B.—No. 5.

No. 55. Copy of a Letter from His Honor J. P. Taylor to the Hon. E. "W". Stafford. Superintendent's Office, Sic,— Southland, 29th May, 1866. I have the honor to acknowledge the receipt of your letter of the 14th instant, and, in reply, beg to state that the Sub-Treasurer's statement of the circumstance is correct. The unintentional mis-statement, made by me, arose from the fact that, in the negotiations which had taken place between myself and Messrs. Morison, Law and Co., I always understood the possession of the plant to be held for freight, and, when replying to your queries, was impressed so positively on the subject, that I wrote without hesitation, the more that I could not understand how any other description of lien to that firm could exist. Upon the settlement of the matter, however, it transpired that the lien was claimed under a document granted to the firm in question by my predecessor in office, and a further examination revealed the fact that the freight of railway plant, by the " Paria" had been paid, in order, as it appeared, to protect the draft of Mr. Morrison, the London agent of the Provincial Grovernment, and that a lien on this plant was given by the late Superintendent to Messrs. Morison, Law and Co., to secure the payment of a liability for the passages of immigrants by the same vessel, which liability has since been paid oif, and the plant finally released. It was my intention, immediately, on ascertaining these circumstances, to have communicated them to you, but in consequence of my severe indisposition at the time, it was inadvertently omitted. 1 can only express my regret that the mistake should have been made. The railway contractors required the plant so urgently, that, before the matter was finally settled, they had commenced using it, with Messrs. Morison, Law and Cos. sanction, granted at my request. I have, &c, John P. Taylor, The Hon. the Colonial Secretary, Wellington. Superintendent.

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FINANCIAL CONDITION OF SOUTHLAND