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perity, however, also suggests and justifies the propriety of reducing and consolidating the debts of the Province; accordingly I purpose asking you to sanction the immediate redemption of the Canterbury Association Debentures; this being effected, would leave the proper debts of the Canterbury Government comprised within two items only, viz.: The Emigration Debentures, amounting to £30,000, and the Railway Loan Debentures, not yet sold. With respect to the former amount of £30,000, I may state that a considerable sum is secured by unpaid notes of Assisted Emigrants; and that with regard to the Railway Loan there has been as yet expended only £10,000* in anticipation of its negociation.

Before indicating in detail the leading items into which I shall recommend you to distribute the public income, I must earnestly ask your assistance in an endeavour to firmly engraft on the system that shall govern the future appropriation of the revenues of this Province, a great fundamental rule, to the effect that the land revenues shall be materially devoted to such works and outlays as are directly calculated to facilitate the beneficial use and occupation of the waste lands whence the revenue is derived.

In order to the effective maintenance of such a rule, it will every year be necessary to make a special allocation of a specific proportion of revenue to rural roads, bridges, and drainage. The comparatively high price of waste lands in Canterbury was clearly intended by the Legislature, and is paid by the land purchaser as a provision not for the establishment of luxurious cities, but for the purchase of those roads, bridges, and means of drainage which are necessary to the reasonable enjoyment of the lands sold. A just proportion of expenditure having been fully made in any particular district, such district should thenceforward mainly support the expenditure consequent on disrepairs, and also of such additional works as the inhabitants therof might deem it desirable to entertain. While on the other hand it might be held as just that municipal revenues—for example, the provincial three-eighths of the Customs duties, and various other resources of a kindred nature—should be applicable principally to assisting the local efforts of town municipalities.

I am assured that there exists no reason for entertaining doubts as to your entire willingness to ordain an equitable apportionment of revenue in favor of those to whom it is morally due. I am aware that it will be perfectly unnecessary for me to urge reasons of policy in this behalf. I may state, however, that complaints, in themselves natural enough, have from time to time reached me from certain outlying districts, alleging neglect of the claims of the inhabitants of those districts upon the Treasury. These complaints, although often quite inconsistent with a liberal judgment on past attempts to effect a fair balance of conflicting demands, and the great difficulty, nay impossibility, hitherto of their adjustment by reference to abstract rules or axioms never as yet formally recognised by the Legislature, yet those complaints have, I believe, generally arisen out of circumstances that have excited a galling belief that the land revenue has not been administered fully in accordance with the uses to which they (the complainants), before they became land purchasers, justly considered the land revenue to be mainly limited.

I believe, gentlemen, that after your deliberations of this session there will be an entire absence of any substantial ground for discontent of the nature I have indicated, and am hopeful that any impulsive tendency towards dismemberment of the Province, encouraged as it has been by the existence of a law called the "New Provinces Act," may entirely disappear from Canterbury.

Since the last extension of the number of the Provincial Council in 1857, the population has not only very materially increased, but the respective populations and interests of the different districts no longer bear the same relative proportion one to the other as formerly. It has therefore become desirable to effect a re-adjustment of the representation. For this purpose I shall cause to be presented to you a bill providing additional members for both the northern and southern districts of the Province, and thus increasing the number of the Council from 26 to 33.

Recent advices from the Northern Island justify a strong hope that the late native disturbances have definitely ceased, and that therefore Canterbury, in common with the other Provinces of this island, at any rate, will not be called upon to defend their claim to entire exemption from all charges in respect of an internal war, that may perhaps be regarded, under recent circumstances, as having been necessary on various grounds. Possibly it may be held by some to have been indispensable to the security of the northern landed estate, but it could not be held as in any degree essential to the conservation of any interest of this island. I certainly see no reason why the Government of New Zealand should be called upon to pay the costs of a war, induced by a long train of circumstances, which the Imperial Government had specially retained to itself the sole right to deal with.

It is worthy of remark that there is no mention in the constitutional civil list of any provision for the cost of maintaining an army, or for the suppression of a native rebellion. Had the Imperial Government, by the Constitution, handed over to the people of New Zealand the government of the country without excepting the Maories, it is possible in such a case that the late necessity for an appeal to arms might not have arisen. Certainly, opportunity would have been given to the settlers to attempt a peaceful solution of all difficulties. The Crown did, however, solely govern the Maories; under its government causes of war arose, and that Government cannot consistently with liberal principles coercively exact indemnity from the colonies against the expenses and risks of an administration, neither erected nor desired by them. In the very limited space allotted for brief mention of

• To make the ordinary Provincial Treasury Credit amount to the sum stated above, the Draft on the Railway Loan Account should be shown to be £20,000 nominally, whereas £10,000 only has as yet been drawn.