C.—l.

The total revenue exceeds the previous year's by £48,831 7s. lid., which is accounted for principally by the increase under the Land for Settlements Acts. There was a falling-off of £4,435 7s. Bd. in the territorial revenue in consequence of the great diminution in the receipts under the head of " deferred-payment " and "perpetual-lease" tenures. Analysing the revenue as derived from each land district (vide Table 1 of the Auditor's report), it will be observed that there was an increase in all the districts excepting Taranaki and Canterbury, and that the increase was very substantial in the case of Auckland, Hawke's Bay, Wellington, Marlborough, and Otago. Taking the various items of the revenue {vide Table 2 of the Auditor's report), the following were approximately the principal increases under the various headings: — £ Land for Settlements ... ... ... ... ... ... 40,251 State forests ... ... ... ... ... ... ... 12,855 North Island Main Trunk Railway Account ... ... ... 1,535 Native townships ... ... ... ... ... ... 232 Endowments ... ... ... ... ... ... ... 669 On the other hand, the principal decreases were as follows: — Territorial revenue ... ... ... ... ••■ ••• 4,435 Cheviot Estate ... ... ... ... ... ... 830 Government Loans to Local Bodies Account ... ... ... 1,106 Eebate of Bent. —The Commissioners of Crown Lands and the Receivers of Land Revenue in each land district, who jointly decide the amount of rebate to be allowed to Crown tenants, have evidently extended the provisions of the Acts and allowed the tenants reductions in their payments to the extent of £13,604 13s. 4d., which is £4,391 16s. 4d. more than the amount in the previous twelve months. This is partly due to the fact that the number of tenants has increased, and the rentals paid are correspondingly greater. Deposits. —No less a sum than £141,445 4s. lid. was received by way of deposit, being made up principally of deposits on applications for land. Thirds and Fourths. —The local bodies received from the Lands and Survey Department the sum of £32,774 lis. 7d. on account of "thirds" and "fourths," to be expended in providing road access, or improving the same for the benefit of the selectors from whose holdings the amount was derived. No less a sum than £4-2,926 4s. lOd. remains to the credit of the local bodies, only awaiting submission by such authorities to the Land Board of suitable proposals for the expenditure of the amount in the manner prescribed by the Land Act for the advantage of the settlers affected. Instead of there being a decrease of this amount since the end of the previous year, there has been an increase of £1,724, though it might have been expected that advantage would have been taken of the opportunity afforded to assist the settlers in the back country, where, as a rule, the roads remain unfinished, to their great disadvantage and inconvenience. Loans to Local Bodies. —Under the provisions of " The Local Bodies Loans Act, 1901," nineteen blocks of Crown lands, comprising 137,057 acres, valued at £81,857, were loaded with £23,490 to provide the necessary funds for the construction of roads to open up and make these lands accessible. Full particulars relating thereto will be found in Table 45 in the Appendix. The Auditor of Land Revenue was occupied during the greater portion of the year in visiting not only the principal offices of the Department, but also the various branches, in each of which he made a thorough investigation and examination of the accounts, ledgers, and procedure therein, and furnished in each case detailed reports and returns disclosing the results of the tests applied; and lam pleased to be able to report that on the whole the offices and the work were found to be in a satisfactory condition. The Auditor's suggestions were forwarded in due course to the Commissioners of Crown Lands and Receivers of Land Revenue in each district, and have had the effect of removing anomalies and conducing to the better conduct of the business of those branches of the Department. The work of the Auditor's office has necessarily expanded, as the number of tenants, amounts of rentals, and dealings of the Department have multiplied. Arrears (Table 31). The arrears of rent and instalments upon all systems total 766 selections, and £8,611 in amount. This, according to the practice of many years past, is exclusive of the half-year's instalment which accrued on the Ist January, three months before the expiration of the financial year, and the comparison is thus brought into line with the ordinary practice in regard to private lands where the rent is not payable until the end of the term. The following particulars of the arrears for the past four years show that there has been a reduction of the number by nearly one-half as compared with the previous year, and that the iii—C. 1.

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