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exclusive of the proceeds of the reclaimed land) will be sufficient to enable us to carry out existing contracts—to complete works in progress—still that we cannot undertake fresh works unless further funds are provided. Some amendments (which have been already published) to the existing Land Regulations will be brought under your consideration. That which refers to free grants of land to military and naval settlers, will, I trust, meet with your support, inasmuch as it simply confers upon non-commissioned officers and privates, the same privileges given to military and naval officers under the regulations now in force.

The most important amendment is that relating to land not worth 10s. an acre, or unavailable for agriculture. At present any intending purchaser may (under clause 8) call upon the Land Commissioner to certify, that land is not worth 10s. an acre, and on receiving the Commissioner’s certificate to that effect, may have the land put up to auction at 5s.; but there is no power given to the Government to call for such certificate, or to put up land at 5s., unless it be first moved thereto by an intending purchaser; the result is that the 8th clause of the existing regulations is, to all intents and purposes, a dead letter; and that some three million acres in this Province, which never will be bought at 10s. nor can be used for agricultural purposes, are locked up against purchase. It is therefore proposed that the Government shall be empowered, without waiting for an application from an intending purchaser, to proclaim all lands, which may from time to time be certified by the Commissioner as not worth 10s. an acre; or as being unavailable for agriculture, open for sale at 5s. an acre; to place, in fact, such land, as far as its sale is concerned, on precisely the same footing as 10s. land at present is; so that any party may on the day on which a block of such land is notified as open, purchase the whole or any portion of it without its being put up to auction,—except, of course, in the case of simultaneous applications. But with respect to similar land on runs held under license from Government, and fully stocked, we propose that it shall only be sold by auction, after three months’ notice of the intended sale shall have been given to the runholder. So that the runholder will always have an opportunity of competing—and can never have his run bought over his head (for the purpose, it may be, of compelling him to sell his stock at a mere nominal price) without due notice.

By these modifications of the 8th and 14th clauses of the present Regulations—I believe, that (amongst other advantages) the Government will be enabled to sell a considerable quantity of land—probably from 100,000 to 200,000 acres a-year, of land that never would be sold at 10s.—that the Land Revenue would not merely be increased, but would be rendered certain for many years to come; that these lands by becoming freehold, would be so improved as to carry a much heavier amount of stock than they at present do—and that in the course of no long time the most inaccessible and worthless lands of the Province would be converted into profitable sheep-walks. Should you adopt this modification, I shall propose that a clause be added to the effect, that the expense of the survey of all land sold at five shillings shall be defrayed by the purchaser.

The proposal to make provision for the ultimate extinction of the public debt of the Province, cannot, I think, be regarded otherwise, than as calculated to restore the confidence of the public creditors of this Province, whose interests were so recklessly disregarded in the “New Provinces Act.” And whatever difference of opinion may exist, as to the soundest basis, on which to extinguish the public debt, the proposal laid before you in the amended Land Regulations, of devoting a special portion of the public estate to the liquidation of the debt, will afford the best guarantee that the Province of Wellington will be an accomplice in no act of repudiation.

I mentioned in my address last year, that in consequence of the doubts raised by the Governor’s disallowance of the Act authorizing the loan of £25,000, the directors of the Union Bank, though they had brought the loan into the market at the same time as the loan of £50,000, had yet thought it prudent to suspend the sale of the bonds of the former until those doubts were quieted. I have now to inform you that the Bank having called upon me to place them in a position to dispose of the remaining bonds, a Bill with that object, confirming the Loan Act of Sess. IV, No. 9. will be laid before you. As the only ground upon which his Excellency was advised to disallow the Act, viz.—because it appropriated a certain sum towards building a lighthouse, has been removed, and as all the other works, for which the loan was authorised to be raised, with the exception of the Wanganui Bridge now in progress, have been completed, or works of almost equal importance, I can scarcely anticipate, that his Excellency’s Government will persist in offering any further impediment to the disposal of the bonds of this £25,000. The Loan Bill will have to be reserved for his Excellency’s assent.

The question of subsidizing the Wonga Wonga will again be brought before you. As long as it was employed in keeping up communication between the extremities of the Province and the capital, there could be little doubt as to the expediency of granting such a subsidy, as would afford the shareholders a reasonable dividend upon their investment. Accordingly a subsidy was paid from August, 1857, to August, 1858, at the rate of £2,500, and from that date up to the end of last March, at the rate of £1,250 a-year. But the circumstances under which it was agreed to subsidize the vessel are entirely changed, for not only has the ‘Celerma’ line of steamers been established, by which a tolerably regular and constant intercourse is maintained between Wellington and the other Provinces, but it is now proposed to run the Wonga Wonga between this Province and that of Hawke’s Bay. You will, therefore, have to consider, whether it is expedient to retain her services, and if so, what portion of the subsidy of £1,500 claimed by the Company should be borne by this Province. The Hawke’s Bay Government have consented to pay, on certain conditions, £500 a year, or rather, I believe, £20 for every trip the vessel makes to Napier, and the Company backed by the Chamber of Commerce, request you to contribute £1,000. It appears to me that the Directors of the Company in making, and the Chamber of Commerce in supporting, such an application, have left out of their consideration