5.—The Hon. the Premier to His Honor the Superintendent.

Sir,—I have the honor to acknowledge the receipt of your letter of the 22nd April, in reply to mine of the 13th.

2. There are a few points to which I think it desirable to reply: to others I do not refer, either because I consider that I have answered them by what I have already written to your Honor, or because they seem to me of a la quoque nature, and entirely out of place in this correspondence.

3. I am not aware that in my letter to you I assumed that Parliament would render the Government more support than Governments usually anticipate. There would be no strength in any government, if fear of a minority becoming a majority were allowed to interfere with the ordinary duties of administration. I desired to represent to your Honor that as, by law, the Provinces cease to exist after next session, the General Government were performing only their duty in obtaining the information necessary to provide for the charge which will then devolve on them.

4. You refer to my action some years ago, when I had the honor to be a member of the Otago Provincial Executive. I acted then, as now, in accordance with what I believed to be my duty, and I do you the justice to believe that you are similarly actuated. As you have twice referred to me personally, I may be allowed to say that I continued to aid the Provinces, and to believe they might be enabled to survive, long after that belief was dead in the minds of some of the most acute men in New Zealand. No Province has, in my opinion, more contributed to make Abolition necessary than has Otago—for it has refused to accept any limit to its desire to expend money. That, without the means at its command, it should have embarked in a variety of railway schemes, not content with the lines in progress from the Waitaki to the Bluff, from Invercargill to Kingston, and from Milton to Lawrence, sufficiently proves the necessity for the check the Assembly has imposed. Nor does this appear to have been done too soon, for notwithstanding the largeness of your Honor's views as to Otago's capabilities, the fact is that, in order to find means for meeting the expenses of the next six months, your Honor's page 15 Government have had to attempt to make land sales of a most objectionable nature. I refer to the sales proposed to be made to runholders, without competition, in defiance, as I am advised, of the intention of the law, and which I feel bound to inform your Honor, the Government would have taken means to prevent, but for the conviction that the Waste Lands Board would do so.

5. Your Honor's opinion of the manner in which the Provincial Government carry out their public works is entirely different from that which we are able to arrive at, from the information at the command of the Government. That information is to the effect that the Provincial Railways have been very imperfectly constructed.

6. I regret that your Honor should venture to make such an assertion as to the cost of the Clutha Railway. The Government have in their service several engineers of standing and long experience. There is no engineer in the employment of the Province whose opinions are entitled to equal weight. Persons may always be found ready to express opinions, but I should have thought Otago had, from the want of competent engineering skill, suffered quite enough to make its Government cautious as to assailing the work of men of experience.

7. You certainly do not rightly interpret my meaning in supposing that I said our political institutions were to be influenced by moneylenders. I think the passage to which you refer clearly enough expressed my meaning, that the Colony should not commit itself to the expenditure of borrowed money in excess of the amount which those from whom it looked for the money were willing to supply.

8. Your Honor's idea of making Otago an independent Colony is impossible of realisation—fortunately for the people of that Province, who certainly would not gain by the proposal, which, as I have already pointed out, would mean contralised power in Dunedin, and financial difficulties of a very grave character.

9. The subsidy proposed to be given to Dunedin will not injure the country districts : it will be more than covered by the savings incidental to doing away with the Provincial Government.

10. I cannot accept your Honor's version of the meaning of Abolition, and you will forgive me for saying that nothing but very Strong foregone conclusions could, I think, make you persist in your opinions in the face of the information which has been afforded to you. I should be most happy to circulate the bills which will embody the policy of the Government, but they are not fully prepared. Sufficient, however, has been decided to enable me to convey to your Honor a very clear idea of the measures the Government propose to introduce in connection with Abolition. Some of the details may be modified, but I think the particulars I am able to give will convince you that nothing approaching to such a thoroughly localised system of government has yet found place in the Colony.

11. Provincial Councils and Superintendents we do not propose in any shape to perpetuate or to reproduce, and various departmental ser- page 16 viees, such as Gaols, Hospitals, the administration of Harbours, &c., we propose to carry on as we do the Post Office and Telegraph Departments.

12. We intend to introduce a bill regulating the election of local bodies, its provisions being made applicable to Municipal, Road Board, County, Education Board, and other elections. Such a measure will enable the bills by which it will be sought to constitute and empower those bodies, to be kept free from much confusing repetition.

