B.—No. 3.

No. 88. THE SUPERINTENDENT, SOUTHLAND, TO THE COLONIAL SECRETARY. Superintendent's Office, Southland, 12th October, 1864. Sir,— I have the honor to acknowledge the receipt of your letter of the 27th ultimo, in which you inform me that the General Government hoped to be able, after the arrival of the September mail from England, to propose some comprehensive plan, by which it would be enabled to relieve the Provincial Treasury of Southland from the pressure of its financial difficulties, that this hope has been abandoned for reasons stated, and that you regret that the temporary relief given cannot be continued beyond the 2Cth of October. I hoped that under any, and especially under those circumstances, that you would hays, in reply to my representations, have intimated the willingness of the General Government to accede to the request of the Provincial Government with regard to a Loan T*ill to recover its liabilities. The Provincial Government has all along been unable to see any way other than by a Loan Bill to meet its liabilities completely, within any reasonable time ; and while it willingly acknowledges the valuable assistance it has received from the General Government, yet it has always recognised the fact that that aid was only temporary and provisional, as you observe. It is quite prepared to undertake to meet all those liabilities now, as it has been from the first perception of the pressure, if it received your assurance that a Loan Bill will be assented to, and seeing that you do not indicate any other course, and now withdraw the assistance given duiing the winter, I have to represent that as the capital of the Province,—the unsold lands, the Railway Lines, &c, is sufficient to enable it to offer ample security. The Provincial Government does not doubt that, with the promise of your sanction to a Loan Bill of an amount sufficient to cover its liabilities, it will soon overcome the difficulties which at present paralyse its free action. My views as to the nature of this loan have been clearly expressed to you (August 20). If, in addition to this the General Government, seeing that a very considerable portion of its advances to this Province have been repaid, would also authorise me to draw upon it for a sum of Fifteen or Twenty thousand pounds, if required, on account of the Province, I would feel confident that the existing embarrassment of this Province would terminate at an early date. I have, &c, J. A. R. Menzies, Superintendent. The Hon. the Colonial Secretary, Auckland.

No. 89. THE COLONIAL SECRETARY, TO THE SUPERINTENDENT, SOUTHLAND. Colonial Secretary's Office, Auckland, 17th October, 1864. Sir, — I have to acknowledge the receipt of your Honor's letter, No, 175, of the Ist instant, stating that you fully relied on receiving from me before that date some definite reply on the subject of permanently providing for the liabilities of the Province of Southland. In reply, I have to inform your Honor that the definite decision of the General Government on the subject referred to was communicated to you in my letter, No. 302, dated the 27th ultimo, and as you had previously been informed that no decision would be come to until after the arrival of the English Mail (about 22nd September), and as, even if a decision had been settled and transmitted by the Mail which left Auckland on the 23rd of September, it would not reach Invercargill by the Ist instant. lamat a loss to imagine the ground on which you relied on receiving a reply before that date. I hare, &c, William Fox. His Honor the Superintendent, Southland.

79

PROVINCIAL LOANS.