. Neither Canada nor the Australian States accepted the opportunity to exhibit; and whilst this fact is to be regretted, there is no doubt that New Zealand secured a big advertisement by having more attention paid to its stand than it would otherwise have had if the Exhibition had been thoroughly representative. The New Zealand Government received gold-medal certificates for its exhibit of butter, cheese, wool, grain, hemp, hops, timbers and veneers, flour, oatmeal, farm-seeds and clovers, leather, and a collection of minerals. In addition to these certificates (reproductions of which will be found in the appendix), manufacturers of this country also had similar awards granted them, and have expressed their thanks to the Department for the assistance afforded them in further advertising their manufactures. The Produce Commissioner had charge of New Zealand interests, and he reports as follows :— 13 Victoria Street, London, S.W., 22nd February, 1906. Liverpool Colonial Products Exhibition, 1906. Although not so representative as last year, the recent Colonial Products Exhibition at Liverpool possessed many valuable and interesting features, and may be generally reported upon as a success. The attendance of the public was good, being about doable that of the previous Exhibition. The Colonial Governments represented were New Zealand, Newfoundland, British East Africa, and Gambia. Semiofficial exhibits were made of Jamaica, Grenada, and other West Indian produce. The British Cottongrowing Association, in conjunction with the Imperial Institute, made an extensive and comprehensive exhibit. Among various trade displays a splendid show of West Indian fruit took the lead. Other features were a collection of colonial flags and a large number of models of steamers of various lines trading to the colonies. The principal side attraction directly connected with the Exhibition consisted of a choir of coloured vocalists specially brought over from Jamaica, which proved a great draw. The Exhibition was officially opened by Lord Derby, and reopening ceremonies were performed by the High Commissioner for New Zealand, Lord Brassey, and various leading men in the shipping and commercial world of the district. The New Zealand Section took a decided first place in the Exhibition, as regards size, comprehensiveness, and general attractiveness. The larger part of the portable carved stand used at the Crystal Palace was employed. The best of the exhibits at the permanent New Zealand Court at the Crystal Palace were drawn on for the occasion, and these, supplemented by goods received specially from the colony, made up a very complete, and well-balanced exposition of New Zealand's resources, industry, and wealth.

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For this occasion a complete collection of the grain and seeds available had been prepared in fine linen bags of suitable sizes, and showed to great advantage. On the present occasion it was decided not to display frozen meat or butter or cheese on our stand. Arrangements were accordingly made with the Riverside Cold-storage Company, who occupied a stall adjoining and possessed all facilities for refreezing, &c, for the proper display of these important lines. The meat displayed by this company was solely New Zealand, the carcases being well ticketed as such. Our literature concerning New Zealand meat, &c, was also distributed at this stall. Among some other exhibits not previously made were specimens of gold-bearing quartz, together with concentrates, &c, loaned from the Waihi Gold-mining Company's Office in London. These, together with the specimens of iron-ore, ironsand, coal, and phosphate rock, made up a satisfactory little mineral section. The photograph taken of the New Zealand Court, copies of which will be forwarded by next mail, affords a good idea of the disposal of the exhibits, with the exception of the hemp and cordage, which is almost hidden in the picture by the Dairy Industry Trophy. Referring to the hemp it may be mentioned that the bale of " Fine " grade supplied through the Department attracted a good deal of attention, and was very favourably commented upon by fibre experts. The hats made in the Cook Islands were duly received and displayed, and have now been transferred to the Crystal Palace, as requested by the Department. The timber industry photographs also came to hand, and will form an interesting addition to our collection of New Zealand industrial pictures. A fair number of rugs were sold during the Exhibition, and the balance of the consignment received has been handed over to the Londen agents of the companies. Account sales of rugs, also of the hemp disposed of at the close of the Exhibition, are being prepared and will be forwarded by next mail. The two New Zealand flags forwarded from the colony were placed at the disposal of the management for display with others, as referred to, and are now held for use on future occasions. Inquiries on the part of visitors at the New Zealand Court were very numerous and covered a wide range —the trade, consumers, and emigration sides sharing the list fairly equally. The trade inquiries can be more appropriately dealt with in separate detailed reports. The timbers attracted as great a share of attention as anything. There are undoubtedly valuable new openings for certain classes of our woods if regular supplies can be forthcoming. Among the grain the malting barleys earned great praise, more than one trader declaring that any quantity, for instance, of the Golden Drop variety (grown in the Blenheim district) would be eagerly taken, if available, at highest current rates —say £2 per quarter at that date. During the course of the Exhibition I gave a couple of lantern lectures on " New Zealand as a Field for Settler and Tourist," in one of the Courts of Justice in the St. George's Hall building. On both occasions there was a crowded and interested audience. The large supply of the Christmas Annual of the New Zealand Mail, forwarded by the Department, proved as popular with the public as those distributed last year. An endeavour was made to place them as discriminately as possible. Large quantities of other New Zealand literature of an informative character were also distributed. It was understood that awards of merit would be made this year, but so far no action seems to have been taken by the Exhibition management in this direction. lam in communication with them on the subject. , Royal Horticultural, Show. New Zealand Apples and Canned Fruit. Arrangements were made by the Department to send forward a shipment of fresh apples and tinned fruits to London for exhibition at the Royal Horticultural Society's Show, held in London in the beginning of June last. Great care was taken in the preparation, and notwithstanding the long distance the apples had to travel, the shipment turned out in excellent condition, with the exception of one or two packages. It is hoped that when New Zealand apples can be shipped at a payable price to the grower, a large trade will be done with the United Kingdom. Owing, however, to the small crop last season, and the high prices obtained locally, there were no large shipments made. I notice by the manifests of outgoing steamers via Cape Horn that apples from Hobart are shipped in fair quantities to Monte Video and Rio de Janeiro, and it is very probable that a market in these places might also be found for New Zealand fruits. The apples were sold after the Show to the Army and Navy Stores, where they were included in a further attractive display before sale. In connection with the exhibit it would not be out of place to quote the Garden, an English publication of note in these matters :— " It is absolutely waste of labour to grow fruit for market unless it is tastefully and carefully packed, but the conservatism of the English fruit-grower refuses to recognise the folly of sending to market produce that has no chance whatever against importations from over the seas. We were recently looking at a consignment of apples from New Zealand, and scarcely a fruit was damaged—all clean, wholesome-looking specimens of almost equal size and colouring." The same publication the following week stated, — " The most remarkable exhibits were those of apples from New Zealand, which were exceptionally fine. The display made by the New Zealand Government consisted principally of apples, of which eighty varieties were shown, illustrative of those chiefly produced in the orchards of the colony, but included also bottled and canned fruits of all sorts, jams, sauces, &c. The apples were particularly fine."

