No. V.—Jan. 28th, 1869.

In my former letters I have dealt principally with the settlement which has taken place in what is generally known as the Castlemaine district, occasionally travelling out it of when a considerable quantity of land occupied under the clause lay near my line of route. The selections already described are without doubt the most important which have taken place, although the recent extension of the operation of the 42nd clause to areas within thirty miles of a gold-field may, in a short time, place them in a very secondary position. The operations of the clause in what may be termed the Ballarat and Ararat districts have, however, been but little less important than these already referred to, and in my future communications I shall give the result of my observations during a tour extending from Ballarat, through Creswick, Smeaton, and Climes, thence across Dowling Forest to Burrumbeet, Beaufort, Ararat, and Pleasant Creek.

Between Ballarat and Creswick Creek the settlements are few and unimportant. On the left-hand side of the main road nearly all the land at all fitted for agricultural pursuits was purchased years ago, and on the right hand most of it is considered auriferous, was mined on during the earlier days of the gold-fields, and in some places is still the scene of mining operations. Even where this is not the case, the soil is generally of the very poorest description, covered with quartz gravel, and anything but eligible for settlement. Notwithstanding this, several small patches, where the ground is not quite so barren, have been taken up and appropriated as homes by persons whose avocations necessitate their residence in the district. These have all been improved; and although the crops, whether of vegetables or grain, are not remarkably luxuriant, and the tenements erected on the land have no great architectural pretensions, still the residents have effected a considerable improvement in their position. They have homes, which they did not possess before, and have exchanged uncomfortable tents for habitations of a more substantial description; whilst the small amount of cultivation already indulged in page 21 materially adds to the support and comfort of family. In the parish of Creswick proper the settlement is also of a very limited character from two causes. A very large portion of the land is occupied for mining purposes, and what is not thus held was either sold by auction some year since or is reserved lest it should hereafter prove auriferous. On some land of this latter description several families are now settled, but are in illegal occupation. It was intended to proceed against them some months ago, but the authorities have exercised a Wise discretion in abstaining at present from any interference with them. The people residing on the land are neither loafers nor dummies, but hard-working miners, who would be only too happy to pay for a licence if they could procure one, and certainly would not grumble at the rent charged to these more fortunately situated. The small patches they have taken up are all cultivated, and comfortable homes are erected upon them. Of course if the land is hereafter required for mining purposes they must give way, but in the mean time there is no occasion to disturb them, and to eject them from the holdings to which, by the peculiar exigencies of the case, they are unable to obtain a legal title, would be little better than an act of unnecessary cruelty. There are some allotments averaging from sixty to eighty acres each, in close proximity to the township, which are held by storekeepers, publicans, and others, on which no improvement has been made, with the exception of the fencing. The land is certainly of an inferior description, and in some places stony. It is ostensibly held for grazing purposes, but the probability appears to be that it was taken up wholly for speculative objects, and with the intention of eventually securing the freehold at a low price. Were this land still open for selection, it would certainly be more profitably occupied, and the attention of the proper authorities should be directed to it, as simply fencing in a section of land, without in any manner utilising it, is certainly not complying with the intention of the clause or the conditions of the lease. The few who, in this locality, have cultivated their allotments, are for the most part doing well, and their crops are better than the average in the neighborhood. At Spring-hill, which adjoins Creswick, nearly all the land has been purchased, and there is no settlement under the clause which requires notice.

