(1.—9,

farming resulting from the policy of Native-land development are contributory factors to a solution of this very vexed problem. The Department encourages the payment of rates wherever possible and, where it handles the funds of scheme-settlers, examines the returns closely with the object of paying rates where that course is justified. ALIENATIONS OF NATIVE LAND. The number of alienations other than to the Crown during the year was 630 and the area affected 60,425 acres, compared with 525 alienations and 49,793 acres respectively last year. Particulars are as follows :—

LEGISLATION. The only legislation passed during the year was the Native Purposes Act, 1937, but it contained, in addition to certain empowering clauses affecting particular matters, some very important policy amendments of the law in relation to Natives and Native land. For example, section 3 of the Act is designed to give greater protection to Natives by preventing what may be called " agency contracts" for the removal of timber, flax, &c., on Native land, from becoming valid without the usual requirements of confirmation by the Native Land Court, while section 4 prevents a person from obtaining and holding a valid mortgage over Native land, without confirmation by the Native Land Court, when the mortgage debt is assigned to him by a State Loan Department upon payment of the amount secured. The Act also amends the law in relation to Native reservations, empowers the revesting of Native townships in the beneficial owners, settles a doubt as to the beneficial ownership of certain Palmerston North reserves, and extends the time for the making of valuations for renewals of leases under the West Coast Settlement Reserves Act, 1892. EXPENDITURE PROM CONSOLIDATED FUND. For the year under review the gross expenditure from Consolidated Fund, vote, " Native," was £188,078, and the recoveries amounted to £32,751. Brief particulars of the net expenditure covering general costs of administration and grants for Native purposes are as follows : — General Administration— £ £ £ Salaries and staff expenses (including travelling) .. 104,096 Office expenses (rent, stationery, postages, &c.) . . 10,372 114,468 v Less recoveries from the Native Trustee, the Maori Land Boards, and the Employment Promotion Fund .. .. .. 32,751 81,717 Purchase of equipment (motor-vehicles, furniture, &c.) .. .. .. 2,630 — 84,347 Grants for Native purposes — Sir James Carroll Memorial .. .. .. 250 Housing Fund for erection of houses where Natives are unable to provide the security required by the Native Housing Act, 1935 .. .. 50,000 Maori Purposes Fund .. .. .. 1,600 Survey liens written off . . . . . . 7,000 Miscellaneous . . . . . . . . 110 58,960 Protection of Native land — Destruction of rabbits .. .. .. 1,650 Clearing noxious weeds . . .. . . 5,000 6,650 Taranaki lands compensation .. .. .. .. .. .5,000 Sundries .. .. .. .. .. .. .. 370 £155,327

4

1936-37. 1937-38. Number.j Area. Number. Area. Acres. Acres. Sales .. .. .. .. 248 14,881 233 10,225 Leases .. .. .. .. 277 34,912 397 50,200 Totals .. . .. 525 49,793 630 60,425 Only \ acre of Native land was purchased by the Crown during the year.