25

H.—3

On the banks of the Kawarau, in the neighbourhood of Gibbston, there are nine or ten parti es of miners, sluicing the terraces into the river, which is so rock-bound that the formation and extension of the tail races is quite a formidable undertaking. The average returns I believe to be about £2 10s. per week a man. The Cambrian "Water-race works, which cost nearly £G,OOO, are at a standstill. The shareholders, having exhausted all their means, are raising funds by working in other places before expending more money in cutting up extensive tail races to work the Cambrian ground. The Gentle Annie Creek" is beginning to gain attraction as an auriferous locality, solely through the exertions of an enterprising Welshman, who has succeeded at a cost of£GOO in bringing in a waterrace around some very rough and precipitous country. A special claim of ten acres has been granted to him as a reward for his enterprise, which he richly deserves, as he will give employment to ten or twelve men for years hence upon ground which is now proved to be very payable for sluicing purposes. The Victoria Bridge, which lias been erected across the Kawarau River since my last report, has proved a great boon, not only to the settlers, but also to the travelling public, and has given fresh impetus to mining in its neighbourhood. The merit of the building of this bridge belongs solely to Mr. McCormack, the proprietor, who projected and carried the work out to its final issue. It is a suspension bridge, hung on fourteen four-inch wires on each side of it, and is an ornamental as well as a useful structure. Nearly the whole of the Wakatipu district is supplied with coal from a coalpit on the Kawarau Flat, and this alone would be a sufficient reason for the erection of another bridge like the Victoria across the Kawarau at Morven Perry. News lias just reached me that a quartz reef has been discovered at Deep Creek, Kawarau. Tho specimen that I have seen, it is estimated, would produce at the rate of six ounces to the ton. TJp the Arrow River no rich finds have been discovered during the past year, with the exception of one claim, which has paid as much as £20 a week a man for some time past. A company styled " The Sons of Fortune," is forming a drainage tunnel under the Arrow River, at a cost of probably £2,000, to work some well-known rich ground above the Arrow Falls. The construction of the tunnel will probably occupy eighteen months, but this is believed to be the only method of draining the ground. On the subject of farming, this interest has suffered much on account of the diminution of population owing to the exhaustion of many alluvial workings, and prices having ruled low. The harvest of 1875 has been a good one, although late. Wheat is selling at 35., and oats at 2s. Gd. per bushel. I anticipate a great change for the better in this industry, for the following reasons. The farmers are purchasing their lands from the Government, and, as freeholders, find it worth their while to erect more substantial fences and expend money in cultivation. They appear also to be introducing a proper system of farming, and instead of continual cropping with cereals are adopting a rotation of crops, and combining with this employment the rearing of stock. Another inducement for the farmers is the new outlet for surplus produce by the Winton and Kingston Railway. At Arrowtown there have been great improvements going on since the date of my last report. Roads have been made under tho supervision of a municipality which has been formed during the past year, and buildings have been erected at a cost exceeding £3,000, which has greatly enhanced the value of town property. The district has not suffered much owing to the diminution of population caused by the Palmer rush, as the proprietors of .races and claims have left representatives to protect their property, and themselves intend to return to a country having so many attractions, especially that of a healthy and bracing climate. The commonage rights and privileges, about which there have been so many discussions, have at last been partially settled by the sale of leases of about two-thirds of the waste lands in small runs, each for a term of seven years. The balance of the land, comprising about 90,000 acres, is used by the settlers for depasturing purposes, and a Ranger has been appointed to keep the boundaries and act as License Inspector. The vexed question between tho rights of agriculturists and miners is becoming more harassing each year. Undoubtedly it is very difficult to decide what land is auriferous and what is not. At the same time vast tracts of country are lying useless which could afford employment for thousands of men, to their own advantage and to that of the Treasury chest. The difficulty could be obviated by a short amendment (Gold Fields) Act, abolishing the arbitration system, and providing that leases shall be granted with the right to the soil to a given depth for cultivation only, and that clauses be inserted in the leases providing that when gold is traced within the boundaries of any area, on satisfactory proof thereof, portions of the same, in blocks of not less than five acres at a time, shall be yielded up to the gold mining applicant on payment to the lessee of a sum not exceeding £3 an acre, and refund of rent that the agriculturist has paid to the Crown, the exact sum to be paid as compensation to be decided by the AVarden and four assessors. It having been decided by the District Court that the agriculturist has a right to the land to the centre of the earth downwards, and the cumbersome machinery of arbitration having caused so much delay and expense, has aroused the miners to oppose agricultural settlement wherever there is a possibility of gold being found. The consequence is, the Wardens have no fixed basis on which to decide, and it becomes safer to refuse the leases until legislation provides that the agriculturists- shall have no control over the minerals, and that an uniform price shall be paid, if required, for mining purposes. Then the agriculturist will bo able to calculate whether it is worth his while to fence in and cultivate the land, and opposition will cease. In all decisions he should have a right to remove all improvements, and time be given, if the land is under crops, for them to mature. lam of opinion that in this district the introduction of such a law would cause the almost immediate occupation of about five thousand (5,000) acres under tho Agricultural Lease Regulations. The advantages, both to the Government and the people, by revenue and settlement, would be very great. During the present month, quartz reefs have been discovered near Macetown, at the head of Cardrona Creek, and at Deep Creek, Kawarau Flat, being three distinct localities. The crushing of specimens from the Macetown Reef produced at the rate of 2^ oz. to the ton. From the 4—H. 3.