SIR, - I have the honor to lay before you, the detailed statements in the usual form, exhibiting the operations of the branch of the Public Service under your charge, connected with Indian affairs, during the year, commencing 1st July, 1868, and terminating 30th June, 1869.

The disposal of the Indian Lands, both in the Saugeen Peninsular, and the Manitoulin Island, has steadily proceeded, and as they are sold only to persons who propose to become actual Settlers, the system is calculated to insure eventually the sale of every lot suitable for farming purposes, and at prices too, superior to what could now be obtained, were the lands allowed to remain in a wilderness condition.

With a view to facilitating access to the lands sought for, for settlement, the work of opening out Roads in both of the localities referred to, has been carried on successfully. The length of Roads in the Manitoulin Island, constructed and requiring comparatively little work to complete them is about 40 miles.

An exploration by Provincial Surveyor Gilmour, for continuing the line of Road from its commencement, midway between Owen Sound and the Saugeen, up the entire length of the Saugeen Peninsula, resulted in discovering important tracts of valuable land, which the forming of this road will render easy of access.

The expenditure for surveys and road construction, has, of course, diminished considerably moneys which otherwise could have appeared as additional investments.

The cause of Education has received its full share of attention, and grants have been made in a liberal manner towards the erection of School Buildings, and in some cases improved salaries to Teachers.

The Mount Elgin Industrial School, which was on its establishment, placed under the charge of the Yesleyan Methodist Society, having been re-organized, will, it is trusted, be of essential advantage to the Western Bands.

The annual grants for seed, grain, and implements, have been somewhat increased, and there are indications in some quarters, that the cultivation of the land has been better managed than formerly, but very much requires yet to be done, to justify an opinion that the Indians are, as a general rule, becoming practical farmers. It is, however, but just to those of the Six Nations on the Grand River, to state, that their Agricultural Society, at its last meeting, exhibited no little success, in some important particulars, and a community numbering approaching 2,800, having on use among them threshing machines of their own, and good implements of husbandry, must, it will be admitted, be advancing. The population returns are, as is nearly always the case, incomplete. But they are sufficient to prove that the comforts and attention to health, incident to an advancing civilization, have occasioned in a majority of the settlements an increase in numbers.

The measures adopted for the disposal of the merchantable timber on several of the Indian Reserves, on favorable terms to the interests of the Indians, will add, in the course of the next two or three years, materially to their invested funds.

The Legislative enactments, passed during the past and preceding Sessions of Parliament, designed for the amelioration of the condition of the Indians, will, it is believed, eventually be of essential benefit. They, however, require time (considering their habits of thought,) to estimate correctly the utility of those measures.

The Indian Lands in the Province of Quebec have engaged attention, and a considerable