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The London Journal of Horticulture says,— " The display made by the New Zealand Government consisted principally of apples, of which eighty varieties were shown, illustrative of those chiefly produced in the orchards of the colony, but included also bottled and canned fruits, of all sorts, jams, sauces, &c. The apples were particularly fine. A number of very fine photographs of New Zealand scenery were shown on the tables. The Colony of New Zealand is eminently adapted for the production of all fruits belonging to the temperate zone. Prom Auckland in the north to Otago in the south, fine crops of apples, pears, peaches, plums, &c, can be grown. As yet, however, fruit-growing on commercial lines is in its infancy. Gold medal." The medal gained for New Zealand apples was the highest award given to an exhibit of one class of fruit only. It should be mentioned that the fruit was selected and packed for exhibit by the Government Pomologist, of the Agricultural Department. The following is an extract from the report of the Produce Commissioner on the show : — "It was found possible to show more than one plate of a number of varieties which had been repeated in different cases. The most numerously represented variety was the Ohinemuri or Munroe's Favourite, of which there were some beautiful specimens. Altogether, the long table presented a very bountiful and attractive appearance, the fine colouring and size of the fruit being specially noticeable. " The canned goods were displayed in a separate position near the apples, and made an effective show, in conjunction with a selection of' X ' goods brought from the New Zealand Court at the Crystal Palace. " I am pleased to report that a silver-gilt medal was awarded to the New Zealand Government for the collection of apples. Had we had other fruits available to show in conjunction, so as to form a general collection, it is highly probable that a gold medal would have been secured. The medal gained was, however, the highest award given to an exhibit of one class of fruit solely." New Zealand Tinned Meats, etc. In view of the set-back given to U.S.A. tinned goods owing to the Chicago meat scandals, the time is considered very opportune to endeavour to extend our markets for this class of goods. Arrangements have accordingly been completed for a comprehensive exhibit to be shown at the Groceries Exhibition, Agricultural Hall, London, in September next. The exhibits were shipped by the s.s. " Athenic "on the 19th July last. An illustrated pamphlet has been prepared, giving full details of the rigid method of inspection adopted in New Zealand to insure the consumer receiving a pure article. This pamphlet will be freely distributed at the Exhibition and in other channels where trade is likely to be effected. The exhibits, totalling ninety-six cases, were furnished by Irvine and Stevenson, Dunedin ; W. E. Tait, Woodlands ; Wanganui Meat-freezing Company, Wanganui; Wellington Meat-export Company, Wellington; Gear Meat-preserving Company, Wellington; Southland Meat-preserving Company; and the Christchurch Meat Company : and comprised the following : —6 lb. tins of roast, boiled, and corned mutton, and roast, boiled, and corned beef ; 2 lb. tins of roast, boiled, corned, and spiced beef and mutton, rabbits, sheeps' tongues, ox-tongues, calves' tongues, ox-cheek, sausage, brawn ; 1 lb. tins of assorted pies, oysters, jugged hare, whitebait, sheeps' tongues, and corned mutton ; 2 oz. and 4 oz. bottles of potted meats and meat-extract. The Directors of the Navy and Army Contracts were informed of the demonstration of New Zealand tinned meats that is being arranged at the Groceries Exhibition at the Agriciiltural Hall in September. They were interested, and have promised to instruct their inspecting-officers to examine and to report on the goods ; they were promised samples of the meats sent forward by the several companies, and both the Directors have undertaken, should these prove satisfactory, to place the names of the packers on the Official Lists of those from whom tenders for supplies are requested, and I trust that good may result from this. Admiralty and Wae Office Contracts. I have received a report dealing with tinned-meat contracts entered into by the Admiralty and War Office, and the size of packages required; and it might interest packers to learn that while the requirements for the navy can be taken in tins containing 1 lb. or 2 lb. full weight, owing to rations being served to the men while on board ship at one common mess, those of the army necessitate each man's daily ration being made up separately. Tinned meat is the chief meat diet served out to the soldier while on active service : little of it is used in the army at other times. The daily allowance per man is 13 oz., and it is for this reason that specifications of contracts stipulate for tins holding 13 oz. or 26 oz., instead of 1 lb. or 2 lb. The Director of the Army Contracts considers that if the terms of contract were altered to admit of 1 lb. and 2 lb. tins being supplied, there would be very large waste of food entailed. It was pointed out to him that many additional packers would tender were it not that they had to incur considerable cost in procuring plant suitable for packing the size of tins required, and that they feared that if they lost the contract this expenditure would be useless. Further, it was pointed out that, except for War Office requirements, there was no sale for New Zealand meats packed in 13 oz. and 26 oz. tins. While the Director thinks there is no likelihood of the weights being raised, he says that possibly an alteration might be made so that 12 oz. and 24 oz.—i.e., f lb. and \\ lb.—tins might be accepted. He asked if that would be more satisfactory to the New Zealand packers; and was told that if it were impossible to accept 1 lb. and 2 lb. tins, as desired, the suggested alteration would be an improvement, especially as the net weight of the contents had to be clearly impressed on each tin. This would help their general sale, were the contract lost, by removing the unfair competition of American short-weight goods that are now sold without distinction, and are accepted by the public as full-weight in competition with full-weight New Zealand^tins.

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APPENDIX 11. EEPORT OF PRODUCE COMMISSIONER, LONDON. Sir, — Westminster Chambers, 13 Victoria Street, London, S.W., 9th June, 1906. I have the honour to forward herewith the annual report of Mr. H. C. Cameron, Produce Commissioner, dealing with the work of the Department with which he is connected. In doing so I beg to direct your attention to the reference made therein to the increase in work now performed, to the weekly cabled market reports, and to the advertisement by lectures. Concerning the latter I may state that, while this work has been voluntarily undertaken by Mr. Cameron, and has of course as a rule to be performed out of office hours, I have received many letters expressing appreciation of the lectures and thanking me for the opportunity given by such means of obtaining information concerning the colony. I am forwarding Mr. Cameron's report in advance of that which will come to you later on the work of my Department, as, knowing that it is required for inclusion in the annual report of the Industries and Commerce Department, I am desirous that it should reach that Department in good time. I have, &c, The Right Hon. the Premier, Wellington, New Zealand. W. P. Reeves. Sir,— Westminster Chambers, 13 Victoria Street, London, S.W., 18th April, 1906. I have the honour to submit a report of the work done by my Department, dealing generally with the produce-markets here, for the year ending the 31st March, and in doing so I beg respectfully to direct your attention to the steady increase in the duties attached to it. During the period under review the ordinary work with which I had formerly been associated was added to by the inclusion, under my supervision, of the New Zealand representation at the Indian and Colonial Exhibition, which was held at the Crystal Palace during the summer of 1905. As in the previous year, advantage was taken of the opportunity afforded at the Colonial Exhibition at Liverpool of making a good display and advertisement of New Zealand products there. The work occasioned in assisting with the arrangements made on account of the New Zealand International Exhibition, to be held at Christchurch, generally, and of the British Manufacturers' section specially, has been considerable. In accordance with instructions I visited the International Exhibition at Lisge, for the purpose of interesting exhibitors there in that to be held in the colony. The cables sent to Wellington each week, giving quotations and particulars concerning various lines of New Zealand produce, have been despatched regularly as in former years. These, however, have been considerably amplified during the year. They have really almost become full weekly market reports. Naturally the attsntion necessary in watching the various markets, so as to be able to cable accurate and reliable information, has been constant, and it is highly gratifying to be able to report that on several occasions congratulations have been received on the accuracy of the information contained in the cables despatched to the colony. Reports—fifty-six in number —have been made to you and forwarded to Wellington on matters generally affecting the produce trade in the colony. As showing the variety of subjects dealt with the following list of them may be interesting : Dairy-produce, butter-adulteration, borax preservative in butter, frozen meat, fraudulent meat-sales, lamb-sales, chilled-beef shipments, frozen-meat exhibits, Smithfield by=-laws, poultry-shipments, feather-sales, wool, hemp, hemp-grading, fraudulent hempsales, kauri-gum, apple-shipments, hops, honey, seal-skins; Colonial Exhibition, Crystal Palace Colonial Exhibition, Liverpool: Permanent New Zealand Court, Crystal Palace ; advertising by lectures ; advertising by small country exhibitions ; West Coast shipments. The ordinary work of my Department has been conducted on lines similar to those of former years. The services of my assistant having been required elsewhere during the greater part of the year—in attendance at the Colonial Exhibition at the Crystal Palace, in emigration work, &c. —the clerical work has been carried on by temporary clerks, which has naturally kept me somewhat closely confined to the office. Advertisement by Lectures. In my annual report last year I referred to the success attending lectures as a means of advertising the colony, and of creating interest in it and in its productions throughout this country. I then stated that I thought it advisable to develop the lecturing branch of this Department. Finding that I could undertake this important work without interference with my ordinary duties (the lectures usually being delivered in the evenings or on Saturdays in my private time) I have given considerable attention to this work. During the winter months I delivered ten lectures, all, with the exception of two, without loss of time as stated. On every occasion I had large and appreciative audiences. As far as I can gather, the lectures have been highly successful, and as an advertisement for the colony have been undoubtedly advantageous. Dairy-produce. Butter. At the opening of the official year, the market for New Zealand butter was in a very satisfactory condition. The price then being realised for choicest quality was, on average, 106s. per cwt., with a quiet steady'denaand. season in this country at thatjtime was, however, mild and open, with the result, consequently, that English and Irish supplies rapidly grew, so that steadily week by week

