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tiki road) would commence at the Rangitiki river, and passing through the centre of the Manawatu district, would be carried to that part of the Tatarua Range where it thins out and affords one easy passage to the Forty Mile Bush, where it would intersect the Wellington-Napier trunk line. The length of this line would be about 40 miles. I further proposed that all these roads should be laid off with a view to their being ultimately converted into railroads. His Excellency's Government have not only expressed their concurrence in these views, but have authorised me to commence any or all of these lines as soon as the requisite surveys are executed.

It is proposed that these lines should mainly be constructed by immigrants to be introduced under the provisions of the Loan Immigration Act, upon the same system as was so successfully adopted in the Wairarapa—that ample reserves, divided into sections of a reasonable size, be made in each district through which a road is being made, upon which the immigrants would be located with the option of purchasing their allotments at the upset price at any time during the progress of the work, and with permission to work, as many days as they may wish to do on their own farms. The advantages of such a system are sufficiently obvious. By having Government employments given to them almost at their very doors, the immigrants gain in a few days work in each week on the roads the means of subsistence, and are enabled to devote the remainder of their days to the improvement of their farms under certain. The first difficulties of settlement are in a great measure obviated, and the temporary laborer by the acquisition of a freehold is ultimately converted into a permanent settler.

Instructions will I hope be sent by this mail to Mr. Morrison, and also to Mr. C. R. Carter, who before leaving kindly placed his services at my disposal, to select and send out with the least possible delay a considerable number of immigrants, chiefly of young married couples, on the best terms on which they can be procured. I say the best terms, for the development market fluctuates so much that it is unwise to fetter your agents by too stringent instructions. Preference will, of course, be given ceteris paribus to those who contribute towards their own passage; but if necessary the agents will be authorised to pay the whole amount, taking Promissory Notes, with the understanding that if the immigrant remains in the Province two years, and pays half the amount, the other moiety will be remitted—these being the same conditions as are in force in the Nelson Province.

Looking at the large population recently attracted and still flowing to the Marlborough gold diggings, of which there will ever be a considerable number unemployed, I apprehend there will be no difficulty in procuring any amount of labor that we may require for the immediate prosecution of the works I have referred to, nor am I without hope that large bodies of natives in each district will readily accept employment upon them.

While I have no great faith in Military Settlements, I have nevertheless accepted with pleasure the authority given me by Ministers to enrol from 100 to 300 military settlers, as I believe, that in no part of New Zealand can the experiment be more fairly tried, and with greater prospects of success, than in the country north of Wanganui; these men will at first be employed in making the trunk line between Wanganui and Waitotara, with the view of their being ultimately located in the territory between the Waitotara and Patea Rivers, a block of land at present occupied almost exclusively by rebel natives, who

have all along been engaged in the wars. Whether this land should be taken by compulsory purchase, or by the process of confiscation, is, of course, a question for the consideration of His Excellency's Government; but the public safety of the settlement and the settlement of Wanganui imperatively demands, especially after the recent raid upon the Wanganui River by these very natives, that the territory in question should be occupied by a population both friendly and capable of guarding our northern frontier. And none insist so strongly upon such a barrier being established against the Ngatiruanuis as the natives of Wanganui, to whom we have contracted a debt of gratitude exceedingly difficult for ever to discharge.

In order to remedy in some degree the disproportion of the sexes which these military settlements and the proposed immigration will necessarily entail, and which constitutes to my mind the greatest curse which can be inflicted on any country, more especially on a young community, I earnestly hope that you will accede to my recommendation to appropriate the sum of £4,000 to the introduction of young unmarried females, under the superintendence of Miss Rye who has kindly volunteered her services in selecting them, and with whose philanthropic views we must all warmly sympathise.

Grievous as was the disappointment which you experienced at the refusal of the General Government to ratify Mr. Crosbie Ward's contract for the establishment of Steam Communication between England, New Zealand and Australia via Panama, there is every reason to hope, thanks mainly to the prompt and generous action taken in the matter by Canterbury, backed as she is by the majority of the other Provinces, that the General Assembly will insist upon the contract being carried out. I no sooner heard of the determination of Canterbury to take upon itself, if necessary, the whole contract, that I intimated my intention to recommend a guarantee one half of the amount of the subsidy alleged to be in excess of the sum voted by the General Assembly, and after the unanimous expression of opinion recently received here in favor of Mr. Ward's contract, I confidently rely upon your supporting Canterbury to the extent proposed.

That Wellington should have been selected as the port of call ought not to have excited any surprise; for all the correspondence that has taken place upon this subject—a correspondence extending over a period of seven years—Wellington has almost invariably been indicated, and for the twofold reason; 1st. That it is accessible at all times and in all weathers to vessels of any size; and 2nd. That it is the port from which the mails can be most speedily dispatched to the other provinces of New Zealand, and from which also the interests of all the Colonies of Australia can be most easily and equitably served; for while to call at Auckland would mar the interests of Victoria subservient to those of New South Wales—in other words would make it a Sydney line; and to call at Otago would deprive Sydney of any benefit—would make it a Melbourne line, the position of this port is so central that it places the Southern and the Northern colonies of Australia on an equal footing.

You will be glad to learn that by the last mail Mr. Morrison intimated that he had, on behalf of the Province, entered into an agreement with the Inter-colonial Company for the erection by the latter of a patent slip in Evans' Bay—the principal conditions being, that the slip should be capable of taking up vessels of 1,500 tons, that the charges should be subject to the approval of the Provincial Government, that the Government should grant the site, and guarantee for a period of fifteen years interest at the rate of seven per