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"The present and future prosperity of the Province depends so largely upon the introduction of population, and the supply of labour suited to the requirements of existing industries, that I have no hesitation in recommending you in the terms of the Act to make liberal provision for this purpose. You will be requested to give your consideration to a Bill which will be submitted to you on this subject in accordance with the Act to which I have alluded.

"A Bill will also be submitted to you for the purpose of bringing into operation within the Province of Canterbury, an Act intituled ‘The Hawke’s Bay and Marlborough Rivers Act.’ The Act appears to me to be well adapted to meet the wants of some districts of this Province which suffered during the floods of last February. ‘The Canterbury Rivers Act, 1868,’ was passed with more especial reference to the danger which was anticipated to the city of Christchurch and its environs, from the outbreak of the Waimakariri river. You will be asked, in terms of the 2nd section of this Act, to consider the advisableness of proclaiming this Act to be in operation within such district as is likely to be affected by overflows such as occurred during the early part of this year.

"By an Act, intituled ‘The Canterbury and Westland Public Debts Appointment Act, 1868,’ the previous decision of the Legislature as to the appointment of the debt between the province of Canterbury and the County of Westland has been revised, and the question remains to be determined by arbitration. I shall lose no time in appointing an arbitrator in accordance with the requirements of the Act.

"Correspondence will be laid before you on the subject of the balance of the loan unraised at the time of the passing of the Public Debts Act, 1867, amounting to £266,600. It will be observed from this correspondence, and from the information derived from the public accounts of the sales of Canterbury debentures, that the province has only received from the General Government for each debenture unsold at the time of the passing of the Public Debts Act, 1867, the sum of £97 less certain charges, while the holder of bonds previously sold has, in the terms of conversion offered by the Colonial Treasurer, realised a premium of from five to six per cent. on each debenture. It is right, however, to observe that the amount payable annually in interest by the province will be considerably less than it would have been had the Colonial Treasurer complied with the terms of the 6th section of the Public Debts Act, 1867.

"In accordance with your decision in a previous session, I have appointed a Commission to enquire into the questions which, in your opinion, required investigation in connection with the Lyttelton and Christchurch and Great Southern Railways. The gentlemen appointed to conduct the enquiry were Mr. Paterson, of Dunedin, Civil Engineer (whom I have every reason to believe to be thoroughly qualified to give an opinion on all matters coming within the scope of his profession, and having special qualifications in respect of the construction of railways), and Mr. Symington, of Christchurch, merchant, who has specially devoted his attention to the examination of the accounts. Their report will be laid upon the table.

"I have to express my entire satisfaction with the amicable arrangement entered into by my Executive with Messrs. Holmes and Co. for the delivery of the Railway by the Contractors to the Government on the 1st of August last.

"Your consideration will be asked to proposals for the apportionment of the balance of the Loan which will remain after meeting existing liabilities. I cannot too earnestly press upon your attention, in the present financial condition of the Province and the Colony, the necessity of devoting this balance, as far as possible, to works of a directly remunerative character; and, holding this view, I would respectfully suggest the primary