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the importation from New Zealand had to face a declining market. Within five weeks prices dropped 13s. per hundredweight. From the middle of May there was a recovery, and until the sale of the last parcels of New Zealand butter on the market, about the middle of July, prices had climbed to 101s. Throughout the summer the butter-market kept firm, and, with the expectation of no accumulation of stocks in cold-store, prospects for the coming season's shipments of New Zealand butter were very hopeful. The first of these to arrive from the colony realised, on average, 1145., and steadily until January prices rose to 118s. on average, which was then reached for choicest quality. The collapse of prices in the beginning of February, when they dropped suddenly to 1065., apparently caused some excitement in the colony, where the fact evidently was overlooked that quotations had been abnormally high, and that 106s. was an unusually good quotation for the time of year. The cablegrams that had been sent out just prior to that time should, however, have prepared shippers in the colony to anticipate the fall that occurred. As so generally happens, immediately the market took a turn downwards efforts were made on the part of " bear " speculators to still further depress it. In this these operators were assisted by the arrival at that time of large shipments of butter from Australia, which affected the market unfavourably. The Danes at the same time reduced their butterquotation. By the beginning of February weak holders of New Zealand butter had begun to get nervous, and were anxious to sell. Noting this, traders refrained from buying more than they found absolutely necessary, and keeping off the market succeeded in bringing about the collapse in prices, and -in getting them reduced until the average quotation for choicest New Zealand butter was 106s. —a fall in three weeks of 11s. to 12s. per hundredweight. At the time, however, supplies of best butter were moderate. This was stated in the weekly cable to the colony. American renovated butter and mixtures were, owing to the very high prices that had been ruling in the early part of the season, coming forward in large supply. These seriously hurt the market for butter, not perhaps so much by the actual sale of them to the consuming public as by the inclusion of these lines in the estimates that were published of butter-receipts into this country. For instance, in one circular which was issued to the trade, the increase in imports of butter to the United Kingdom in January, 1906, compared with those of the corresponding month of 1905, was shown as 8,639 cwt. On analysing the figures, however, it was found that while the chief increase (35,234 cwt.) in imports was from the United States and Holland, both of which countries were sending renovated butters or mixtures, there was a decrease in the amount of butter received from the butter-producing countries —Denmark, New Zealand, Australia, and Argentina—of 31,747 cwt., so that was no reason for the slump that occurred. The primary cause for the unsettled state into which the market had drifted was the very high price that had been ruling for all best butters. While the market was excited and prices for colonial butter about 118s., many outside speculators came into the market and bought rather heavily. These people had no legitimate trade outlet, and, as extreme prices naturally caused a reduction in consumption, immediately prices eased off these speculators had to sell as best they could. The market went from one extreme to the other, for, as always happens—no matter what the commodity—when prices are pushed too high, they have to come below their proper level before trade becomes healthy again. The season now running has, however, been the best ever experienced in the New Zealand butter trade. Shippers, whether speculative buyers or consigning factory companies, must have been satisfied. The steady improvement noticeable during recent years in the quality of New Zealand butter has been maintained. With the exception of a few minor complaints, I have met with none but favourable comments from every one handling it with whom I have come into contact. The shipping companies have continued to carry the dairy-produce in a satisfactory condition, and deliveries are now made with much greater regularity than was the case a few years ago. Delay in discharge from ship has not been complained of so greatly this year. Cheese. As in the case of butter, the market for cheese at the commencement of the official year opened well. Finest quality was fetching 58s. per hundredweight then, and although the market was quiet, buyers being naturally chary of giving such a high figure, holders were firm in their demands. For a short time during summer there was an uneasy feeling and the market grew unsettled. The price, however, did not go below 505., on reaching which buying brightened and the value again recovered, rising steadily Is. per week until the previous price was quoted. Since the first shipments of New Zealand cheese for this season arrived, the market has been good Opening at 635. per hundredweight there has been little fluctuation, the value remaining between thut figure and 60s. throughout. One outstanding feature of the cheese-market this season has been the premium paid for coloured cheese, supplies of which have been very light. I understand that statements made by merchants and agents to cheese-makers in Canada and New Zealand, representing that the demand for coloured cheese has been decreasing in this country, had induced makers to confine their attention to the production of white cheese only. While it is perfectly true'that the inquiry for coloured cheese is not quite so great as it was some years ago, there is still a very considerable demand for it. I believe it would be advisable, therefore, for cheese-makers in the colony not to confine themselves to making one class of cheese only. In my reports I have frequently alluded to this subject. It is quite impossible to give any indication at the beginning of the season as to whether white or coloured cheese will command'the higher price. It would, therefore, be well for all cheese-makers in the colony to make half their output white and the other half coloured. In this way they would be certain to strike a fair average price for"their product. It has been simply owing to the short supply from all sources, and to the consequent difficulty of filling consumers' orders, that higher prices have been obtained for it than for 3-H. 17.

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white. At the present time there are indications of cheese-makers going to the other extreme, and now shipments of coloured cheese are beginning to arrive, particularly of Canadian new season's make, in considerable quantity. Present arrivals from New Zealand also would indicate that cheese-makers there have been increasing their output of coloured. lam afraid this will be found to be a mistake, as the market of this country having got accustomed to white, the sudden large offerings of coloured cheese may upset it, and result in a premium being paid for white. This season the temperatures at which cheese has been carried on board ship have been raised s°, which I consider is an improvement. The condition of arrivals has been uniformly satisfactory, and no complaints have been received by me concerning damage on shipboard. As in the case of butter, arrivals have been more regular, and discharge has been conducted satisfactorily. Butter-adulteration. During the year close attention has been given to butter-adulteration in this country. Recognising the importance of the matter to the New Zealand producers, I have kept in touch with the several associations interested in the butter trade who have been doing their utmost to keep this question prominently to the front. Reports have been made by me to you on the subject. The recent dissolution of Parliament, with the accession to office of a new Government, has given fresh impetus to our efforts. During the election questions dealing with the sale of butter and with the adulteration of it were put to candidates for Parliament, and, as far as possible, interest generally was roused throughout the country. Meetings have been held in many districts, and urgent representations have been made to the new Minister of Agriculture. Earl Carrington, the new Minister, had fortunately formerly shown considerable interest in the subject, and had repeatedly expressed himself as in entire sympathy with the movement to suppress fraud in the butter trade. The present representative of the Board of Agriculture in the House of Commons, Sir Edward Strachey, is also closely identified with the subject, and has all along been a very strong supporter of the movement. Consequently, hopes are entertained that more consideration will now be given to the question than was given to it by the late Government. The several deputations that have already waited upon the Minister of Agriculture have been favourably received by him. The attention of Lord Carrington has also been specially drawn to the matter by yourself, by letter, on lines similar to those previously sent to his predecessors in office, in which you direct his attention to the necessity of prompt action being taken in introducing a Bill dealing with the butter trade. It is hoped, therefore, that attention will be paid by the present Government to the subject without delay. Although the Government in the colony is extremely alive to the injury to the New Zealand butter trade occasioned by the unsatisfactory state of the law in this country relating to the sale of butter, and representations have been made by them to you with a view to having the conditions here improved, and by you to the British Government, there appears to be a lack of support given by the butter-pro-ducers in New Zealand to the efforts that are being made on their behalf for the improvement of matters. This year there has been, as last, a very considerable supply of fresh butter made by them and shipped from the colony. The supply of this fresh butter greatly helps the perpetration of the frauds of which the New Zealand producers complain. It is readily purchased by " fakers " for the purpose of manipulation and adulteration. It seems surprising that butter-makers in the colony, who ask for assistance in improving the market here for the sale of their butter, should, at the same time as they make that request, be doing what is necessary to encourage the continuance of these frauds, so frustrating our efforts for their welfare and hindering the improvement they demand. I understand that a Select Committee of the House of Commons has been appointed to make full inquiry into the subject of butter-adulteration. Evidence will be taken and a report drawn up and submitted to Parliament by the Committee. It is to be hoped that the evidence will be satisfying, and the report of such weight as to convince the Government of the necessity for introducing a Bill dealing with the question at the very earliest opportunity. I am afraid, however, that no amendment to the present law can be hoped for during this session. Boracic Acid in Butter. I regret to report that during th N year a prosecution was instituted by the Lancashire County Council authorities against a retailer for selling New Zealand butter containing 0.77 per cent, of boracic acid. On coming before the Magistrates, however, the case was dismissed, the Bench arriving at the conclusion that the prosecution had not made out their case. Although, at the request of the County Council authorities, the Magistrates stated a case for appeal, no further action has been taken in the matter. It is regrettable that an action such as this should have been brought against New Zealand butter. I had always understood that in no case did any factory company in New Zealand apply more than 0 - 5 per cent, of boracic acid. Although there is no legal standard in this country for the application of boracic acid to butter, thrre is a general understanding that up to O5 per cent, shall not be objected to by the authorities. A fe~ years ago a Committee, which was appointed by the House of Commons to inquire into the butter laws, recommended that that percentage should be legalised. This recommendation, however, has never been adopted, and there is no law at present on the subject. I desire to imprsss upon the butter-producers in the colony the very great risk that is run in damaging the reputation that has been gained for New Zealand butter on the markets in this country by applying more than 0.5 per cent, of boracic acid to it when made in the colony.

