I have the honor to acknowledge the receipt of your letter of the date quoted in the margin, (August 14th, 1868) in reply to the Council's letter of 13th August, on the subject of a site for an Athenæum.

In reply, I am instructed by the Reserves Committee of the Council to state that, if the Athenæum Committee agree to surrender the unexpired term of the lease of section 34, block VI, Dunedin, the Council will pay fair valuation for the buildings on the allotment, and will consider favorably the application for a site at the Octagon Reserve.

The Athenæum Committee are reminded that during the last ten years the Institution they represent has benefited largely by having a lease of a Municipal Section in the heart of the City, at a nominal rent.