13. In 1870, with a vote I obtained from the Council, I engaged Mr. Henry Y. Brown as Government Geologist. His geological sketch map and his researches, which he pushed in one instance far into the interior, have been of the greatest value; and it was with much regret that in 1872, owing to the disinclination evinced in the Legislature in the then straitened circumstances of the colony to expend money on a scientific department, that I was obliged to forego my desire of making it a permanent part of the establishment.

14. As Colonel Warburton's journey from the Central South Australian telegraph line to our north-west coast was set on foot and its expenses defrayed by private colonists of South Australia, I only allude to it to acknowledge the obligation that this colony lies under to those public-spirited gentlemen and to the gallant leader and his followers. Parties headed by Mr. Gosse, by Mr. Giles, and by Mr. Ross have all within the last two years penetrated from the eastern colonies to within the boundary of our unexplored territory, but, beyond a certain extension of geographical knowledge, without effecting any material results.

15. Under the head of Survey and Lands Department, it will be proper to glance at the alterations in the Land and Mineral Regulations, which have offered increased inducements and facilities for cultivation and occupation, and which have considerably promoted mining enterprise. Gold Mining Regulations have been also prepared and are ready for issue, should occasion, as is likely, render them requisite. I willingly acknowledge the assistance I have received from Mr. M. Fraser, the Surveyor-General and Commissioner of Crown Lands, who has had much experience in New Zealand, for the services he has rendered in all these matters.

16. The mineral riches of this colony are very great. I have never doubted but that they would ultimately become a main source of its advancement. All the different kinds of auriferous quartz known in other colonies are found abundantly in various parts of this--the question of payable gold is, as I have long since reported, simply a question of time. After many efforts, I at last, in 1873, obtained a vote for prospecting, and the results are most promising, the fact of the existence of rich auriferous quartz being now established. We shall immediately be in a position to crush specimen consignments of quartz by a Government steam-crusher, and I doubt not but that, if followed up, the results will be most important. But gold is not the only nor perhaps the most important of the minerals possessed by West Australia. The colony is extraordinarily rich in lead, silver, copper, iron, plumbago, and many other minerals are found in various localities, and indications of coal and petroleum are not wanting--what IS wanting, is energy and enterprise to develop these riches, and that energy and enterprise is being attracted chiefly from Victoria, first by means of concessions that I was enabled to make, and now by the reports of the new comers to their friends. I made a small concession to a smelting company: and another, and also an iron mining company, is in the field.

17. When on my arrival I turned around me to see what was to be looked for to supply the place of Imperial expenditure, only second to our minerals, our forests attracted my attention. They could not fail to do so, because just before I came there was an outcry for the development of this industry by Government aid. With Lord Granville's assent I made liberal concessions, and thereby induced a pioneer company, shortly followed by others from Victoria, to embark capital in the enterprise. The public ardour here had, however, cooled, and an ignorant cry was raised against foreigners, and the prospects of the trade were systematically decried. Several causes besides this militated against it, but it is surmounting them, and at the present moment not only are the companies largely employing labour and expending money, but their own success is becoming an established fact, and the export is enormously increasing, and with good management must continue to increase indefinitely. Whilst on this subject I may allude to the question of the preservation of our forests, but as I am treating it more fully in a separate despatch I will only say that this and the kindred question of planting ought, at no distant period, to occupy the attention of our Legislature.

18. The pearl shell and pearl fishery may be said to have sprung into existence within the last few years. It employs a fleet of cutters and schooners, chiefly of small size, on the north-west coast, Port Cossack being the head-quarters. At Sharks Bay also there are a number of smaller boats. A licence fee on boats and a tax on shells has been imposed by the Legislature; laws for the protection of aboriginal divers and Malays have been enacted. I shall immediately have a Government cutter on the north-west coast for police and customs purposes, which will also be useful in cases of shipwreck amongst the islands and inlets, and in searching for and reporting the position of reefs, of anchorages, and of new banks of pearl oysters. It will probably hereafter become advisable to let areas for pearling under certain regulations as in Ceylon, but this could not well be done with our present means and knowledge.

19. To turn now to the more settled industries, first in importance is that of agriculture. It is chiefly in the hands of men of little capital, and is carried on in a very slovenly way by the greater part of them. Bad seasons, an over-great reliance on cereals, which have for several successive years been seriously affected by the red rust, and a neglect of other products suitable to the soil and climate, added in too many cases to careless and intemperate habits, have until lately rendered the position of many of the small farmers a very precarious one. Last year, however, was more favourable, and they to a great extent recovered themselves. The lesson of the past has not been altogether lost; they have also been much assisted by the new Land Regulations, and a few prosperous seasons will, I sincerely trust, put this class, which ought to be a mainstay of the colony, into a really prosperous condition.

20. The cultivation of the vine is a profitable pursuit, and the quantity of land fitted for that purpose is very great; both soil and climate are eminently favourable to the growth of the grape. Recent legislation has given some encouragement to wine-growers by facilitating the sale of home-grown pure wine. The quantity of land laid down in vineyards is slightly increased, but the class of settlers that are most numerous in Western Australia do not readily take to industries that are new to them, however profitable they may be, nor can they afford to wait for returns, nor have many of them the knowledge necessary to make good wine: still this industry will become one of the most important in the colony.

21. The pastoral interest is the pioneer interest of a new colony. Western Australia has been somewhat less favoured than some other parts of Australia in its pastoral lands, but it has, nevertheless, a good deal of very good pastoral country, and under the extremely liberal concessions lately offered to those who will devote capital to the eradication of poison plants much more may be made available, whilst fresh country is being largely occupied inland.

The progress, however, of the pastoral interest, considering the age of the colony, though latterly great, is not SO great as might have been expected; the comparatively good prices obtainable and anticipated for meat have kept down the increase of stock, and consequently the yield of wool; and as yet very little or nothing has been done to supplement natural resources by growing artificial grasses and fodder plants. No country presents greater capabilities for horse breeding, and cattle do exceeding well and are very profitable.