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Government, amounts due to the Bank monthly on Deficiency Bills, Subsidies to Hospitals, &c., &c., and other items on the proposed estimates, the total of which amount to £38,000, and in which amount the Bank overdraft is not included.

It is possible that the Bank authorities will advance another sum of £5000 this half year on the security of Deficiency Bills, but I very much doubt whether they will do so in the face of the unpaid overdraft; however, should such an arrangement not be possible, if the expenditure is kept down to its lowest possible limits, and the liquidation of the present debts of the County first considered, I have no hesitation in stating that its financial position on the 1st July next will be better than ever it was before.

In checking over the Revenue I regret very much to find that an amount of £300, due by Mr. Richard Reeves for rent of the Kawhaka Toll-Gate (and which I mentioned in my last report as having been referred to arbitration) has not yet been paid. As the whole responsibility of having settled this affair to a certain extent rests on yourself, I trust that you will be able to explain satisfactorily to the Council by what motives you were induced to accept payment of this account in three or six months’ Bills. If I remember rightly you stated to me, on a former occasion, that you did so by the advice of some of the members of the Council, and also of one or two of the legal practitioners in Hokitika. But you must admit that it was against the advice, both of myself and the County Treasurer. Having, however, proceeded so far in arranging the matter, it was clearly your duty to have placed these Bills in the hands of the County Treasurer, the financial Officer of the County Government, who would have taken such measures as would have secured the payment thereof as they became due, but instead of doing this you keep them in your own possession, and treat the matter more as though it were a private debt due to yourself rather than to the Government.

Again, at the end of the past half-year, on making enquiries of you as to whether this matter had been settled, I find that the Bills have never been deposited in the Bank where they were made payable, and that there is no probability of the matter being settled, yet in the face of all this you again accept Bills at three and six months, on Mr. Reeves plainly telling you that he cannot pay in cash. I cannot help admitting that such a system is altogether unprecedented in the Government service.

I observe also that there are sundry other amounts due to the Government, such as rent of the Grey Coal Mine, Gazette Fees, &c., as shown in the statement appended, and which I respectfully suggest should be collected without further delay.

With regard to the Expenditure during the past half-year, I beg to inform you that, with some few exceptions, to which I shall presently allude, it has been made in accordance with the amounts voted on the Estimates, as you are already aware that from July to the middle of August there was virtually no Treasurer, and on the discovery of the late Treasurer’s defalcations the accounts of the County were in such a state of confusion that it was a matter of great difficulty to balance them. It was during this period that some of the following payments were made for certain services, which had not received the authority of the Council, and which will now require their special vote in order to render them legal. They consist of the following items, viz:—

Since the appointment of Mr. Horton as County Treasurer, “The County of Westland Act Amendment Act, 1869,” came into force, and consequently all payments have been made under Clause 5 of that Act, and all accounts audited previous to payment.