B.—No. 2.

the Tables to which I have alluded, show a revival of prosperity in the ColonyWe all know the good effect the increase in the value of wool has had. Most of us, too, are aware that the industry of Gold Mining is much improving. Not only has the total yield of gold increased, but the area of proved auriferous land is constantly being extended. Other signs of prosperity are not wanting. The Land Revenue "is very much increasing. Whether or not it is desirable to encourage the sale of large blocks of land, the fact that purchases are made is an indication of a desire to invest in the country. Again, there is a disposition in all parts of the Colony to build, not only dwelling-houses, but premises for business and manufacturing purposes. An inclination is being shown to enter into manufacturing pursuits. Attention is being devoted to the preservation of articles of food; to the manufacture, amongst other things, of woollens and blankets; of rope, by improved machinery; of agricultural implements; of glass, paper, and blasting-powder. There is, I think, room for a much larger manufacturing enterprise than at present exists: still, it is satisfactory to note progress in the right direction. In respect to Agriculture, lam under the impression that the State does not know as much of what is really being done, or give such assistance, as it ought. It is, however, eminently gratifying to notice from Table L, that during the five years ending 1871 there was a continuous increase in the value, per head of the population, of agricultural produce exported. EXPENDITURE FOR THE TEAR 1871-72. The expenditure during the year for Colonial Charges was, according to the appropriations, £565,637 6s. 3d.; besides which, £185,037 was paid for interest and sinking fund upon Provincial loans, which amount I need not refer to further than to say that it is recoverable from the Provinces. The supplementary expenditure upon Colonial account amounted to £35,818 Is., being a few thousand pounds less than the amount authorized by law. The two items make, together, £601,155 7s. 3d., expended on account of Colonial Charges; to which has to be added, £200,611125. 6d. for Provincial Capitation Allowance; and £31,830 7s. lid. for excess of payments to the Provinces, or, in other words, in excess of charges on the monthly accounts. There is, further, the £60,000 Deficiency Bill paid off, which, as I have already explained, was part of the liabilities of the past year. Then there must be added, £62,928 ss. 9d., the amount of liabilities from 1870-71, which remained at the beginning of 1871-72. There is an amount of £20,295 6s. 6d., a payment to the Special Eund, which, indeed, ought to have been considered one of the liabilities of the previous year. We must add, also, to the expenditure account, one-half the amount of the Stamp Duties, £37,295 Is. lid., paid to the Public Works Eund. Those several sums make a total of £1,011,119 4s. lOd. Now, as to the liabilities which we may estimate as belonging to the year 1871-72, although they could not be paid before the year's end. There were liabilities on account of Interest payable in Sydney on the Ist July, and Interest and Sinking Eund payable in London on the 15th July, amounting to £109,369 14s. Id.; on account of Reserve Eund, £11,510 2s. 5d.; for Miscellaneous Services, £13,000, of which £5,000 is payable to New South Wales in settlement of the old Panama Service accounts; for Deficiency Bills, £100,000. Those items together make a total of £236,909 16s. 6d. Adding the liabilities to the amount of expenditure as stated, and to the deficiency with which we commenced the year, Aye have a total of expenditure and liabilities of £1,251,329 Is. 4d., which deducted from the total of the revenue, £1,261,891 4s. 7d., leaves a balance of £10,562 3s. 3d., with which to commence the piesent year. I will briefly trace out the same result from a comparison of the liabilities with the assets, at the commencement of the Financial Year. As I have stated, the liabilities were—lnterest and Sinking Eund, £109,369 lis. Id.; Miscellaneous Engagements, £13,000 ; Reserve Eund, £11,510 2s. 5d.; Deficiency Bills, £100,000; amounting in all to £236,909 16s. 6d. On the other hand, we had, at the end of the financial year—Cash, £92,896 Is. 9d.; Advances repayable to the Consolidated Revenue, £91,919 3s. lid.; recoverable from Provinces, £31,277 18s. 4d.; recoverable from Confiscated Lands Account, £13,650 16s. lid.; recoverable from various funds, £14,383 12s. 9d.; and Reserve Account, £311 6s. id.

Evidences of renewed prosperity.

Expenditure, according to appropriations, £565,637 6s. 3d.;

Total on Colonial Charges, £601,455 7s. 3d.; Capitation Allowance to Provinces, £200,614 12s. 6d.;

Expenditure during year, and liabilities from 1870-71, £1,014,419 4s. lOd.

Add liabilities of 1871-72, not paid, before end of year, £236,909 16s. 6d., and deficiency at starting —Total, £1,251,329 Is. 4d.; Or, balance of £10,562 3s. 3d. to commence present year. Same balance, by deducting liabilities from assets.

8

FINANCIAL STATEMENT.