The several colonies of Icelanders, Swedes, Hungarians and Germans, established in the neighborhood of the main line of the Canadian Pacific Railway and the Manitoba and North-Western Railway are said to have improved both with regard to the number and condition of the resident settlers and extent of their farming operations. With regard to these colonies, it has been urged that it is undesirable to allow separate nationalities to thus form exclusive settlements. The only case in which, in my opinion, this objection would have any weight is where foreigners might congregate in numbers sufficient to enable them to transact business wholly within themselves without assistance from or close communication with the English speaking population. Such a condition of affairs is, I think, under existing circumstances, impossible. At any rate, we find, as a matter of fact, that in the several colonies referred to the people are rapidly learning our language and adopting our usages.

Mormons.

I am informed that about twenty families of Mormons settled during the spring and summer of this year on Lee's Creek, in Township 3, Range 25, west 4th meridian. They are a very industrious, enterprising and apparently well-to-do class of settlers, who seem to be content to submit to the laws of the country, and in nowise disposed to attempt the practice of polygamy. The natural difficulties which the pioneers of this sect in Utah faced boldly and overcame with a splendid success augurs favorably for the benefit likely to result from this settlement in Alberta. Mormons in Utah, so far, at least, as the agriculturists are concerned, learned by experience, more or less severe, how to live within their resources economically, and how to develop from the somewhat uninviting and arid soil of Utah a condition of high cultivation that would be a credit to the best agricultural state in the American Union.

General Condition of the Country.

The crop returns indicate a most bountiful harvest in all parts of Manitoba and the North-West. The only localities in which over limited areas damage was occa sioned by drought or frost, were in the Calgary and Edmonton Districts. Gophers did some damage to grain in the central portion of the Regina District.

The grain crop of Manitoba is estimated at about 22,000,000 of bushels, and that of the Territories at between 3,000,000 and 4,000,000. Throughout the average yield per acre has been in bushels, wheat, 27-7; oats, 46.2; and barley, 36.3.

The number of horses in Manitoba is said to be 29,915; sheep, 12,540; hogs, 35,713; horned cattle, 101,681, Cattle have increased largely in Manitoba and in the settlements upon the North Saskatchewan River, but in the grazing district proper there has been a decrease, due in a minor degree to exportation, but largely to the losses resulting from the severe winter.

The inspector of ranches, Dr. Cox Allan, reports the number of horses and cattle in the grazing district in 1887 to be about 93,000.

Dr. Allan reports that this year there are 5,800 sheep in the Alberta District; the number reported last year was 1,700, showing an increase of 4,100.

The above figures do not include the cattle in the Regina, Coteau, Prince Albert, Battleford and Edmonton Districts.

Water Supply in the Districts of Assiniboia and Alberta.

During the past season two well boring machines have been in operation in the vicinity of Regina and Moose Jaw, but the results, I regret to say, are not wholly satisfactory. In a considerable number of cases in the Regina District water has been secured in satisfactory quantity and quality, but not more than one-half of the borings are successful at either Regina or Moose Jaw. Whether this is due to the inadequate penetrating power of the machine employed or to the natural difficulties of geological formation I cannot say. This matter should be the subject of very careful and exhaustive enquiry, and I shall take the earliest possible opportunity of

looking into it. In the accompanying report of Mr. Superintendent Pearce, it is suggested that in the Alberta District a diamond drill costing about $15,000 might be profitably operated by private enterprise. The first cost is, as he points out, considerable, but the machine is not, I believe, an expensive one to operate. With its assistance there is little doubt but that water could be procured in places where an ordinary boring machine would prove useless. If this is the case and if the work should not at an early date be undertaken by private enterprise, further enquiry and consideration may possibly warrant the Government in employing one or two diamond drills in Assiniboia and Alberta.

Coal.

The Superintendent of Mines reports a satisfactory development in coal mining. The output of the several mines now in operation largely exceeds the quantity imported to this country from the United States, which, until recently, provided our sole source of supply This must be regarded as an important factor in the general improvement this year in the condition of Manitoba and the Territories. The local coal is sold considerably cheaper than the imported article. The settler thus gains the full benefit of this difference in cost, and derives advantage as well from the employment which the mines afford.

Regulations for the Disposal of Dominion Lands in British Columbia.

I had the pleasure of visiting the Pacific Coast with the Deputy Minister last summer, partly for the purpose of looking into certain claims preferred to lands in the vicinity of Port Moody, and also in order that we might, by consultation with Mr. H. B. W. Aikman, Agent of Dominion Lands at New Westminster, and Mr.T. S. Higginson, Crown Timber Agent, and by personal observation and enquiry, gain such information as would enable us to recommend for adoption a set of regulations for the disposal of Dominion Lands within the Railway belt in British Columbia.

