There is another class of cases to which I think any remedial legislation of the character above referred to should be made to apply. I allude to the titles obtained by Mennonites by virtue of their performance of special homestead conditions which, so far as I can see, are not provided for in the Act. It has been the practice of the Department to issue patents to Mennonites, notwithstanding the fact that they have neither resided upon nor, in many cases, cultivated their homesteads. Section 32, 46 Vic., cap. 17, provides that homestead settlers embracing not less than 20 families may, with a view to "greater convenience in the establishment of schools and churches, and to the attachment of social advantages of a like character," be permitted to settle together in a hamlet or village.

This clause of the Act does not however relieve the settlers from the obligation of cultivating their respective homesteads, nor does it allow them to convey or to agree to convey their lands. You are aware that in cases referred to, patents have been granted, notwithstanding the fact that homesteaders have failed to cultivate any part of their lands, and have also mortgaged them to the Waterloo Society (and to companies ard individuals for the purpose of paying off the Waterloo Society). This has been done with the knowledge and concurrence of your Department and is fully justified, equitably, by the special governing circumstances. The titles however which have been granted appear to be bad in some cases, and to require and deserve confirmation by Parliament.

Of course a Mennonite in order to obtain a patent must furnish evidence that he has resided in a village and has cultivated land appurtenant thereto; but the Act, as it now stands, requires him to cultivate his own land.

The provisions of the law prohibiting conveyances of land before the homesteader obtains recommendation for patent is, I think, simply intended to ensure fulfilment of the conditions as to residence and cultivation which are properly regarded as, and are according to the statute, the essential acts to be performed in making title. If, notwithstanding the fact that the settler has conveyed his land in contravention of this provision of the law, he has nevertheless performed the requisite residence and cultivation, I cannot see that the public interest will be injuriouly affected by legalizing the titles in question.

General Conditions of the Country.

Crops during the past year have been damaged considerably by frost in Manitoba, but in the Territories have escaped damage from this cause except in a few localities. The high price of wheat ruling this year bas, I am glad to say, minimized the evil caused by a partial loss of crop in Manitoba. Even without the abnormal increase in the value of wheat, I am satisfied that the settlers would not have suffered very severely from the diminished crop; they do not now depend so much as formerly on the production of cereals. Both in Manitoba and the North West more attention has been given of late years to the raising of cattle, hogs, and sheep, with extremely favorable results. A loss of the wheat crop is therefore not so serious as it would be if cattle raising were not so much in vogue. A farmer to-day, even if the frost affects his grain and destroys its value for milling purposes, is not very seriously out of pocket so long as the grain is good enough to feed his hogs and cattle.

Speaking of the portions of Manitoba and the North-West Territories traversed by the Canadian Pacific Railway, I am happy to be able to report that the settlers in the past year have made excellent progress. With regard, however, to the settlements bordering on the North Saskatchewan River, I regret that notwithstanding a most. bountiful crop they are reported to be not so prosperous as we could wish for. The absence of railways and the consequent impossibility of bringing their grain to market, takes away the value of cereal products that under more favorable conditions would yield a considerable profit.

The Ranching District.

According to the reports of Dr. Allen, Inspector of Ranches, and of Mr. Wm. Pearce, Superintendent of Mines, the cattle industry in Alberta has, during the past

year, been very successful. There is, however, some little conflict between lessees of grazing tracts and settlers who desire homestead entry upon lands which are under lease. I refer to the old leases which prohibit settlement. It is in my opinion desirable that an official of the Department should make a careful examination of all lands embraced in the old leases with a view to reporting to you what leases it is in the interest of settlement and of the general good necessary to cancel after notice as the statute provides. This matter should, I think, be attended to as early as possible.

Excellent effect has so far resulted and is likely to be of permanent and increasing advantage from the reservation of land in the grazing district, bordering on the the rivers, which upon the recommendation of Mr. Pearce have been withheld from sale or settlement with the object of affording shelter to the cattle and access to the water. These reservations are made by the authority of section 30, 46 Vic., chap. 17, which provides for the reservation from homestead entry of lands ordinarily available for that purpose if in your opinion it is desirable in the public interest not to entertain any application therefor.

