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rations, to be afterwards repaid by the recipients.

The loans necessary for carrying out the above objects will require the sanction of the General Government, which I do not conceive will be withheld, inasmuch as the objects contemplated bear materially upon the settlement of the Native difficulty, and must ultimately have a tendency to diminish the necessary expenditure for military purposes that is incurred by the Colony as well as by the Mother Country. It must also be evident that the security for loans already contracted will be greatly enhanced in value by the possession of additional tracts of land and population.

The subject of Education is one of such importance that I trust it will engage your attention. It will be found that at present the funds derived from leasing Educational Reserves are inadequate to the wants of our rising population.

There is another object of local interest to the Town in which it will be necessary that some steps should be taken, and that is the erection of an Athenæum. It will be in the recollection of the Council that a sum of £200 was voted for this purpose, and a further sum has been raised by private subscription, but no part of this has been expended. I propose to ask you for a further sum to carry out this object.

With regard to Roads, it appears to me that all that can be done for the present with our limited resources is to keep in repair and complete as we can the main lines already commenced.

Branch Roads should be undertaken by private enterprise, such grants in aid being allowed in fair proportion to each district as the resources of the Province will afford.

I will lay before you an able and detailed report by the Provincial Engineer on the general state of the roads throughout the Province, shewing that much has been already done in opening up internal communications.

The great line of road connecting the Northern and Southern parts of this Island must necessarily, owing to the natural features of the country, be taken along the Eastern side of the mountain ranges which form the backbone of the Island.

This Province has already, by means of Native and other labor, constructed a considerable portion of the line, and it now devolves more particularly on the Auckland Government to open up those portions of it which are within that Province.

I have been in communication with His Honor the Superintendent of Auckland on the subject, and I am glad to find that he is disposed to co-operate in the matter.

In the expectation that he will devote certain sums for the purpose, I have arranged with the Natives to cut a line through a dense forest which forms six miles of the worst part of the road between Napier and Taupo. A wooden dwelling-house has been erected by a Chief near the line of road for the accommodation of travellers, and I am assured of having the assistance of the Natives in carrying on the work towards Taupo.

I am also in hopes that it may be possible to open up a better line of communication between our inland plains and the West Coast of the Wellington Province. Situated as we are, between these two Provinces, it cannot fail to be a matter of solicitude to us to have the great road of the Country leading through the fertile plains of Hawke’s Bay, and whatever may be the action taken by the General and Provincial Governments in the matter, it certainly is a work which I feel justified in adverting to, as the future condition of the Colony at large will be greatly affected by it.

A company has been formed for the purpose of establishing Steam Communication between this Port and other parts of New Zealand, and there is every reason to expect that considerable advantage will accrue to the Province from the undertaking.

It is much to be regretted that the efforts hitherto made to deepen and improve the Harbor, which were attended with considerable expense, have proved unsuccessful.

Desirable as it may be to render it accessible to larger Shipping, I consider that it would be imprudent, except under highly scientific guidance, to incur any expenditure beyond what is required for better Wharf accommodation, and such piling as may be found indispensably necessary.

A Local Marine Boards Act will be prepared to provide for the appointment of Commissioners, whose duty it will be to regulate the affairs of the Harbor, and it is for the Council to consider whether the Boating Establishment does not require to be placed on a better footing.

It will be necessary that early action should be taken by the Council to decide upon the best course to pursue in reference to the adjustment of the Wellington debt.

His Honor the Superintendent of Wellington has intimated to my predecessor a willingness on the part of his Government to have the question of the apportionment of the debt decided by arbitration, and three Commissioners have been appointed by that Province for the purpose.

A statement of the Revenue and Expenditure for the past year will shortly be laid before you, together with the Estimates for the ensuing year.

It is my earnest desire, as I trust it may be that of the Council generally, that our proceedings should be marked by a determination to promote the general interests of the community, irrespective of any local differences, which can only have a tendency to impede the advancement of the Province.

DONALD M’LEAN,
Superintendent.

Napier, 25th March, 1863.