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I lost no time at the close of the extraordinary Session of last spring in putting in hand the various Public Works for which you had voted supplies and in negotiating for the loan which you had authorised me to raise. But the increase in the Revenues through sales of land, and the necessity of suspending the works during harvest, rendered it unnecessary for me to borrow money, the balances in the chest more than providing for all the works which I could execute in the time with all the labour available. The whole of the Loan will therefore be at your disposal for the present year. And I would urge upon you to devote an increased portion of it for Immigration. The neighbouring Provinces of Wellington and Otago are voting large supplies for Immigration purposes, and I think it would be a wise policy to work in harmony with them in this matter.

I do not think it would be right to incur any larger debt at present, I entirely agree in the policy of borrowing for purposes of Immigration and Public Works, but I do not think it wise to incur so large a debt that the annual Interest should bear more than a certain relation to the annual resources of the country. If the experiment of borrowing succeeds this year, and probably will, be quite wise to borrow again next and every succeeding year; because the interest on one or two hundred thousand pounds a few years hence may bear a smaller proportion to the then Revenues than the interest on £30,000 does to our present Revenue. I The only thing to be guarded against is borrowing to such an extent as to cripple the credit of the country in any temporary depression which may occur, and to which all countries, but especially young countries are periodically liable.

But in discussing the Estimates, gentlemen, a subject will come before you of the greatest importance. Referring to the expenditure on behalf of the Resident Magistrates\' Courts, a correspondence between the General and Provincial Governments will be laid before you, and you will be called on to say what course the Province should take in reference to the present state of affairs.

As this is the time and place for me to justify what has been done by the Provincial Government, I will ask your attention to this matter for a few moments. There is no doubt as to the full right of the Superintendent to appoint Resident Magistrates for the following reasons:—

The office is one created by a Colonial Ordinance, and the person selected to fill it must be already one of Her Majesty\'s Justices of the Peace, and the Governor is empowered to appoint it \"provisionally, until Her Majesty\'s pleasure be known.\" This power of Provisional appointment is

not delegated by the Crown, but is given by a Local Ordinance, one which may be altered or repealed by a Provincial Ordinance. The Constitution Act alone limits the powers of the Provincial Councils: but the Constitution Act only debars the Provincial Councils from interfering with the Superior Courts. No one can read the second matter excluded from the Provincial powers \"the establishment or abolition of any court of judicature of civil or criminal jurisdiction, except Courts for trying and punishing such offences as by the law of New Zealand are or may be made punishable in a summary way, or altering the constitution, jurisdiction, or practice of any such Court, except as aforesaid,\"—without inferring that the Provincial Councils are specially empowered to alter the constitution of any Court of summary criminal jurisdiction: that is the plain meaning of the words. Now the Resident Magistrates\' Courts are Courts of summary criminal jurisdiction. Their constitution may therefore be altered by the Provincial Laws. I am quite at a loss to conceive what argument can be set up against the plain and manifest intention of the Constitution Act to place the Courts of summary jurisdiction under the Provincial Legislatures.

Under your first Empowering Ordinance the right of appointment of Resident Magistrates was vested in the Superintendent. That Ordinance was disallowed by the Governor under the advice of the Attorney-General, but it was re-enacted with the alterations suggested by the Governor. We are at liberty then to conclude that an Ordinance which was disallowed by the General Government had been carefully considered; and yet this power now in question was not objected to by Her Majesty\'s then Attorney-General. We have then almost the highest legal authority in this Colony for saying, that the power of the Superintendent to appoint is not to be questioned. Not only so, but the same power was exercised by the Superintendent, and the right so to exercise it fully recognized by Mr Whittaker, the present Attorney-General when the acting Attorney-General in 1855.

But I am prepared to say that, without any Empowering Ordinance at all, the power of appointing Resident Magistrates, and performing all other functions of Government, is fully and entirely vested in the Superintendent by the \"Interpretation Ordinance\" of the late Legislative Council Session XI, No. 3,—and which has not been objected to by the Law officers of the Crown in England.

The doubts which have arisen upon this question are not derived from legal opinions by competent Lawyers, but from vague expressions arising on the debates in the General Assembly, and dictated more by a