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few years could, however, be leased on short terms for grazing purposes, and they could be resumed for planting as occasion required. In all instances lands it is proposed to reserve for this purpose are of very low farming value ; but, in any case, the production of milling-timber is no less important than the production of farm-produce, and it is an industry which the State alone can in this country engage in to any large extent, as few farmers could be found who woidd be willing to plant a'crop which takes from forty to sixty years to mature, and on which the profit is so small and the risk so great. A start has been made with the proposed scheme of State assistance in tree-planting by farmers, and there are now about 150,000 trees available for this purpose in the different nurseries. This method of encouraging tree-planting has been for some years in operation in Canada, South Africa, and the different Australian States, and lias proved most satisfactory. Owing to the already increased operations of the Forestry Branch, and owing also to the large extension of planting that must occur in order to make provision against the near exhaustion of outnative timbers, it is necessary to make arrangements for an increase in the staff, as was recommended in the report of the Royal Commission on Forestry. Proposals in this direction have recently been formulated and are now awaiting approval. In January, at Wellington, Mr. Phillips Turner (representing the Head Office), Mr. R. G. Robinson (Superintending Nurseryman for the South Island), and Mr. H. A. Ooudie (Superintending Nurseryman for the North Island) met in conference and discussed several matters of a technical and general nature relating to our forestry operations. Their proposals were of a valuable nature ; some have already been adopted, whilst steps are being taken shortly to give effect to others. The exchange of ideas possible by conferences of the chief officers is of advantage to all participating, and it is proposed to hold them annually. As the late Mr. H. j. Matthews's book, " Tree-culture in New Zealand," is now out of print, it has been decided that a book with a similar title be written by members of the present Forestry staff, with the assistance of two or three gentlemen outside the Department for three special subjects. Mr. R. C. Robinson, Superintending Nurseryman for the South Island, went to Europe last year and represented this Dominion at the jubilee of the Royal Scottish Arboricultural Society. On the way there he visited the principal nurseries and plantations in Canada and the United States ; and when in the United Kingdom lie was shown over all the chief tree-plantations and chief nurseries. His inspection of the important European forests was unfortunately curtailed by the outbreak of war ; however, the information gained will be of great value. A full report of his tour is attached as an appendix to the general report. I personally inspected all the plantations and nurseries during the year, and I feel assured that operations are being conducted in an efficient and economical manner. The staff under Messrs. R. G. Robinson (Superintending Nurseryman for the South Island) and If. A. Goudie (Superintending Nurseryman for the North Island) have worked well and zealously, and have shown every desire to advance the interest of the State in its afforestation operations. During Mr. Robinson's absence from the Dominion his work was satisfactorily carried on by Mr. W. T. Morrison. I wish to place on record my satisfaction with and thanks for the assistance, co-operation, and efficiency of the officers and men employed in this important branch of my Department, which reflects also great credit on the Superintending Nurserymen in charge—viz., Mr. Goudie for the North Island and Mr. Robinson for the South Island. In connection with the administration of the branch, Mr. E. Phillips Turner, F.R.G.S., Inspector of Scenic Reserves, and Mr. W. R. Jourdain, Chief Clerk, have lent me loyal and willing assistance. The reports of the Superintending Nurserymen are attached, together with detailed reports from the officers in charge of the different nurseries and plantations. The report on the timber industry in New Zealand is also attached as an appendix, instead of being attached (as was formerly done) to the Report of the Lands Department. On account of my having reached the retiring-age, this will be the last annual report on forestry matters that I shall have the honour of submitting to you for presentation to Parliament, and the carrying-out of these proposals will be left to my successors ; at the same time I feel that I cannot too strongly impress on all concerned the importance of giving greater attention to this subject than has been the case in the past. There is undoubtedly a very pressing demand for railways, roads, and other public works for present use, but it is also incumbent on us to provide for the requirements of the country in the near future, and that an ample supply of timber is amongst the most important of these requirements cannot but be recognized. I have, &c, James Mackenzie, Under-Secretary for Lands. The Right Hon. W. F. Massey, P.C., Commissioner of State Forests.