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"merit in default, is undoubtedly a mistake. As a rule, these people cannot or do not pay the fineß, and consequently go to prison, where they are kept just long enough to get a fresh craving for drink, and on liberation at once indulge too freely and are again consigned to gaol; but these are not criminals in any sense of the word, they are nothing more nor less than individuals suffering from a disease, and should be treated as such, and sent to some establishment where they would receive proper treatment and perhaps cure. But to go back to the argument that the present system is neither deterrent nor reformatory. Let us take the statistics for the last ten years, and we find that in 1886 5,003 persons passed through the prisons of the colony, and of these 2,234 had been previously convicted, while last year 3,392 persons passed through the prisons, and of these only 1,767 had been previously convicted, showing a decrease in the ten years of 1,611 prisoners, with a decrease of 467 in the previously-convicted classes. : It is, of course, an easy matter to condemn not only our present prison system, but also the manner in which it is administered, but I am certainly not prepared to recommend any radical changes, because they have succeeded in some other country, without being first convinced by practical demonstration that our system, which the statistics show works well, can be bettered when all the exceptionally difficult circumstances of this colony are taken into consideration. It is easy to condemn any system and administration, but to devise a better scheme that could be successfully carried out in this colony appears to bo beyond the conception of those who are ever ready to find fault with the existing state of things. No ideal system for the treatment of prisoners to please everybody has yet been invented, and I am quite sure that such a one never will be. 19. It gives me great pleasure to draw attention to Table D, which shows that only one child under the age of ten years has been confined in the gaols of the colony during the past year, as against nine in 1895. This is, of course, one too many, but clearly shows that as regards infants being sent to prisons we are at last waking up to a sense of our duties. In those aged from ton to fifteen years there were 17, as against 53 in the. previous twelve months, while in those aged from fifteen to twenty years there were 257, as against 306 in 1895, showing a total decrease for last year of 93 in those under the age of twenty years. This matter of juvenile offenders and their treatment is one of vital importance to the community generally, and, though every possible precaution has been taken to prevent these juveniles being contaminated by the adult prisoners, it will be freely admitted that children are no proper inmates for gaols, and every time they enter the prison doors and are again discharged so much nearer are they to becoming confirmed criminals, and therefore the decrease during last year, as before stated, is considered more than encouraging. 20. A reference to Table X shows that there has been an increase in the number of prison punishments awarded during the past year—viz., 262, against 222 in 1895. Of these, 239 were minor punishments inflicted by Visiting Justices, while 13 were more serious, or aggravated prison offences, and, after first being investigated by a Visiting Justice, were reheard in open Court. This system of having aggravated prison offences reheard in open Court is working well, and is a source of much relief and satisfaction to the prison officers generally. 21. The number of offences committed by prison officers last year was four, as against eight in 1895, all of which were of a minor nature, and I have every reason to be fully satisfied with the conduct and ability of the gaolers and their subordinates, who, notwithstanding the necessarily long hours and monotony of their duties, as a rule, to a considerable extent, study the temperaments and dispositions of those over whom they are placed, and so, while maintaining strict discipline, establish a mutual confidence which results in a cheerful obedience and good feeling generally between all parties. 22. During the past year the prisoners in Auckland, Wellington, and Dunedin have been employed principally in works connected with the fortifications, and good work has been done. In Auckland fair progress has been made in continuing the building of the new prison, and it is hoped,, at no very distant date, that all the old wooden buildings will have been vacated. At New Plymouth good work has been done in cutting down the banks surrounding the gaol, which, for sanitary reasons, was urgently required. At Nelson good work has been done by the prisoners on the Rocks Road, and a very few months more should see that work completed. At Napier employment has been found in opening up a quarry on the gaol reserve, atid getting out and squaring stone for a new boundary-wall which is much needed. In Wellington, besides the fortification works, bricks, drain-pipes, and tiles have been made for the various Government buildings. At Lyttelton the work has been almost exclusively confined to the reclamation of Sticking Point, and making good damage which had been caused by gales since the work was abandoned some years ago, when the prisoners were removed to Ripa Island for building defence works. At Dunedin, in addition to the fortification works, the prisoners have done good and useful work on the Maori Kaik Road; while in Invercargill they have, as usual, been employed by the Corporation, which pays a fixed rate of wages for their services. 23. As regards new prisons, Auckland is making good progress, and is being entirely built by prison labour. The male wing at Mount Cook is now about completed, and has been fitted with electric light, and it is hoped the male prisoners will soon be moved into it from the Terrace. At Dunedin the new prison to accommodate (each with a separate cell) 50 male and 20 female prisoners is nearing completion. This prison has been built by co-operative labour, and will serve the requirements of the locality probably for some years to come. A gaoler's residence is much required in Dunedin, and should be commenced on part of the site the old prison now stands on as soon as those buildings are vacated. 24. In the month of May last the Lady Superintendent and Prison Evangelist of the World's Woman's Christian Temperance Union and Penal, Charitable, and Reformatory Work, from Providence, United States of America, visited this colony on an extended tour of inspection of the prisons and charitable institutions of the world. While in the colony she visited the larger prisons, and before leaving New Zealand she was pleased to write to me in the following strain ;

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