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Frozen Meat. Mutton. Taken all round, the price realised for New Zealand mutton during the official twelve months has been a satisfactory one. Though not so high as the previous year, the average —4|d. per pound for Canterbury and 3§d. per pound for North Island mutton —that was realised must be considered a fair price. Trade on the market at no time, however, could be considered brisk. During the latter part of ]905 it was very quiet, and prices dropped as low as 3§d. per pound for Canterbury and 3|d. per pound for North Island. River Plate was then in very large supply, and was strongly pushed for sale at about 3d. per pound, and the competition of it was somewhat severely felt. I recently noticed in a New Zealand paper a letter from a correspondent to the effect that New Zealand mutton had the command of the markets in the south of England, and that the River Plate shippers confined their attention to the north, leaving the London market alone. I know this opinion is held by many in the colony, and am desirous therefore of pointing out that this is incorrect. The importation of River Plate mutton to London alone during 1905 was 1,033,230 carcases. As that country at the same time sent shipments direct to Cardiff, Southampton, and Plymouth, ports in the south of England from which distribution took place, as well as to east coast and northern ports, it will be readily understood that the bulk of the London arrivals were distributed in the immediate vicinity of that market. River Plate mutton is now as generally sold in the south of England as it is in the north. During the year, shipments were received on the London market for the first time from Uruguay and Patagonia. It cannot be said that New Zealand meat during the past year has shown improvement in quality. Complaint was often made of the scarcity of carcases of suitable weight and condition. They were generally said to be too heavy. Owing to the scarcity of light weights, these often commanded a premium of Jd. per pound over others. The information given from week to week by cable has kept the producers in the colony well posted up in what has been going on in the mutton-market here. Although trade throughout the country in New Zealand mutton has been steady, I regret that I am unable to report any expansion in distribution, which seems to have remained much the same as formerly. Lamb. For the first half of the official year—that is, during the summer months —prices of New Zealand lambs were high. Opening with a good demand at s|d. per pound for Canterbury, and 5Jd. per pound for other brands, prices did not fall below s|d. for the former and sfd. for the latter until the end of July, when there was a slight decline. Towards the end of September, however, the market became depressed. Stocks on hand were very heavy, and, although there was a scarcity of prime quality, prices fell to 4|d. per pound on average. Declining still further, 3|d. per pound for Canterbury and 3|d. per pound for other brands was all that was realised about the middle of November, after which, although the market continued dull and prices low until the beginning of the new season's arrivals, a slight recovery on these figures was experienced. The new season has opened fairly well at about s|d. for Canterbury and s|d. for other brands. Owing to the very heavy supplies on hand and coming forward from Australia, it is not expected that prices will be nearly so good this coming year as last. Trade in New Zealand lamb in this country is now widespread, and the repute it has attained is highly satisfactory. The inclination, noted in my report of last year, of provision-merchants to include New Zealand lamb in the lines handled in their shops has continued, and is now very general indeed. This species of distribution is one to be encouraged. As in the case of mutton, the cablegrams sent weekly have given very full reports concerning the lamb-market. Beef. I regret it is impossible to report with satisfaction upon the market for New Zealand beef during the past year. Prices have been, if anything, a shade higher, averaging 3|d. per pound for hind quarters and 2fd. for fores. The competition from Argentine continues very severe, the supplies from there, both of chilled and frozen beef, having been very heavy. On the other hand, the shipments of beef received from New Zealand have been light. At no time during the year has there been a satisfactory demand for frozen beef, but in spite of this the market has been kept free from the fluctuations that in some former years occurred. Fraudulent Meat-sales. Although complaints have been received from all parts of the country, as in former years, concerning the fraudulent meat-sales practised by many traders to the detriment of those anxious to conduct an honest trade in New Zealand meat, I have not to report any prosecutions undertaken by this Department for the prevention of the practice. In order, if possible, to bring about a discontinuance of the fraud, however, letters have been issued from this office drawing attention of those known to be trading unfairly to convictions that have already been obtained, and warning them of the seriousness of the offence. lam of opinion that this warning has been of considerable benefit, although it is undoubted that the fraudulent sale as New Zealand meat of inferior meat from other countries is still rife throughout the country. • Chilled-beef Shipments. During the year two experimental shipments of chilled beef were made from the colony. In one instance the meat was found on arrival to be in some degree frozen. When placed on the market it was sold at a price slightly higher than that ruling for frozen beef from New Zealand. The extra price

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realised, however, could scarcely be said to be sufficiently satisfactory to cover the extra cost incurred with the shipment. The result of the other trial shipment unfortunately proved a total loss to shippers. The condition under which the meat was treated could hardly be said to afford a fair test for chilled beef. The length of voyage was fifty-nine days, which was excessive for the attempt. The low price that has ruled for Argentine chilled beef, as compared with that for frozen beef* throughout the year has not been encouraging for the prosecution of experiments in the shipments of chilled beef from New Zealand. Lamb-shipments. During the year one or two shipments of lamb, made on account of the Department of Agriculture from the Government farms, have been received and dealt with by this Department. They have been sold on the market here, and reports concerning them have been supplied to the Department at Wellington. Frozen-produce Exhibits. I am pleased to report having been able to make an arrangement last summer with the Linde British Refrigerating Company (Limited), by which a good advertisement for New Zealand meat and dairy-produce was secured. At the Naval and Shipping Exhibition at Earl's Court the Linde British Refrigerating Company (Limited) had an exhibit of refrigerating plant, with cold-air chamber and chilled-room. In conversation with the manager I pointed out to him the great advantage that would be derived if the chambers were filled with articles which would clearly demonstrate to visitors to the Exhibition the uses for which the chambers were intended.- My suggestion that it would be advantageous if the cold-air chamber was filled with meat, dairy-produce, &c, was agreed to, and I was granted the use of the cold-air chamber for the display of such New Zealand produce as I cared to put in. The Colonial Consignment and Distributing Company (Limited) kindly consented to supply me with carcases of mutton and lamb. Butter I obtained from a dairy-produce merchant dealing in New Zealand produce. Part of the shipment of poultry forwarded from the colony for the Colonial Exhibition at the Crystal Palace I sent to Earl's Court. With these I succeeded in making a very nea,t and effective display. I took the opportunity of distributing there numerous pamphlets treating on New Zealand mutton and lamb, and I was pleased to note, from inquiries received both verbally and by letter concerning New Zealand produce, that they did a considerable amount of good. It was evident that interest in New Zealand produce was taken by persons into whose hands the literature fell. Smithfield Market By-laws. I have already reported concerning the proposed alteration in the Smithfield Market by-laws, by which the Corporation of London attempted to obtain from the Board of Trade permission to revise the Central Market by-laws in a manner that would have proved hurtful to the interests of all engaged in the New Zealand meat trade. The matter was taken up and protests made to the Board of Trade concerning it. As the result of these protests it was understood that the Board of Trade had resolved to hold an inquiry into the whole matter. During the year, however, I was informed that the Board, at the request of the Corporation, had postponed the proposed inquiry. It was expected that the London Corporation were to raise a test case during the year by prosecuting the Christchurch Meat Company (Limited) for selling a parcel of New Zealand meat within the precincts of Smithfield Meat-market to a client who is not a client of the Corporation therein. A case such as this would have been one in which very great interest would have been taken by all concerned in the frozen-meat trade, as on the decision of it important issues rested. Nothing further, however, has been done in the matter, and I believe that the intention to prosecute has been abandoned. At present the by-laws remain as they formerly were. Poultry-shipments. Some trial shipments of poultry have during the year been placed on the London market. These arrived in excellent condition, and have met a ready sale at good prices. Both ducklings and chickens have been received, and each has been favourably commented on by those engaged in the poultry trade here. The best time of the year for ducklings to arrive in London is during the months of March, April, and May. About Christmas, or earlier than these months, is not so good. Towards Easter the demand is at its best, and prices are then highest. Naturally, prices vary according to the season. Ducklings from four to six months old, and weighing from 4 lb. to 5| lb. each, are most suitable for the London market. If properly fattened and packed, and carefully frozen and handled, there should be no fear of obtaining other than satisfactory prices for ducklings arriving from New Zealand on the London market during the months specified. Chickens meet a ready market for a longer period than do ducklings. For chickens, such as those referred to as being received from New Zealand, there is always a good market in this country, and prices are likely to be remunerative. Feathers. Several shipments of feathers have been received from the Department of Agriculture at Wellington during the year. These have been handled and sold at auction under my supervision. Being a new line in the colony's export this was considered the best means of getting them introduced to buyers, who have expressed satisfaction with the quality of the lots offered. Good competition for any further parcels that may be sent forward may now, I believe, be relied upon. The prices made have been good, white ducks' feathers having realised up to Is. s|d., brown ducks' feathers Is. l|d., and fowls' feathers from 2fd. to 4£d. per pound.

