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Possibly more recent and favorable intelligence connected with the progress of the war may before now have tended to induce a reaction of public opinion in England towards the Colony, but however this may be, until peace is re-stored on a permanent basis, it will be vain to expect such a complete re-establishment of public confidence as will place the Colony beyond the reach of pecuniary embarrassment.

It is beyond my province to comment in this place upon Imperial or Colonial policy as it applies to the conduct of the war, or to the means which are being used in order to secure the restoration of peace; but it is doubtless a part of your duty and of mine also, in dealing with the Revenues of this Province, to consider how far the destination of those Revenues may be affected by operations which are controlled by Imperial and Colonial policy.

To the present time the war has been conducted mainly at the cost of the Imperial Treasury, but it has never-thless been found necessary to resort to a Colonial Loan for the purpose of defraying that share of its cost which, under existing arrangements, devolves upon the Colony. As we have already seen, this Loan is at present unsaleable at ordinary rates. The Colonial Government have contracted extensive liabilities in anticipation of its disposal, and if, as is generally believed to be the case, they may at any time be called upon to meet these liabilities, the Securities of the Colony and its future Revenues must be sacrificed to its pressing necessities.

The difficulties of the position are not lessened by the attitude assumed by the Imperial Government, who have expressed their intention of either withdrawing the troops at the end of the present year, or, if longer retained, of charging the colony with the full cost of their maintenance. These facts point mainly to one of two consequences—either the war must be concluded before the end of the present year, or the Colony must be charged with the cost of its continuance, in which latter case, not only will Provincial Securities remain unmarketable, but in all probability the whole of the Customs and a considerable proportion of the Territorial Revenues will be impounded by the General Government for war purposes.

The crippling effects upon our Provincial administration, caused by the abstraction for General Government purposes of five-eighths of our Customs Revenue, have long been so apparent that I need not comment upon the disastrous effects which a continuance of the war in the Northern Island, at the cost chiefly of the Middle Island, would entail. It therefore only remains for me to request that you will give this subject that mature deliberation which its importance demands, with a view of uniting with me in devising such measures as may be calculated to avert an evil of incalculable magnitude.

The administrative action of the Provincial Government during the four months which have elapsed since your last Session terminated, has been necessarily narrowed by the circumstances in which they have found themselves placed, it having been prudently decided by you that such Public Works only as were of absolute necessity, in addition to those which were then contracted for, or which were in course of progress, should be proceeded with until additional means were available, through the sale of Debentures or otherwise.

A system of Departmental retrenchment, which received your sanction, has been instituted; and although at present necessarily incomplete, owing to the existence of engagements which could not be brought to an abrupt termination, the results will not fail to be apparent to you, on comparison of the present with past Estimates.

Since I last had the honor to address you, the new Land Acts of 1863 have become law. As the principles embodied in these Acts received the sanction of the Provincial Council, after having been submitted to the test of much deliberative discussion, and as the operation of these Acts will exercise an important influence on the future settlement of the country, it is desirable that every existing impediment to their full and fair trial should be removed. Such impediments having been found to exist immediately on the attempt being made to work the new Acts in connection with the unrepealed portions of the Old Regulations, I propose during your present Session to direct your attention specially to those portions of those Regulations which appear to require amendment, in order to adapt them to the principles of the New Acts.

Before passing to other subjects, I would here remind you that the time is fast approaching when you will be called upon to decide in what manner the Pastoral Lands of the Province shall be administered. It has long been apparent that the conditions under which these lands are occupied are unsatisfactory to all parties concerned. The lands of the class referred to form a Provincial estate of immense extent, and of great value, but practically unproductive as a source of revenue. On the other hand, the occupiers hold these lands under so precarious a tenure that they cannot be reasonably expected to pay the amount of rent for their holdings which might be readily obtained were the tenure of a more certain character. Although immediate legislation on the subject is perhaps uncalled for, the future administration of our Pastoral Lands is a question of such vital importance that its early discussion, with a view to a future wise legislation thereon by the General Assembly, cannot be considered altogether premature.

It is with much satisfaction that I am enabled to congratulate you on the general prospects of the Province. The permanency and vast extent of our Gold Fields now appear to be fully established, and it is gratifying to find that Mining on our various fields is now assuming the character of a settled business, and that the various modes of working are being conducted in a thoroughly systematic and scientific manner.

I have also much pleasure in referring to the progress of Agriculture, and to the rapid and extensive inroads which it is making upon the waste lands of the Province. During the present season many thousands of acres, which have until now been comparatively useless, will be brought into a state of profitable cultivation; while drainage, and other operations preparatory to cultivation, are being carried on throughout the country on an extensive scale.

Several new Bills will be introduced by the Government, and you will be asked again to pass, with necessary amendments, several of the Ordinances of last Session to which his Excellency has been advised by his Ministers on technical and other grounds to withhold his assent.

The periodical Returns from the various Departments, which will be laid on your table, will inform you of the nature and extent of the Works now in progress, as well as those which have been completed during the recess.

Reports from several Commissions appointed by me, in pursuance of Resolutions of your House, will also be presented to you.

The Estimates, based upon probable Revenue, will shortly be introduced, and will convey to you the views of the Government with regard to its appropriation.

With other subjects of importance, your attention will be specially directed during the present Session to the New Zealand Exhibition, which it is decided to open about the 3rd of January, 1865, on which occasion the presence of His Excellency the Governor is expected.

As you have already evinced your sense of the importance of this movement, it is unnecessary for me now to press its claims upon you. The work which has devolved upon the Commissioners has been of an arduous nature, and many difficulties have been encountered in the prosecution of their design; but, having been encouraged by your countenance, and by repeated assurances of outward support, they now look forward with increasing confidence to a successful termination to their labors. I will only add, that the ability and indomitable energy which have characterised their proceedings entitle them to the thanks of the Colony, and are an earnest of those prosperous results which they anticipate.

I now leave the work of the Session in your hands, with the sincere prayer that the Divine blessing may attend your labors.

J. HYDE HARRIS,
Superintendent.

REPLY TO THE ADDRESS OF HIS HONOR THE SUPERINTENDENT.

WE thank your Honor for having called the Council together at the expiry of the financial half-year, in accordance with the resolution at last Session, that the supplies for carrying on the Government of the Province should only then be voted for the period of six months.

We are glad that your Honor finds that your former impressions of the financial stability of the Province are unchanged, and have been even strengthened by what has transpired since our last Session. Though the Province has passed through a season of universal depression, there is cause for thankfulness that it has not been followed by consequences of a more serious nature.

The external dangers to which the Province is exposed demand most vigilant attention, and being fully alive to the serious consequences entailed on the Provinces of the Middle Island by the continuance of the present war, any prudent measures calculated to remedy this evil, and place matters in a more satisfactory position, will have our best and most earnest attention.