adjusting the accounts according to the instructions of his Excellency, it appears that, if those instructions be rigidly adhered to, this Province will have commenced with a debt of upwards of three hundred pounds to the General Government. The papers laid on your table last Session will enable you to understand how this debt has arisen: His Excellency directed the late Sub-Treasurer to pay over to the General Government out of any balance in his hands on the 30th September, a sum equal to the difference between one-third and one-fifth of the whole revenue of the Province from the 17th January to the 30th September. This demand exceeds the balance in the Sub-Treasurer’s hands by upwards of three hundred pounds. I have not yet received an answer to the application I made for further instructions on this point.

Notwithstanding this, however, the revenues for the quarter have so far exceeded, and the expenditure has so far fallen short of the respective sums placed on the estimates, as to leave a small balance applicable to public works. And I took upon myself to anticipate your appropriation of this money by applying it at once to repair the main lines of road. Detailed statements will be laid before you of the sums already expended and of the engagements entered into. The step which the Provincial Government has taken is one, however, which ought not to be drawn into a precedent for the future. I anticipate your approval of it in the present instance solely on the grounds that no time was to be lost if the main roads were to be made passable for the coming winter, that it is impossible, in the present state of the Settlement, to obtain any considerable number of labourers, and that these disposable funds had not arisen and were not anticipated during your last Session.

With regard to the mode of dealing with these funds for the future, it is impossible to calculate what sums may be so available during the current year. I shall therefore ask you to approve provisionally of such expenditure as may be necessary for carrying on such public works as you may deem most advisable without regard to any estimated revenue, and that you will indicate the order in which you wish those works to be executed, according to their several degrees of importance, leaving it to the discretion of the Executive Government, to apply the monies accruing from time to time to the execution of those works in such manner as circumstances may admit.

I regret to say no instructions have yet been received in the Province on the subject of the disposal of the funds arising from the Waste Lands within the Canterbury Block. Eight months have now elapsed since the management of these lands came under the General Government. A considerable sum has accumulated, and is now lying in the bank, and cannot be used because no instructions have been received for its issue to the Provincial Government.

The difficulties which you experienced at your last session in relation to the financial policy of the General Government have as yet received no solution. The seat of the General Government having been removed to Auckland, and the Civil Secretary’s office at Wellington having been broken up, no reply has been yet received to the communications from the Provincial Government, transmitting the resolutions which you passed. In the mean time, as long as any doubt exists as to the legality of the present arrangements, the only consistent course appears to be that the monies paid to the Provincial Government from time to time under his Excellency’s instructions, should be taken and deemed to be in the nature of an advance from the General Government, liable to be accounted for out of any monies appropriated to, or declared to have been legally appropriated to, the Province by an Act of the General Assembly.

A plan for restoring a regular immigration to the settlement will be submitted for your approval. The enquiries which I have made lead me to believe that it would not be wise to look to the Australian colonies as a source whence any large and immediate supply of labour is to be obtained, or to propose the expenditure of the public funds upon immigration thence. It seems to me that the immigration fund can be employed in no way so beneficially as by organizing a regular line of passenger-ships from England, bringing with them not only a regular supply of the best class of labour, but also all those additional and substantial advantages which direct communication from England confers, and which were so largely felt during the first eighteen months of the settlement. This is the object I have had in view in the Bill which will be laid before you.

Although you have at present no power to make laws respecting the Waste Lands, yet the time appears to have arrived when it is desirable for you to express some distinct opinion on the best plan for their disposal and management, having regard to the general advancement of the Province, and to the interests of all classes of the community. I have therefore caused to be prepared a complete scheme for the management of the Waste Lands, upon which I shall ask you to express some opinion by resolution.

The accounts of the Canterbury Association have arrived in the colony, and a digest of them has been transmitted to the Govern-