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all sales of any waste lands of the Crown of New Zealand, one-fourth part of the sum paid by the purchaser, shall be paid to the New Zealand Company, towards the discharge of the sum of £268,370 15s.

Apart from the question of the justness of the debt, the policy of attempting to raise so large an amount from the settlers of a young colony, not to be expended on public works tending to enrich the country, to benefit the settler, and to give value to his land; but for the purpose of being abstracted from the colony has been questioned. Looking to the principle on which a debt was admitted to be due to that company—to the amount of the debt—and to the circumstances under which its repayment was secured to them; the agreement to impose a charge of upwards of a quarter of a million sterling upon the public lands of New Zealand has been commonly regarded as an arrangement more favourable to the distant members of an Association who "have found themselves unable to continue their proceedings with profit to themselves or benefit to the colony" than to the settlers in the country itself, who in their own persons, and by their own labour, have been doing the work of its colonization. The circumstances under which the Legislature was induced to give its sanction to an Act providing that in case the New Zealand Company should fail in their colonising experiments in the Province of New Munster, that the loss incurred by them in their unprofitable undertaking should be charged upon the Waste Lands and upon the Colonists of New Zealand at large, have never been explained.

It cannot be a matter of surprise that the extension of this charge to the Northern District of New Zealand, witnessed as it is from the first of the New Zealand Company's operations, and which has not at any time acknowledged any benefit from that body, or any advantage from any of their proceedings, should have been made the subject of repeated remonstrances by the colonists of the North.

If the facts had been known to the Legislature, that the Colony has acquired little or no waste land in New Zealand by virtue of its Sovereignty; that nearly the whole of its present Demesne has been purchased from the native owners of the soil, with moneys raised within the Colony; that the land which may in future be needed for the use and occupation of British immigrants in that like manner be acquired by purchase from the natives, the price of £268,000 must tend to lessen the price to be paid to, and thereby to depreciate the property of the native seller, and must at the same time operate in the nature of a tax upon the English buyer; an enactment for making good the losses of an English Joint Stock Company, at the expense of the aboriginal owners of the soil, and of the present and future colonists of New Zealand, would not have received the sanction of the British Parliament.

In addition to the repeated remonstrances of the colonists themselves, strong representations against the imposition of this charge upon the resources of the colony have been made to Her Majesty's Government by Governor Sir George Grey, and a remonstrance was also made by the Executive Government of the Province of New Ulster against the extension of its operation to the Northern District of New Zealand. The subject has now to receive the consideration of the Constitutional Representatives of the country, and I am not without hope that the measure to be taken by the Assembly in reference to this debt may yet be influential in effecting its satisfactory adjustment.

No provision has been made by the Constitution Act, for regulating the appropriation of the revenues arising in the several Provinces from duties of Customs, &c. levied under existing colonial Ordinances. But it has been provided, as you are aware, by the Constitution, that subject to certain charges imposed upon them, that the revenues which may be raised by the Supreme Legislature, shall be subject, in the first instance to be appropriated by that body, but that, so far as the Assembly shall not appropriate them, such revenues shall be divided amongst the several Provinces in the proportion in which they shall have been contributed by them. A careful consideration of the provisions of the Act, will probably lead to the conclusion that it was the intention of its framers, that the general revenues of the colony should be subject to the like appropriation, but although such may have been the intention of the authors of the Constitution, the object has not, in fact, been accomplished; the provisions of the Act having been made to apply, not to the revenues already arising under Ordinances of the Legislative Council, but to future revenues in the words of the enactment; in question, to the "the revenues arising from taxes, duties, rates, and imposts, levied in virtue of any act of the General Assembly;" unless some more convenient method should be suggested for effecting the object, I would recommend for your consideration the expediency of passing an Act which shall provide that the revenue now arising from duties of Customs levied in virtue of any colonial ordinance, shall, for the purpose of the Constitution Act, be deemed to be duties, &c., levied in virtue of an act of the General Assembly.

As it may be desirable, however, for the adequate support of the Provincial Establishments, and for the prosecution of local improvements and public works of a Provincial character, that the local Legislatures should have some certain funds at their disposal for these purposes not liable to be suddenly withdrawn, it may probably be deemed expedient to provide by an Act of the Assembly, that either a fixed amount or a certain proportion of the general revenue, after the Colonial Treasurer is satisfied, be paid over to the Provincial Treasury, and be subject to the appropriation of the Legislature of the Province.

The adoption of this course will remove any doubt which might otherwise be entertained, as to the power of the General and Provincial Legislatures over the appropriation of the revenues; and will give that stability to the financial arrangements and to the public undertakings of the several Provinces, essential to the efficient administration of their affairs.

It may be assumed that the general revenue for the current year will amount to £95,600, and that the territorial revenue will amount to £104,681, making a total of £200,281.

For the support of the Provincial Establishments and for local Public Works, the Legislative Councils of the various Provinces have appropriated for the period of twelve months, as follows, that is to say,

Auckland .. .. £32,262
New Plymouth .. £4,016
Wellington .. .. £18,002
Nelson .. .. £10,953
Canterbury .. .. £18,999
Otago .. .. £1,995

Total .. £86,227

It may be estimated, therefore, that a sum of about £114,054 will remain to be disposed of.

The expenses of the Supreme Court, banking, marine, registration, Post Office, and other departments under the exclusive jurisdiction of the General Assembly, ought I think, to be regulated and provided for by the General Assembly; the aggregate amount required for the support of these establishments may be estimated at £30,437; the expenses connected with the General Assembly, salaries of officers, travelling, &c., expenses of the members, printing and other incidental expenses, may be estimated at to £3,000; and