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On the whole, therefore, there will be a sum of £35,000 available for expenditure on such public works as you may determine upon.

Proposals will be made to you to appropriate this amount in the following manner—

£15,000 to the Northern Railway.

£15,000 to the Southern Railway.

£5000 for a Tramway from Selwyn through the Leeston District to Southbridge.

In submitting these proposals for your consideration I would venture to suggest that, should you adopt them, the works should be put in hand on such a system as may provide against interference with the labour market, to the prejudice of the ordinary productive industries of the country.

I am of opinion that these works, if they are to have their full influence for good upon the well-being of the country, should be carried on simultaneously with the introduction of a stream of immigration. If this be done the evil to which I have alluded will be prevented. I have had estimates prepared of the cost of continuing the Railway over ground such as that over which the Southern Railway passes, and I see no reason to doubt that the Railway can, with present facilities, be constructed at a cost not to exceed £8000 a mile, including fencing and a certain amount of station accommodation. Works of this kind, involving no great engineering skill, may, I think, readily be carried on as funds accrue, in such a manner as to adapt their rate of progress to the variations of supply and demand in the labour market.

The promise of certain employment to newly landed immigrants would be a great inducement to them to leave their own country, and a correlative advantage to the Government of their employment in this manner would be that the moneys due by them to this Province might be recovered in instalments during the period for which they were engaged, and be devoted at a shorter interval than is usually the case, to the introduction of fresh labour.

Above all things, I would impress upon you the evils which would ensue from entering upon large contracts, involving the anticipation of revenue, and entailing an additional charge on the revenue for payment of interest, which, as will be seen from a consideration of the Estimates now submitted to you, the Province would be unable to bear.

The sum of £15,000, added to the portion of the loan already appropriated to the Northern Railway, will make a total of £45,000 devoted to this purpose. If the land, through which the line of railway passes, can be purchased at a reasonable rate, say at a cost not exceeding £15,000, should you consider it advisable to proceed with the work, you may direct that the necessary steps should be taken, preliminary to putting the work in hand.

It will be desirable that the cost at which the land can be purchased should be at once ascertained. The line as at present surveyed and laid off on the ground, passes through a number of very valuable sections, and the cost of purchase, both on account of the value of the land and the severance of sections, would be very considerable.

It will be for you to consider whether an alternative line could with advantage be adopted. A line has been suggested, which might be taken by way of the Canal Reserve, which would join in with the line, as at present laid out, at a point following the Canal