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Minister during his visit to Whanganui; and speaking of the Natives of my own particular district, I am led to look forward hopefully to the future, as I have met with much encouragement during the past year in my endeavours to foster and carry out amongst them such schemes and projects as are likely to prove beneficial to the race. .. j In the matter of Native schools,two districts have been duly defined,and sehoolhouses are about being erected at two of the principal settlements on the river, one in fact being now in course of erection. The Natives have agreed to support both schools, and will contribute their quota of the expense of putting up the necessary buildings, a matter of some difficulty, as the timber has had tobe conveyed from town by canoes poled by Natives over numerous and difficult rapids, and I hope by the end of the year to see two schools in full working order, to be followed by others. The Natives are becoming alive to the importance of securing an education for their children, whereby their status as a people will be much elevated, and a meaus afforded the rising generation of greatly improving their manners and habits of life, and taking an active part in helping to promote the happiness and welfare of themselves as a people, and of the country in general. A greater desire to obtain knowledge has been exhibited on the part of the Natives, and I have succeeded in obtaining over 100 subscribers to the Maori Messenger, at 10s. per annum. I cannot say that any marked improvement has taken place in the moral and physical condition of the Natives since my last annual report, and it will take time to work out any vital change in these matters, the Natives being much wedded to their old customs and habits, which, through the instrumentality of the schools, the course of time, .and further intercourse with the Europeans, will no doubt eventually lose their hold upon them, and a better state of morals and physical condition be attained to. More care and attention is now shown by the parents in nourishing and bringing up their children, and European medicines are in greater request than formerly. It is interesting to notice the great fondness exhibited by the Natives towards their children, and the strong desire shown for offspring ; it being; considered a matter for much regret and humiliation (if not of degradation) amongst them to be childless, and the more children a man has the greater is he thought of; and, as a result of this feeling (many of the women being barren), polygamy is on the increase, and is not considered incompatible with good morals ! The attention of the Natives to agricultural pursuits has not in any way diminished, and, owing to the enhanced prices received for grain and other produce during the past season, a greater extent of ground has been laid under cultivation this year than formerly. Tobacco is now grown in sufficient quantities to supply their own wants, and after some further experience and instruction as to the mode of culture, they will have a surplus stock for sale in the market, as the plant thrives amazingly in the up-river districts. The hop plants and mulberry trees introduced last year are in a thriving condition, and steps will be taken this winter to propagate largely these plants and trees, with a view to affording the Natives another means of obtaining wealth and its attendant advantages. I am also able to report favourably about the flour mills, the mill-house at Pipiriki having been entirely rebuilt at the expense and labour of Maoris, and the requisite machinery has been already ordered from Glasgow, Major Kemp having advanced £60 to the importer, so that there should be no delay in executing the order. Kemp has subscribed largely towards the cost of this particular mill, with the view of resuscitating the Pipiriki settlement, and encouraging its scattered inhabitants to return to that locality and settle down again there in peace and prosperity, a very praiseworthy object on his part, and of political importance, seeing that most of the Pipiriki Natives had turned Hauhaus, fought against the Queen's troops at Tataraimaka, where their principal chief, Hori Patene, and a number of his tribe were killed, and have since resided at Taranaki and elsewhere, including the chief Hori Patene the younger, in a state of sullenness and despair. The Natives at Karatia and Koriniti are also busily engaged in erecting their mills at those pas, and have lodged with me the greater part of the instalments—£so in each case —demanded by the importer as a deposit before ordering the iron machinery required to render the mills complete and efficient for grinding corn, a quantity of which is stored up awaiting the completion of the mills, when it will be turned into flour for home consumption and disposal at the nearest market, viz., the town of "Whanganui. The stones in these mills are of the best burr and of great value, tho ones at " Governor Mill," particularly, being of extra size, and were presented to the Natives many years ago by His Excellency Sir George Grey. Mr. McLean has promised a money contribution of £50 to each mill, on the part of tbe Government, upon the arrival of the machinery ; money which could not be better spent than in encouraging such industries. The Native ploughing match this season, where prizes were given by the Government, was very successful, one Maori particularly, a boy of about eleven years of age, and nephew of Captain Wirihana, having greatly astonished the spectators, Maori and European, by his clever handling of the plough, much to the delight of his uncle, who seemed most proud of his performances. Next year I would recommend the match being held at Turnkina or Rangitikei, so that the coast Natives may join ; and Maori contributions have been promised (in addition to that of the Government), so that larger prizes may be offered to the successful competitors. "With regard to public works undertaken by the Natives, the only one at present is the road from Banana to the Murimotu plains, which the Whanganui Natives are about commencing under the supervision of Mr. Booth, and which will prove of great advantage to themselves when completed, and which fact they begin fully to realize. As a proof of the loyalty and obedience to command, of the Whanganui Natives, I would take occasion here to mention that I have succeeded since January, 1872, acting under the instructions of the Hon. the Defence Minister, in recovering, for the most part from the up-river Natives, 226 stand of Government arms ; the greater part of those still outstanding (some 300) being for the most part in the possession of the Ngatinpa Tribe, who do not reside in my district, and from whom I have reason to believe they will eventually be recovered.