B—No. 3

But assuming that the interest and sinking fund due on the 30th June, 1860, was £4,440, it is clear that as Ilawke's Bay had had £30,188 10s. Bd. expended on its land purchases, and Wellington only £16,194 12s. 3d.; that therefore Hawke's Bay should pay a proportionate amount of interest, viz., £2,735 95., leaving Wellington to pay as its share, £1,467 Bs. 7d.; and further, that as only £46,383 2s. lid. had been expended out of the £49,000 that had been raised, the General Government, which had the use of the balance, viz , £2,616 17s Id., as a working balance, ought to credit Wellington with interest on that account, viz., £237 2s. sd. But if the £12,735 be also (as I contend it ought; divided into equal moieties between the Provinces, the account will stand thus:— Expenditure for Hawke's Bay £32,046 0 8 14,337 2 3 £4G,383 2 11 Leaving (as before) in the hands of the General Government 2,016 17 1 £49,000 0 0 And the proportion of Interest will be Ilawke's Bay £2.903 15 4 Wellington 1,299 2 3 General Government 237 2 5 £-1,440 0 0 I believe that this statement will be sufficiently intelligible. What I claim is simply this. Supposing the whole £54,000 to have been raised and six per cent, for interest and sinking fund to be due upon it, then that Hawke's Bay is liable for such interest and sinking fund on the amount it has received, say £32,046 Bd. Wellington is liable for interest and sinking fund on the £14,337 2s. 3d. it has received, and the General Government is liable for interest and sinking fund on the balance in its hand, which they have used as a working balance. There are two other points to which I beg to call your attention. While adhering to the apportionment (agreed to in 1S60) of the £54,000 equally between the two Provinces, I must protest against the apportionment of £12,735 made by the late Ministry, under which they allotted of that sum £8,225 to Hawke's Bay and only £4,510 to Wellington, and I submit that this £12,735 should be divided equally between ths two Provinces. I further submit, that as it appears manifestly unjust that Wellington should be charged £1,633 !4s. 7d. for expenses on purchases amounting to £14,707 13s. 4d. (being at the rate of 38.5 per cent.) while Hawke's Bay is only charged i' 3,960 )3s. on an expenditure of £31,706 15s. (being at the rate of 125 per cent), that these departmental charges require to be reapportioned between the two Provinces. You will perceive that, under any circumstances, a very considerable balance will be due to Wellington. As soon as this is fixed I shall be prepared to adjust accounts with the Sub-Treasurer here. I have, &c, I. E. Feathekston, 'The Hon. the Colonial Secretary, - Superintendent. Auckland.

£ '. Balance 17"4 Less amount payable by General Gov. 237 1 5 £1467 0

No. 5. MR. SEWELL TO THE SUPERINTENDENT OF WELLINGTON, Colonial Secretary's Office, Auckland, sth November, 18G1. Sic, — In the absence of Mr. Fox in the North with Sir George Grey, I have to acknowledge receipt of your Honor's letter of the Bth October ultimo, and to state that the matter shall receive the immediate consideration of the Government. I have, &c, His Honor the Superintendent, Henkt SeWELIc Wellington.

No 6. No. 835. MR. POX TO THE SUPERINTENDENT OF WELLINGTON. Colonial Secretary's Office, Auckland, 27th November, 1861, Sir,— With reference to your letter of the Bth October, 1861, upon the subject of the distribu-. tion, in accordance with the rule of the New Provinces Act, of part of the interest aud sinking

5

THE PROVINCES OF WELLINGTON AND HAWKE'S BAY.