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Wool. The market for wool during the year has with each succeeding sale been rising higher and higher. Supplies have been slightly under the requirements of manufacturers, who, having been continuously busy and full of orders, have competed for everything at good prices. The numerous cables sent to the colony during the year, giving full information concerning the wool-market, must have kept the producers in the colony well informed of what was happening on this side. It is therefore unnecessary to touch but briefly on the subject in my annual report. Hemp. Throughout the year the market for New Zealand hemp, although prices on the whole have been good, cannot be described as bright and active. Opening at £29 in April the value gradually fell, until, in July, G.F.W. was only realisingjm spot £26 per ton. There was, however, at this time an indication that improvement was in prospect, as the offers made for shipments to arrive some months ahead were higher than those for hemp on hand. In September and October there was an excellent demand for Manila hemp, which affected that for New Zealand. Prices rose in sympathy, and, the market continuing firm, £33 10s. per ton was reached. Complaints were received during the year regarding the disposal of New Zealand hemp on the London market. I made inquiry into the matter, and found that New Zealand hemp had been sold in London as " Fine Wellington," which was not always of the quality associated with that grade. I believe it is not uncommon for merchants dealing in hemp to fill orders received from their customers with lots which they may consider suitable for the purpose, irrespective of grade-marks. Although sales, that may be effected in New Zealand or in this country through brokers, of parcels for shipment from the colony are made subject to the Grader's certificate of quality, such certificate is not always recognised on the market here after the hemp passes out of first hands. The grade-tag, being easily removable, is often taken off the bales. That the substitution of hemp of inferior quality for that recognised by the grade-tag is hurtful to the New Zealand hemp industry lam satisfied. What action to take to prevent this being done is hard to suggest. The hemp is purchased by merchants, handled in their warehouses, sorted as they desire, and sold and sent out to the customers in the course of their private business. It will therefore be readily recognised that it would be difficult for any supervision at this end on behalf of the New Zealand Government to stop the practice. Were it possible to compel the sale of the hemp in this country only with the tag attached, and to instruct the manufacturers using it here that they should see that the tag was attached, some good might be done. Under present conditions, however, lam of opinion that it is only so far as the sale of shipments arriving from New Zealand direct are affected that Government supervision can be of value. It is only of comparatively recent date that Graders' certificates of New Zealand Government tags have been recognised on the hemp-market here, and, as can be understood, it takes some considerable time before any new business practice becomes thoroughly recognised in any trade. So far as the sale of shipments arriving from New Zealand are concerned the Government grademark is generally accepted as the basis of transactions. During the year the information received from Wellington concerning the hemp trade in the colony, and particulars of shipments coming forward, have been circulated by me amongst brokers and others interested, and have also been supplied for publication in newspapers. lam now arranging with some of the brokers for the inclusion of the shipment figures in the periodical reports which they issue to their clients. Similar information is already published concerning those from Manila. Kauri-gum. There is little to be noted concerning the kauri-gum industry in this country'during the past year. Regxilar sales have been held, and reports concerning them have at once been made by cable to the colony. In these the prices of several standard qualities have been given, which it is hoped have been useful as an indication of values to those interested in the trade there. Apple-shipments. No shipments of apples have been received from New Zealand during the year. The Australian season is expected to be poor as regards output, and consequently prices on the London market are expected to be high. It is unfortunate that, owing to unfavourable weather in New Zealand, no shipments from there need be expected this season. It is to be hoped that the export of apples will be taken up, and regular shipments made. There is undoubtedly always a market in this country ready to absorb what may be sent forward at prices that will prove remunerative to growers. Of course, it is necessary that great care should be taken in grading, packing, and carriage on board ship. If these are thoroughly attended to there is no doubt, as has already been proved by trial shipments, that there is a payable business to be done here. Hops. The hop-harvest in this country was this year an exceedingly favourable one. While the acreage planted was about the same as that of the former year, the yeild per acre was largely in excess of the crop at that time. Not only was the hop-crop this year one of the heaviest gathered for a very long period, but the quality and condition of the hops were everywhere superior. Prices therefore have been ruling low, and there does not seem any likelihood of a payable market being found here for New Zealand hops for a considerable length of time.

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Honey.

The market for New Zealand honey in this country has not yet been properly tested. Until regular shipments of high-class quality can be placed on the markets here through some special agent, who, relying upon getting these shipments, can be encouraged to take an interest in them and work up a special trade on behalf of his New Zealand clients, best results need not be, expected by farmers in the colony. Hitherto only occasional trial shipments of New Zealand honey have been made. These, while being principally of excellent quality, have, owing to the irregularity and uncertainty of arrival, not been looked upon by honey-buyers as of any great moment. They have merely been purchased, as any other odd parcels usually are, by buyers who take them into their common stock of honey as speculative purchases. Seal-skins. During the year a small consignment of seal-skins was received from the Marine Department at Wellington, which was sold at auction under my supervision. Colonial Exhibition, Crystal Palace. During the year the Colonial and Indian Exhibition was held at the Crystal Palace. Opening early in May, this was continued for eighteen weeks, closing in September. An excellent site near the centre of the Palace, and close to the principal road and railway entrances, was secured for the New Zealand Court. Selections of the colony's leading products were received from Wellington, and these, added to goods in hand from the previous Liverpool Exhibition and others obtained from the Imperial Institute, enabled a good representative display to be made. A novel feature, which attracted a great deal of notice, consisted in the one-ton cheese manufactured at the Wyndham Dairy Factory in Southland. In conjunction with the Christchurch Meat Company (Limited) and the Linde British Refrigerating Company, a good display of New Zealand frozen meat, poultry, butter, &c, was made in a large glassfronted refrigerating chamber. This exhibit, with its running machinery, proved a great attraction and advertisement. For the New Zealand Court a special stand was constructed, carved in Maori design. Being unlike the usual style of exhibition stand, it caught the public eye, and proved effective generally. The stand was constructed in sections, easily taken down or put together either in whole or part, and is thus available permanently for any exhibitions in which New Zealand may desire to participate. Photographs of the various sections of the Court were forwarded to Wellington at the time, and were reproduced in the last annual report of the Department of Industries and Commerce. The attendance of the public at the Crystal Palace during the run of the Exhibition totalled nearly one and a quarter million. Being the summer season, a large number of important and popular functions took place at the Palace, bringing people of every class from all parts of the country into contact with the Exhibition, not to mention the immense holiday concourses. It is pleasing to record that the New Zealand exhibits were very successful in the matter of awards for merit. Those secured comprised thirteen grand prizes, thirty-two gold medals, five silver medals, and one bronze medal. They were as follows : —Grand prizes : New Zealand Government —for completeness and excellence of general exhibit; trophy representing NW Zealand dairy industry ; butter, cheese ; fleece wool; grain in sheaf ; hops : Christchurch Meat Company (Limited) —for frozen meat; slipe wool : G. G. Stead —for grain ; peas : J. T. Griffin —for peas : Mosgiel Woollen Factory Company (Limited) —for woollen goods. Gold medals : New Zealand Government—for hemp ; timbers ; photographs ; sport exhibits ; agricultural and other publications : ironsand, and articles manufactured from same : G. G. Stead —for grass-seed ; clovers ; vegetable-seeds ; forestry seeds : J. and T. Meek ■ —for flour ; oatmeal ; bran : J. T. Griffin —for barley ; clover : Christchurch Meat Company (Limited) —for preserved meats, &c. ; tallow, oleo, oils, &c : Gear Meat Company (Limited) —for slipe wool ; tallow : Dalgetty and Company (Limited) —for scoured merino wool : Wellington Woollen Company (Limited) —for woollen goods : Underwood Milk Supply Company (Limited) —for condensed milk : E. Mitchelson and Co. —for kauri gum : Donaghy and Co.—for rope, cordage, binding-twine, &c. : Auckland Veneer and Timber Company (Limited) —for ornamental cabinet, door, and veneers: Frank Hyams (Limited) —for greenstone jewellery : May-Oatway Syndicate (Limited) —for "Safety" combined house-bell and fire-alarm : Alfred Osborne —for inlaid table-tops : Michaelis, Hallenstein, and Farquhar (Limited) —for leather: Westport Coal Company (Limited) —for coal: Ewing Phosphate Company (Limited) —for phosphate (rock and ground) : Dr. R. S. Reid—for automatic burglar-proof window-sash block. Silver medals : Gear Meat Company (Limited) —for preserved meats, &c. : S. Kirkpatrick and Co. —for preserved fruits, jams, &c. : J. T. Griffin —for beans : New Zealand Canning Company —for tinned fish : G. E. Butler —for oil paintings : Thompson and Co. —for mineral waters. The New Zealand Court was in the special charge of Mr. Hooper. Numerous inquiries were received concerning the colony and its products from traders, consumers, would-be emigrants or tourists, and visitors generally. It is safe to say that the interests of New Zealand in all these departments were materially advanced through the medium of the Exhibition. Liverpool Colonial Exhibition. Although not so representative of the chief colonies as that of the previous year, neither Canada, South Africa, nor any of the Australian States taking part in it, the Colonial Products Exhibition at Liverpool this year may be generally reported upon as a success. The attendance of the public was good, being about double that at the previous Exhibition. The Colonial Governments represented were

