that these lands are wholly the property of

the colony, and ought to be disposed of as
the true interests of the colony, and not of
this particular Province may demand. If,
therefore, they should be indiscriminately
sold to the highest bidder, without any means
being taken to attract population, we cannot
complain of any special injustice to this Province having been committed, but can only
regret the adoption of what appears to us a
shortsighted policy, detrimental to the colony
at large as well as to the district in which
we live. It is very probable that in this case,
as happens in solving so many political problems, the course actually taken will be a
compromise, and that the Colonial Government reserving to itself a large share of the
land fund will allow a portion to the Province, for the trouble and cost of administering these lands, and for the construction of
such roads as may be deemed necessary for
the profitable sale of the land and the security
of the country.

My negotiations with the General Government with respect to the handing over to the
Province of portions of the confiscated territory as an equivalent for the expenditure
of the balance of the land purchase fund apportioned to this Province have not yet led
to any definite result. The difficulty as to
the valuation of the land, which I have already spoken of, is felt also in this question,
and finding that a disposition was shown to
place upon it a heavier price than under the
circumstances the Province could in my
opinion afford to pay, I have suggested as a
means of altogether avoiding the troublesome
question of the value of the land, that the
amount standing to the credit of the Province
for the purchase of land should be set off
against the debt allocated to the Province for
public works executed by the General Government. The Province would thus be relieved from a large part at least of the debt
which has been fixed upon it, without the risk
and delay which would attend the transaction
if that debt were to be paid off out of profits
to be derived from the sale of land. These
two sums would not, however, balance each
other. The claim of the Province on the
land purchase fund is partly for money to be
expended for the Province, for which no
interest is to be paid, whilst for the remainder,
interest at 4 per cent. and 2 per cent. sinking
fund is chargeable. Estimating both these parts
together as equivalent to a claim for money subject to no payment of interest to the amount
of £19,000, and setting this as far as it will
go against the allocated debt, there would
still be a balance against us at the present
time of £7,000 or thereabouts. I cannot,
however, but entertain the hope that, if the
Provincial Government were to lay before the

Colonial Legislature at its next session, a
clear statement of the circumstances under
which the amount charged to us as allocated
debt was expended, showing what the Province has got for this expenditure, and that
in respect for the same small portion of road
to pay for which this heavy burden has been
imposed, an increase of several thousands has
been made to our floating debt (by the payment from the Provincial Treasury of compensation to persons through whose land the
road was taken) we might procure at least
such a reduction of the charge as should
admit of the two sums referred to being altogether struck off against each other.

From the estimates, which will be laid before you, you will perceive, that without allowing for payment of interest on the allocated debt, and after making reductions in
the salaries of all the public officers, which
were previously, I think, very moderate,
there is still an excess of expenditure over
estimated revenue for twelve months ending
in June 30, 1867, of some £1,200, and
although there is reason to hope that the Customs’ Revenue has been under-estimated, it
will be most prudent to look on these figures
as representing the actual state of the case.

As regards the interest on the allocated
debt, which is not entered on the printed estimates, there is as far as I can see no
possibility of meeting that charge out of the
revenue this year except by special taxation
for the purpose; and the imposition of such
taxation is a course which I cannot propose
while the settlement is in its present position,
nor until an appeal has been made to the Legislature to lighten this unmerited burden.

But, leaving this charge out of consideration for the current year, I think it is
clearly our duty to endeavor to bring the
remainder of the expenditure of the Government within the revenue, and as I can see no
way of further reducing the expenditure of
the different departments, to any extent
worth naming, without detriment to the
public service, or injustice to the public servants, I would suggest for your consideration
whether it would not be possible and right,
that the ordinary revenue should be relieved
from the very large annual expenditure
hitherto charged upon it for charitable aid,
that expenditure being provided for either by
the establishment of an organised society to
collect subscriptions and disburse relief, or, if
it be preferred, by levying a rate for the
purpose. Some small addition may probably
be made to the revenue by adopting as far as
possible the principle of making the different
departments self-supporting, and charging
fees for all services performed by public
officers for private individuals.