A,—3.

32

" Richmond," which was the only vessel in the line from Auckland to Rarotonga and the Society and other eastern islands. The " Richmond " ceased, to run at the end of 1896, and the Union Steam Shipping Company's steamer will therefore be the only one for the present year. Freights and passage-money have been considerably reduced, and are not likely to be raised to anything like former rates. The Union Company will also, it is said, offer increased facilities for sending oranges and other fruit from Rarotonga to the southern ports of New Zealand on their line of traffic. Anything that tends to widen the orange-market will be of great advantage to Rarotonga and the other Cook Islands ; their power of producing oranges of the best quality will always be one of the safest resources. At present many hundreds of thousand rot yearly, in the absence of a sufficiently extensive market. Exports. Table 11. gives in detail the exports for 1896, with those for the previous years. For 1896 the trade with islands beyond the Cook Group shows an increase, the amount of imported merchandise reshipped being £3,889, against £1,792, £1,293, £1,219 for the previous years respectively. The produce received from these islands, and included in the Cook Islands exports, was £1,333 for 1896, against £1,058, £1,729, £1,219 for the three previous years respectively. The export of Cook Island produce shows a considerable decrease, being £15,486 for 1896, against £19,080, £18,936, and £18,758 for the previous years respectively. The decrease, it will be observed, is due to a falling-off in the copra and coffee export of nearly £3,600 as compared with the previous year. This was in consequence of the exceptionally dry season; but the present season is as exceptionally favourable, and promises to do more than make good the deficiency. Oranges and limejuice show a considerable increase, the former owing to the increased facilities for shipment, through the competition of the two steamers, and the latter through an improvement in the price, which stimulated production. These four articles—coffee, copra, oranges, and limejuice—are likely to continue to be the staple products of these islands ; but the increase of coffee will depend largely on the dealing with the lands lying waste. These lands are all owned by Maori chiefs, and occupied by their Native tenants on a very uncertain tenure. Efforts are being made to obtain a more certain tenure, with a fixed rental in money, but the rent has always been paid in services and the tenure at the chief's will. A change is talked of frequently, but so far nothing has been done. The custom is as old as the Maoris themselves, but they are gradually getting accustomed to the new idea. In connection with the exports it will be observed that of the total produce—£l6,B2o—nearly all— £15,297 —went to New Zealand. Tahiti took £1,378, while San Francisco received its first direct shipment of £145. Table 11. will show how steadily the proportion taken by New Zealand has increased during the last four years. Imports. Table 111. gives the imports in detail, showing a total of £23,068, of which there came from New Zealand, £17,153; Tahiti, £3,912; San Francisco, £2,003. In comparing these figures with those for previous years it must be borne in mind that hitherto San Francisco shipments have come via Tahiti, and been included in those from that island. Even taking this into account, the table shows the leading position of New Zealand—a position which, with ordinary attention to the goods shipped, and with reasonable freight, will not easily be disturbed, especially as the market for oranges and other fruit, which form the bulk of export,cargoes, must always be New Zealand. The figures for the last three years are : — 1896. 1895. 1894. Exports to New Zealand ... ... ... 17,153 16,855 13,153 „ Tahiti and San Francisco ... ... 5,915 6,414 9,282 Finance. Tables IV. and V. show the finance of the Federal Government during the last four years. The hospital was opened on the Ist May, 1896, and has since been placed under the control of a Board of Europeans and Maoris, elected yearly, and receiving from the Government the duty of 1 per cent, on imports levied towards its support. Currency. The only legal currency is British coin. None other is received by the Governments, Federal or Local, in payment of duties and dues. In the absence of a bank or other means of maintaining a steady supply of coin, the merchants import only enough to pay duties, and the dollar is still generally used and taken at 2s. The dollar is about twice the size of the English florin, and appeals to the Natives from that cause and from long use. Most of the Natives occupy land, and have produce to sell, and the higher price they receive for that in Chili money compensates to some extent for the higher money price they pay for imported goods, but wages are still at about the same rate as before the Chili dollar fell from 3s. to 2s. The Natives complain of the high prices now charged for imported goods, but are slow to understand the connection between that increased price and the currency in which their purchases are made. Nor are they ready to take a lower price in British coin for their produce than that which is offered to them in Chili dollars by the importer of goods upon which he has charged a high exchange, and can afford to lose a part of that exchange in order to make remittances and avoid loss in sending away the dollars to be sold as bullion. The only places to which the dollar can be exported as coin are the French islands, in the Society and other eastern groups, where it is current in commerce in the same way and in the same terms as in the Cook Islands.