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been let by contract, as required by statute. Without entering upon the particular phase of the question of the undue competition which prevails under the contract system, leading often to disastrous results to employers and employed, and a frequent source of expensive litigation, it is desirable here to point out that where moneys advanced by Government are concerned it would in most cases be preferable, on economic grounds, and as being a distinct advantage to the workers, that the co-operative system should be introduced. There could be no difficulty in bringing this about in the case of Government grants, it being sufficient in such cases to stipulate that the controlling authority should carry out the works on this system. In the alternative, the Government could carry out the works in accordance with this principle. With regard, however, to loanmoneys and the ordinary expenditure of local bodies, an amendment of the law would be required. Beferring to the contract system, it has been plainly exemplified locally that, were it not for the protection afforded under " The Contractors' and Workmen's Lien Act, 1892," many an industrious worker would inevitably have been deprived of his earnings. This Act and " The Workmen's Wages Act, 1893," are now fairly understood and appreciated, and it is hoped that any defects perceptible in them will shortly be remedied. I would suggest that printed forms of claims as per the various schedules be supplied to agents, so that they may be readily obtained if required. In farm and agricultural pursuits there has been a steady progressive stride and an increase in products, though it is to be regretted that, owing to the wet weather prevailing at harvest, the grass-seed crop was one of the poorest gathered, and, in consequence, work in this direction was necessarily limited. The large increase in the export of wool this season may be placed as a setoff against other losses. The local freezing-works has kept pace with the increase in flocks and herds, and there can be no question but that this industry has given a great impetus to the settlement of land, and materially helped the progress of this district. The building trade has been unusually brisk throughout the year, which affords some indication of confidence in the present and hopefulness for the future of Poverty Bay. There are yet large areas of Crown and Native lands which should be brought into profitable occupation in the near future. There are also numbers in our midst who are eager to form associations for the purpose of settling upon these lands, and the Government have been approached on the subject, with the result that assurances have been given that small-farm settlements in suitable localities will be established. The promotion of settlement obviously will stimulate the labour-market, and in a great measure help to solve the labour difficulty occasionally arising here and elsewhere. It is hoped that, so far as this portion of the colony is concerned, there will be little delay in placing a large body of old colonists and desirable settlers upon the present waste lands. I have, &c, E. Tregear, Esq., Wellington. H. McKay, Agent.

WELLINGTON. Sm ,— Wellington, Ist May, 1894. During the past year I have had very little to do with the actual work of inspection of factories in the City of Wellington, that part being undertaken by Mr. Shanaghan, from whom you will get a detailed report. My time has been occupied principally in dealing with the labour portion of the department, and in visiting other districts in connection with factory and labour work. I shall divide my report into two portions —viz., labour and factories. Laboue. During the past year the work in the central office has greatly increased, owing to the establishment of new agencies of the department in various places throughout the colony, and the extension of the co-operative system of work. There is also the scheme of the Minister of Lands for settling the people on the land, in which they are assisted by being paid for felling the bush, grassing, &c, the cost being added to the original price. The selection of men for these settlements has been intrusted to this department, and the selections made, as a rule, have turned out well, the men doing their work satisfactorily. Many of them are taking up the land and becoming, I hope, permanent settlers. In Wellington, as will be seen from the tabulated return, the number of men assisted by the department is greatly in excess of any other district in the colony. This, of course, is accounted for by the fact of Wellington being the central port, and also that the majority of the Government works are being carried on in the North Island. We have during the last twelve months had a large number of people arrive from the Australian Colonies, due, I suppose, to the severe depression existing there, also to the cheap fares now ruling. Unfortunately, the majority of the men from the other side are penniless, or nearly so, when they land, and are forced to take to the road at once : hence the numerous complaints about the numbers swagging the country. Last year I had the pleasure to report that nearly all Australians applying to the department for work or information had means, but it is not so now. The reason, to my mind, is obvious; the men who left at the beginning of the depression had money in hand; the others, unwilling to leave, spent all they had in trying to get work before coming here. I trust that, with the advent of the bushfelling season, the present stagnant state of the labour market will be greatly relieved. The bush-burning season in the North Island, particularly in the Wellington Province, has been a good one, many settlers being enabled to clear off the accumulation of years. This will, no doubt, encourage the small struggling settlers to have a larger area of bush felled this season, as it does not pay the small settler to have his land lumbered by standing bush. At time of writing this there is a great stir among certain of the benevolent people in Wellington, Christchurch, and elsewhere, and there is talk of erecting night-shelters, doling out rations, &c. I trust that this will not be gone on with, as it will have a direct tendency to invite a certain class of men whom, I am sorry to say, we have in our colony to come into the towns to participate in the good things going. Also, this system of giving charity without any return has been found to have a degrading tendency, as