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summer and for light traffic, is unable to bear even a considerable winter traffic. A heavy traffic in winter would soon render many parts impassable. Stone for road metal is distant, and, for the present, expensive, and it would be impracticable to metal any great extent of road before winter. Another alternative is open, namely, to lay down a horse tramway on the North Road at first, and if possible before winter, for about twenty miles from town to a point touching the gravelly plains inland, which, while unenclosed, form good natural roads, as an instalment of the plan of extending this ways towards Whakatu. The original expense of such a tramway would not much exceed that of a metalled road, while it would have the incalculable advantages of being capable of being laid down in a few months, and of becoming at once a permanent way—the expense of maintaining which would be trifling as compared with that of maintaining an ordinary metalled road, as the latter would require frequent renewal, each time, at an average cost little less than the original expense. The cost of carriage would be most materially lessened—the rural lands along the line would be opened out and enhanced in value, and, moreover the Tramway would at once begin to yield a Revenue. It is proposed that a rail should be laid on a part of the present highway so far as the lands on both sides is sold, and, beyond that point, that a line should be reserved for that purpose.

In order to carry out this work it will be necessary that a loan should be raised for that specific purpose, and the sum I would propose is £180,000. The objects of those loans, amounting in all to £250,000, are for a Railway, a Tramway, and Jetty Works—specific works of a purely reproductive character, a class to which alone such loans are legitimately applicable. The repayment of those loans will be a primary charge upon the Land Revenue—the capital of the Province—and when by its means we shall have repaid the debt incurred in constructing such works, the transaction will be equivalent to a re-investment of a part of that capital in such a way as to render it a permanent source of local revenue.

In intimate connection with this subject, arises another to which I desire to draw your attention. It is well known to this Council that in the past few months a marked advance has taken place in the value of fixed property. The upset price of rural Waste Lands of the Crown is now below the market value. The increasing commercial prosperity consequent on the influx of population and capital has given to it, theoretically, a greater value, and the experience of every day shows that this is realised in fact. I have to suggest for your consideration the propriety of raising the upset price of rural land. An increase of price, while it would directly tend to discourage speculation, would not deter the bonâ fide settler from buying land for cultivation; and though the best lands in the neighbourhood of the town have passed into private hands, the extension of roads and settlements is opening up districts in the interior, a large extent of which, yet unsold, is as well adapted for agricultural purposes as any in the Province. This applies in an eminent degree to the line of country which will be opened up by the prosecution of the Tramway to Whakatupe. The report of the Chief Commissioner shows that a large extent of land on that line within a moderate distance of the town, is peculiarly well adapted for settlement, and the extension of that work will inquestionably increase its value. It will be seen from another report of the Chief Commissioner that the extent of unsold arable land in the Province is estimated at about 761,000 acres, exclusive of much excellent land in valleys in the northern parts of the Province which will ultimately be available.

In case you should upon deliberation come to the conclusion that the price of rural land should be raised, I have to suggest that it would be desirable at the same time to give expression to an opinion upon the question of the advisability of adhering to the improvement clauses under altered conditions of price.

Gentlemen, it denotes no undue presumption to anticipate that, with an excellent harbour, the nearest to Melbourne of the New Zealand ports—the terminus of the Southern Island Telegraph—having ample wharf accommodation and other facilities for a rapid discharge of cargo—a Railway from the Port to the Capital—easy access to the richest Gold-field known in the island, such as will give to this place the command of the market of a large producing population there, and in all directions to rural districts which present attractions for settlement inferior to none in any colony, and capable of sustaining a dense population—the prosperity of the Province will be assured, and that prosperity will continue because it will be mainly based upon permanent conditions.

In carrying out a course of action which will tend to promote such a result, the Provincial Government relies on the support of this Council to enable it to take advantage of that 'tide which leads to fortune;' and which occurs but rarely in the history of communities—which is now flowing for this Province, and which, if the Government and Council display energy and intelligence equal to the occasion, will shortly give to Southland that influential position among the sister provinces of New Zealand to which her geographical position and latent resources alike entitle her.

REPLY OF THE COUNCIL.

Sir,

It affords this Council much satisfaction to learn that the finances of the Province are in such a healthy state, and that its commercial prosperity, as indicated by the Customs' returns, is rapidly advancing.

We entirely concur with your Honor's estimate of the importance to the future progress of this Province of the great works which are now contemplated, and the measures connected with them will receive our most careful consideration.