3

A.—4

Your Honor declines to give the first of those assurances; but if the matter rested there, so reluctant would the Government have been to advise the disallowance of the Ordinance, that I should have again urged you to give the assurance asked for, and, indeed, if necessary, offered you some temporary assistance to enable you to have kept within the limits of the overdraft allowed by law. But the matter does not so rest ; for, whilst your Honor professes to assure the Government that the Provincial Auditor will control the expenditure, it has come to the knowledge of the Government that that officer has already signed a warrant for the whole amount of the expenditure. I must express great regret that your Honor should have given the Government an assurance couched in a manner so calculated to mislead. Your Honor must have been aware that the assurance asked for was, that the Provincial Auditor would properly control the expenditure, as other Auditors control the expenditure in other Provinces. Had your Honor, instead of the ambiguous assurance given, stated that the Provincial Auditor had already signed the warrant for the amount, you would have shown a better appreciation of the frank manner in which the Government had treated you. It seems that the Auditor has been induced to sign a warrant authorizing Mr. Bunny to pay for the services as he considers them rendered. This document was signed without the Provincial Auditor having first satisfied himself that the amount it authorized was legally available. It may be that there was a sufficient amount to the credit of the Provincial Account to save the Provincial Auditor from the legal consequences of a breach of the 24th section of " The Provincial Audit Act, 1866/' but none the less is this his action a breach of the spirit and intention of the provisions of the legislation for controlling Provincial expenditure. The Provincial Audit Acts were meant for the protection of the Provincial Councils, as the Colonial Audit Acts are meant for the protection of the Colonial Parliament; and in condemning the proceeding under notice, the General Government are acting just as much in the interest of the Province and of Provincial institutions as fulfilling their duty to the Colony. Unless it be held that the end justifies the means, no arguments in favour of the objects of the expenditure can be admitted as an excuse. In view of such a proceeding, the Government cannot hope that the irregularities on the face of the Ordinance are likely to be surmounted by the discretion of the Provincial Government ; and it will therefore be the duty of the Government to advise His Excellency to disallow it. I have to inform your Honor that the Provincial Auditor will be suspended, and his conduct inquired into. In the meantime, I have to caution your Honor not to act on the warrant, the legal value of which is doubtful. I have, &c., His Honor the Superintendent, Wellington. William H. Reynolds.

No. 5, His Honor the Superintendent, Wellington, to the Hon. the Colonial Secretary. Sir,— Superintendent's Office, Wellington, 12th February, 1874. I desire to bring under your immediate attention the great public inconvenience which has arisen from your suspension of the Provincial Auditor. I am professionally advised that no other than the Provincial Auditor can certify to a warrant, except in the special cases cited in the 7th section of " The Provincial Audit Act, 1866." On the 12th of every month I have to direct certain moneys to be paid to different persons for services performed : to-day I am unable to do so, unless you think proper to authorize Mr. Dorset to act notwithstanding your suspension of him from his duties. I have, &c, William Fitzherbert, The Hon. the Colonial Secretary, Wellington. Superintendent.

No. 6. The Hon. the Colonial Secretary to His Honor the Superintendent, Wellington. Sir,— Colonial Secretary's Office, Wellington, 13th February, 1874. I have to acknowledge the receipt of your letter of the 12th instant, in which you direct my attention to the inconvenience arising from the suspension of the Provincial Auditor. In reply, I have to state that the Provincial Auditor has been suspended on account of most irregular action, instigated by the Provincial Government; and if the Provincial Government sustain inconvenience, they have themselves to thank for it; and if the public are inconvenienced, they also may thank the Provincial Government. Mr Dorset was directed to notify his suspension to the Deputy Auditor; lam not aware that he has done so. I have, &c, William H. Reynolds, (in the absence of the Colonial Secretary). His Honor the Superintendent, Wellington.