remove existing causes of irritation, and to revive
that confidence in the Government which has been
so grievously impaired by the proceedings of the
late Administration. While on the one hand, there
will be no solicitation—no leasing of their lands, yet on the
other hand, they will know and feel that in the
event of their wishing to sell, they will not be subjected to the vexatious delays hitherto occasioned
by the necessity of referring every negotiation to a
distant authority—but the terms of purchase arranged, and the boundaries of the Block offered for
sale, after due notice, publicly defined and marked
out, the purchase will be at once completed.

While I am anxious to avoid raising any undue
expectations from the change thus made in the
Land Purchase Department, I have reason to believe that no long time will elapse before valuable
blocks will be freely offered for sale to the Government.

With respect to the funds by which purchases
are to be effected, I am not in a position to state
how much of the Land Purchase Loan remains
unexpended; but I fear that when the accounts are
rendered it will be found that of the £27,000 allotted to this Province, the whole, with the exception of a few hundreds, has disappeared, and that
some 30 per cent. of the amount has been frittered
away in the expenses of the Department. As it is impossible to give even an approximate estimate of the
sums that may be required, I shall simply ask you
to authorise me, by resolution, in the event of other
funds not being available, to raise temporary loans
from the banks—an operation which there will be
no difficulty in effecting, as the Union Bank has on
former occasions made similar advances to a large
amount, and as the Bank of New South Wales has a
time since, when I hoped that Mr. McLean might
purchase certain blocks, involving heavy payments,
readily consented to place at my disposal whatever
amount might be necessary. Such advances, it
will be understood, will have to be repaid out of
the first proceeds of the sales of the purchased
blocks.

You are aware that the two Bills, the one repealing the clause of the Land Revenue Appropriation Act of 1858, under which one-sixth of
your Land Revenue was authorised to be retained
by the General Government; the other compelling
a refund of the amount so impounded, which were
passed by the House of Representatives in 1860,
and rejected by the Legislative Council, were again
introduced last session, and agreed to by the House
of Representatives without a division, but that the
Legislative Council again threw them out. It is
satisfactory to know that before next session, the
Legislative Council will be so far reformed by an
addition to its numbers, that it will scarcely be in
a position again to defeat the repeated decisions of
the House of Representatives on a money bill, with
which it has constitutionally no right to interfere.

In the meanwhile the present General Government has advanced to the Province as a nominal
loan, the whole amount of the “Reserved Sixths”
received up to October last, on the security of a
portion of the land in process of reclamation, and I
have no doubt they will continue to hand over the
accruing sixths as often as we may ask for them,
especially as under the change just mentioned in
the Land Purchase Department, the onus of providing the funds for land purchases will devolve
not upon the General but the Provincial Government.

During the last session of the General Assembly
the Representatives of Hawke’s Bay and of this
Province, after repeated conferences upon the subject of the apportionment of the Public Debt,
agreed to submit the case of their respective provinces to the Auditor General, not as an arbitrator,
but with the view of obtaining his opinion as
to conditions and principles, by which, in the
event of an arbitration being agreed to, the arbitrators should be guided, and upon the understanding that the report should be laid before the
Provincial Councils of the two Provinces for their
sanction, previous to any further action being
taken in the matter. The Auditor General, after
hearing the statements of the two parties, and
fully considering the whole question, ultimately
gave it as his opinion that the permanent debt of
the original Province must be taken at the date of
separation at £100,000; and that the apportionment should be based on population, rather than territory; and accordingly recommended that Hawke’s
Bay should be charged with £25,000 of the
£100,000. Your Representatives at once offered
either to adopt the Auditor General’s recommendations, provided the same principle of apportionment was applied to the Land Purchase Loans,
or to adopt the territorial basis of apportionment
for the £100,000, or finally, by way of compromise,
to accept the sum of £35,000; but the Hawke’s
Bay Representatives did not feel themselves justified in agreeing to any of these three proposals.
It is under these circumstances that, in redemption
of a pledge given to the House of Representatives,
I shall submit a Bill appointing commissioners
with full powers to adjust the debt with the
Hawke’s Bay Government. Without expressing
my entire concurrence in the conclusions arrived
at by the Auditor General, I yet willingly admit
that he has so far cleared the way for a settlement that I do not apprehend that there will be
any serious difficulty in satisfactorily arranging
this vexed question, if the Hawke’s Bay Government is prepared to enter upon the proposed
negotiations in the same spirit as we do.

The shortness of the last Session having precluded the possibility of your examining the
claims preferred against this Province by Messrs.
Gladstone and Co., in respect of the Ann Wilson’s
immigrants, I must again ask you to take the
matter into your consideration, with the view
of enabling the Government to give a decided
and definite answer to Messrs. Gladstone and Co.
From the correspondence which has already been
published you will perceive that the two questions
submitted to Her Majesty’s Commissioners were:
1st. Whether the Provincial Government was at all liable for payment of the
passage money of the immigrants by the Ann
Wilson? and
2ndly. If liable, whether large deductions ought not to be made on account of the
breaches in the Passengers’ Act, and the conduct
of the Captain and Surgeon, which have forced
the Provincial Government to forego, as far as it
is concerned, any attempt to recover the money
on the promissory notes of the immigrants.

The Commissioners decided that the Government of Wellington could not be compelled to
pay for the immigrants by the Ann Wilson, but
they nevertheless concluded their report with a
recommendation that it should pay the amount of the passage money, less the sum of
£609 on account of the non-issue of the legal
allowance of water. Now as the second question
was clearly contingent upon the answer given to
the first, which was given in favour of the Government, I have always contended that the commissioners exceeded their powers in even entering
upon it—that in short, having decided that the