A.—l

30

From the head of Lake McKerrow to Jamestown, at ■which place the river leaves the lake for the sea, there is little or no land available for agriculture. The ranges bounding the lake are, however, covered with timber of excellent quality. From Jamestown to the sea, a distance of about five miles, the river runs through extensive flats of splendid agricultural land, heavily timbered with white, black, and red pine. It is principally on these levels that the land in Class Ais situated, and whore alone clearing has been attempted. At the date of my visit there were four families resident at Jamestown, or near it, besides other parties working singly or without families; including those settlers who were at Big Bay, occupied in gold mining, there would be about forty souls in the settlement. lam bound to pay that, in despite of its great natural advantages, the settlement appeared to be in a languishing condition. The inhabitants, while they one and all spoke in the highest terms of the spot which they had cleared as their home, appeared to be in a despondent state. It was evident, too, that, taking into consideration the length of time during which the settlers had been located at the Bay, the settlement had not made the progress which might have been fairly expected from it. I attribute this —Ist. To the utter isolation of the settlement, resulting from its uncertain and unfrequent communication with, other portions of the Province. 2nd. By reason of the unsatisfactory working of the Land Regulations, principally with reference to clause A; and 3rd. To the absence of any settled industry, by the means of which labour and capital would be introduced into the settlement. The absolute isolation of the settlement has, I think, had a great deal to do with its slow progress. Not only have the settlers been unable to obtain regular supplies, but they have actually been reduced to the very brink of starvation. This uncertain and irregular communication has exercised, in my opinion, a very depressing influence upon the settlers ; they look upon themselves as deserted and uncared for, and, as a natural consequence, they lose that push and energy without which progression is impossible. This irregularity of communication is against them in another way :it is almost a bar to future settlement. The ranks of the settlers receive from time to time very slight augmentation as to numbers. Intending emigrants will not be at all likely to visit the settlement with a view to locating themselves there, unless they see some reasonable chance of getting away again, should they find it does not suit them. Under present circumstances, a person may be set down in Martin's Bay by a chance steamer, and have to remain there for six months, unless, indeed, he undertakes an almost impassable journey overland to Wakatipu. This state of things will certainly be much improved when the track is cut; indeed, the completion of this appears to me to be an absolute necessity to the future existence of the settlement. There should be also regular communication by sea —say three times a year, at least —as it is from this source that the settlement will receive its supplies. The settlers also complain that the steamers do not bring for Bale numerous necessaries which they require. When we were there the only food obtainable was, with, perhaps a single exception, bread, tea, sugar, and salt meat, the latter of a very inferior quality, almost unfit to eat. There was not in the whole settlement a piece of fat to use either for cooking or eating. The settlers say, and with truth, that they cannot do a fair day's work on such food as this. An enfeebled condition of body results inevitably in a depression of mind, and it is not in this state that men should exist who have to fight and overcome the primeval forest of New Zealand. As to the Land Regulations, with reference to Class A. —These regulations permit a person to select and retain, as against any other selector for twelve months, fifty acres of land, he having at the same time no intention of using or improving the land, or of ultimately settling thereon. It is a fact that numbers of persons have applied for and hold frontage, and thereby valuable sections in this manner, for purely speculative purposes; and intending settlers find that in this way valuable and immediately available land is locked up for twelve months by persons who have not any intention to use it. At the expiration of tho twelve months the section becomes vacant, and is probably re-selected under the same circumstances. This is certainly inimical to the best interests of the settlement. It could, I think, bo met in the following manner: —At the time of the selection, the selector should be required to deposit a small sum, to be returned to him whenever improvements evidencing an intention to settle on or utilize the land have been made. It appears also to be understood that the conditions as to the further residence upon the land can in some way be evaded, and that a residence in the settlement itself, though not upon tho section, will be sufficient to entitle the selector to his Crown grant, even though the land may be very slightly or not at all improved. I myself saw one section which was improved to the extent of half an hour's work, the proprietor of which has never resided upon it. I understand that he expects his Crown grant at the expiration of his three years. lam not of course in a position to say whether it is intended to carry out the regulations with absolute strictness or not; but in my opinion the residence clause might, with great advantage, be wiped out altogether, and an improvement clause substituted. It is, I think, the improvement clauses which in the Agricultural Land Regulations on the gold fields have been so valuable in inducing settlement. Ground cannot be improved without labour and the expenditure of capital, which is nearly all that is required. Nearly all the settlers at Jamestown reside in the town, probably for the sake of companionship, preferring this to living on their sections, which they visit by means of boats. It is indeed questionable whether a direct sale of tho land at a moderate price, upon the system of deferred payments, with a strict improvement clause, would not be preferable to the existing regulations, which, without any officer on the spot to administer them, do not appear to be working in a satisfactory manner. One of the greatest aids to the development of the great resources of the Martin's Bay settlement would be the establishment of some permanent industry there, by means of which capital would be introduced, and an impetus given to the whole settlement. This could of course only be attempted by private enterprise; and it will, I have no doubt, before long take the direction of the establishment of saw mills, for which I feel convinced no more favourable localities could be found on the New Zealand coast. Timber of all kinds and of the finest quality is abundant, while there is sufficient water power to turn all the mills in tho Colony. The logs could be floated, by means of the lake to the mills from all parts of the settlement; while the Hollyford River could be used as a drive for tho magnificent forest on its banks. The river from the sea is easily entered by steamers of a moderate draught of water, and the Melbourne market is at hand. The benefit to the settlement by the establishment of such an industry would be incalculable; it would indeed be the key to its success.