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of interest on the Provincial debt for the current financial year, and to authorise you to draw on this Treasury for any amount you may require to enable you to make the payment. I have, &c, R. F. Porter. The Sub-Treasurer, Wellington. - Note.— A letter informing the Superintendent of Wellington of these instructions was for* warded at the same time.

No. 4. THE SUPERINTENDENT OF 'WELLINGTON*, To THE COLONIAL SECRETARY. Superintendent's Office, Wellington, Bth October, 1861, Sir,— I have the honor to acknowledge tfie receipts of your letter of the 20th August, 1861, No. 463, enclosing a statement of the apportionment between the Provinces of Wellington and. Hawke's Bay for the sums due for interest and sinking fund to the 30th June, 1860, on the amount raised for land purchases in this Province to that date, requesting me to cause the amount alleged to be due from Wellington on that account, viz., Two thousand three hundred and sixty-eight pounds eighteen shillings sixpence, to bo paid before the 30th September to the Colonial Sub-Trea-surer, and informing me that the Sub-Treasurer on receiving the same has been instructed to pay over to the Provincial Treasurer the sum of two thousand four hundred and five pounds six shillings seven pence, being the balance of Surplus Revenue due to this Province on account of the year ended the 30th June, 1860. Having, previous to leaving Auckland, gone through these accounts with the Honourable the Colonial Treasurer, and I believe satisfied him, that the basis upon which they had been adjusted was altogether erroneous, it will be unnecessary for me to apologise for not having complied with your request. In apportioning the interest and sinking fund on the amount of the £54,000 raised for Land Purchases, the Treasury Accountant has adopted the rule of apportionment laid down in the loth Section of the New Provinces Act without reference to the amount expended in each Province. The whole £54,000 might have been expended in Land Purchases in Hawke's Bay, and yet according to the principle adopted by the Accountant, Wellington would be called upon to pay interest, &c., on the monies expended, according to the proportion that its revenue bore to that of Hawke's Bay. Now the rule of apportionment specified in the New Provinces Act was only to prevail until the debts, whether General or Provincial, had been apportioned between the two Provinces. For example, if the permanent debt of £100,000 of the original Province of Wellington had been apportioned in equal moieties between the two Provinces each would have been chargeable with interest on its respective moiety. The rule laid down by the New Provinces Act would at once have ceased to apply. It would have been perfectly immaterial what ratio the revenue of one Province bore to that of of the other, each would have to pay interest on the amount of principal with which it had been debited. At the present moment, as the debt of £100,000 has not been apportioned, each Province is bound to contribute towards the interest on the whole amount, according to the rule of the New Provinces Act. But, with respect to the £54,000 of the £180,000 allocated to the Province of Wellington for land purchases, the case is altogether different —the rule of apportionment of the New Provinces Act has been set aside; for the late Ministry took upon themselves, without any consultation with the Provincial Government of Wellington, to expend the greater portion of the £54,000 in extinguishing the tit'e to laud in Hawke's Bay. In the Session of 1860, however, the Members of the Province of Wellington refused to recognise this livision of the Loan, considerable discussion ensued, and ultimately it was agreed between them and the Colonial Treasurer, ou behalf of Hawke's Bay, that the £54,000 should be apportioned equally between the two Provinces, and that the amount which Hawke's Bay had received over and above its moiety should bo refunded and placed to the credit of Wellington. The £54,000 having been thus apportioned equally between the two Provinces, it follows that the Rule of the New Provinces Act no longer applies, but that each Province should be charged ■with interest and Sinking Fund ou the amount of the £54,000 allotted to it. It is of course impossible for me, out of accounts so unintelligible as the Land Purchase Department, and which avoid going into details, to state the exact amount of Interest and Sinking Fund with which each Province is chargeable; I can only pretend to give an approximate staten cut, trusting that you will cause the whole of these accounts to be analysed and re-adjusted. From the statement you have enclosed, it appears that up to the 30th June, 1860, £49,000 had been raised, and the Interest and Sinking Fund on this sum amounted up to that period to £4,440. Now the accounts laid before the House of Representatives, and published in the Blue Book, 1860, (sec paper C—No. 1, p. 7), shew the expenditure to have been £56,665 6s. 7d.; but from this the sum of £12,735 has to be deducted, in conformity with the resolution the House passed August 16, 1808, leaving therefore the expenditure, on which interest is to be charged, only £43,930 6s. 7d., or, as shewn in one of the accounts, £46,383 2s. lid., the difference, £2,452 16s. 4d., being described us advances to District Commissioners for land purchases uot yet accounted for.

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APPORTIONMENT OF THE PUBLIC DEBT OF