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The area of cultivation has been nearly doubled in the same period, and the value of the exports of the Province has reached a sum during the past year of more than one million sterling.

The great increase in the value of our exports, combined with the influx of population and capital, have had a most marked effect upon the sales of waste lands, which have greatly exceeded the amount anticipated. The receipts under this head were estimated for the year ending September 30, 1871, at £34,875, and the actual receipts for that year were £36,225 15s. 6d. The estimated receipts for the year to end 30th September, 1874, were £262,800, but the amount actually obtained to the 27th of this month, that is, in a period of eight months, is £458,308 2s. 9d., or £190,508 2s. 9d. in excess of the sum estimated for the whole year; and during this period more than 117,671 acres have been surveyed.

The large increase of traffic on the railways is another evidence of the prosperity of the Province. The total receipts for the year ending 30th September last, amounted to £75,674 19s. 11d., while the receipts for the seven months ending 30th April last, are £61,747 4s. 8d.

As the traffic returns show a considerable amount of income in excess of expenditure, I have thought it expedient to reduce the rates of carriage and fares on the different lines, a course which I confidently anticipate will induce traffic, and promote the public convenience.

This reduction will take effect in a few days.

The lines of railway from Rakaia to Ashburton, from Rolleston to Malvern, and from Rangiora to Cust, will be open for traffic shortly; and the branch line to Southbridge will probably be open in a few months.

You will learn from returns which will be laid before you, that every effort is being made to promote the diffusion and settlement of the large numbers of immigrants who are arriving in the Province.

Depôts are being established at Waimate, Akaroa, Rangiora, Ashburton, and Oxford. In accordance with the resolution of the last Council, cottages have been erected, or are in course of erection, for the reception of immigrants in various districts of the Province. It is of such importance that the immigrants forwarded to this province should be of a character suited to its requirements, that I trust you will see fit to continue, in England, the services of an agent, having accurate local knowledge of the wants and resources of this portion of the colony.

I regard with considerable satisfaction the fact that the working classes in England are taking practical steps to make themselves acquainted with the field which is here open to industry, and have no doubt that a better knowledge of the advantages which are offered will lead to a considerable influx of population. As a matter of primary importance, you will be asked to make liberal appropriations to the Road Boards, especially in those districts where lines of road are not already formed.

From information which has been received, I learn that an engineer may shortly be expected from England to report upon the construction of harbour works at Timaru. I shall recommend you to set aside a liberal sum to give effect to any proposals which may be made by him.

I shall shortly be in a position to call for tenders for a portion of the work authorised by you to provide a water supply on the Waimakariri Plains. I shall ask you to make a further appropriation for the same purpose in the district between the Rivers Ashburton and Rakaia.