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mails will be carried right through to San Francisco without transhipment.

Although, owing to unforeseen circumstances, the Dunedin and Port Chalmers Railway has not been completed within the stipulated time, yet I understand that the whole of the plant is now on its way from England. Should it arrive in due course, the promoters expect to have the railway open for traffic in July next, with the exception of the pier, which will probably take some months longer to erect.

Gentlemen,—Another incident worthy of note during the year has been the addition to our local industries, of a woollen manufactory on a comparatively extensive scale. This has been the result of the bonus voted by the Provincial Council two sessions ago.

Although this is the only practical fruit which has resulted from the various offers of a bonus on the part of the Government, I am disposed to think that we should still try this means of stimulating new industries, especially the development of our coal fields and the manufacture of paper.

It is not very flattering to the commercial enterprise of the Province, that during the past year there have been imported 24,280 tons of coal, representing a money value of £34,000, while equally good coal is known to exist convenient to water-carriage within our own territory. In point of fact the Province may be said to be one great coal field. Now that the consumption of coal will be so largely increased, in order to supply the requirements of the American steamers, it behoves us seriously to bestir ourselves in this matter.

As regards the manufacture of paper, it will be remembered that a bonus was offered some eight years ago. Had the amount offered been greater at that time, it is believed that a large and flourishing manufacture would have been ere now in operation. We have in this Province an unlimited quantity of raw material, suitable for paper making, indigenous to the soil, and the manufacture only requires a commencement in order to form one of our most staple exports. As it is, I should propose that we supplement the offer of the General Government by an equal sum.

In compliance with your resolution of last session, power has been obtained to dispose of land, on special terms, to the extent of 100,000 acres, on Stewart’s Island, and an equal area between Waikava and Catlin’s River.

The great difficulty in practically dealing with these lands is the cost of survey, an expense which the Province can scarcely be expected to bear in respect of that portion of the land proposed to be free granted. Regulations have, however, been framed, which it is hoped may lead to the beneficial occupation of the territory in question, which regulations only await the sanction of His Excellency the Governor in order to become law.

As you are aware, the General Assembly passed an act last session to enable free grants of land to be given by way of encouraging the growth of forest trees. Before, however, the provisions of the act can be made available in this Province, it is necessary that you should, by resolution, concur with me in bringing it into force.

The Colonial Legislature at its last session sanctioned the expenditure of a large sum out of loan towards the construction in this Province of certain railways; also towards water supply on gold fields, and immigration. I believe that steps are in progress with a view of giving practical effect to the action of the Legislature in respect of all these proposals. It is much to be feared, however, that, in as far as this Province is concerned, the Colonial Legislature has made a mistake in not leaving the practical administration of the matters in question to the Provincial Government. If any one thing more than another is essential to secure the success of the great policy of public works and immigration upon which the Colony has embarked, it is

local administration. However expedient it may be that there should be only one national borrowing power in the Colony, such power should be exercised only on behalf of such Provinces or districts as are in a position to employ the loan advantageously, the administration of the loan being left very much to themselves. It is, I think, much to be regretted that this principle did not commend itself to the Legislature, and that instead of creating an entirely new and distinct machinery, it did not make use of that already in existence. It will be fortunate for the Colony if it does not yet see cause to regret its determination to administer local undertakings from one remote centre.

In conformity with your resolution of last session, a Bill has been prepared with a view to the formation of Shire Councils. Probably, however, this measure may be deemed premature, until such time as the new Roads Ordinance, which it is proposed to bring into operation in June next, shall have had fair time to develop itself.

A Bill will be submitted to you for the purpose of securing to Municipal and Shire Councils the whole of the Publicans', Auctioneers', and other License Fees levied within their respective boundaries, on condition that the main roads, when formed within said boundaries, shall be upheld and maintained by them.

Gentlemen,—The sum paid into the Provincial Treasury during the past year, from all sources, has amounted to £286,236, while the sum expended has been £245,000. As however, this is a subject which will be more fully brought before you by the Provincial Treasurer, I need not enlarge further than to state that the expenditure has been diffused generally throughout the Province, and that your cash votes for last Session for Roads and Bridges, and Public Works, amounting to £89,600 have been expended, or are in course of expenditure, to the extent of £82,000. Upon the whole, when it is borne in mind that the Province has not during the last year fingered one farthing of its Customs Revenue, while it has had to provide for the carriage of its inland mails, for Police, Gaols, Hospitals, Lunatic Asylum, Education, Administration of Justice on Gold Fields, as well as Interest on Loans, comparatively small as has been the expenditure of Public Works, it is satisfactory to find that the amount has been so large.

As respects the future, it is useless to shut our eyes to the fact that the extent to which we can construct and maintain public works throughout the Province must depend entirely upon the extent to which we dispose of our waste lands. And while I hold that in administering the Land Act, the primary object must and ought to be the actual settlement of the country; at the same time, if the country is to be rendered accessible and fit for settlement, we cannot ignore dealing with the land from a revenue point of view likewise.

In voting any thing, therefore, beyond the absolutely necessary requirements of the public service for the current year, it had better be distinctly understood that the expenditure will be entirely contingent upon the sale of land. I deem it right to lay so much stress upon this, inasmuch as there is a disposition on the part of some to dispose of the whole of our territory by way of free grants.

The amendments proposed by you last Session in the existing land regulations were, as you are aware, embodied in a bill which was submitted to the General Assembly. This bill, with some few alterations, received the sanction of the House of Representatives, but did not pass the other branch of the Legislature. A copy of the bill as amended will be placed before you. This bill will again be submitted to the Colonial Legislature at its next session, with, it is hoped, a more satisfactory result.

Gentlemen,—With the prospect of railways superceding, in a great measure, the main trunk lines of