H.—No. sa.

The question as to the effect of Chinese immigration on the gold fields, is one to which I should havo desired to give mature consideration before venturing an opinion, which the time you allow will not permit of. Any opinion which I may have is formed from what I have observed in this district, to which my experience of tho Chinese is confined, and I would remark that as yet the Chinese are in the minority, the numbers standing at, European miners 1,000, Chinese miners 600, which fact ought to be kept iu view in considering any remarks I may make. Up to the present time, I would, without hesitation, say that the Chinese miners have been a benefit to this district. The mining, as a rule, that has been carried on by the Chinese, has been confined to the ground that had long ago been deserted by the Europeans, and that which the Europeans declined to work. From such ground the Chinese have unearthed a very large quantity of gold, which, but for their industry and perseverance, would have remained buried. Occasionally the Chinese have opened up fresh ground ; but in this district they have preferred to follow in the wake of the European miners, gathering what they happen to leave. 1 have never known the Chinese undertake any of those works, requiring considerable power both of mind and body, such as the bringing of large bodies of water to bear on the auriferous hills, and spurs, and slucing them away. That is the only sort of work on the mines that will now pay the European miner. The Chinese workings are confined to the more primitive styles of paddocking and driving out the wash, and box-sluicing or cradling it. I may say that the Chinese miners have never come in any way into collision with the European miners in this district. Up to the present, the only European miners who ever have had any complaints against the Chinese, are a class who work after the same primitive style, but with less energy and perseverance than the Chinese. This class of European miner is numerically small, and their ideas none of the largest; content to work for a small wage after their own fashion, with no ambition above a comfortable living and plenty to drink, and who would be jealous of an influx of any miners, no matter of what nation. This class are quite as indifferent colonists as the Chinese, and give much more trouble ; but in this district, even with that class, there have been few complaints. As consumers, the Chinese miners have been a benefit to this district; and up to the time that they introduced their own storekeepers, all classes of European storekeepers were of that opinion, and have often been heard to remark that, had it not been for the influx of Chinese, they must have left the district. Since the introduction of the Chinese storekeepers, the smaller European storekeepers have changed their opinion, the Chinese having ceased, or almost so, to deal with them. The larger European storekeepers, with whom the Chinese carry on a large business for clothing, tools, aud some of the staple articles, continue to consider them a boon to the district. The small settler has also been benefited by the Chinese miner, with whom he carries on a considerable trade in poultry and pigs. Of course all would prefer an influx of bond fide European miners; but if the gold fields have reached that stage, as I fear they have, when they cease to attract European miners, an influx of Chinese is better than stagnation. It may be said that the gold miner only reaps one crop, and that he must have reserves to fall back on; and that if Chinese are allowed to overflow the country, the present European miner will have nothing to fall back on. I would, in answer to that, remark that, so far as Otago is concerned, my experience of Chinese is, that their mining is confined to ground that is considered not payable by Europeans as a rule, and that the Chinese are not equal, either mentally or physically, to undertake the sluicing away of the auriferous terraces and spurs, the only mining that now pays the Europeans. The European miner will, in my opinion, ever maintain his supremacy, and will, as a superior animal, even when outnumbered, cause the Chinaman to do the drudgery. I think it is a proof of no overcrowding, that, as yet, both Chinese and European miners have found room to act independently, and the superior has not begun to employ the inferior. The " cry " that is at present being made, is, in my opinion, raised, as it was in Victoria, by the small class of European miners to whom I have already alluded as not being over energetic, and the smaller storekeepers, who may have lost the Chinese trade, together with some who think tho influx of Chinese will affect the labour market. Up to the present, in this district, the temper of the European miner is amicable towards the Chinese. I have, &c, C. E. Haughton, Esq., M.H.R., AV. Lawrence Simpson, Chairman, Gold Fields Committee. Warden. The European miners are not on the increase, not because of any influx of Chinese, but because the pavable ground is becoming less in area, and no fresh discoveries have been made recently. AV. L. S. Mr. R. Beetham to Mr. C. E. Haughton. Sir, — Warden's Office, Queenstown, 28th August, 1871. In reply to your telegram of the 26th instant, I have the honor to report that the Chinese miners at present located in the district under my charge number about I,SOO, and exceed the number of European miners by about 500. They have hitherto confined their attention principally to cleaning up the beds of creeks and small rivers, which have been partially worked and, to a great extent, abandoned by the European miners. They are content with small earnings, and are satisfied with gains which would not be accepted by the Europeans. I have made the most careful inquiries as to their organization, the cost of living, and their earnings. 1 find that their average earnings may be set down at from 15s. to 20s. per week clear of all expenses—that is, they save from 15s. to 20s. Thus they can live for about Bs. to 10s. per week. They do not amalgamate in any way with the Europeans, but exist entirely by themselves ; and will not, except in rare instances, subscribe to any local charity, such as hospitals, <fcc, though they are quite ready to take advantage of them when sick. They have simply one object, and that is, to save what money they can and return to China. Assuming that they save £45 per man per annum (and

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AD INTERIM REPORT (No. II.) OE THE