OTAGO.

[FROM OVii OWN CORRESPONDENT.] Dunedin, December G, 1862. The Provincial Council commenced its sittings on Wednesday week in the School-room of Burns's Church, the Supreme Court not having yet vacated the Court-house. In his opening address, the Superintendent congratulated the Council on the prosperous condition of the province, and tho equally satisfactory nature of its finances, and then proceeded to intimate the measures that would be brought before the Council. After referring to measures of public utility, such as roads, telegraphs, immigration, the West Coast expedition, &c, &c, his Honour stated that he had received a letter from the Superintendent of Taranaki, asking what facilities would be offered by tha Otago Government to those inhabitants of New Plymouth who might be desirous of emigrating to Otago. The Superintendent intimated to the Council that he had in anticipation of their decision forwarded certain proposals to the Superintendent of Taranaki, which he would lay before them by message. His Honour then referred to the necessity of revising the Land Regulations. The Major is quite an enthusiast on the subject, and thus expressed himself in his address :—: — It is abundantly evident that our Land Regulations do not invite a bona fide settlement of population, neither i 9 the marketable value of the land realized by the State, while the best portions of the country, those particularly adapted for agricultural settlement, arc being alienated without being populated. I again most earnestly press the consideration of this most important subject during the present session. I will take an early opportunity of communicating to you certain proposals, which appear adapted to meet some of the evils complained of, and which will also enable you to anticipate by loan those resources which will be available when, by the expiry of the existing pastoral licences and the consequent resumption of the laud, the Government will be in a position to realize, by way of lease, a sum scarcely less than that derived from the sale of land at the present time. A measure so necessary to the lull development of the country, now partially paralysed, and the preservation from forced sales of the land, now sacrificed, will doubtless commend itself to the judgment of his Excellency's advisers, and receive their cordial support. So soon as the duties of the session are over I shall be happy to concur with you in a request to his Excellency the Governor, that he may be pleased to dissolve the Council. The Council has already got through a good deal of work, and, considering that there is to be a dissolution for the purpose of increasing the representation, the Government have introduced a greater number of important bills than is either fair or decent to the large mass of at present unrepresented population. We are to be made highly moral by a Sabbath Observance Ordinance, a measure redolent of bigotry, and a Theatres' Ordinance, containing amongst other provisions a clause enabling the Superintendent to close the theatres on the Presbyterian fast days! Seeing that the " old identity " rather flout the Episcopalians and others, by their non-observance, or partial observance of Good Friday and Christinas day, this bill is rather a step too far. On Thursday, the Superintendent's message, respecting the Taranaki refugees, was brought up. It was to the effect that the passages of all desirous of settling in the province should be paid, and each family should be allowed fifty acres or more of laud at the upset price of twenty shillings per acre, to be paid in five annual instalments, on the condition of occupancy and improvement. The Provincial Secretary moved the adoption of this proposal, and, after some debate, chiefly on the Bomewhat hasty manner in which the Superintendent had acted in offering these terms to the Superintendent of Taranaki in anticipation of the vote of the Council, the motion was carried unanimously. On Monday, the proposals of the Superintendent, respecting the alterations in the Land Regulations, came on for discussion. The following are the proposals referred to : — 1. " That, in order to secure the finest agricultural laud from immediate sale, it is absolutely necessary that lands of a secondary character should be thrown into the market, in blocks of not more than 320 acres, in order to afford the means of investment by the farmer of capital, who wishes to inclose and lay down the land in artificial grasses ; and also with the view of obtaining funds for opening out the country, by the formation of roads, and by improving the navigation of rivers and lakes. 