A.—No. 10

4

CORRESPONDENCE RELATIVE TO PAYMENT OE

office, or resignation, or absence, the property would remain in the individual, and would not, on the appointment of a successor, vest in such successor, as that can only be effected by legislation. Apart from the question of law, it appears advisable that two persons disconnected from the Provincial Government should be selected. The object of the sinking fund is to provide a fund for the payment of the debt, which fund should be put beyond the control of the debtor. This cannot effectually be attained if the trustees are the representatives of the debtor. In Otago the trustees appointed are the Hon. A. C. Strode, the Resident Magistrate; and Mr. John Jones, merchant; and it is believed the effect of appointing such persons is to give increased security for the punctual payment of the annual sums payable. I would accordingly suggest for the consideration of your Honor, that you should nominate two or three indifferent persons, resident in Nelson, who will consent to act as trustees, and that the Provincial Solicitor prepare a proper declaration of trust, and that then the Governor appoint the persons named and that the money be paid to them. In the event of any change of trustees, a new appointment and a transfer will be necessary. This can only be avoided by legislation. As the Commissioner of Crown Lands, and the Sub-Treasurer at Nelson, were requested to undertake the duties of trustees, I should feel obliged if your Honor would communicate to them the purport of this letter. I have, &c, His Honor the Superintendent, Nelson. E. W. Stafford.

No. 4 Copy of a Letter from His Honor A. Satestdebs to the Hon. E. W. Stafford. (No. 85.) Superintendent's Office, Slß,— Nelson, 29th December, 1865. Referring to your letter of the 15th ultimo on the subject of the appointment of trustees under the Waterworks Loan Act for the investment of sums of money to be set apart as sinking fund for the liquidation of previous loans, I have to state that I entirely concur in the opinion expressed in that letter that the Trustees should be persons disconnected with the Provincial Government, and I have therefore much pleasure in recommending the undermentioned gentlemen for appointment, viz :— D. Bough, Esq., Oswald Curtis, Esq., W. C. Hodgson, Esq., I have, &c, Alfred Satjnders, The Hon. the Colonial Secretary, Wellington. Superintendent.

No. 5. Copy of a Letter from the Hon. E. W. Stafford to His Honor A. Satodebs. (No. 22.) Colonial Secretary's Office, Sib,— Wellington, 12th January, 1866. I have the honor to acknowledge the receipt of your Honor's letter No. 85, of the 29th ultimo,, recommending certain persons for appointment as trustees under The Nelson Waterworks Loan Act, for the investment of sums of money set apart as sinking fund, and in reply to state that these persons will be appointed, but that the Provincial Solicitor should prepare a declaration of trust in terms of" my letter No. 444, of the 15th November last. I have, &c, His Honor the Superintendent, Nelson. E. W. Staffoed.

No. 6. Copy of a Letter from His Honor A. Satestdebs to the Hon. E. ~W. Stafford. Superintendent's Office, Sib,— Nelson, 6th May, 1866. By " The Waterworks Loan Act, 1864," it is provided that a sum equal to two pounds per centum per annum on the amount borrowed by this Province under the authority of " The Nelson Debenture Act, 1858," shall be paid out of the revenue of the Province and set apart as a sinking fund for the liquidation of the loan referred to and invested in such manner as the Governor shall direct. In addition to the two per cent, the Provincial Council in its last session voted the sum of fifteen thousand pounds to be invested for the same purpose, and as it is the intention of this Government to hand over this amount to the trustees appointed to invest the amount appropriated by the Waterworks Loan Act, I have the honor to request that you will be good enough to inform me at your earliest convenience in what manner His Excellency requires the investment made. I have, &c, Alfred Satotdebs, The Hon. the Colonial Secretary, Wellington. Superintendent.