B. - No. 3a,

Sub-Enclosure No. 2 in Enclosure No. 1. THE SUPERINTENDENT OF SOUTHLAND TO THE MANAGER OF THE BANK OF OTAGO. Superintendent's Office, Southland, 22nd January, ISGI. Sik, — I have the honor to request that iv terms of the agreement between the Bank of Otago and this Government, you will provide a portion of the sum (to be realised by the Northern Eailway Debentures) viz., fifty thousand pounds sterling (£50,000). The Railway "Works proceeding very rapidly, and in consequence heavier payments having to be made sooner than was anticipated, has neeesitated the Government calling upon you to act at an earlier period than it would otherwise have done. A confidential agent of the Government is the bearer of this letter, which has thus been forwarded in order, that no chance of miscarriage or delay in carrying out the matter may occur. You will oblige, if remitting through the Banks, to pay into the credit of the Provincial Treasurer. I have, &c, Jas. E. Menzies. John Bathgate, Esq., Manager of the Bank of Otago. Sub-Enclosure No. 3 in Enclosure No. 1. THE MANAGER OF THE BANK OF OTAGO TO THE SUPERINTENDENT OF SOUTHLAND. The Bank of Otago, Limited, Dunedin, 27th Jan., 18G4. Sib, — I was favored with your despatch of 22nd January, and to meet your requirements have sent down an Interim Manager to open a branch at Invercargill without a day's delay. The drafts on behalf of the Government in anticipation of the Northern Eailway Loan will be honored to the extent of £50,000. You will be so good as to place in the hands of the Interim Manager a minute authorising how the account is to be operated on. As I find difficulty in disposing of drafts on London here at this season it will be of importance that the credit required be used as slowly as possible. I have, &c, John Bathgate, Colonial Manager. To His Honor the Superintendent, of Southland. Sub-Enclosure No. 4 in Enclosure No. 1. JNO. MORRISON, ESQ., LONDON, TO THE MANAGER OF THE BANK OF OTAGO. Office of the New Zealand Government Agency, 3 Adelaide Place. King "William Street, London, 24th June, 18G4. Dear Sib, — In reply to your communication of to-day, I beg to state for the information of your Directors, that I could not assscnt to the Southland Government Debentures for £110,000 being disposed of under par, and further that I consider the present an unfavorable moment for introducing them on the market. I am willing however, if required, to allow the 12 months named in the agreement with the Bank to date from the present time, and assume that the Debentures had been offerred. The quest ion-of removing the coupons for the July dividend, I need not therefore reply to. I am &c. John Morrison, Alex. Grace, Esq., Secretary, Bank of Otago, 5 Adams Court.

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FINANCIAL CONDITION OF SOUTHLAND.