Passing from Clunes we come to a fine agricultural district—Smeaton, or what is more generally known as the Smeaton Plains. Here there has been a large area of land taken up, both under the 42nd clause and by virtue of rural store licences issued under the Land Act of 1862. Prior to the passing of the act of 1865 a large quantity of land was taken up under these licences, with the view of acquiring a sort of pre-emptive right to the ground, and by the 27th clause of that act it was provided that where homesteads had been formed on such areas the licensee should, under certain provisions, have the exclusive right of purchasing such allotment within six months after the passing of the act. I believe the whole of the holders of these licences in this district applied to be allowed to purchase the land occupied by them within the specified period, and their improvements were valued with a view to the applications being acceded to. Prior, however, to the sale taking place, the Mining department stepped in, and protested against the land being alienated, on the ground that in all probability it would prove to be highly auriferous. This occurred more than two years ago, and nothing has been done since. The Government decline to sell the land, and the occupiers pay no rent, but continue to hold page 22 and cultivate their several allotments. Of course by this arrangement a considerable revenue is annually lost to the state. As there appears to be a well-founded objection against the sale of at least a considerable portion of the land in question, the best mode of solving the difficulty would be to place all the rural store licensees under the provisions of the 42nd clause, and change the one tenure for the other. By this means no injustice would be done to anyone, and at the same time the national income would be materially benefited, since at the present time there are upwards of two thousand acres divided into fifty-three allotments held in this manner. All of this land has been cleared, fenced-in, is under cultivation, and on twenty-one allotments comfortable, and in a few instances substantial, stone or brick residences have been erected. The total value of the improvements thus effected is estimated at close on £10,000, or an average of something like £4 12s. per acre. About one thousand acres in the parish are held under the 42nd clause, and, like the land just described, improvements of a very satisfactory nature have been carried out on all the holdings. Indeed, this portion of the country presents a highly gratifying appearance. Comfortable homesteads surround the observer on every side, and nothing approaching poverty is to be seen. All the available land has been taken up here, save a few pieces which have been reserved for public purposes. These have recently been applied for, but as the land has acquired an exceptional value, it would be scarcely fair to lease it under the clause. If not required for the objects for which it was at first set apart, it should be offered for public competition, so that the state may obtain the enhanced price which it is sure to realise. A small portion of the land in this district is stony, and has been very expensive to clear, but the soil is generally good, consisting in some places of a light loam, whilst in others it is black with a sandy bottom. As appears to be the general rule this season, the crops are not so good as was anticipated. Oats have yielded fairly, the average being about twenty-five bushels to the acre; but the wheat will not give more than from twelve to fifteen, although in some few cases I heard of as much as thirty being obtained. The wheat on some of the farms in this locality has suffered severely from rust. The grain has a shrivelled appearance, and where thirty bushels were expected, only from seven to ten have been realised. I was told that the Adelaide seed and the Golden Cup were the sorts which suffered most from this cause, whilst the Tuscan was more free from the disease than any other description. Rust has shown itself in this district in places where it was least expected—on good and well drained land, and where one crop of potatoes was all that had been previously taken off it.

In the parish of Campbelltown about 1,500 acres have been taken up under the rural store licenses, and 11,000 under the 42nd section, the combined area being held in the names of 225 persons. The settlement here is not of a very satisfactory character. Joyce's Creek divides the parish into two parts, known respectively as East and West Campbelltown. In the western portion there is far more land held under the clause than in the eastern, but at the same time there is a much greater amount of cultivation in the latter than in the former. The soil in this locality is not of a first-class character, but it is not to this cause alone that the paucity of settlement, as compared with the quantity of land selected in the western portion, is to be attributed, for country of a worse description has been taken up, and is being successfully cultivated. Some allotments here have been taken up by farmers living on their own land, who use page 23 them as grazing-paddocks, and this there is not much objection. The case, howere, is entirely different when some hundreds of acres are surrounded by one fence, although the land is held is in held in different names, and no attempt is made either to cultivate a profitable use. It is alleged that the allotments thus alluded to were taken up by persons in the interest of the Messrs. Anderson, who are the taken up proprietors of some saw-mills in the neighbourhood Messrs. Anderson, by means of transfers, hold a large quantity of and in their own name, and loud complaints are made by the farmers, who state that whilst they are compelled to keep their farms clear of thistles, Caledonia's emblem flourishes most luxuriantly on the allotments thus held in contravention of the provisions of the clause, and the seed is consequently scattered all over the country by every wind that blows. Altogether the settlement in the western portion of this parish is, with few exceptions, a sham; the land has been taken up by dummies, and the sooner it is again thrown open for selection the better. To the cast of Joyce's Creek a very different condition of things is to be observed. Here most of the selections appear to be bonâ fide. In the majority of instances the land has been fenced in, portions are under cultivation, and in some cases the holders are residing on their allotments. Consequent upon the drought, however, the crops are but poor, and inferior to these in the neighbouring parishes of Smeaton and Glengower.

In Glengower, which lies to the west of Campbelltown, about 5,000 acres have been taken up under the rural store licenses and the 42nd clause, but principally under the latter. The soil here is much better than that in Campbelltown, and on some of the bills it is exceedingly good, being of a dark chocolate colour, and formed principally of decomposed basaltic rock. The land in this parish was originally hold by about 100 persons, but by subsequent transfers the number has been greatly reduced, and the holdings have proportionately increased in size. Most of the settlers here appear to be in very comfortable circumstances. They have erected neat residences; and the appearances of the farm-yards, short as the crops have been, indicate anything but poverty and want. Some of the land in this locality is held by farmers who had homesteads prior to the passing of the Amending Land Act, and of course these reside on their own purchased property. In many cases, in order to satisfy the commission who visited the district some time since, these persons erected small wooden shanties at an expense of some £10 or £15 each on the allotments taken up by them under the 42nd clause. These are now tumbling to pieces; but as the ground has in nearly every case been fenced in and cultivated, there is no room for complaint. The land is all profitably occupied, and the district has reaped considerable benefit from the operation of the clause.