H.—3.

Hydraulic sluicing is the main system of working carried on at all those places, and of course with the greatest success where the greatest supply of water is and the greatest amount of pressure put on, as by iron pipes. On the river there is only one dredge actually at work in this district, and it has been at work steadily for the last five years or more, and has yielded returns at the rate of £4 a week, I am informed, to each of the four men who work on it, during the whole of the time. It is built much after the fashion of the harbour dredges, and is driven by a current wheel. There are two other dredges ou the same plan at present being built, and will shortly be at work : among all the systems that have been tried on the river, this is the only one that has had any permanent success. The quartz workings in the district may still be said to be confined to Bendigo and to Carrick in the Cromwell division ; but within the last few months discoveries have been made on the Old Man Range, immediately above the alluvial workings known as Conroy's, in the Alexandra division, and on Thomson's Creek in the Dunstan Range, Blacks division. Thomson's Creek reef is on the same range as the Bendigo reefs are on, and probably may be a continuation of those reefs across the range. In both instances gold has been found in the stone, but sufficient has not been done to enable an opinion to be pronounced. A great deal of prospecting has been done by different companies on the Bendigo reefs during the year. The only reefs there, however, giving any returns of gold, are the Cromwell Quartz Mining Company and Booney and Co. The yield from those reefs has been equal to 9,000 oz., over two-thirds of which was yielded by the Cromwell Company's reef. There has been a great falling off in the Carrick Range reefs. The Star of the East, the Crown and Cross, and the Young Australia are-the only reefs that can be said to have made any yield this year, and that has only been 3,889 oz. Of the quartz reef companies that have been engaged prospecting during the year, the one that has been most successful is the Eureka Company, Bendigo. They are now in a position to make a fair start, having got out a large quantity of stone and completed their tramway to their machine. Settlement. —Statement op Land taken up during the Yeae. Under Agricultural Lease. District. No. of Leases. Teviot ... ... ... ... 16 ... ... ... 2,000 Clyde 1 640 Blacks ... ' 1 36 Alexandra ... ... ... ... 1 ... ... . 48 Cromwell ... ... ... ... 1 ... ... ... 10 2,724 Under Deferred Payments. Blacks, Teviot, &c. ... ... 13 ... ... ... 1,682 4,406 Land remaining Open foe Selection in Disteict. Land Open. - A^ Uy 5' !„_„„ for Cultivation. Under Agricultural Lease — Acres. Acres. Teviot ... ... ... 4,339 ... ... ... say 2,000 Blacks ... ... ... 3,647 ... ... ... „ 1,000 Alexandra ... ... ... 306 ... ... ... Nil. Clyde .... 13,290 „ 1,000 Cromwell 15,372 „ 3,000 36,954 7,000 Under deferred payments ... ... 4,500 ... ... ... „ 2,500 Total open ... ... 41,454 Total fit for cultivation 9,500 In the Teviot and Blacks districts, settlement has as last year progressed most, and naturally so, in those places possessing the best land. Erom the foregoing figures it will be seen that almost all the available »ood land has been taken up ; and until a more liberal system as regards area is adopted, the inferior ground, I fear, will remain waste lands for a long time. If the present limited area of 200 acres is to remain the maximum that can be taken up by one individual, it will be necessary, now that all the places where there was any extent of good land to be got in a block are exhausted, if people are to be encouraged to settle in this district, to resort to the system of proclaiming small blocks, even as small as 100 acres, open for settlement wherever anything like agricultural land can be got —of course with a due regard to the effect such would have on the depasturing ground. I make this suggestion because although there cannot be said to be much agricultural land in the district, there are numerous isolated patches of from 100 to 500 acres of very fair land, particularly along the banks of the rivers and small creeks and in the gullies, that would be readily taken up. Indeed, I am constantly being applied to for such patches. I myself, however, am much more in favour, iv this district, of the maximum area allowed to be taken up by one individual being very much increased, as stock-growing, not cereals, will be the staple of the district, and by this system it would not be necessary to spot out the eyes of the country. Of course I know that this would be contrary to present legislation, which makes the agricultural qualities of the ground a sine qua non before it can be taken up for settlement. But why should that be ? Why should cultivation be made the iron rule as to whether land is to be settled on or not? But I suppose, uutil the depasturing leases fall in, there is no hope of any change in this direction.