B.—No. 3.

Enclosure 1 in No 1. Thejollowing Memorandum on the existing financial condition of the Province of Canterbury, and the Works proposed to be undertaken by the Government of that Province, is submitted in accordance with the request oj His Excellency* Ministers. I. Existing Ptovincial Debts. These consist of four:— 1. The original debt of the Canterbury Association. This has been all but paid off. 2. A loan of f.50.000 contracted for purposes of Immigration, several years since, at an interest of 8 per cent., ami sinking fund of (our per cent. This has been expended. £5,400 has already been invested on account of the sinking fund, and £ ,200 is being invested annually.' 3. A loan of £30it,000, for the construction of the Lyttelton aud Christchurch Railway, bearing interest at 6 per cent., with a unking fund of 2 per cent. Of this loan £50,000 worth of debentures were taken up out of Provincial Revenues and cancelled. £100,000 worth of debentures have been pl..cel in the hands of the UnLn Bank of Australia for negotiation, on which a sum of £50,000 Ins been advanced by the Bank. According to the latest advices from London only £30,000 of these debentures had been actually sol I. 4. A loan of £500,000 sanctioned, iv 1862, bearing 6 percent, interest, and 1 percent, sinking fund. Of this loan £50,000 was fold in Canterbury last year. No further portion has been placed in the market. The al)ove figures are tiken from a statement of account made up to the Ist April last, which has not been materially modified since that time. The indebtedness of this Province iray, therefore, be said to stand as follows: — Total amount of Lans sanctioned (exclusive of the Canterbury Association's) £330,000 Total amount actually raised £130,000 Cancelled out of Provincial Revenue .. ... ... ... 5 >,000 £180,000 Amount which may still be raised under existing ordinances ... ... ... £650,000 The total present debt of the Province is, therefore, £124.000, ngainst which it had ou Ist April last spent £'212.000 on the Lyltelton Railway. A portion of t :is Railway is in operation, aud is let for three years, at rates increasing from 6 to 10 per cent, on the cost of construction. 11. Territorial Revenue. The Land Revenue of Canterbury for the past two years has averaged £200,000. There are six m'llion acres let un ler Pastunye Licenses, of which it is considered in Canterbury an under estimate to assume that 750,000 acres "ill be soli! within the next ten years at £2 ncr acre. This will give an averge income from the sale of Rural Land of ... ... £150,0' 0 The proceeds of Town Lands may be taken at ... .. ... .. 1",000 The Pasturage Rents amount to ... ... ... .. ... ... 17,000 £177,010 After consideration of the necessary charges on this revenue for expenses of nntingement, surveys, roads, buildings, &c, the Superintendent and Provincial Council huve sot apart, by an Ordinance called "Railway ant Harbour Works Lund Ordinance," two-fifths of the Territorial Revenue towards the construction of Railways and Harbour Works This appropriation, so fixed by law, may be estimated to yield at least £7^,000 per annum. Into this fund must be paid the profits from the Lyttelton and Christchurch Railway, which, ou the completion of the tunnel iv less than two years, will be considerable. 111. Intended Works. It has, in the opinion of the Government of the Province of Canterbury, beome necessary to the development of the ?esources of that Province, and to its material progress, that improved means of internal communication of an extensive character should be entered upon. Two obvious reasons for this sip:— 1. That the cost of transporting agricultural produce to a port of shipment by ordinary land carriage is rendering it difficult if not impracticable to farm land to a profit at a greater distance from the poit than that to which cultivation at present extends. 2. That the finest half of the Province is rendered very difficult of access by two large and dangerous Rivers, the Rakaia and Rangitata, which can only be bridged at a large cost. There are other reasons, not now necessary to be entered upon, which afford good <jrounds for believing that, unless works of the above character are undertaken without delay, the profitable occupation of the soil will be checked, and the sales of land will fall off. The works which are contemplated aud have received the general approval of the Provincial Council, are:—

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