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New Zealand, Newfoundland, British East Africa, and Gambia ; while semi-official exhibits were made of Jamaica, Grenada, and other West Indian products. The British Cotton-growing Association, in conjunction with the Imperial Institute, also made an extensive and comprehensive exhibit. The New Zealand Court took a decided first place as regards size, comprehensiveness, and general attractiveness. The fine stand which had been made for use at the Crystal Palace, having been designed with the view to rearrangement and to convenient erection in sections, such as might be required at smaller exhibitions, was used at Liverpool. The chief exhibits at the permanent New Zealand Court at the Crystal Palace were drawn on for the occasion, and these, supplemented by goods received specially from the colony, made up a very complete and effective display of New Zealand's resources, industry, and wealth. On the present occasion it was decided not to display frozen meat or butter and cheese on the New Zealand stand. Arrangements were accordingly made with the Riverside Cold-storage Company, who occupied a stall adjoining and possessed all facilities for freezing, &c, for the proper display of these important lines. The meat displayed by this company was solely New Zealand, and the carcases were clearly labelled as such. Literature concerning New Zealand meat, &c, was also distributed at this stall. Merchants this year appeared to take more interest in the Exhibition than before, and I am satisfied that the exhibit made by New Zealand must prove helpful in the development that is being introduced by means of the service of direct steamers between the colony and the Port of Liverpool. Inquiries on the part of visitors at the New Zealand Court were very numerous, and covered a wide range —the trade, consumers, and emigration sides sharing the list fairly equally. The timbers attracted as great a share of attention as anything. There are undoubtedly valuable new openings for certain classes of our goods if regular supplies can be forthcoming. The grain, particularly the malting-barleys, earned great praise. The hemp attracted a great deal of attention, and was very favourably commented upon by fibre experts. One of the opening addresses of the Exhibition was delivered by yourself. During the course of the Exhibition I gave a couple of lectures, illustrated by limelight views, on " New Zealand as a Field for Settler and Tourist," in one of the courts in St. George's Hall, there being on both occasions a crowded and interested audience. Gold-medal diplomas of merit were awarded as follows : To the New Zealand Government—for butter, cheese, grain, farm seeds and clovers, timbers, veneers, &c, hops, flour, oatmeal and bran, leather, hemp, collection of minerals, and wool; to the Mosgiel Woollen Company (Limited) —for woollen goods ; to the Wellington Woollen Company (Limited) —for woollen goods ; to Messrs. S. Kirkpatrick and Co. (Limited) —for preserved fruits, jams, &c. ; to Messrs. Thompson and Co. — for aerated waters, cordials, &c. ; to Messrs. Donaghy and Co. (Limited) —for rope, cordage, and bindertwine ; to the Christchurch Meat Company (Limited) —for preserved meat, meat-extract, &c, and for tallow, oil, and oleo. Permanent New Zealand Court at Crystal Palace. During the year arrangements were made with the management of the Crystal Palace Company for the establishment of a court in which an attractive exhibit of New Zealand products could be permanently shown. This was the result of representations made by yourself to the Government that such a display would provs an attractive feature, and would be an excellent advertisement of the colony's resources, to the large assemblies of persons who so generally frequent that centre. For this purpose the " Roman Court" at the Palace has been engaged, and is now occupied. This court lends itself admirably to the purpose, and the result is that a bright and serviceable display of New Zealand productions of all sorts is secured, which is most favourably commented upon, and is doing an immense deal of good. The bulk of the exhibits in the court are, as was intended, those shown at the Colonial Exhibition. Not only does the New Zealand Court at the Crystal Palace act as a standing advertisement for the colony, but it is extremely useful as a store and basis from which can be drawn exhibits required to make displays at small exhibitions throughout the country, advantage of which has been frequently taken during the past year. Advertising by Small Country Exhibitions. The opportunity has been taken this year, having had a sufficiency of produce-exhibits on hand, of making small displays of New Zealand produce at several local exhibitions held throughout the country. At the Darlington Seed Show the New Zealand exhibit attracted considerable attention and favourable comment, while at Gravesend, Rochdale, Halifax, &c, the result attending this innovation was likewise highly successful. I have, under your authority, had a number of enlargements of photographs of New Zealand views made of a size suitable for the purpose, and their inclusion renders these exhibits highly attractive. It is intended to push energetically the development of this system of advertising. I have, &c, H. C. Cameron, The High Commissioner for New Zealand, London. Produce Commissioner.

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APPENDIX 111. Sir, — Department of Industries and Commerce, Durban, 19th October, 1905. I have the honour to submit a resume of the work done by me since my report of April of current year. All along business has been gradually getting worse in South Africa, and especially so in Natal; September was said to have been the very worst month for business for many years. The finances of the country are in anything but a healthy condition ; although, as usual, there is a persistent clinging to the hope of better times. Some authorities insist that the tide has turned. Meat-tax. I have already informed you that there was an agitation in the country in favour of a meat-tax ; I also expressed the hope that there might be some preference displayed towards the British colonies ; the tax has been reimposed, but I regret to say that no favour has in any way been displayed towards the colonies. It was thought, and very strongly asserted, that the colony could supply its own beef; a blizzard swept over the country, and an enormous amount of stock was destroyed ; since then there has been little talk about local supplies. Immediately on the imposition of the meat-tax there was a war of prices in connection with meat, and prices were cut to a very low mark; it was evident that this could not continue for a very long time. The immediate effect seems to be that small men are feeling the pinch already, and are selling out their business ; it is reported that the Federal Cold-storage people are'buying up" a very large number of shops, and will very soon have the whole trade in their own hands. t. j New Zealand Oats. Early in the year I had occasion to call the attention of the Natal Agricultural Department to a matter which tended to injure the New Zealand trade in this respect. In the report of experiments made at the Experimental Farm it was stated that the . New Zealand oats did not germinate ; after an inquiry had been made it was found that the sample ,7 referred to was not New Zealand produce at all, but some obtained from a local store. I managed to have a correction inserted in the Government Agricultural Journal. The matter may seem a small one in itself, but it gave rise to a great deal of comment among importers of New Zealand oats, and, but for the correction, might have done us a great deal of real injury. There has been a great deal of discussion' among as the Johannesburg Chamber of Commerce and the various municipalities about imported fodder and oats as rivals to the local produce ; the New Zealand oats are so much superior to the local oats, that in many instances these bodies feel compelled to buy them, although they urge that the local article shall be used where possible ; this is of course what might be expected. At the discussion at the Johannesburg7Chamber of Commerce it was admitted that the New were the finest in the world. New Zealand Wheat. Some shipments of New Zealand wheat have arrived recently, and I learn that very large quantities have been ordered to arrive ; at the outset it was feared that the New Zealand article would be too soft for this country, it is however gratifying to find that so far the shipments have given every satisfaction. There should be a very good trade between the two countries if the samples and prices can be made to suit. Trade-marks. - In a country like South Africa the matter of trade-marks is one which calls for very careful consideration ; there is a large trade with all parts of the world, and the competition is so keen that it is not at all wonderful if brands sometimes get mixed, intentionally or accidentally. For these and other reasons the matter of registration-marks has been considered. The decision arrived at here is that there is no protection to any trade-mark here unless it is locally registered. Cold-storage. It is really difficult to say very much of a matter which must be of the greatest interest. The general complaint is that, from a business standpoint, the thing is largely a failure. The Government Coldstorage at Maritzburg could almost be had for the asking ; Langham's Cold-storage at Delagoa Bay has never been used; on the other hand, Sparks and Young declared a dividend of £8,640. There is at present a move to amalgamate all the cold-storage companies, and there seems a very fair chance of them getting their way at last. It is very rare to stir the lethargy of South Africa in any respect until far too late to do any real good. New Zealand Butter. The position of New Zealand butter is well assured, and there seems only one condition of success, and that is the regular supply of first-rate quality; merchants are somewhat nervous upon this point since there is a talk about withdrawing the direct steamers; although there has been no drawing-back so far in the matter of orders, merchants assure me that there is an uncertainty about the matter. But, of course, that rests with the New Zealand people ; a trade has been created, and in order to do that there had to be a great deal of effort put forward. The prejudice here against anything from Australasia is far stronger than the truth warrants. Quite recently a Cabinet Minister publicly stated that

