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In Government Notification 222 of 1907 the Forestry Licence Rules were published der the New Territories Ordinances. The rule prohibiting sale of timber from Village Licence was afterwards repealed in Government Notification 262 of 1907. As amended they are reprinted in Appendix C.

It is satisfactory to hear from Government Officers whose work takes them to the various- parts of the Territories that a general improvement in the state of the Chinese Pine Plant- ations has been observable during the last few years. This improvement is coincident with the introduction of the Forestry Licence system.

AGRICULTURAL AND OTHER INDUSTRIES.

Cotton. After three years' trials under various conditions and with seeds from different countries it has to be admitted that cotton in this climate is a failure, and I hope it will be the last time that this department is called upon to try to introduce crops of this kind among the Chinese. The ground capable of growing crops is very scarce in the New Territories and is already almost completely occupied with food crops necessary for the villages. It is prob- ably now generally understood that only crops suitable to very poor soil or crops of excep- tionally high value are worth experiment here with a view to introduction into the agriculture of the New Territories.

Sugar. During the last 5 years this department has imported and cultivated several kinds of improved varieties of sugar cane and has distributed them to the farmers in the New Territories. Although they have proved in the few cases of which details could be obtained to yield much superior crops to those usually grown, there has been a curious failure on the part of the Chinese to understand the advantage of substituting them, or perhaps a lack of energy to grasp the opportunity offered. So far as I am aware all the stock issued by this department has been allowed to die out, with the exception of that grown on the Castle Peak Farm.

Camphor.—Attention is being turned in many tropical countries to the possible profits of camphor tree cultivation. Large quantities of seeds have been collected and supplied to British Colonies as well as to foreign merchants during the year.

Castle Peak Estate.-Mr. Kim the manager of this farm tells me that the young fruit trees imported and laid down at various time since the commencement of his business are doing particularly well.

Wood Oil. It was formerly thought that Aleurites cordata was the sole source of Chinese Wood Oil. Mr. HRMSLEY from an examination of the evidence available at Kow arrived at the contrary conclusion that not only was it not cultivated in China, but that it did not occur there at all. It was therefore interesting, as mentioned in my last report. to record its cultivation at Yenping in Fokien Province and another locality can now be added as Mr. KERSHAW has brought specimens from the hills behind the Tin Wa Temple near How Lik, 18 miles above Sam Shui.

Fodder --A quantity of an Australian fodder grass, supposed to have good drought resisting powers was introduced and sown in the Government Nursery at Sookaupo in 1906. It grew well and was tried in February of this year by the Colonial Veterinary Surgeon on bullocks at Kennedy Town. Although a good deal withered the cattle ate it greedily and Mr. GIBSON asked for some plants to try side by side with Guinca Grass the usual winter fodder in use here. Plants were sent and I now have a report that it has grown well though it is not comparable either in bulk or quickness of increase with Guinea Grass. Further trials however will be made.

LIBRARY.

The following periodicals and other works have been purchased:-

Acta Horti Petropolitani, II, VI & VIII.

A Text Book of Fungi. G. Massie.

Botanical Magazine, 1907. Botanisches Centralblatt, 1907.