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provisions of the Wellington Debts Act" to the extent of a further sum of £3000: thus making in all £78,000 to be raised under the act; an amount, however, which will be still £7000 within the limit authorised by that act. The circumstances to which I refer are these. The adjustment of accounts between the provinces of Wellington and Hawkes’ Bay, after having been in dispute for a great number of years, was at length referred to what was intended to be a final tribunal. An award was made and a certain basis laid down according to which the final accounts should be made out. An account, purporting to be in terms of this award, was officially rendered to the Superintendent of Wellington on the 3rd May, 1871, stating the amount due by the province of Wellington to the province of Hawke’s Bay to be £881 6s 7d. On the 3rd April, 1872, eleven months afterwards, I was informed that the amount due by the province of Wellington to the province of Hawke’s Bay was £3881 6s 7d. The additional sum of £3000 thus brought against Wellington is said to have been paid eleven years ago by the province of Hawke’s Bay; and is only now for the first time brought to charge against this province; although an official account, having no reference to this large amount was rendered eleven months before. Whilst I forbear to comment on the circumstances, it is nevertheless necessary for me to state that, whilst I am quite prepared to use every exertion to discharge the just liabilities of the province, I specially guard myself against being supposed to admit the validity of the present claim, merely because I indicate the source from which it may be met, in case it should be found, after due investigation, to be valid. You will find the correspondence on the subject by referring to the appendix (C).

Another result of our legislative labors last session was the passing of the Wellington Special Settlements Act, 1871. I believe that this act will be highly beneficial in aiding the settlement of the agricultural lands of the province. Action has already been taken by which 45,160 acres of agricultural land have been proclaimed under Part I. of the Special Settlements Act; and also by which, under the provision of Part II. of the same act, 42,000 acres have been set aside for the location of special settlers. The majority of these special settlers will probably arrive from the dominion of Canada, through the agency of Mr. M’Leod; and the agreement which I have entered into with Mr. Engels will, I hope, eventuate in the location of a few select families from Scotland and Holland. (Appendix D.)

I must not omit to mention that under the authority of an act of the last session of Parliament, I have paid the amount of purchase money for the Wesleyan reserve, which has now become provincial property; and also that by the Wellington City Reserves Act, 1871, I am authorised to convey to the Corporation of the city of Wellington the Town Belt, subject to certain trusts, which I have to determine and on which I have already consulted the city authorities with every prospect, I may say, of a satisfactory result. The difficulties, therefore, which have for so many years interfered with the satisfactory management of these valuable estates, may at length, I hope, be regarded as removed.

As part of the account which I am now rendering of the last year’s administration, I pass on to a notice of the action taken by the Provincial Government to carry out the provisions of Provincial Acts, strictly so called, passed during the last session of the Provincial Council. The two leading measures of that session were the Highways Act and the Education Act. Both these Acts required, as you are aware, a very large amount of preliminary labor, before they could be brought into operation. Every effort has been made to produce the necessary detailed maps; and so soon as the several district maps were completed at the Survey Office, the valuators appointed by the Government received the necessary instructions to proceed with their work. The result of these labors is not of course yet ascertained; but I believe that when the detailed maps and the valuation books pass into the hands of the proper authorities, it will be generally admitted that a work of considerable labor and value has been accomplished. At any rate I express an earnest hope that these two important measures will receive a fair trial.

I now pass on to give an account of the extent to which your wishes, as expressed in the Appropriation Act of last year, have been carried out. Appendix E will show you in detail the actual expenditure as contrasted with the appropriations. This return speaks for itself. The expenditure in excess has been kept within the legal limit prescribed by the Provincial Audit Act. The principal item of excess was in the case of the Hutt Bridge; in explanation of which I refer you to the report of the Provincial Engineer. You will also bear in mind that it is useless to build bridges unless we keep the rivers to the channel under them, which frequently, as in the case of the Hutt river, requires expensive protective works; and you will also recollect that a toll has been erected at this bridge, which will, I anticipate, ultimately recoup the outlay. The items which show the largest unexpended balance, viz., the Wairarapa Bridges and the Provincial Buildings are severally under contract; and, on the whole, the works connected with them are progressing favorably.