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Australasian butter was so bad that he would sooner be without than eat it; that itjjould be bought at 7d. per pound. Although in no way interested, except as the representative of the country. I should be sorry if, from any cause, a trade should declin or become difficult of operation. ■ j New Zealand Politics. In the course ot the year a great deal has been done to direct the eyes of the people of Africa towards New Zealand. Mr. McLarty, M.L.A. for Durban, discussed in Parliament the desirability of appointing a Public Trustee for Natal on the New Zealand lines ; the Premier promised to look into the matter during the recess with a view to bringing in a Bill. The Hon. Mr. Powell, M.L.C., Capetown, had advocated the adoption of the New Zealand method in connection with the railway?. The Industries Commission, now sitting in Natal, applied to me for a supply of such literature as might aid them in coming to a decision in some matters ; I promptly supplied such as I had at my disposal. Delagoa Bay. After my recent visit to Johannesburg, I decided to have a look at Delagoa Bay. This port has already a great deal of the Rand trade, and is, I think, certain to do a great deal more at no distant date. The Transvaal people have large interests there ; the Transvaal and the Portuguese Governments are in active co-operation with each other in constructing a line of railway through Swaziland ; this will bring Delagoa Bay within fourteen hours of the Transvaal, and as the line has a grade of 1 in 100 only, whereas to Natal it is a case of ladder-climbing from sea-level to 5,000 ft., this will be an immense advantage. Great-improvements are going on, such as deepening the channel, construction of wharves, building sheds, &c. Railway Rates. On several occasions I have called attention to the necessity of some form of reciprocity between the South African colonies and New Zealand ; Canada sees the importance of the matter. On two occasions large amounts of stock have been brought from New Zealand to this country by the same person ; on the latter occasion the amount was about £10,000. I applied for a rebate on the very high rates ; I could not succeed. The consequence is not that the perron did not buy the stock, but that he will land in future at East London. Now, if trade is to go ahead, facilities are of first importance. If the Governments only get into touch they might secure some arrangement which would be to their mutual advantage. Withdrawal op Repbesentative. The proposal to withdraw the New Zealand representative is looked upon as exceedingly unfortunate, more particularly, perhaps, by the merchants and agents, many of whom are either NewZealanders or Australians, and are therefore likely to look at matters from the clear-headed standpoint,. and not from the standpoint of mere sentiment. New Zealand Supplies. There has been a great deal of dissatisfaction expressed in connection with the difficulty in getting regular and adequate supplies of New Zealand produce. Samples of excellent quality are sent, they are put into the hands of the agents, a demand is created, and then orders are despatched, only to be disappointed. Some oysters were sent : they were placed in the right hands, an order was sent over, 100 cases were .promised, and when the vessel arrived there were just four cases. In another case a merchant who had been dealing largely in New Zealand bran suddenly found the supply stopped, and he was compelled to place an order with Australia for 1,000 tons ; these remarks apply equally to other lines. I have had notice of some samples of dried milk from Messrs. Nathan :if this turns out to be a good article I think there should be a good demand ; merchants are on the look-out for a good brand •in place of Nestles and the Dairymaid. International Exhibition. As soon as possible after receiving the official notices of the International Exhibition I made arrangements for distribution. Just at the time the Agricultural Show was being held at Durban ; this is generally, and was this year particularly, a very important concern ; I therefore took advantage of the Show to get into touch with such as are likely to be interested in such matters, and distributed a good deal of information. I then proceeded to Maritzburg, where the Royal Agricultural Society held their Exhibition, and did similar work there. I also visited the heads of the Government at Maritzburg and gained their cordial sympathy, and after a time there may be some active co-operation. Some of the leading men of Natal have assured me that they will come to New Zealand, and will certainly not come alone. I have also been to Johannesburg on a similar mission ; on my journey up I took care to distribute, and arrange for the distribution of, notices, literature, &c, at all places where there seemed to be the slightest use in so doing. At Johannesburg I personally distributed notices and literature at all leading hotels, clubs, Chamber of Commerce, Chamber of Mines, &c, so that as far as advertising can be done in that wav it has been done. A great deal has also been done in the same direction at Capetown. The merchants and agents seem to feel that they are treated a bit capriciously ; they have done so much to create an interest and a trade ; at the same time, the majority of those with whom I have ■conversed think that the money spent by the New Zealand Government in having a representative has been regained many times by New Zealand, though in an indirect way. Certainly a keen interest 4—H. IJ.

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m New Zealand has been from some cause created, and all I can do under the circumstances is to leave what literature I have in the hands of those who are deeply interested, and who will take care to keep the interest alive ; this I have done. On coming back to New Zealand I shall bring with me numerous letters, some from those in most important positions, expressing regret that the Government has felt it necessary to withdraw its representation ; the hope is also widely expressed that some form of representation will be continued, if for no other purpose than to give information to the numbers who are sure to be anxious to settle in " God's own country." My two and a half years' residence has certainly been the means of creating an interest of no small extent, and this I trust will be seen by the results of the Exhibition next year. I have, &c, J. Graham Gow. Hon. Sir J. G. Ward, K.C.M.G., Minister of Industries and Commerce, Wellington, New Zealand. Sir, — Department of Industries and Commerce, Kobe, J 4th April, 1906. As requested by the Minister of Commerce, I forward you the following particulars re trade with Japan for the year ending the 31st December, 1904, the figures for the year 1905 not yet being available : Butter, £4,800; wheat-flour, £13,200; wheat, £119,200; other cereals, £29,000; animalbones, £4,400 ; hides and skins, £1,800 ; leather, £6,600 ; flax and hemp, £13,000 ; wool, £498,000 ; horses, £19,800 ; glue-pieces, £2,000 ; tallow, grease, oil, £43,600 ; manures, £10,600. Owing to the absence of direct steamer-communication, the commodities imported from New Zealand are transhipped at Australian ports and are included in the Customs returns of imports from Australia. Until a direct steamer service is established the prospects of extending trade with New Zealand do not appear to be favourable, but in considering the trade of Australasia the possibilities of future development will be apparent. Only the principal items imported are mentioned. Hemp. —Regular quantities are imported of fine and G.F.A.Q. grades, and smaller lots of F.A.Q. and tow. For the three years, 1902-4, the trade has not shown any expansion, while imports from Manila have increased considerably. This is doubtless due to the heavy rate of freight paid on shipments from New Zealand. For the sake of comparison the following figures, showing the values of imports from New Zealand and from Manila respectively, may be useful: New Zealand—l9o2, £13 116 ■ 1903, £14,862 ; 1904, £12,930 : Manila—l9o2, £3,619 ; 1903, £96,005 ; 1904, £138,371. With regard to extra fine quality there appears to be no market in Japan for this grade. Some quantity of the finest Manila hemp is used for weaving purposes, but extra fine New Zealand flax is not suitable for weaving, the fibre being too coarse, and for ordinary ropemaking G.F.A.Q. and F.A.Q. grades are most in demand. Wool. —This appears to be a hopeful line, and the trade with Japan will no doubt expand considerably in the future. For your information I enclose list of principal importers. I have, &c, J. Graham Gow. T. E. Donne, Esq., Secretary, Industries and Commerce Department, Wellington. APPENDIX IV. TRADE REPORTS. The following diplomatic and consular trade reports, issued by His Majesty's Foreign Office, relating to the trade, finance, &c, in the undermentioned countries may be seen on application to the Head Office of the Department of Industries and Commerce : — France. —French Octroi System. French Mercantile Marine Laws. Trade of Indo-China for the if ears 1903-4. Trade of Marseilles for the Year 1905. Trade, Agriculture, &c, of French West Africa for the Years 1904-5. Trade of New Caledonia for the Year 1900. Trade of Reunion for the Year 1905. Trade and Agriculture of the Consular District of Calais for the Year 1905. Trade of Havre and District for the Year 1905. Trade of Consular District of Cherbourg for the Year 1905. Trade and Agriculture of Pondicherry for the Year 1905. Trade of Corsica for the Year 1905. Trade of Consular District of Bordeaux for the Year 1905. Silk Industry of Lyons and St. Etienne, and Trade of Grenoble, for the Year 1905. Trade of Dunkirk for the Year 1905. Trade of Cochin-China for the Year 1905. Germany. —German Paper Industry and Export Trade. Agriculture in Germany. Agriculture in the. Rhenish Province. German Colonies, 1903-4. German Trade with India. Trade of Bavaria for the Year 1904 and Part of 1905. Finances of the Kingdom of Saxony for the Years 1906-7. Trade of Germany for the Year 1905. Trade of Consular District of Leipzig for the Year 1905. Trade of Pomerania for the Year 1905. Trade of Consular District of Hamburg for the Year 1905. Belgium. —Shipping and Navigation of the Port of Antwerp for the Year 1905. Arms Industry of Liege. Netherlands. —Finances of the Netherland Indies for the Years 1905-6. Finances of the Netherlands for the Years 1904-5 and 1905-6. Trade of Amsterdam for the Year 1905. Trade, &c, of Java for the Year 1905. Trade of Rotterdam for the Year 1905. Trade of Curacoa for the Year 1905

