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the Whakatipu Lake. The facility of access to the Lake from the Southland ports, as compared with that from any port elsewhere, gave the control of the trade with the population which rapidly increased upon the field, to the merchants of this place—the supplies having for the most part, and for sometime almost exclusively, been sent from this Province. Many of the miners there have gone from Southland, and a number of gold buyers from thence also. The difficulty and hazard attending the transmission of the rough gold which those parties acquired, prevented them from forwarding it to their families or principals, as the case might be, or even from getting it deposited in a place of security: a considerable time elapsed, and gold continued to accumulate before the alternative was presented of sending it to Dunedin by the escort—a service which has only lately been established—and a very natural desire was expressed and reiterated in this place that the Government of Southland should provide an escort for the gold of those who wished to send it to Invercargill.

"The Provincial Government was quite prepared to establish an escort within this Province—a service, however, which would necessarily fail to meet the requirements unless connected with a corresponding service communicating directly with the gold-fields; and it was influenced by other considerations apt to be overlooked in the excitement of feeling. It was of opinion that the duty of giving the protection sought for within the Province of Otago devolved specially on the Government of that Province; it had no desire to supersede the proper authorities in the performance of such special duties, and therefore, before determining on the extension of such a service into the Province of Otago, it endeavoured to obtain the co-operation of the authorities of that Province in executing a duty which it conceived would be most conveniently carried out by joint action, namely, to give each within the limits of its own Province the protection which was necessary to enable persons on the Whakatipu gold-field to transmit their gold to a place of security in either Province.

"As time passed, the necessity for such a service in the interest of Southland became more apparent. The acceptance of the alternative of sending their gold to Dunedin—after the escort thither began its functions—would subject those who desired to transmit their gold to Invercargill to considerable expense and delay before its value could be realised there; it became obvious also, after repeated communications, that no hope of a co-operation, such as above alluded to, could any longer be entertained; and then the Government, for the protection of the interests of this Province, established a Provincial Agency at Whakatipu, and organised an Escort from thence to this place.

"From the returns of the census of the Province taken in December, we gather evidence of progress on all sides. In December, 1861, the population was 1820, in December, 1862, it was 3455—an increase of 90 per cent. The quantity of stock and extent of land fenced and in cultivation have also increased largely. A comparison of the shipping lists is equally satisfactory; in 1861, the tonnage inwards was 9099 tons; in 1862, 20,289 tons. The value of imports in 1861 was £55,240, in 1862, it amounted to £169,000. The value of exports in 1861 was £5131; in 1862, £19,471.

"The Revenue returns afford further proofs of prosperity; the gross Customs’ Revenue in 1861 was £3401, in 1862 it was £11,763; and the Land Revenue in the past four months exceeds the average estimated in October last, amounting as it has done to £23,000.

"The chief reason for your assembling at this time is to consider the propriety of constructing a Railway between the Bluff and this place. At the time the Council was prorogued, it was expected that the elements of this question would be matured for deliberation at an earlier date, but various unforeseen causes occasioned considerable delay in the preliminary work. That is now done, and it is done well, and the delay is the less to be regretted since it has given an opportunity of obtaining an opinion of high value from a gentleman who has lately settled in this Province, and whose name is well-known as the engineer of different Railways in Great Britain, where he has acquired a large experience. To the Reports of the Chief Surveyor and Mr. Dundas, I can refer you with confidence for the details of the work, and the various matters connected with it, that incidentally arise in considering it. The work presents no engineering difficulties, either in curves or gradients; abundance of materials are close at hand along the greatest part of the line, so that it is practicable to construct the permanent way at a comparatively moderate cost. The estimate for the whole line—permanent way, stations, plant, and rolling stock—is £6500 a-mile. The work proposed will be of a substantial character, calculated to bear a heavy traffic with locomotive engines.

"In necessary connection with this work, it is proposed to make Jetty Works of considerable extent, without which indeed, at least at the Bluff, the Railway would be comparatively inefficient. Reports on those works and accompanying plans will be laid before you. I have to propose for your consideration that the sum of £120,000 should be raised by way of loan for the purpose of meeting the expenditure upon those specific objects. The allocation of this loan will be in the proportion of £105,000 for the Railway, and £15,000 for Jetty works; and it is proposed gradually to pay it off in twenty-five years.

"But another question of nearly equal importance and even greater urgency, is that of keeping open the communication with Whakatipu throughout the winter. The supplies of a producing population in the Whakatipu district, which at present numbers from 8000 to 10,000 men, will for the most part be sent from or certainly through Southland. The possibility of keeping up those supplies will depend upon the condition of the roads, and the experience of past winters has taught us that the gravel employed in metalling our roads, though forming an excellent way in