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At Seacliff and Hokitika we have been compelled to use the entertainment-halls for dormitories, a state of things which only the direst necessity can excuse, for it cannot be justified. The Asylum Department in this colony has to face a choice of difficulties. On the one hand the public are very exacting in their demands for the proper treatment of the insane, but they are roused to indignant clamour only when some painful occurrence reveals the difficulties which their officers are daily confronted with, and almost despairingly struggle to overcome. In the intervals there is no sustained resolve that their representatives shall provide the means of proper classification and treatment. On the other hand, the Government are straining every nerve to open the country for settlement, with all the necessary expenditure this involves; and it must be admitted that, to expect them to provide out of revenue for modern asylum requirements is very hard. By far the hardest and most unpleasant part of my duty is to induce the Government to give the means to meet the spasmodic demands of the people for rational treatment of those terrible nervous diseases that afflict so many of our fellow-creatures. As things are now in New Zealand, the lack of accommodation makes it impossible for me in nearly all of our asylums even to pretend to a rational classification, which is the indispensable condition to the scientific treatment of mental disease. I have over and over again explained how it is that there seems to be such a large proportion of insane among our population. For 1897 the latest report of the Lunacy Commissioners for England and Wales gives the proportion of 320 for every 1,000 of the population, or lin 313. In New Zealand the proportion per 1,000 is (exclusive of Maoris) 333, or 1 in 300; and, if Maoris are included, 3-16, or lin 316. We must not forget, however, that in New Zealand a very large proportion of old and infirm persons, suffering merely from senile decay, are thrust into our asylums simply because we have not here, as in older countries, infirmaries and similar places where such cases could be taken care of. In England and Wales 11,118 out of the total number of the insane— namely, 99,365 —are maintained in such intermediate institutions. The result is that our asylums are hopelessly cumbered with an accumulation of persons for whom there is no hope of recovery, so that we are quite unable to secure proper classification and rational treatment for our curable patients. One of the many ways in which our lavish distribution of charitable aid through local bodies has degraded and pauperised our people is demonstrated by the constantly-increasing tendency to get rid of aged relatives, who are simply in their dotage and require care and attention, by getting medical certificates that they have delusions, are dirty in their habits, or are unfit to take care of themselves. The Magistrates, when an information is laid regarding such cases, are placed in a very painful position, and so are the doctors. They have to consider the possible consequences when such people are friendless or neglected, and they shrink from the outcry which follows if they decline to certify when such cases can be brought within the legal definition of insanity, and some scandal arises from their not being under proper care and control. Another cause which tends largely to fill our asylums with incurable cases, which swell our admissions and our death rate, is the fact that the whole cost of maintaining the insane comes out of the consolidated revenue; while the sick, and aged, and doting poor are a burden on local rates. There arises, in consequence of this, a determined and an increasingly widespread struggle on the part of hospital officers, guardians of old people's homes and refuges, and Charitable Aid Boards to get persons who are troublesome from senile decay admitted to the public asylums. No officer of the Lunacy Department can interfere until after admission to the asylum, and they find that, once there, they cannot discharge them unless they can hand them over to some responsible body to take care of them. In 1890, when Sir Harry Atkinson was Premier, I made a strenuous effort to induce the Auckland Charitable Aid Board to admit to the Costley Home, then just opened, with plenty accommodation, a number of chronic and harmless persons merely suffering from decaying faculties, and who had been sent to the Asylum because there was no other refuge for them. They were discharged with the hope of relieving the congestion of the Asylum. Thereupon there arose a great outcry from one end of the colony to the other against my inhumanity. The Auckland Charitable Aid Board declined all responsibility. The Government had not the courage to face the storm, and had to compromise the matter by paying the Salvation Army to take care of these poor people. That is an illustration of the struggle which is always going on to relieve local rates at the cost of the asylum vote. The same thing would happen to-day if the Government were to attempt to confine our asylums to their proper functions —namely, the curative treatment of the patients who are curable, and the care of those who could not be managed outside of the asylums. As the law now stands it would be sufficient to remedy this state of things if it were only enforced, for it lays down the principle that 600 cubic feet is the minimum dormitory space for each patient. Yet a reference to the foregoing figures shows that, making allowance for all the space available at present in all our asylums, we have 234 patients in excess of the legal limit. Even when all the works now in hand are ready for occupation, we shall have an excess of 158; and that without making any allowance for the inevitable annual increase, which will be considerably over a hundred. This being the condition of our asylums, it seems hopeless to induce medical men and the friends of patients who are showing symptoms of incipient mental disease to commit them to our care, when even with our present means much could be done in the way of prevention that is impossible without legal control in private houses. No man can exaggerate the terrible consequences to many unfortunate persons of the natural horror of committing dearly loved friends to institutions which are well known to be so overcrowded that their proper treatment cannot be hoped for. The early treatment of the mentally diseased in many cases offers the only chance of restoring sanity. Many for the want of this become hopeless dements for life. Dr. Levinge, in his report on Sunnyside Asylum, calls attention to an aspect of our asylum system and its results which is, perhaps, of all others the most appalling : I mean the undoubted fact that our patients, male and female, who are discharged "relieved" or "recovered" are not, and cannot under the present state of public sentiment, be prevented from propagating insanity to fill our future asylums. I pointed out in my last report to Parliament on our system of