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£38,516 required by the Act, and souls residing were 226. As stated in my remarks under " Lands disposed of," not so much eagerness is evinced towards making these holdings freehold when the opportunity occurs, which may be attributed to the fact that tenants who have not the requisite cash to enable them to acquire the freehold recognise the wisdom of paying 5 per cent, to the Crown in preference to a much higher rate to money-lenders, whilst those possessing the necessary capital can easily find an investment that would allow a fair margin of profit as between the rental paid to the Government and the interest earned by such investment. Lease in Perpetuity. —Six fresh selections only under this tenure have obtained during the year. There were two forfeitures, two surrenders, and one exchange, and the area now held by 202 tenants is 103,616 acres, for which an annual rental of £3,606 is payable. Value of improvements required was £28,291, whilst the value of those effected was £73,877, and souls residing were 171. Small Grazing-runs remain as at last year, 248,938 acres being held by eighty-five tenants, who pay an annual rental of £2,775; and of twelve leases expiring in February, 1908, eleven have been offered to existing lessees for a further term at increased rentals, and the twelfth is to be subdivided and offered as two runs. Pastoral Runs. —There are 117,713 acres held by seventeen settlers, representing an annual rental of £777. Four new selections were made during the year, included in which was a time-expired lease reselected by the original holder, whilst two (inclusive of the foregoing) were surrendered. Inspections and Rangers' Reports. One Ranger visited 567 properties, with an area of 241,051 acres, on which he found 1,870 souls residing. The value of improvements required was £78,086, as against £199,539 actually effected. 21,504 acres of the total area visited was felled, 26,234 acres was grassed, and 8,442 acres in crop; whilst 452 buildings were erected thereon, of a value of £20,521. Out of a total of 567 tenants, 104 were defaulters—for non-residence, 57 ; for improvements, 39 ; and other causes, B—due in some instances to want of schools or to insufficient means of access, although in this latter respect there is a marked improvement since last year. The other Ranger reports that he visited 180 properties in the Poverty Bay district, with an area of 161,553 acres, and found that 470 souls resided, and that improvements to the value of £174,959 had been effected, as against £54,440 actually required. Area felled on holdings visited was 64,000 acres ; grassed, 69,000 acres ; and in crop, 257 acres. Buildings erected were 221, of a value of £22,604. Position and Peogress of Settlement. The high standard of settlement obtaining in this district has been well maintained during the year, and the predictions of my predecessor as to its well-being and prosperity fully justified. Settlement has proceeded apace, increasing steadily, and for lands which have been thrown open for selection there has been keen competition—in all cases a good class of settler being obtained. Especially is this so in the case of the Mangatahi Settlement, of 12,272 acres, opened for selection on the sth February last. The Land Board was most careful in examining applicants, and, in the endeavour to secure the best class of settler, rejected no less than twenty of the 151 who applied for the twenty-two allotments. On every hand there are unmistakable indications of satisfactory settlement, and the Rangers' reports disclose further progress. Total improvements effected on all lands are valued at £199,539, and those required at £78,086. Stock carried stands at —horses, 3,714 ; sheep, 379,550 ; cattle, 17,686 ; and pigs, 1,394 : being an increase of 67,586 as compared with last period. The results of the year, both from the farmers' and pastoralists' points of view, have been excellent, prices all round being well sustained, and this Department, in consequence, experiencing little or no trouble in collecting rents and enforcing the requirements of the Acts. With the splendid climatic conditions which obtain here, landholders can hardly avoid prosperity, and one is, therefore, with the present hopeful outlook, quite safe in predicting another successful year. Rebate of Rent. Four hundred and seventy-six tenants, holding an area of 221,358 acres, have benefited to the extent of £997 under " The Crown Tenants' Rent Rebate Act, 1900 " ; and under " The Land for Settlements Consolidation Act, 1900," 389 tenants, holding an area of 214,017 acres, were granted rebates amounting to £3,561. These figures are considerably in excess of last year's totals. Number of Tenants, and Arrears. Last year's numbers have been further added to, and now 1,361 tenants hold 830,565 acres, for which £61,720 is payable annually, or an average of £45 3s. per tenant per annum. Nineteen tenants are in arrear to the amount of £254, being thirteen under Land for Settlements Acts, owing £240, and six ordinary, owing £14. When it is remembered that arrears for the past two years were £2,102 and £1,044 respectively, it will be seen that this constitutes a record for the district. Forfeitures and Surrenders. There were ten forfeitures for non-compliance with conditions, five being again selected and four not yet reoffered. Six surrenders were accepted —two for subdivision, and four unable to carry on. Five of these are again occupied, and one not yet reoffered. Lands to be opened. The area available for selection, and part of which will be dealt with during the coming year, totals 140,128 acres ; 109,635 acres being in the Cook and Waiapu Counties, under the optional and grazing-

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