A.—3a

10

of liquor imported by Europeans and delivered to them in Rarotonga for the twelve months ending the 31st March last was 268 gallons of spirits, 282 gallons of wine, and 298 gallons of beer. Assuming that the population is 126, that would give an average per head for Europeans and half-castes living as Europeans- of 228 gallons per head of spirits, 223 of wine, and 236 of beer. There were also supplied on doctor's certificate 283 gallons of spirits, 149 of wine, and 92 of beer and stout. In my opinion this is an extravagant amount for the European population of the Islands, and the amount given for medicine is also large. The Europeans, I am afraid, must have given some of it to the Natives; but what is of more importance is the amount of intoxicating liquors made from bananas, oranges, and other fruits. This manufacture of alcohol seems to be very prevalent in the bush districts, and also in some of the villages, and it is having a very injurious effect on the Natives. Mr. Reynolds complains that the Commissioner was not insistent on the stopping of this bush-beer-making in the Islands. It is doubtful if there is a sufficient force of police in the Islands to put it down. The suggestion has also been made that the Native police were not very zealous in putting it down. I was told that some of the Natives argue that if Europeans can get their liquor, why should they be prevented from getting theirs? The amount given on doctor's certificate is large considering the modern attitude of doctors towards alcohol in cases of sickness I may give an illustration, of what takes place in London hospitals. The cost of alcohol used in the Board hospitals in London was, in 1894, for 19,937 under treatment, £1,388; in 1909, with 27,570 under treatment, the cost was only £251. That shows how even in fever cases the supply of alcohol has fallen. Illustrations might be given from other hospitals. In the Salisbury Infirmary the cost has fallen from £302 in 1865 to £18 in 1905. Dr. Perceval was not responsible for these figures I have quoted, as his duties did not commence till nearly the end of the period referred to. From what I could gather from many white residents, a large number —I was told perhaps 80 or 90 per cent, of the white residents —are in favour of alcohol being prohibited absolutely from coming into the Islands. I believe that is the only remedy. If that were carried out, alcohol only being received as a medicine and dispensed as a medicine by the doctor, the brewing of bush-beer could be more easily put a stop to. Efforts should be made to try and create public opinion amongst the Natives against the use of alcohol, and from what I heard this could, I believe, easily bo done. Many of the Natives that addressed me urged that some steps should be taken to promote total abstinence. I am also of opinion that there will have to be more strenuous efforts made to put down what is termed "bush-beer drinking." It is true that no law can be enforced if it is against public opinion, but I believe that the Local Council and the Arikis are desirous that something should be done, and if their influence is thrown into the scale for temperance the police would find it more easy to get the existing statute strictly enforced. H. Education. Hitherto the education of the children has not been considered a duty of the Administration. Schools have been maintained by the London Missionary Society, and there is one school maintained at Avarua by the Nuns of St. Joseph. Good work has been done both by the London Missionary Society and by the nuns. I am of opinion, however, that the time has come when education must be looked upon as a matter of State. So far as the London Missionary Society is concerned, I understand they are quite agreeable to come to an arrangement to give up their buildings —both their buildings at Tereora and also at the villages—for public schools. The Tereora school has been a boarding-school both for boys and girls. It is well situated and has a suitable area of land, and I forward herewith a photograph and plan of the land. The land was originally given by the Natives for public-school purposes, and T understand it is held on lease by the London Missionary Society from the owners. The society has gone to considerable expense in the erection of buildings, and I understand they are willing to hand them over on reasonable conditions. I strongly advise that this offer should be accepted. The necessity of having such a school is great, and a school is also needed in each of the villages, Ngatangiia, Arorangi, and Avarua. The Tereora school could be used as a training-school for Native teachers. In my opinion it is necessary that some of the brighter boys and girls should be trained to become teachers or assistant teachers in the schools in the various islands, and perhaps bright pupils might be taken from some of the other islands and boarded at Tereora, and trained as teachers for their native islands. The education that is necessary is not a mere literary education. Tn my opinion it would be wise that not more than two or three hours a day should be spent in literary education, and that the rest of the school day should be spent in traininjr children to work—(l) training them to become gardeners, and to understand the planting, growing, and reaping of fruit-trees; (2) the necessary technical trades that are suitable for the