I have thought it right to draw your attention to these points as indicating the changes which are rapidly being introduced by the action of the Colonial Legislature. Whether the change in respect of the conduct of immigration will be beneficial, appears to be open to question, and will greatly depend on the course adopted by the Colonial Government which is now solely responsible for it. Largely increased responsibilities remain to you in respect of the requirements of the largely increased population which is contemplated.

The General Government has initiated a scheme of Railways as a means of developing the material resources of the country, and proposes to make great efforts to introduce and settle a large number of immigrants in the Colony. If the good order, good government, and best interests of the country are to be promoted, corresponding efforts must be made to maintain in a state of efficiency the educational and social institutions which have ever occupied a prominent position in the minds of those who have worthily engaged in the work of colonisation.

You will be asked to sanction a considerable expenditure on the general purposes of Education, especially in the erection of Borough and District school buildings, so as to enable fuller advantage to be taken of the provisions of the Education Ordinance of last Session, for the purposes of which taxation will be initiated early in this year.

I desire again to bring under your notice the advisableness of vesting the Educational Endowments of the Province in trustees, and making provision for the permanent appropriation of the proceeds of the Educational Reserves to the purposes for which they were made. Among the special objects for which it is very desirable that permanent provision should be made independent of annual votes of public money which, in times of financial pressure are of a precarious nature, and of the proceeds of taxation which is never popular, and liable to be objected to for any but purposes of absolute necessity and universal acceptance.

I would mention the Scholarships which are so valuable as forming a link between the primary and high schools, and as leading up to the higher branches of education, which I trust, ere long, to see promoted and guided by the New Zealand University throughout the Colony.

A proposal was made on the 16th of last month, and has met with general acceptance, to commemorate the Twenty-first Anniversary of the Province by the establishment of an Observatory. It has since transpired that, unknown to the promoters of this undertaking, the Astronomer Royal had suggested Christchurch as the best place for the purpose, having special regard to important astronomical observations to be taken in the year 1874.

I shall ask you to make provision for the erection of the necessary building, and also for the maintenance of the Observatory in permanence.

A copy of a telegraphic message which I have received from the Colonial Treasurer, and of my reply to it, will be laid on the table.

The necessity for increasing the accommodation in the Hospital and Lunatic Asylum will be brought under your attention.

The accommodation in the Orphan Asylum has been considerably increased during the past year, and it is already fully occupied. It contains at the present time 98 inmates, and there are still 41 destitute children outside its walls dependent on the Government for their maintenance. The Reformatory now in course of erection will provide for a number of these. That the sums distributed by the Provincial Government in charitable aid at the present time, independently of the expenditure on the Hospitals, Orphan Asylum, and Lunatic Asylum, should amount to £4000 per annum, is a fact of great significance, and one which will shortly force itself on your attention more prominently.