The Land Grant in aid of the University of Manitoba, provided by 48-49 Vic., Chapter 50, section 2.

I have ordered the temporary reservation of about 250,000 acres of land in the Province, from which, in pursuance of the statute in that behalf, I propose to select the 150,000 to which the university is entitled. I shall endeavor to restrict the grant to not more than two sections in any one township, as it is in my opinion highly desirable in the common interest that an exclusive grant of lands in any locality should be so restricted; if this were not done the settlement of the Province might be seriously retarded.

Repayment of Seed Grain.

In my annual report for last year I drew your attention to the fact that in forwarding seed grain for settlers in Assiniboia and on the north branch of the Saskatchewan River we had expended in all $108,000. On the 30th October last the books of my office showed that in the proceeds of grain returned and in cash received we had thus far recovered $.0,714.03, also having on hand at Prince Albert at the present time about 5 000 bushels of oats and barley. The terms of repayment entitled the borrowers to return an equal quantity of seed grain over the market price. At the time this arrangement was made the prices were fixed at respectively 50, 25 and 35 cents per bushel for wheat, oats and barley (excepting in the Saskatchewan district) being the then market price. The price of wheat has since advanced, and I have lately issued a circular to all persons who have not as yet made repayment giving them notice that unless the amounts due are paid by the 1st January next, payment after that date will be collected with interest added at the price ruling at the time the payment is actually made. I hope that this notice will have the desired effect. The price of wheat has increased so much, as compared with former years, that I trust our settlers are in a fairly satisfactory condition financially, and for the most part able to discharge their obligations.

Well Boring.

The result of the operations with our well boring machines, which are now in use in the district of Assiniboia, has been tolerably satisfactory. There is however some misunderstanding apparently as to the intention of the Government in introducing these machines. The impression seems to prevail very generally that the Government has undertaken to provide wells in cases of all settlers who are unable to procure water by digging in the ordinary way, and complaint is occasionally made that settlers are unable to obtain the use of our machines. This impression is of course erroneous. The intention of the Government was simply to demonstrate by the purchase and operation of the well borers that water could be obtained by their assistance where ordinary means had failed. This would not have been

attempted had it not been that at the time, owing to loss of crops, the settlers in the North-West were in a depressed state financially and unable to help themselves, not possessing either at that time the municipal organization under which the desired relief might have been provided without pressing too heavily on individuals. These machines have lately been offered to the Government of the North-West Territories, who have accepted the management and disposal of them for the future.

The Revenue from Dominion Lands.

The annexed report of the Inspector of Agencies shows that the revenue from all sources of the Dominion Lands Agente exceeds by about $150,000 the receipts for the year ending 31st October, 1887.

The expenditure for last year was $46,071.52, this year it is $49, 345.61, being an increase of only $3,274.09. This is a very satisfactory result, and does not include revenue from timber, grazing lands and other sources not under the immediate supervision of the local agents.

Pre-emptions.

I drew attention in my report of last year to the steps that had been taken to cancel the existing entries for pre-emptions which were not held by resident settlers, and to render them available for settlement under sub-clause 5, section 38, cap. 54, Revised Statutes. The intention was not to deprive any resident settler of land that in consequence of bad crops or inability resulting from any other cause he is really unable to pay for. It became known to me, however, that in many cases pre-emption lands stood entered in the books of the various agencies of the Dominion Lands, in the names of persons who were not residing upon their homesteads and who apparently had no intention of making the payments required to entitle them to patents.

In a very few cases, possibly in none where a settler has represented himself as being in residence upon his land and unable to meet his payment, have I ordered summary cancellation of the entry. The circular which was issued to all holders of pre-emption entries in default stated that an extension of time might be had on application to me; and in many instances where the entries of persons in that situation have been cancelled in conseqsence of the facts of the case not having been brought to my knowledge, I have, upon application and a proper representation of the facts, ordered that his entry should be restored, and that the party should be allowed an extension of time within which to pay the principal amount due, or the accrued interest, and interest in advance for such further period not exceeding one year within which he might reasonably expect to pay some proportion of the parchase money. My intention in these cases was that payment by all resident settlers who desired to hold their pre-emptions, might be deferred at least until this year's crop had been marketed.

