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that as soon as we have completed our arrangements for the accommodation of scholars whose parents live at a distance, there will be a Large increase in the number of pupils. Those of the boys and girls who have been in constant attendance have made satisfactory progress under the tuition of Mr A. G. Oldfield, the village schoolmaster. It is with pleasure also that I have to report that the Natives have made considerable efforts to enlarge their cultivations during the past year, with satisfactory results. I believe there have been eight or ten thousand bushels of wheat produced in this district, an industry which has been almost abandoned since 1862, when tho Natives sent to Auckland more than twenty-one thousand bushels of this cereal. More than two-thirds of the grain crops this year has been grown by Natives; and I am informed that the Native-grown wheat realized higher prices in the Auckland market than that of their European neighbours. It is satisfactory to see that this success has greatly encouraged them, and that they are now preparing a much larger extent of ground to put under crop. There has not been much mortality amongst them during this year. A few of the aged one 3 have been carried off by severe influenza. I think the Native population remains much about the same —1,100. But I hope to be able next year to get a correct census of every " hapu," which shall be forwarded to your office in due course. We are in a state of profound peace in this district, nor do I see the remotest chance, under the conciliatory policy being pursued, that this peace will be disturbed. Our relations with our Hauhau neighbours is improving daily ; not only do they visit our settlements for purposes of trade, but they consult our officers in cases of perplexity, and almost invariably follow the advice tendered to them. With the Hauhaus, the one great source of trouble is the land. Many of them have claims on the Waikato side of the ranges, which are being dealt with by the Ngatihaua for their own benefit; and I am becoming more and more convinced that the Government ought to retain in their own hands largo restrictive powers to check tho eager advances made by European speculators and runholders. For, to my mind, it is a matter of serious consequence to the Colony that any single individual or set of individuals should through an imprudent act endanger the peace of the country; and I trust that the Government will seriously consider this subject, which I respectfully submit calls for some legislative action. In the event of a conflict with the Waikatos, should any such calamity arise, our altered relations with the Ngatiraukawa will greatly tend to tho security of the Bay of Plenty districts in general, and Tauranga in particular, inasmuch as the frontier of the settled district may now be considered to be removed from the forest line within fourteen miles of this town to the Waikato ; and I beg to suggest to the Government tho advisability of cultivating by every possible means our good relations with that once formidable tribe. I regret that tho inquiry into the Tauranga lands under the Tauranga District Lands Act is progressing slowly, owing to my many engagements and frequent interruptions. Still the disputes that have been the subject of investigation have been satisfactorily arranged, and the decision of myself, as Commissoner, abided by. lam unwilling to recommend the Government to appoint any other Commissioner, for many obvious reasons; but I may take occasion to suggest to the Government that I may be relieved of some of my other duties, in order that I may give more of my time to the important work of finally settling the title to the lands which have been restored to the Natives in this district. Maketu. The Maketu or Lake District, as it is sometimes called, is under the immediate care of Mr. F. E. Hamlin, E.M., and I suppose that he has furnished already minute details of the state of the district under his charge. I will therefore confine my observations to matters which have fallen under my own notice, and to the impressions which have been left on my mind from what I have seen. The tribes occupying this district have, within a very recent date, been designated the Arawa, a name adopted by one of their chiefs to distinguish those tribes whose ancestors migrated to this country in the Arawa canoe. The four most important sections of this powerful tribe are the Ngatiwhakaue, Ngatipikiao, Tuhourangi, and the Ngatirangiwewehi. The last-mentioned have become greatly reduced in strength, from the fact that two-thirds of them joined in the rebellion, and a great number of them, including their principal chief, fell at Te Eanga, in the Tauranga district, in 18G4. The Arawa are a very different people to the Ngaiterangi. They are more warlike, turbulent, and, from their extreme jealousy of each other, difficult to manage —and yet, withal, loyal to our Government. I have gathered from them in frequent conversations, that this was, in the first instance, made the subject of careful deliberation. The subject of taking part for or against us was discussed at many a meeting; and it was finally decided that it would be impossible for them,as a race,to cope with the dogged perseverance of the white man, and therefore it was to their advantage to ally themselves to the Pakeha. Whatever may have been the motive for their taking part with us, it must be acknowledged by all who have observed the course of events on the East Coast for the last twelve years, that they have been most active and valuable allies : while we were deploring our heavy losses at the Gate Pa, a handful of Arawas were driving back, with great slaughter, the East Coast tribes who were trying to force their way through Arawa country to take part in the struggle going on in Waikato and Tauranga. Had the 800 hostile Natives been aided by the Arawa, or had the Arawa remained neutral, our forces would have had their hands more than full. Then, again, when the master and crew of the cutter Kate, with Mr. James Fulloon on board, were massacred at Whakatane, it was the Arawas who took up our cause, and after a series of operations under Major Mair, the only European officer with them, they succeeded in capturing all the murderers; and up to a more recent date they have done us good service in the field. I have been led to make these remarks from a fear lest, after a lapse of years, we should overlook the valuable assistance rendered us in our time of need, and be tempted to indulge in disparaging remarks when the less pleasing characteristics of this tribe are brought prominently under our notice. No one knows better than myself that dealings with this people are trying to flesh and blood to a degree ; but I also think that their past services ought to be