A draft set of regulations was afterwards discussed by yourself, your Deputy and the Land Board in Winnipeg, the result being the regulations lately issued under the authority of Sub-section 4, of Section 1, cap. 56 of the Revised Statutes of Canada, which appear to be well adapted for the purpose.

I have the honor to be, Sir,

Your obedient servant,

H. H. SMITH.

Commissioner.

No. 2.

CALGARY, 31st October, 1887.

H. H. SMITH, Esq.,

Commissioner of Dominion Lands,

Winnipeg, Man.

SIR,-I have the honor to transmit through you for the information of the Honorable the Minister of the Interior, my report for the year ending this date on matters appertaining to my office, or which may have come under my notice, and which may be of sufficient interest to justify a perusal thereof.

At the close of last departmental year, at your request, I was in Winnipeg, where I remained attending to matters brought before the Land Board till early in December, when I returned to Calgary, and where I remained some two weeks, in the mean time visiting Banff and other points. I then returned to Winnipeg, remained in your office a few days, when I proceeded to Ottawa.

When in Ottawa it was deemed advisable to utilize my services there till about 1st May, when I returned to Winnipeg, where I remained until about the 19th of that month. I then went to Banff, and thence to Calgary where I met Mr. Burgess, Deputy Minister of the Interior, and with him visited several portions of the ranching districts. Owing to almost unprecedented high water, the ranching area visited was not so extensive as the. Deputy Minister desired, it being impossible to cross many of the streams. I then returned to Calgary, where I remained until the Deputy Minister returned from the coast. I then returned with him and you to Winnipeg, and remained there till the Minister of the Interior started from Winnipeg for the Pacific coast. I accompanied him as far as Calgary, and from there I proceeded to the Lethbridge District and met every settler who was at home in the townships surveyed in that district during the past year. In the latter part of August I met the Minister of the Interior here, and accompanied him to Battleford, and from that point to Winnipeg. I returned to Calgary on the 20th September, and on the following day proceeded to Kamloops, when, with Mr. Aikman, a member of the Land Board, I met the squatters within that portion of the railway belt which might be termed the grazing portion. I accompanied Mr. Aikman to New Westminister, and embraced the opportunity of visiting the St. Alice Hot Springs and Harrison Lake on the shore of which are the said springs. I then returned to Calgary, and a few days subsequently accompanied to Banff Mr. E. A. Nash, who has been recently appointed agent at that point. Afterwards I visited Canmore to personally examine into certain matters connected with the Department at that point.

The foregoing enumerated duties, together with several minor trips and inspections, have kept me fully occupied during the past year.

I have reported through you to the Minister on various matters about which I was instructed to so report, or which came under my observation and were considered worthy of notice.

As to the duties performed by the Land Board, your report will doubtless deal fully therewith.

Establishment of my office and headquarters at Calgary.

Since May, 1884, it has been in contemplation to establish my headquarters here, but it was not till the first of July last that my office here was regularly opened. A good deal of back work had to be put in shape, which, so far, is not fully overtaken.

Grazing and Ranche Matters.

The past winter was the most severe that has been experienced for very many years, and the losses in cattle consequently high, but not nearly so high as in the

ranching country south of the International boundary. As always occurs in such cases, the loss of "pilgrim" stock was particularly heavy, especially in the case of domestic as distinguished from range cattle. Such winters have occurred occasionally in the past, and no doubt will be again experienced. It is particularly unfortunate for those (as was the case last winter with a very large percentage of the whole) in the Canadian North-West who had brought in their stock during the preceding summer. Even such winters as the last may be successfully met if the following conditions could be carried out:-1st, that the stock should be familiar with the range; 2nd, that the calves should all, or nearly all, come between, say 15th April and 15th September; and that sufficient fodder could be put up to feed the weak stock, cows, and calves under one year of age, these to be kept so that they can be looked closely after and fed when necessary. Steers, and heifers not in calf, and all over one year of age, passed through even last winter without at all serious loss. The past season has witnessed the exportation of live cattle direct from the ranches here to England, vid the Canadian Pacific Railway to Montreal and from there to their destination by ocean steamers. These shipments have proved satisfactory to those who undertook them. It is reported that after paying all expenses the cattle have realized about $45 per head. Some of the cattle were slaughtered in Montreal, and were, as regards quality, an agreeable revelation to the purchasers. The time seems opportune for the commencement in this country of beef-packing establishments, similar to those of Chicago, Kansas City, St. Paul, and other cities of the United States. These establishments have contributed very largely to the success of the cattle industry. The facilities granted by the Canadian Pacific Railway Company for the profitable carrying on of such shipment have been, it is stated, all that could be desired.