The effect of this action has been to render available as homesteads a very large number of pre emptions which for a considerable period of time have remained unoccupied and in every sense unproductive. They were of no use to persons who held them, and in consequence of non-cccupation were a positive detriment to the localities in which they were situated.

The policy to be adopted hereafter in respect of pre-emption lands which have not been paid for as the law requires, deserves very serious consideration. The Dominion Lands Act provides in most explicit terms that unless payment is made within the proper time the entry shall be forfeited.

If we continue to defer the actual cancellation of the entries which at law are forfeited, and grant extensions of time without collecting at least the statutory interest on the amount of the purchase money, we shall inevitably incur this danger, interest will accumulate until it amounts to a considerable sum; in the interval the holder of the entry remains in enjoyment of exclusive rights of ownership as to the land; he may possibly make large improvements, and in course of time his occupation and improvements may be of such a character as to render it difficult for the Depart

ment to cancel the entry without making it appear, to the settler at least, that he is being harshly treated. Delay in the matter of the collection of pre-emption payments appears to be undesirable unless the settler who holds the land evinces good faith by keeping the interest on the purchase money fully paid up.

Land Sales by Railway and Land Companies.

I find upon enquiry into the matter, that the sales for the past year of the several land and railway companies operating in Manitoba and the North-West Territories amount to altogether 236,300 acres, at an average price of $3.60 per acre. This average may be applied to the whole of the sales both in Manitoba and the North-West. It is, however, explained that the average price of lands sold in Manitoba would be somewhat higher but for the low value of (the lands in the sand hills sold by the Canadian Pacific Railway Company at about $1.50 per acre.

The whole area of land sold during the past year equals, I am informed, the aggregate sales of the three preceding years, and almost all of the land has been sold to actual settlers. This is a gratifying evidence of the increasing settlement of the country. I have the honor to be, Sir,

Your obedient servant,

H. H. SMITH,

Commissioner

No. 2.

OFFICE OF THE SUPERINTENDENT OF MINES,
CALGARY, 31st October, 1888.

To the Commissioner of Dominion Lands,

Winnipeg, Man.

SIR,-I have the honor to report through you for the information of the Honorable the Minister of the Interior on the work of my office for the year ending this date.

My duties as member of the Land Board, and the various inspections, reports, &c., arising therefrom, have kept me fully occupied, and they being under your cognizance, it will be unnecessary to recapitulate them here.

Grazing and Ranche Matters.

The past winter was all that could be desired by stockmen; the spring, however, proved unusually stormy, the result being a loss of newly-born calves which was considerably above the average. About 5,000 beef cattle have been shipped from this district to England, the prices received here varying from $40 to $50 per head, and the cass of beef furnished by them has been an agreeable surprise to those who heretofore had not been acquainted with the excellent quality thereof. The Canadian Pacific Railway Company have, it is stated by the cattle men, done everything possible to promote this traffic.

Manufacture of Leather.

In my last annual report I drew atter tion to the advantages offered by Calgary, or some point on the Canadian Pacific Railway in the District of Alberta, for such manufacture. Some enquiries have been made of me as the result of said report, and there are good prospects for the establishment of such an enterprise in the near future.

Sheep.

Were it not for the low price of wool, the rearing of sheep would rapidly increase, the country being admirably fitted therefor; but it is asserted at present that business is not profitable, owing to low prices.

Horses.

During the past season a very large number of valuable stallions have been imported, chiefly from Great Britain; also a large number of excellent mares, chiefly from the Eastern Provinces; and in a very few years it may confidently be anticipated that thousands of first class horses will be available for export. No anxiety need be anticipated regarding a profitable market for them.

Nature has been lavish in granting all the requisites to enable the economical growth of healthy borses, with good lungs and well developed muscles, and it only remains for our horsemen to use the necessary judgment in breeding. Our severest winters have caused practically no loss in horses. Considerable attention has, during the past year, been directed to this country both by parties desiring to embark in the business of horse-breeding and also by those looking forward for a supply of first-class horses for the markets of the east. *

There are any number of profitable openings for breeders both on a large and small scale in this district.