The Hon. the Colonial Secretary to the Superintendent of Nelson.

I have the honour to acknowledge the receipt of your letter of the 25th ultimo, recommending that an advance of £750 be made to the Collingwood Coal-mining Company, to enable them further to ascertain the existence of coal in quantity in their mine.

In reply, I have to inform your Honour that the Government are quite ready to afford assistance to the above Mining Company, to enable them effectually to test the quantity and position of the coal which can be got from their mine.

After consulting with Dr. Hector, however, the Government believe that the necessary cost of the tunnel has been over-estimated. Dr. Hector proposes to visit Nelson next week, and after receiving his report the Government will communicate further with your Honour.

In the meantime they are prepared to promise the Company a subsidy of £500 for the purpose above-mentioned, which will doubtless enable them to proceed at once to call for tenders for the work.