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Greece. —Finances of Greece for the Year 1905. Trade of the Morea and the Provinces of iEtolia and Acarnania for the Year 1905. Trade of Corfu for the Year 1905. Trade of the Cyclades fox the Year 1905. Trade of Cephalonia and Zante for the Year 1905. Trade and Agriculture of Thessaly for the Year 1905. Trade and Agriculture of Piraeus and District for the Year 1905. Italy. —Agriculture of Tuscany. Trade of South Italy for the Year 1905. Foreign Trade of Italy for the Year 1904. Trade of Consular District of Genoa for the Year 1905. Trade of Consular District of Eome for the Year 1905. Trade of Sicily for the Year 1905. Finances of Italy for the Year 1905. Switzerland. —Trade of Switzerland for the Year 1905. Austria-Hungary. —Trade of Trieste for the Year 1905. Norway. —Trade of Norway for the Year 1905. Sweden. —Trade of Stockholm and Eastern Coast of Sweden for the lear 1905. Denmark. —Trade of Denmark for the Year 1905. Trade of Denmark for the Year 1904 (supple* mentary). Trade of Iceland for the Years 1903-5. Spain. —Trade of Consular District of Bilbao for the Year 1905. Trade of the Canary Islands for the Year 1905. Trade of the Consular District of Cadiz for the Year 1905. Trade of the Provinces of Galicia, the Asturias, and Leon for the Year 1905. Trada of Consular District for Barcelona for the Year 1905. Portugal. —Trade of Goa for the Years 1904-5. Trade of Quilimane for the Year 1905. Trade of Oporto for the Year 1905. Trade of Consular District of Beira for the Year 1905. Trade of the Azores for the Year 1905. Roumania. —Trade of Rournania for the Year 1905. Servia. —Trade of Servia for the Year 1904. Bulgaria. —Trade of Bulgaria for the Year 1905. Turkey. —Trade of Constantinople and District for the Year 1905. Trade of Palestine for the Year 1905. Trade of Beirut and the Coast of Syria for the Year 1905. Trade of the Trebizond Vilayet for the Year 1905. Trade of Vilayet of Aleppo for the Year 1905. Trade of Basra for the Year 1905. Russia. —Trade and Agriculture of Poland and Lithuania for the Year 1905. Trade of Consular District of Batoum for the Year 1905. Trade of Consular District of Moscow for the Year 1905. Trade of the Grand Duchy of Finland for the Year 1905. Foreign Commerce of Russia and Trade of Consular District of St. Petersburg for the Year 1905. Trade of Consular District of Rostov-on-Don for the Year 1905. United States. —Coal Industry of the United States in 1904. Turpentine Industry in the United States. Finances of the United States for the Year ended the 30th June, 1905. Trade of the United States for the Year 1905. Trade of the States of Maryland, Virginia, West Virginia, and Kentucky for the Year 1905. Trade of the States of California, Nevada, and Utah, and the Territory of Arizona, for the Year 1905. Trade of Consular District of Philadelphia for the Year 1905. Trade of Texas for the Year 1905. Trade and Agriculture of the States of Oregon, Washington, and Idaho for the Year 1905. Trade of the Consular District of Boston for the Year 1905. Trade and Agriculture of the Consular District of Chicago for the Year 1905. Argentine Republic. —Trade of the Consular District of Buenos Ayres for the Year 1905. Bolivia.— Trade of Bolivia for the Years 1904-5. Argentine Republic. —Trade of Consular District of Rosario for the Year 1905. Brazil.—Trade of Santos for the Years 1902-4. Trade of Brazil for the Year 1904. Trade of the State of Rio Grande Do Sul for the Year 1905. Chile.— -Trade of Coquimbo for the Year 1905. Costa Rica. —Trade of Costa Rica for the Year 1905. Columbia. —Trade of Santa Marta for the Year 1905. Guatemala.— Trade of Quezaltenango for the Year 1905. Honduras. Trade of Honduras for the Years 1904-5. Trade of Omoa and Puerto Cortes for the Year 1905. Mexico. —Mexican Budget for the Years 1905-6. p ero —Trade of Iquitos for the Year 1905. Trade of Peru for the Year 1905. Venezuela. —Trade of Cuidad Bolivar for the Year 1905. China. Land-taxation in the Province of Honan. Trade of Canton for the Year 1905. Trade of Nanking for the Years 1903-5. Trade of Shanghai for the Years 1901-4. Trade of Teng Yueh for the Year 1905. Trade of Ichang for the Year 1905. Trade of Swatow for the Year 1905. Trade of Hankow for the Year 1905. Trade of Wuchow for the Year 1905. Japan. Gold-mines of Formosa. Trade of the Consular District of Hakodate for the Year 1905. Persia. Persian Customs Regulations. Trade of Arbistan for the Year 1905. Trade of Bushire lor the Year 1905. Egypt. Trade of Port Said and Suez for the Year 1905. Trade of Alexandria for the Year 1905. Morocco. Trade of Morocco for the Years 1903-4. Trade of Consular District of Tangier for the Year 1905. Cuba.— Trade of Cuba for the Year 1904 (supplementary). Western Pacific. —Trade of Samoa for the Year 1905. Trade of the Friendly Islands for the Year 1905. Zanzibar.— Trade of Zanzibar for the Year 1904. Qyfo a .—Trade of Cuba for the Year 1904 (supplementary).

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WORKS OF REFERENCE. The are on hand at the Head Office of>e Industries and Commerce Department, and are available there for public reference : Ceylon Handbook and Directory. Canadian Trade Index, 1905. South African Trade : General. By T. Nicol Jenkin. South African Trade : Engineering. By Ben. H. Morgan. South African Trade : Textile and Soft Goods. By S. W. Witham. 1904. Annual Report of the Co-operative Wholesale Societies (Limited), England and Scotland. 1904. The Delagoa Directory (Loronzo Marques). 1904. The Shippers' Guide to South and East Africa. General View of Commerce and Industry in the Empire if Janan. Prepared by tfie Paris International Exposition of 1900. American Trade Index. Published by the National Association of Manufacturers, Philadelphia, Pa., U.S.A. Sources of the Agricultural Imports of the United States. 1904. Distribution of the Agricultural Exports of the United States. 1904. Export Hand Adressbuch yon Deutschland. 1904. Report upon the Trade of Japan. 1906. Annual Report, Chamber of Commerce, Port Elizabeth, South Amca, containing complete xrade Returns and Statistics. 1904. Annual Report, Chamber of Commerce, Durban, South Africa. Guide to South African Ports. Issued by William Cotts and Co. South African Customs Union Tariff. 1903. Natal Customs Tariff. 1906. Australian Handbook. 1905. Official Year-book, New South Wales. 1906. Official Year-book, Victoria. 1906. Official Year-book, South Australia. 1906. Official Year-book, Queensland. 1906. Australian Year-book. 1906. Indian Trade Journal. 1906. Regulations of the Port and Harbour of Natal. Report of Port Captain, Colony of Natal. 1903. China Imperial Maritime Customs : Return of Trade and Trade Reports. 1903. Tariff and Regulations, Port Elizabeth Harbour Board. Engineer's Report, Natal Harbour Works. Tables Relating to Trade of British India with British Possessions and Foreign Countries up to 1905. Review of the Trade of India up to 1906. Report of the Annual Meeting of the Associated Chambers of Commerce of the United Kingdom held in London, March, 1905. Thirteenth Annual Special Issue of the Timber Trades Journal and Sawmill Advertiser. 1906.' Forty-first Annual Report of the Cape Town Chamber of Commerce ; with the President's Address Statistics, and other Commercial Information. 1903. . Dock, Port, and Harbour Regulations for Table Bay, Cape of Good Hope. Fairplay. Weekly Shipping Journal, London. Guide to South Africa. Issued by the Union Castle Steamship Company. • Cape Colony. By A. R. E. Burton. . Natal: Harrison's Official Railway Guide and Handbook of Generai Information. 1904. Newspaper Press Directory. 1904. The Argentine Year-book. 1904. The Canadian Annual Review. 1905. International Fire Exhibition. 1904, : Imperial Institute Technical Reports and Scientific Papers. 1904. Forty-fourth Annual Report, Chamber of Commerce, San Francisco. 1904.

Approximate Coxt of Paper.— Preparation, net Riven; printing (3,950 copies*, £ 26 19b.

Authority: John Mackvt, Government Printer, Wellington.— l9oB.

Prim 3d.\

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Colonial and Indian Exhibition, held in Crystal Palace, London, 1905. Grand Prize Diplomas were also awarded the New Zealand Government for Trophy representing New Zealand Dairy Industry, and Exhibits of Butter Cheese, Fleece Wool, Grain in Sheaf, and Hops.

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Colonial and Indian Exhibition, held in Crystal Palace, London, 1905. Gold Medal Diplomas were also awarded the New Zealand Government for Exhibits of Hemp, Timbers, Photographs, Sports Exhibits, Agricultural and other Publications.

New Zealand Government Exhibit, Colonial Products Exhibition, Liverpool, 1906,

H.—l7.

H.—l7.

New Zealand Government Exhibit of Fresh and Preserved Fruits, Jam, etc., at the Royal Horticultural Society's Show, London, 1906.

H.—l7

Diplomas awarded the New Zealand Government at the Colonial Products Exhibition, Liverpool.

H.—l7.

Diplomas awarded the New Zealand Government at the Colonial Products Exhibition, Liverpool.

H.—l7.

Diplomas Awarded The New Zealand Government At The Colonial Products Exhibition Liverpool.