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only about half that quantity is to be found, a reduction has been effected on our portion of the debt to the extent of £1,700 a year.

4. I have also the pleasure of announcing to you that on its having been shown to the General Government that a deposit of £10,000 for the purchase of land within this province had been improperly received in, the year 1856, that sum has been placed to the credit of the province; and although in the readjustment of the accounts between the general revenue and that of the various provinces made by the General Government, in accordance with the provisions of the Constitution Act, nearly the whole sum has been absorbed in the liquidation of the debt of this province to the extent of distribution actually carried out in previous years, yet the credit for the sum given to the province turned the balance in its favour, and obviated the necessity of providing a corresponding amount out of its present or future revenues.

5. Deeply impressed as I have always been with the conviction that the welfare of this, or of any new country, depends in a most important degree upon the general facilities it affords for communication and settlement by the existence of good roads, I have had much pleasure in applying to that purpose the funds voted for it last year; and I trust that by a judicious and liberal appropriation of our now flourishing revenues to this object, we may within another year or two see our province, throughout its whole length and breadth, traversed by a system of good and safe bridle roads, which will tend greatly to develop its unoccupied districts, and to increase our means of intercourse with the neighbouring province to the south of us. Our present knowledge of this part of the Middle Island seems to point out three great lines of road, which it should be our earnest endeavour to open and render practicable. The first should be the great line to Canterbury, down the Eastern Coast of the island, running from Nelson by the Pelorus, Wairau, Aware, and the Kaikoras. Of this perhaps the most difficult part has been completed by the formation of a good bridle road towards the Pelorus Valley, over the Maungatapu, as far as the Heringa River, while the track has been cleared of bush the whole way to the Wairau. The expense of forming this latter portion of the road, although large, will not, I believe, be beyond the sum originally contemplated; but that which has been done will be comparatively useless if it be not continued; and looking at the benefits its completion will bestow on the occupants of the Pelorus and Kaituna districts, and the opportunities it will afford for the further settlement of those and the neighbouring valleys, as well as the advantage to travellers from and Nelson and Wairau, by the shortening of the distance between these places, I do not doubt that you will have little hesitation in voting the funds necessary for the completion of this portion of the road. But I hope you will also provide for the permanent improvement of the whole line to the Hurunui, particularly the worst part near the Kaikoras; and also (which is indispensable if the road is to be made really useful) for the establishment of ferries over the Clarence, Pelorus, and any other rivers where they may be requisite. Arrangements have already been made for these improvements, and only await your sanction of the expenditure they involve, to be immediately carried into execution.

6. The second great line which should be rendered easily practicable, is the central road to the South by the Wairau Gorge and Hanmer Plain. I have the satisfaction to state that the greatest of the difficulties attending this route, namely, at the Wairau Gorge, have already been in a great measure removed, and I trust before the winter will have been completely so. This route, it is probable, will in future, should the coast-road be properly opened, be used chiefly if not wholly as a summer road to the South; but as it is considerably shorter than the coast-road, equal exertions should be used to render it thoroughly available.

7. The third great line, which I trust may be opened, will be one to connect the valuable districts in the Western half of our province with Nelson. A gentleman accustomed to exploration has been engaged to undertake the investigation of this route: should he be successful, of which I entertain great hopes, it will be in your power, by devoting a part of the revenue to the improvement of this route, to render accessible to the enterprise and energy of our settlers, some very valuable and even extensive agricultural and pastoral districts, to which hitherto very little attention has been paid.

8. With respect to the roads in particular districts, although much has been done during the past year with the aid of the funds raised under the Debenture Act, chiefly under the supervision of the various Local Road Boards, this of course forms but a small portion compared with what remains to be done, and which can only be effected in a series of years.

9. The most prominent of these districts is that containing the gold-fields. Although a considerable diminution in the numbers of the population there has occurred since their first discovery, the decrease in the number of actual diggers does not, I believe, bear any considerable proportion to that of others who have left,