I.—The Past.

The date of our first important gold discovery was 1861. I shall not enter into details. Everyone knows about Gabriels Gully, the rushes, the enormous cost of carriage, the flood of "new iniquity" which almost swamped the "old identities." Suffice it to say that within four years, no less than £7,000,000 worth of gold passed through the Dunedin Custom-house. The highest export was in 1863, when it reached £2,380,000. A year later followed the exodus to the West Coast, and since then the returns have fallen year by year till they reached about £320,000, at which or thereabouts they have staved for several years. I have marked on the large map before you about 70 places from which this gold has been obtained, and several rivers of which the Shotover, Kawarau, and Clutha are the principal, and along the course of which gold has been found in large quantities. Of course there are hundreds of places where small returns have been obtained, but I am giving you a bird's-eye view of the chief-known source of supply. You will see how large an area they cover, and how widely distributed throughout the Province are these mines of wealth, Roughly speaking, to say nothing of our unexplored western ranges, page 7 the area embraced is 150 miles by 100 miles—equal to 15,000 sqare miles, two-thirds of which at least may be said in one sense or another to be auriferous; or, 10,000 square miles, including mountains with quartz reefs, mountain tops with alluvial deposits, terrace formations, the margins of old lakes and rivers at various elevations, modern river beds, deep leads yet to be disclosed, and auriferous beaches, extending for miles along our sea-coast. When we consider that we have gold at all elevations downwards from 6000ft. at Mt Pisa and 4000ft. at Mt. Criffel and Mt. Burster, to the level of the sea, and in many cases successive layers at different depths over the some area, some faint idea will be gained as to what the past has revealed in respect to our auriferous resources. From first to last we have produced in Otago and Southland £18,000,000 worth of gold out of £44,000,000 produced by the whole Colony. Now, we may naturally suppose that a country which has produced so much contains still more, only we are confronted with the fact that we are now producing less than one-eighth of what we produced in the second year of the discovery. No more Gabriel's Gullies have come to light, and no quartz mines like the Cromwell Mine, which from first to last turned out £350,000 worth of gold. Most investors have suffered more or less, and out of 3900 allurial mines in the province, 1460 are Chinese, so that one is inclined to ask with Bret Harte, "Is the Caucasian played out?" I think not. I think the Celestial has taught us many a useful lesson of patient labour and combined effort, but it is still for the Caucasian to lead the way. I shall here briefly summarise the lessons of the past, and endeavour to answer the question, Why are we not finding gold in such large quantities as in the early days of the diggings? 1st. The gold then found was on the surface and easily obtainable in large quantities. 2nd. The rush to the West Coast took away a large portion of our best miners. 3rd. Wrong nations have been entertained as to where the gold is to be looked forth. Many misapplications of labour without skill have resulted in failure—i. e., water races at too low a level; quartzmining of unskilful and haphazard character. 5th. The share-jobbing mania, attended by bogus schemes and consequent losses of capital. 6th. The difficulty of rasing sufficient capital for really legitimate enterprise. 7th. The want of efficient machinery, with respect to which we are at the experimental stage. 8th. The raising of English capital on most disadvantageous terms. ^* Now, it is the experience on all alluvial goldfields that often the precious metal lying on or close to the surface has for some time been picked up in large quantities, a reaction takes place as soon as such easy methods of getting rich are exhausted. I do not say, for I do not believe, that no such surface deposits still exist. It is as likely as not that other Gabriel's Gullies are somewhere concealed among our mountain ranges; but such finds are only hit upon by accident, and we any dismiss them from our calculations as uncertain quantities. But page 8 that there is far more gold "over our heads" (as Mr. Pyke well put it) and also under our feet, than we have yet got, I am very confident The period of "rushes" is, I hope, over, for these are always attended by severe reactions. We are entering on the scientific stage of gold mining, and that will last.

Vita brevis, Ars longa.

I will now endeavour to answer my second question—