A.—3

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their wishes and opinions to the general Legislature (which will, no doubt, -be much assisted, and in great measure guided by their advice), I trust that no serious inconvenience will result from the postponement for a short time of a change in the constitution of the latter body, by which a representative character will be given to it likewise. 14. With regard to the topics more immediately adverted to in your latest despatch now before me, I think that Dr. Greenwood and Dr. Munro had valid reasons for tendering their resignation, on the ground that the functions of the Legislature had been superseded by the Lieutenant-Governor's taking upon himself to announce that the expenditure of the province would continue beyond the period for which it was sanctioned by the then existing Ordinance. This is a step which I have no doubt the Lieutenant-Governor was induced to take under a mistaken impression of what was necessary for the public service, but of which I am bound to disapprove. If he had mentioned to you, among the subjects for which he proposed to call the Legislature together, that of passing a Supply Ordinance, showing that this had become necessary, you would, no doubt, have sanctioned the assembling of that body instead of recommending its postponement. It was a great inadvertence on his part not to have so mentioned it. But, having omitted to do this, he should either have taken on himself the responsibility of calling the Legislature together for this necessary purpose without your sanction, or he should have postponed all payments not legally authorised until he could obtain authority from you for calling it together and passing the necessary Ordinance. With regard to the resignations of Messrs. Bannatyne, Bell, and Ludlam, I can only say that I certainly never intended my despatch to which they advert to bear the sense which they have put on it, although I regret now to perceive that it was expressed in such a manner as to be susceptible of that interpretation, and I am sorry that this should have occasioned the loss of their services to the public. I have, &c, Governor Sir George Grey, &c. Gbet.

No. 15. Copy of a Despatch from the Eight Hon. Earl Geex to Governor Gbet. (No. 39.) Sir, — Downing street, 2nd April, 1851. I have to acknowledge your Despatch No. 123, of the 24th October last, enclosing the draft of a Provincial Councils Bill, and informing me of your intention of submitting it forthwith to the Legislative Council. 2. The general principles of the measure are in full accordance with the instructions and suggestions which I have already given you on this subject. 3. There are, however, two points in which I consider it defective, and which are of sufficient importance to induce me to mention them at once instead of waiting for the arrival of the Ordinance itself. In what I have to say, therefore, I shall assume that the .Ordinance has passed, or will pass, in substantial agreement with the draft before me. 4. I do not find that it contains any provision reserving to the local Government the initiation of money votes. I conjecture the omission to have happened in this way: the existing Provincial Council Ordinance (section 16) provides that no law shall be enacted or question debated unless on the proposal of the Governor. It is possible that in omitting this provision as incompatible with the new organisation of the Council, it did not occur to the framers to reserve the control thereby abandoned in the case of money votes. 5. But in whatever way the omission may have occurred, it is very material. It is obvious (as experience in some British colonies has amply proved) that without this power the local Government cannot carry on the affairs of the community with advantage, because it cannot estimate beforehand the means which may be at its disposal, or determine to what services these shall be appropriated. The New South Wales Constitution Act (5 and 6 Vict., c. 76, sec. 34) affords an example of the kind of clause which is required. 6. The second point is, your proposing to vest the power of confirming and disallowing the Ordinances passed by the Provincial Councils in the Governor-in-Chief instead of in Her Majesty. 7. This is an innovation of a serious character, and one which I conceive the Legislative Council of New Zealand would have no authority to make, were it not that the language of the Act which you cite (11 and 12 Vict., c. 5) is such as to be open to the interpretation that this very unusual power is conceded by it to that Legislature. 8. I am not prepared to advise Her Majesty to consent to so material a change in the ordinary form of a colonial constitution. Tou state, indeed, as your reason, that you wish to follow the analogy of by-laws made by a municipal body, expecting that the powers of these Provincial Councils will be gradually absorbed by the central Legislature. But this is an anticipation of the correctness of which it is impossible to be certain ; in the meantime the powers actually confided to these Legislatures, although limited by certain restrictions, are absolute on the unrestricted subjects, and greatly exceed those of an ordinal municipal body. Looking, therefore, not merely at the particular instance, but also at the general rules which those intrusted with the administration of Her Majesty's colonial possessions must bear in mind, I think the recognised principle must be preserved. 9. This would, indeed, have been sufficiently done if clause 22 of the draft Ordinance had stood alone ; for it would then have been in the power of the Secretary of State to instruct the Governor-in-Chief in no case to confirm a law passed by a Provincial Council until he had received Her Majesty's authority to do so, leaving the Governor-in-Chief free to disallow, without such authority, any which he might deem objectionable. This would have rendered the deviation from the ordinary method one of form only and not of substance, and I should have regarded it as immaterial. 10. But the power reserved to Her Majesty by that clause seems to be controlled by subsequent clauses (although the effect which would result from this apparent conflict is not clear to me), and especially by clause 14, which renders it imperative on the Governor-in-Chief to declare his disallowance within twelve months, and which must in most cases render intermediate consultation with the Secretary of State impossible.