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derived—and that the remaining districts of the
Province are to take upon themselves the expense of
that Government, to which the population of the
gold producing districts are indebted for protection
in their industry, and for the means of pursuing their
avocations.

The Gold Duty is levied as payment for the
use and occupation of the Waste Lands of the
Crown, and any surplus which there may be after
defraying departmental expenditure upon the Gold-
fields, becomes available, as a portion of the Land
Revenue, for surveys and explorations in new dis-
tricts, for the construction of roads and other public
works, whether within or without the particular dis-
tricts in which it has been raised, for immigration,
and generally for all purposes calculated to promote
the occupation and settlement of all parts of the
Province.

The Provincial share of the Customs duties, I
consider to be available for the general expenditure
of the Province, without regard to the district in
which it has been collected. I do not conceive, for
instance, that the City of Nelson, or its immediate
vicinity, has any claim superior to that of the most
distant part of the Province to the Customs revenue,
on the ground that the greater portion of it is
collected at this Port, and, if that be admitted, the
same rule clearly applies to the ports of the West
Coast.

Had the principle against which I am contending
been acted upon in past years, the large sums which
have, year after year, been drawn from the other
parts of the Province to be expended upon the West
Coast, while it was yielding little or nothing to the
revenue, could not have been so appropriated, and
the development of that district would necessarily
have been retarded.

I have received a communication from Mr.
Francis Stevens, in which that gentleman offers to
go to England at his own expense to negotiate for the
construction of the proposed Nelson, Cobden, and
Westport Railway, provided that certain additional
concessions are made to capitalists willing to construct
the work.

The leading novelty in Mr. Steven's proposal is
that the line, instead of being leased at a nominal
rental, to the company constructing it, for twenty-one
years, should be made over to them in fee simple.

The papers connected with Mr. Stevens' proposal
will be laid before you, and I am confident that you
will give to them that earnest consideration which
the importance of the subject demands; in order to
determine, in the first place, whether the terms which
Mr. Stevens proposes should be offered to capital-
ists are more liberal than is necessary or politic; and,
secondly, whether the prospect of Mr. Stevens'
success is sufficiently promising to warrant us in
deferring negotiations in any other quarter for the time
which Mr. Stevens stipulates for, to enable him to
reach England, and to bring the question under the
consideration of capitalists likely to construct such
an undertaking.

8. A proposition has been made to me to lay
   down a railway between the towns of Westport and
   Charleston, in consideration of certain privileges to
   be conceded by the Government, and of a grant of
   one thousand acres of land. The proposal received
   the recommendation of Mr Commissioner Kynnersley,
   and was favorably entertained by the Executive
   Council.

At the present town of Charleston receives the
chief part of its supplies in duty paid goods from
Canterbury, considerably to the loss of our Provincial
revenue; but the construction of a railway to West-
port would probably bring the trade with Charleston
to that port, to the manifest advantage of this Pro-
vince. The details of the proposition, together with
a Bill to enable me to carry it into effect in accord-
ance with the provisions of the Waste Lands Act,
1863, will be submitted for your consideration.

9. The want of extended telegraphic communication
   upon the West Coast becomes daily more apparent,
   and I propose, with your sanction, to make arrange-
   ments with the General Government for the imme-
   diate construction of a line from Greymouth, by way
   of Brighton and Charleston, to Westport—under-
   taking on the part of the province to be responsible
   for any deficit which may arise between the receipts
   and the cost of maintenance, inclusive of interest on
   the cost of construction.

The cost of the line is estimated at about £7,000,
interest upon which will probably be reckoned at
the rate of six per cent. per annum. When the
new line has been completed, not only will the towns
of Cobden, Brighton, Charleston, and Westport, be
supplied with intermediate telegraphic communica-
tion, but they will also, though by the very circuit-
ous route of Hokitika, Christchurch and Blenheim,
be connected by wire with this town.

10. The vexed question of the existence of a
    practicable line for a dray road from the valley of the
    Motueka to that of the Karamea, across the Mount
    Arthur range, has occupied much of my attention.

I have satisfied myself that much of the apparent
discrepancy between the statements of different ex-
plorers in that district, has arisen from a confusion
as to the part of the Karamea which would be
reached by the route so long insisted upon by Mr.
Hough; and as, although I am convinced that what
is known as the "Karamea Bend," cannot be directly
approached by Mr. Hough's route, I consider that a
practicable road to any part of the Karamen Valley
would be of the utmost importance to the develop-
ment of that district—which has been known to
be auriferous—as well as to Motueka, the Waimeas,
and the town of Nelson, I have despatched a care-
fully selected exploring party, who I trust will set
the question at rest one way or the other. At the
same time, the track ordered by Mr. Barnicoat, when
Acting-Superintendent, to be cut in a comparatively
direct line from the Motueka, up the course of the
Graham, and over the part of the Mount Arthur
range known as the "Loadstone," to the Karamea
Bend, is being proceeded with; and although there
is probably no prospect of a dray road by that route,
I hope for the formation of at least an effective horse-
track.

11. A contract has been entered into for building
    a Hospital on the Waimea-road, upon the plan sub-
    mitted to you during the last session of the Council.
    The cost of the building will, however, greatly ex-
    ceed the sum then appropriated for the purpose;
    but the demands for hospital accommodation, con-
    sequent upon the rapid increase of the mining popu-
    lation upon the West Coast, make the erection of a
    building upon the contemplated scale absolutely
    necessary.

The present Hospital is, as you are aware, under
the sole management of the Superintendent, whose
other engagements make it impossible for him to
exercise the needed supervision; and I think it is
essential to the well-being and comfort of the pa-
tients received within its walls, that an immediate
change should be made in this respect; more espe-
cially having reference to the enlarged scale upon
which the institution will be established when the
new building is completed. It appears to me that
the "Hospital Act" of 1859 contains provisions for
the efficient management of the establishment; and