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country. The large number of direct applications received from Ireland leads me to believe that I can obtain the full proportion of emigrants from that country without the assistance of local agents ; and,, moreover, I think that the selections will be more satisfactorily conducted by employing a special agent whose experience has taught him what class of emigrants the colony really requires, and whose recommendations could be relied on. I shall dispense, also, with all the Agents in England, excepting only a few who, for special reasons, I think it would be well to retain. I believe that, with the assistance of Mr. Berry and Mr. Holloway, and by means of advertising, &c, I shall obtain as many suitable emigrants as will be required from this part of the United Kingdom, and probably also improve their selection. As regards Scotland, I am not at present prepared to make so sweeping a reduction as in England and Ireland, as that country is but thinly inhabited, and there is more difficulty in obtaining its due proportion of suitable emigrants. I shall therefore content myself with reducing the number of Agents in that country to twenty-six. The mode in which I thus propose to deal with the question of local agencies will, I estimate, reduce the expenditure hitherto incurred in that way by at least £1,000 per annum, but it will considerably increase the amount of work to be done at this office. I shall also probably find it necessary to increase the number of the newspapers in which emigration advertisements are inserted. I intended to dispense with Mr. Smith as an officer of the department, and to pay him for his services at so much an emigrant. lam convinced, however, that such an arrangement would be more costly than the present salary paid him. As for not using his services, I cannot bring myself to do so great a wrong to the colony as would be involved irr ceasing to employ orre who discharged his duties so faithfully and ably. The emigrants are immensely indebted for their comfort to Mr. Smith's firm and conscientious action. I have therefore come to the conclusion to remove Mr. Smith and Mr. Shortt, who solely perform emigration duties, from the ordinary staff of the office, and to employ them only as emigration officers, and pay them out of the money provided for emigration purposes. I trust this arrangement will meet with your approbation. I observe with pleasure that you do not grudge expenditure for emigration purposes, as shown by the officers you are sending Home to lecture. I quite concur in thinking that a little extra expense is nothing compared with the value of securing the best class of emigrants, and lam obliged by any assistance you give me in this direction. You will, however, recognize that the comfort of the emigrant on his way out, which he reports to his friends here, largely aids the procuring of other emigrants willing to follow. I consider, therefore, that in Mr. Smith I have the most useful adjunct to the selection of good emigrants. I propose to let two of the rooms of the Agency, and hope by this means to reduce the rent by £80 a year. The changes I am making will reduce the expenditure to about £3,734, as per statement attached, leaving £265 for contingencies. Of course cablegrams to the colony, which are sometimes very costly, cannot come out of this balance. The expense of the Audit officer's room ought to be charged to the Audit Department, and I think, for the purpose, £40 per airnum should be transferred from the AgentGeneral's expenditure. I have slightly increased the salaries of Mr. Shortt, Mr. McKilliam, and Mr. Sison, as per minute enclosed of Mr. Kennaway, which I cordially indorse. I have also increased the salary of Mr. D. Fenn, who acts partly as clerk and partly as messenger, and who, I think, is entitled to this small addition. The staff of the department will now be reduced to very little more than a quarter of what it formerly was. I doubt if the margin left under £4,000 is quite sufficient for contingencies, and I would suggest increasing the vote by £250. I have the honor also to recommend that Mr. Kennaway be designated Assistant Agent-General, instead of Secretary. There is a precedent for this in the South Australian Office, where Mr. Deering holds the appointment lam now suggesting for Mr. Kennaway. I must ask you, as a personal relief to myself, to allow Mr. Kennaway to sign cheques in my absence. During the upwards of two years I have been at Home I have never been absent from London more than three or four days at a time. Had I to be absent for a longer time cheques would have to follow me through the post, a practice I should dread. In making the recommendation to appoint Mr. Kennaway Assistant Agent-General I am assuming, of course, that the title of Agent-General is to be continued. There is, however, I think, much to be said in favour of altering this title, and the status of the Agent-General. The designation is, I believe, borrowed from that which was formerly borne by the representative of the New England States before the declaration of American independence. But it does not do justice to the many responsibilities and the true position of the officer in question. It is open also to much misconstruction, of which, indeed, there is a ludicrous instance on record. The Agent-General of Victoria some years ago ordered the words " Agent-General" to be inscribed on some blinds, in gold letters. Much to his consternation, he found that the artist considered " General Agent" the more correct phrase. It seems to me that the f unctions of Agents-General are eminently representative, and that they should be called Eesident Ministers in England, for their respective colonies. At the same time, I think they should have a defined position amongst the Queen's servants, which at present they have not. They are, in fact, without any rank at all. 1 think, too, that many things which now pass through the Governors of colonies with some risk of disturbing the harmonious relations between the colonies and the mother-country might be dealt with by the Eesident Minister, under direct instructions from the Governor in Council; and so the suspicion of personal government be avoided. Ton will, I hope, acquit me of any personal object in making this recommendation. As an ex-Premier of New Zealand the change would not improve my position, for the colony has no greater honor to bestow 7 than that which is enjoyed by one who is fortunate enough to have held that high positioir. The rank of Eesident Minister should, I thiuk, be the same as that of an ordinary Minister. Ido not think he should necessarily retire with a Government any more than Ambassadors are in the habit of so doing. An Agent-General's position should, in my opinion, be analogous to that of an Ambassador, making allowance for the fact that he is representing a portion of the same Empire. I find, from a conversation I have had with Sir Archibald