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should, in conjunction with two others competent for such a duty, hold a survey on the vessel, and report fully to them as to her condition and the possibility of her being safely launched.

They accordingly deputed Mr. John Walker to undertake this duty, who at once proceeded thither with proper instructions for his guidance.

Mr. Walker on his return reported favorably as to the soundness of the vessel, and the practicability of her being launched.

The Trustees immediately advertised both in Hokitika and Nelson for tenders for the execution of the work necessary.

As, however, the tender received in reply to the advertisement were not altogether satisfactory, and as also from information received from time to time, it was found that the vessel was being lifted by the high tides and ocean swell into a more favorable position for launching; they judged it better to send down known shipwrights who should execute the work at ordinary wages; whilst at the same time the interest of the Trustees should be looked after by the master of the steamer who was retained on board.

This course was adopted, and Messrs. Freeman and Million, and J. Calder were engaged for the work, and they proceeded to Hokitika without delay.

The work of launching the vessel was satisfactorily performed by those employed. She was then brought to Nelson for repairs and refit, and, pending the adjustment of the accounts with the underwriters, the expenditure incurred in launching and repairs, which has for the present been met by an advance from the Bank of New Zealand, has been carried to a Suspense Account, to avoid any further complication of the account standing against the steamer Nelson.

The question of the future disposal of the steamer next became a matter for careful consideration, and eventually the Trustees decided to advertise her for sale or charter—the former alternative to be contingent upon a sufficient price being offered.

The result of such advertisement was that though no offer for the vessel's purchase were made, several tenders for her charter were received, out of which the one from Messrs. J. S. Cross and others was accepted, and a charter party was accordingly prepared and duly signed; letting her to them on the following terms:—

For a term of One year.

At a rental of Two thousand pounds, payable quarterly, and in case of the Trustees not being able to effect an insurance at the rate of twelve and a half per cent. or less, then any additional amount to be paid by charterers. Rent to continue to be paid notwithstanding vessel shall be damaged, stranded, or wrecked, except in the case of total wreck, when the rent will cease from the time that the Trustees shall be placed in a condition to recover the insurance from the underwriters.

Vessel to visit the Port of Nelson once at least every fourteen days, and some port in the Province of Marlborough once every month.

Vessel, hull, and machinery, &c., to be kept in thorough repair, and to be inspected every six months by two competent persons, one appointed by the Trustees and one by the charterers.

In case of a stranding or wreck the charterers to have the control and management of said vessel and repairs, or till condemned and sold.

Insurance to be effected by Trustees.

She sailed from Nelson for the Grey on the 21st September, and when leaving again on the 27th, was driven on shore on the northern bank of the river's mouth.

By the present charter party the lessees are, under the above circumstances, placed in the position of owners, and the duty of endeavoring to launch her from her present position devolves upon them, and the narration of the steps they have taken for the accomplishment of so desirable an object will more properly come within the next annual report.

By order of the Trustees,

H. C. DANIELL,
Secretary.