Tanning Establishments.

The attention of capitalists might wel! be directed to the prospect of tanning being conducted with large profits at some point along the line of the Canadian Pacific Railway. In the Selkirk range of the Rocky Mountains any amount of hemlock bark should be cheaply procurable in proximity to the road, and any number of water powers could readily and cheaply be rendered available for bark-grinding mills. It is stated the practice now is to ship the portions of the bark valuable for tanning purposes in a pulverized state, pressed into bales. There are now available annually at, say Calgary, at least 10,000 cow hides and 3,000 sheep skins. This supply would be doubled in probably a couple of years, from the fact that once there was a fair market for hides every available one would be brought to market; at present cattle that die natural deaths are seldom skinned. In proportion to the population probably three times more leather is consumed here than in the eastern part of Canada. Harness, saddles and leather leggings add extensively to the consumption.

Sheep.

Sheep have, where ordinary care was exercised, proved very successful; the losses that have been at all heavy have been the result largely of smothering, keeping too many in a flock and stud room limited. The sheep are now being keep in bands of 1,000 to 1,200; formerly there were double that number herded together. It is to be anticipated that in the very near future factories for the manufacture of the wool of the district will be established throughout the country. There are any number of locations where good water-power is available, shipping facilities good, and land at nominal prices sufficient for the employés, so that each may have his "garden patch"; "fuel is now very cheap, and building reasonably so, and it will soon be as low as at almost any other point in Canada. Within a year or two at least 200,000 pounds of wool should be available at Calgary.

Horses.

Nature has fitted the grazing portions of our North-West most lavishly in all the essentials for raising cheaply a most excellent class of horses. Water and pas

turage are abundant, and the topography of the country is such that, if properly bred, horses should have good langs, size and muscular development, and in every respect should be very healthy. There has heretofore been absolutely no loss in horses pasturing out during the winter. During the present year a very large number of good mares and stallions have been brought in, the greater portion of the stallions and very many mares from Great Britain. The horsemen seem to begin at last to realize that the day of the Cayuse is rapidly drawing to a close, if it has not already done so. The Cayuse was at one time admirably fitted to meet the wants of the country. To carry on horse-breeding successfully enclosures are necessary; each class of breeding mares and stallions must be kept by itself. When the colt is one year of age he can with safety be permitted to roam with the band, the dam being handled continuously, and the colt until a year old, and during that time he probably could profitably be better broken, and while running at large being visited frequently he will not be timid of the approach of or handling by men; the result will be he may be readily and thoroughly broken, not as at present. The large number permanently injured under the present process will be saved, and the result will undoubtedly prove very much more profitable than if the business were conducted as it has been in the past.

This means either the conducting of this business, if on a large scale, by one corporation or individual, the employment of a large amount of capital and a very considerable number of men, or a very large number of small breeders-men owning from 50 to 100 mares.

The provision enabling small leases of about 2,500 acres to be granted to actual settlers in the vicinity of their homesteads has already done much towards the starting of small bands, and will certainly for the future continue to do so in an increasing ratio.

The very severe character of last winter decreased the number of stock in the ranching country south of the International boundary to a very great extent, probably at least 50 per cent.; in some places it was even higher. From that cause many of the men now in the business became alarmed, and rushed every available hoof at all fit either for beef or feeding, to the eastern markets; consequently, districts that were overstocked last year are not fully stocked this year. The result is that the number of cattle anticipated have not been imported. No doubt a great many would have come in had it not been for the strict quarantine regulations that it had been considered advisable to impose; but favorable seasons will again so stock up the ranges that every acre of the Canadian North West will be in demand.

Dairying.

There are now a few small butter making establishments in the neighborhood of Calgary. Perhaps at no place in the world could dairying be conducted with more pront than along the eastern foot-hills of the Rocky Mountains between the International boundary and, say, the Red Deer River. Water is in abundance; at no point would cattle have to walk such distances to water as would fatigue them; these waters are gravelly-bottom, the purest creeks, rivers and springs; no miring in mud; pasturage in profusion, which, for producing the richest and sweetest milk cannot be excelled anywhere and is rarely equalled; no noxious weeds to impair the taste of the milk. There is scarcely a day during the summer season that there is not breeze enough to prevent flies from tormenting the cattle; the night is invariably cool enough to prevent trouble from this source. The conditions of climate for the manufacture and canning of butter and cheese are all that could be desired. A good article of butter and cheese will bear the cost of transport from here to points where the best markets are available.

Poultry and Eggs.

In connection with dairying, the establishment of henneries could no doubt be profitably conducted to furnish poultry and eggs. Inquiry on the Pacific coast