13. We propose a general Valuation Bill—that is, a measure which will provide a uniform system of valuing property and preparing ratepayers' rolls throughout the country, for boroughs, road boards, and counties. This, also, whilst simplifying the measures relating to those bodies, will provide a uniform system, which is much wanted. Your Honor may have observed that a not dissimilar bill has been submitted to the Imperial Parliament during the present session.

14. We propose to submit a Bill to consolidate the existing Municipal Laws, simplified as already described, but which will contain provisions to enable Corporations to borrow, not dissimilar from Mr. Ballance's bill of last year, with the exception that the purposes for which borrowing is to be permitted will be more clearly defined. The road districts we do not intend to ask Parliament to legislate about this session, excepting to the extent already described. To provide for the local charge of Education, we propose to introduce a bill to continue in existence the present Education Board until February next, elected boards, with a small nominee element, being substituted after that date. The entire control of primary education, and of the reserves for such education, we propose to vest in these boards. It will be the duty of the boards to continue in each Province the system legalised by existing Provincial laws. There will be one difference : for the bill will provide that the inspection of schools shall be under the control and management of the Colonial Government. We contemplate making provision for doing away with education rates and also with fees in primary schools, whilst we propose that education shall be made compulsory.

15. The leading features of the County System we desire have already been explained. We propose that the country, exclusive of towns, shall be divided into counties, governed by elective bodies, endowed with very considerable revenues, and charged with carrying out large public works. The counties will be distinct from the Road Board districts, excepting that in a few instances, where the districts are already of great extent, an option will perhaps be given to them to become counties, and thus to merge into one the revenues of the two bodies. The present Waste Lands Boards we propose to continue for a time; but we hope to provide at no distant date for the addition of the elective element to them. We do not propose to interfere with the Land Laws, excepting that we may ask the Assembly to consider the expediency of increasing the upset price and enlarging the facilities for obtaining land on deferred payments. The Lunatic Asylums, we propose to keep under the direct control of the Government, with the aid of local boards nominated by the Governor. A page 17 qualified Inspector in Lunacy has been selected at Home, and will, I expect, shortly arrive in the Colony. We propose to devolve the charge of other charitable institutions on the authorities of the municipalities and the counties within which they are situated, giving to those local bodies a power of placing the institutions in the hands of special committees or trustees. We regret that in some parts of the country these institutions are now purely Government institutions; and we think larger opportunities for the exercise of voluntary benevolence should be afforded. The railways, as has been stated already, we propose shall pass into the entire charge and control of the Colonial Government. Abundant reasons for this necessity have been shown.

16. I desire, for obvious reasons, not to anticipate the Financial Statement; but I will not shrink from giving your Honor some particulars. We propose to introduce a Bill providing for the disposal of the Land Revenue. This disposal will be of a thoroughly local character; excepting that we shall submit for the consideration of the Assembly the alternative of a gradually-diminishing contribution from the land revenue to meet the interest on railways, rather than to provide this payment from an income and a property tax. As we are not willing that interest on railways in course of construction should be met out of borrowed money, the revenue must supply the means for paying such interest. From the first, the land revenue which has benefited so largely from the railways, should have provided this interest. It will be for the Assembly now to consider whether the unsold lands, or the sold lands and current revenue, shall supply the amount required. Whilst otherwise we propose to thoroughly localise the land revenue we also intend that Road Districts and Counties shall be guaranteed by the Consolidated Revenue the receipt of their appointed subsidies, irrespective of whether or not the land revenue of the particular Provincial district supplies for the time being the necessary amount.

17. Your Honor will, I hope, consider that in the particulars I have given you I have not displayed undue reticence. I should be glad to find that these particulars win you to support the policy they embody; and I feel sufficiently assured of your Honor's generosity to believe that you will not object to being the medium of disseminating throughout Otago information which I confidently believe will more than satisfy every erne in the Province who is not prejudiced beyond the possibility of exercising freedom of judgment. At any rate, the information I have given you will undeceive those in the Province who are opposing Abolition under a total misapprehension of its nature, and of the consequences which will follow it. To the majority of the people of Otago, what we now propose will mean the realisation of the aspirations of many years.

18. I reciprocate your Honor's kindly remarks. I hope I have not said anything calculated to cause you personal annoyance; and I fully recognise, even where I am unable to agree with you, your Honor's public-spirited desire to promote the advancement of Otago and New Zealand. Were you a member of the Colonial Government for three page 18 months, I am convinced you would cease to doubt the necessity of upholding the law which has decreed the Abolition of the Provinces.