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fuud on the sums raised for land purchases in the respective Provinces of Wellington and Hawke's Bay, I have the honor to state that tho Treasury accountant, in making the adjustment referred to, was guided solely by what is to be considered the law respecting the apportionment, without reference to the fairness or otherwise of tho principle upon which that law was based. Your Honor remarks that the rule of apportionment specified "in the New Provinces Act was ouly to prevail until the debts, whether General or Provincial, had been apportioned between tho two Provinces." Upon this point, your Honor will observe that the apportionment between Wellington and Hawke's Bay, either as regards the permanent debt or the proportion of the half-million loan, has never yet been settled by law. During the session of 1860, a resolution was passed as follows :—" That the sum of fifty-four thousand pounds allocated for the purchase of laud in the former Province of Wellington ought to be expended equally between the Provinces of Wellington and Hawke's Bay respectively, and consequently that the unexpended balance of the aforesaid sum should bo exclusively devoted to the purchase of land in the Province of Wellington, and that the sum already expended in excess of the one-half of the fifty-four thousand pounds in the Province of Hawke's Bay should be refunded to the land-purchase fuud of the Province of Wellington, aud that the charge for interest and sinkingfund should be adjusted in conformity with the above resolution." The requirements of this resolution have been carried out. Hawke's Bay has been called upon to pay the sum of three thousand four hundred pounds which had been expended in excess of the proportion of the fifty-four thousand pounds allocated by the above resolution, and in tho account for interest and sinking fund forwarded to your Honor in my letter of the 20th August, 1861, the only amount which is treated iv accordance with the rule of the New Provinces Act is that of eleven thousand pounds, which was expended out of the sum prior to the date of separation, to which the resolution I have referred to does not seem to apply.

These accounts have for some time beeu standing in suspense, nor does it appear either that the Government has the power of settling the various questions between the two Provinces, or the latter are likely, at the present, to come to auy amicable arrangement themselves. It seems to me, therefore, better that the whole matter should continue in suspense until the next session of the General Assembly, whou it is to be hoped that a measure may be framed which will definitely settle the pecuniary questions, which have arisen with Hawke's Bay by the separation of that Province from Wellington. I have, &c, His Honor the Superintendent, William Fox. Wellington.

No. 7. THE SUPERINTENDENT OF WELLINGTON", TO THE COLONIAL SECRETARY. Superintendent's Office, AVellington, 18th December, 1861. Sir,— I have the honor to acknowledge the receipt of your letter of the 27th ulto., No. 839, on the subject of the apportionment of the interest and sinking-fund on the sums raised for land-pur-chases in the respective Provinces of Wellington and Hawke's Bay. I shall do myself the honor of replying to it fully on my return to Wellington. I have, &c, The Hon. the Colonial Secretary, I. E. Featherston, Auckland. Superintendent. No. 8. MR. FOX TO THE SUPERINTENDENT OF WELLINGTON. Colonial Secretary's Office, Auckland, 7th January, 1862. Sik, — I have the honor to enclose for your information the account current between the General Government and the Province of Wellington, and the surplus Revenue Account of that Province for the year ended 80th June, 1861. I have to inform Your Honor, with reference to these accounts, that the balance shewn to be due to the Province on surplus Reve.iue Account, viz., two thousand two hundred and twenty-one pounds nineteen shillings and ten pence, is retained, pending the settlement of the account for interest and sinking fund on suni3 raised for land purchases in the Province of Wellington. I have, &c, His Honor the Superintendent, Henry Settell, Wellington. In the absence of Mr. Fox.

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APPORTIONMENT OF THE PUBLIC DEBT OF