2. " Thnt areas of the best agricultural land be laid off, with adjacent temporary commonages of an inferior class, and be brought into the market in blocks of from 10 to 50 acres, from time to time, to suit the requirements of small capitalists and labouring men. 3. " That, in the disposal of both classes of land before-mentioned, it be a condition of purchase, accepted by the purchaser, that £2 per acre be laid out upon the land in the period of two years, and on failure to fulfil this condition, the land shall be taxed at the rate of per acre annually, until such condition be fulfilled. A bill for the purpose to be introduced into the General Assembly, having retrospective effect to the date of the first sale under tnese conditions. 4. " That, with respect to all lands sold previously to the passing of this resolution, the same tax of per acre be imposed on all lands not improved to the extent of £2 per acre within four years of their purchase. 6. "That it is expedient, with a view to encourage immigration, and to enable immigrants to obtain not more than fifty acres of land without competition, that tho Government, by means of purchasing certain areas, afford immigrants the opportunity of becoming the lessees, with a purchasing clause, on condition of paying a small annual rent, and of improving tho land to the amount of £2 per acre, within three years, and in case of the non-fulfilment of the conditions, the lease to terminate, without compensation, at the end of the poriodf"

It was exrected that there would be an animated discussion on the subject, and it was «l^o well known that these proposals emanated entirely from our hobby-riding "Super," and that his advisers held very different opinions on thn subject. The Provincial Secretary «a* not prepared to submit them to the house, but moved that they be referred to a select committee. A good deal of opposition was i\ii«ed, a« it was rightly thought that the Government should, confine themselves simply to such subjects as were absolutely necessary to the carrying on of the public business, and not endeavour to force on measures involving such important interests, when three-fourths of the inhabitants had no voice in the matter. However, the committee was at last granted, but only because the house saw that the proposals, if carried, could not be acted on, excepting by an Act of the General Assembly. I hear the Major was in a deuce of a fume during the discussion, and had made up his mind to resign in case his proposals had been shelved. It is pretty generally conceded that the existing Land Regulations work very inefficiently. The best land is being extensively bought up by speculators, and t'-e small capitalists cannot compete with them, and the miners will not buy land hedged in by so lmny restrictions, and prefer to inveßt their money in Canterbury or Southland. j A good deal of expression of opinion has been evoked on the subject, and I think the majority of the people arc in favour of some such system as obtains in Canterbury, viz., free selection, at a fair upset value for the land. On Wednesday, the Government nearly went out on the third reading of the Sheep Importation Ordinance. This bill has been framed to remove the restrictions on the importation of fat sheep from | Australia. Hitherto it has been compulsory that all imported sheep should undergo a " dipping " process before landing, and the consequence has been the entire cessation of the exportation of fat sheep from Victoria, for this ablulionary measure had the ellectol ruining the sheep for the market and causing great mortality amongst them. Of course it is the squatters' interest to keep matters in their present state, as they have hitherto commanded the Dunedin and diggings markets, and the result has been that mutton, such as it is, is charged over a shilling per pound. The representatives ot the squatters opposed the bill, and wanted to force an amendment which would have rendered the bill quite inoperative, but the Executive plainly intimated that they would not undertake the responsibilty if it were carried, and so the amendment was negatived, and the bill passed in its original form. On Thursday the Panama service scheme was brought on, and most unexpectedly the Government threw all sorts of obstacles in the way. This excited some surprise, seeing that the Executive had agreed to a basis of arrangement with Mr. Crosbie Ward, to the effect that the Provincial Government was to vote £30,000 as a supplementary vote to that of the General Assembly on the condition that Port Chalmers was to be the terminal point. It turned out, however, that although the Government approved of the scheme they were wishlul it should be postponed until after the estimates had been passed. Upon being pressed on the subject it transpired that the Executive and the Superintendent had very opposite views on the Panama selieme and tile liind proposals, the former being opposed by the Superintendent, and the latter by his Ministers, but they had made a sort of compromise, by which each was to offer no opposition to the other. The subject of the Panama scheme was ultimately allowed to stand over until the estimates bad been gone through, on the tacit understanding that the discussion was to be