Excellency the Governor has proclaimed two Hundreds in the Province which will render available for settlement about 56,000 acres of agricultural lands: the greatest part of which is perhaps the best in the Province, the Aparima Hundred being situated in a district in which land is always in eager demand; whilst the excellence of the land in the Oreti Hundred is so generally recognised as to require no further reference. Under these circumstances, the Provincial Government has reasonable grounds to anticipate that the estimate of Land Revenue for the ensuing year will be fully realized.

When the estimates for the past year were prepared, the Provincial Government did not anticipate that such an urgent necessity would arise in the course of the succeeding financial year for pressing forward so many important public works; but the great increase of population and trade imperatively demanded the immediate prosecution of works which, under ordinary circumstances, might not have become necessary for years, and the construction of which involved much unauthorised but unavoidable expenditure. The departments in which this chiefly occurred are those of the Public Works and Highways. The works executed have been most useful, and the staff of officers in each is in a highly efficient state; but the greatest areas of expenditure over appropriation has been in the Roads Department, rendered necessary in order to endeavour to provide all facilities for the conduct of the traffic with Wakatipu. The route leading thither have been kept in a visible state throughout a remarkably wet winter at an heavy expense, and chiefly by means which ought altogether to have answered the purpose for the time, were economy of expenditure one of the first considerations. No adequate repairs have been made to the formation of the road, which on several portions is now reduced almost to its original state of nature; and, unless proper metalling with broken stone, those roads within a few miles of the town with necessity fall into a similarly impassable condition in the course of new winter. This report I have to draw your attention, as it enters closely into the detail of the requirements of the various roadways and the consequent contingent expenditure.

The Provincial Government has carefully considered the subject of a Railway by the valley of the Oriei, and a preliminary report of the Chief Surveyor contains a substantially statement of the steps necessary for the immediately commencement of this work has appeared so urgent that a survey has been made, in order to bring the subject in a tangible shape under the consideration of this Council. When a comparison is drawn between a metalled road on the one hand, taking into account the impossibility of forming it in the course of the ensuing summer, the expense of making and maintaining it, the absence of all revenue traffic on it for use, and the comparatively moderate expense of a proposed railway, the facility and rapidity of its construction, the small expense of maintenance, its reproductive character, and, above all, the certainty of securing the Whakatipu traffic; and giving a powerful stimulus to the development of the resources of this district through which the line passes, on the other hand the advantages of the latter are very apparent. Even in the view of the last mentioned consideration the work would be reproductive; but the Wakatipu traffic promises to be the most important inland trade in New Zealand. The gold field at Whakatipu is the richest known in the Colony, and it has other mineral riches probably not inferior in importance. In the course of the past winter specimens of copper ore were brought from thence to Invercargill, which were pronounced by an experienced and thoroughly qualified judge to denote unequivocally the existence of silerage lodes. The ore contained indications of tin, which, if found in abundance, would be still more valuable. With a knowledge of these circumstances, it is obvious that the importance of the trade with Wakatipu does not depend exclusively on the production of Gold. Copper or tin mines would be a permanent source of wealth to the community in which they were profitably worked to any railway this district possesses, the conveyance of these metals, and of the community of the poor towns where the ores were shipped, and from whence the supplies were obtained. Further reports and evidence on the engineering and other details of this line will be brought under your consideration; and I am confident that you will determine on that course of action which you conceive will be most conducive to the interests of the Province.

The assent of His Excellency the Governor having been given to the Bluff and Invercargill Railway and Loan Bills, the works were initiated without delay. The Railway materials were ordered from home, and contracts have been concluded for the construction of the roadbed, at Campbelltown and Stanley, to Beaumont at the Makomoko.