ent parts of the country, the inroad already made upon the revenue by the damages recently done to public works, the fact of the cost of the Lighthouse having been defrayed out of the revenue, in lieu of, as was intended, out of the loan of £35,000 disallowed by the late Ministry, and especially the probability that large funds may be required for land purchases, I feel that it is only fair and reasonable that the cost of the Custom House Wharf should, equally with the buildings just mentioned, be provided for by loan. I accordingly intend laying a Bill before you, authorising a loan of £25,000.

Lest any objection should be urged against increasing the public debt, it is, perhaps, right to remind you that at the same time that the permanent annual charges are increased fresh sources of revenue are created. Assuming that the proposed loan will entail an annual charge of £2,000, still, estimating the wharfage dues at £1,500 a-year, the road tolls also at £1,500, and the light dues (the levying of which will it is expected be authorised by the General Assembly in the ensuing year) at £500, you have an addition of £3,500 a year to your income, to meet an increased charge of £2,000.

But while thus proposing to increase the debt of the Province, I am anxious that steps should at the same time be taken, for providing a Sinking Fund for the extinction, not only of the Loan now proposed, but of the whole public debt. You may remember, that in a previous session I threw out a suggestion, that a certain portion of the public estate should be set apart for that purpose, but after more maturely considering the subject, I readily acknowledged the validity of the objections urged to that suggestion then made; and I now propose that each year, a sum (say) of £2000 should be paid over to Commissioners—to be termed Commissioners for the extinction of the Public Debt; that these sums and the interest accruing thereon should be invested in mortgages on Freehold Land within the Province—that such payments should be a first charge upon the Revenue of the Province, after paying interest on Loans—and that the monies and accruing interest so invested should be applied by the Commissioners at stated periods, or from time to time, to redeeming a portion of the public debt.

The advantages of such a scheme are sufficiently obvious—the annual charge would be trifling—the province would receive a higher rate of interest on the money it lent, than it paid on the money it borrowed—its sinking fund instead of being sent out of the Province to be invested in foreign securities, would be employed in developing the resources of the Province—and in the event of the Province requiring further loans, it would go into the money market with much higher credit, than it would do were no provision made for the liquidation of its previous debt. To show the operation of this scheme—if the public debt was £100,000, it would be extinguished within 19 years; but it is not proposed, that the Sinking Fund should go on accumulating for 18 or 19 years till it would be equal to the amount of the debt of £100,000—but that the Commissioners should from time to time apply the whole balance then accumulated to this proposal of a Sinking Fund meet with your approval, a Bill giving effect to it will be laid before you.

The Audited accounts up to the 31st of last March will at once be laid before you. From these and also certain other Returns, you will find that with three or four exceptions, all the works for which you made Appropriations last year, have either been completed or are in progress. With reference to the proposed expenditure for the current year, you will necessarily find many of the Appropriations of last year on the present Estimates.

Taking the expenses of the Ordinary Departments of the Government at £14,000; of the Surveys and Roads Departments, at £5000; the permanent charges (i.e., Interest on Loans) at £9,500, you will find on the Estimates under the head of Sundry Undertakings, the following items proposed: for Education, £750; Council Library, £150; Explorations and Geological Survey, £1100; Subsidy to Local Steam Navigation Company, £1000; for Inter-Colonial Steam, £1,500; for Repairs, Insurances, Furniture, International Exhibition, &c., £950; making a total expense under the head of Public Undertakings of £5450. Under the head of Bridges, you will find: for the Pakuratahi, £825; for the Silver Stream, £129; for the Horoakiwi, £85; for the Wangaehu, £1000; for the Hutt, £300; the Tauera, £629; the Pahautanui, £83; the Porirua, £203; the Tutai Nui, £150; making a total expenditure on Bridges of £3,400. Under the head of Roads, the following votes are proposed: for repairs of the two trunk lines, including Ngahauranga and the Hutt Gorges, £4,700; for the Beach road, Wellington, £100; for the Rangitikei-Wanganui trunk line, £3,000; for No. 3 line, Wanganui, (inclusive of the appropriation of last year) £1,000; (and the following votes all include balances of previous appropriation, unexpended on the 1st of January last): for Featherston to Masterton, £1,000; Featherston to Te Kopi, £250; Masterton to Castle Point, £750; Belmont Road, £310; Wainui-o-mata, £510; Remutaka, £650; bridle track to Mungaroa, £300; Upper Rangitikei to Turakina, £500; Karori diversion, £500; and grants in aid, £4,500; giving a total proposed expenditure on roads of £18,130. Under the head of Buildings and Sundry Works, votes are proposed—for reclaiming land, £3000; Piling bank of Wanganui river, £200; Meteorological Observatory and Instruments, £200; for additions to Gaol at Wellington, £750; to Gaol at Wanganui, £500; to Lunatic Asylum, Karori, £400; for purchase of three acres adjacent to Government Offices, £1,600; for toll-bar at Kai-varra, £350; contingencies for public metal works, £300; cranes, Deep Water Wharf (including metal sheathing, and plant), £18,000; Custom House and Post Office (including sheds, warehouses, and furniture), £3000; Supreme Court, £3000; Police Court and Station, £2000; making (with a few other items) a total expenditure on public buildings and sundry works of £36,500.

The total expenditure proposed for the year is £91,880, but it must be understood that this expenditure on public works, &c., is intended to extend over the period, commencing on the 1st of last January and ending on the 31st of March, 1863. For in making the present statement I am placed in this difficulty: in consequence of your having decided upon April as the most convenient month for holding your session, and sanctioned an expenditure in your last Appropriation Act for the first four months of the present year, at the same rate as that of the year ended the 31st December last, but without making any specific appropriations for these four months, and without changing your financial year, I am necessarily obliged to make a financial statement for the year ended on the 31st December, instead of for the year ending the 31st of next March. To