re-opened in time to allow of an ordinance, empowering Mr. Ward to negociate the service, being passed before the departure of the mail for England. Meantime it is stated by the Lyttelton Times that the New South Wales Government has agreed to support Mr. Ward, and that everything is couleur de rose in that quarter. The news from the diggings continues to increase in importance. The last escort brought down 19,937 ozs. 8 dwts. of gold, of which 13,000 ozs. was from the Dunstan. Some most wonderful discoveries have been made in the district bordering on Lake Wakatip, and the further westward the miners get, the richer the ground becomes. The most interesting discovery lias been made by a man named Fox, on the Avon river, a tributary of the Kawarau. The following is his own account of the locality :—: — " On or about the 25th September, myself and party left the Dunstan gold-field on a prospecting tour, and, striking the couth side of the Kawarau river, at the Nevis, found payable gold on its banks. Following the banks of the Kawarau to Luke Wakatip, and hearing there that no provisions were to be obtained in the vicinity, we determined on going to Trotter's for a supply, but no supply of provisions being obtainable there, we were compelled to go to the Nokomai ; being impressed with the favourable indications of the ground, we retraced our steps to the Slaty Ranges, near Rees's Run, and commenced prospecting. We reached the ground on the sth, and on the 6th struck payable ground, at from surface to 10 feet sinking, always finding gold in payable quantities on a soft slate bottom, but little being procurable in the gravel or washdirt. The run on which we obtained our gold is situated about eight or ten miles from the head of the Wakatip Lake, running into the Kawarau river, and about twelve or fourteen miles from Rees's Home Station. "In proceeding to this gold-field, the route to be pursued is by Invercargill or Riverton ; thence to the head of the Wakatip Lake to Trotter's station, down tho lake 30 miles, to Rees's run or home station, from which the diggings are distant about ten miles, the river running north-east to south-west, and emptying itself into the Kawarau river. The distance from Dunedin is about 190 miles, from Invercargill 150 miles, and from Riverton 120 miles." Fox got over 300 ounces of gold from the Avon. The discovery of this locality is disputed by a MrM'Gregor, who has been working in the same neighbourhood, and got over 300 oz. in about 3 weeks. I have seen the gold ; it is in large pieces, some weighing nearly two ounces. The greatest excitement has prevailed, and large numbers have gone off to the new rush. I must refer you for further details to the h> teresting letters of the Dunstan reporter of the Daily Times. The Southland people are striving hard to secure the trade to the new diggings, and an Invercargill firm are building a steamer of about 40 tons to run on the Wakatip Lake; it is expected to be ready in about six weeks. Meantime, Fox bus bought a ten ton boat and sent it up to the Wakatip, and it is anticipated that some more valuable discoveries will be made there. I hear it reported on good authority that cinnabar (mercury) lias been discovered on the Dunstan. Mr. Paterson, whose singular election I mentioned in my last, turns out, after all, to have been duly elected ! As the Daily Times says, "his election has been secured by a t." The word henceforth, instead of Aenceforth, in the Amended Representation Act, having made all the difference. It is a most delicious sell to all concerned, and it remains to be seen whether Mr. PateYeon will resign or not, although when he thought his election was informal, he deprecated all complicity in the proceedings. The election for Hampden, to supply the vacancy caused by the resignation of Captain Frasei, took place at Waikouaiti, on Thursday. Mr. R, J. Jones, son of John Jones, Esq., merchant of Dunedin, was returned. Mr. Vogel, Editor of the Daily Times, was nominated, but declined going to a poll. We have had an election of members for the new Town Board, and the new Board holds its first meeting next week. Another serious fire occurred in Dunedin a few days ago, resulting in the partial destruction of a large building used as a horse bazaar, in Georgestrcefc. Our Volunteer Brigade appeared on active service for the first time, and worked most admirably, the fire having been subdued by their efforts. A company is being started, under respectable auspices, for supplying the town with water from the streams in the neighbourhood. Fratson, the Melyncux murderer, has been re-

prieved; his sentence lias Leon commuted to penal servitude for life. The Victory steamship Imb become a total wreck, and now lie 3 under water with her b'u-k bioken. She was sold thy other diy for £200! About £8,000 has been spent by ths Company in the attempts to float her. An escort has just come in from the Kokomai, bringing 1,000 ozs.