In Mr. Hall's financial Statement, made 1st. September 1868, he says:- ''The Defence Service has been brought down from £109,025. ''including liabilities, which was authorised for 1867 -68 to £ 47,497. ''for the present year 1868- 69 -'' On the 6th. October 1868, Mr. Hall brought down a Supplementary Financial Statement, in which he asks for a vote of..... £81,000. for Armed Constabulary, and)..... £50,000. for Contingent Defence) in addition to a balance of £40,000 which, it then for the first time appeared was to the credit of the Defence Department from the Public debts Act, making in all a sum of £171,000 To make the Accounts agree, however, it is necessary to add the other provision made by the House for Defence Expenditure, under what may be called the Peace Establishment of £23,800 making in all £194,800 It turned out afterwards, in making out the accounts that the balance from the public debts account, estimated by Mr. Hall at £40,000 was really £201,115 at the disposal of the late Government for Defence Services of the year 1868--69. In addition to which they added a further sum of £ 40,000 by order in Council, making a total of legally available money of £241,115. The expenditure of that year as will be shown by a return laid on the table of the House by the Honourable, the C Colonial Treasurer last Session amounted to £324,403. being an excess of 83,288. over the amount placed by Law at the disposal of the Government. For the Service of the year 1869--70 a sum of £230,800 was placed by the Legislature at the disposal of the Government for the Defence establishment in all its branches, to which must be added £ 40,000. under order in Council, making in all £270,800. The expenditure amounted, as stated in the Treasurer's financial Statement to 273,361 to which a sum of 10,000 may be added for unforseen liabilities up to 30th. June, making a possible total of expenditure of £283,361. in all, or £12,561 in excess of legal provision. But there is an item which will reduce this excess, namely, not yet brought to account, for rations and stores issued to men of the Colonial forces and to other departments of Government, the Telegraph, for instance. These recoveries are estimated when fully mad up to amount to some £5,000 or £6,000 in further reduction of the excess. These figures will clearly show that the amount we have expended over and above the £200,000 voted by the Legislature last year is 47,361. Then if you deduct 40,000 obtained under order in Council the actual amount expended in excess of what was legally provided would be only £ 7,361. or £75,927 less than the over expenditure of the year 1868--69. Confiscated Lands £5,525 charged estimated in Defence Expenditure.