Enclosure in foregoing.

Minute of Cabinet.

Members Present:

• The Vice-President of the Executive Council.
• The Colonial Secretary.
• The Colonial Treasurer.
• The Secretary for Lands.
• The Secretary for Public Works.
• The Postmaster General.
• The Solicitor General.

On behalf of your Excellency's Advisers, I have the honour to submit the following views which are entertained by the present Administration on the state of the Legislative Council of this Colony, and the serious grounds for apprehension that, as now constituted, that body will fail to work in harmony with the elective branch of the Legislature, or in conformity to the constitutionally ascertained wishes of the people.

Your Excellency will recollect that, soon after your arrival in the Colony, and some time before the defeat of the Border Duties Bill in the Legislative Council, I took occasion, in my conversations with you, to express my apprehension that the Bill would be lost in that Chamber, notwithstanding that the measure was then passing through the newly-elected Assembly by large majorities, and was framed to give effect to a policy confirmed by the result of the late appeal to the electors, and on which principally the late Administration had been removed from office. On these occasions I explained that a large number of the appointments to the Council had been made under the advice of Sir James Martin, and that several of the gentlemen so appointed were not in any other respect known to political life, and, without any personal disrespect, might be said to be gentlemen with no ascertainable political opinions. I explained further, that two members, from advanced age and paralytic affliction, were rendered incapable of attending to their duties; that one Member, owing to private circumstances, had withdrawn himself to a great distance from Sydney, where he was engaged in avocations which seemed to render his attendance next to impossible; that one Member was absent in Europe; and page 88 that several other Members very seldom attended, from age, impaired health, the distance of their residences from Sydney, the nature of their occupations, and from other causes. I stated at the same time, on the authority of the Vice-President of the Executive Council (who represents the Government in the Legislative Council), that during the period your present Advisers have held office, up to the date of my conversations, it was difficult to keep a quorum together for the transaction of business. I learn to-day from the Clerk of Parliaments that three Members have never appeared in their places this Session, and that 14 have been absent from half the sittings, which have been 26 in all.

It has been ascertained that the exact number of Sir James Martin's appointments is 15 out of a House of 31 Members, and that not more than three of the other appointments have been made when I have myself had the honour to hold office. Mr. Hay and Mr. Busby were appointed by Mr. (now Sir James) Martin, during the time I held office with that gentleman, from January 1866 to September 1868; and Mr. Samuel was appointed a short time ago by your Excellency on my recommendation.

I have stated these circumstances in detail, because they seem to throw light upon the positive intimation repeatedly made to Ministers before the Border Duties Bill left the Assembly, and in apparent derision of the majorities by which it was supported, that it would be defeated in the Council.

I now come to that defeat. The second reading of the Bill was moved in a House of 17 Members, exclusive of the President; and the division showed eight in favour of the Bill, and nine against it. The eight Members in favour of the Bill included several of the most considerable of our public men. Mr. Deas Thomson was many years Colonial Secretary; Mr, Hay held office in Mr. Stuart Donaldson's Administration, and has passed the Chair of the Assembly; Mr. Weekes and Mr. Samuel held office as Colonial Treasurer in several Administrations; Mr. Owen and Mr. Holt were also Members of former Administrations. On the other side, no person of political consequence voted, if indeed Mr. Docker, the late Postmaster General, be excepted, who has never sat in the Assembly. I append (marked A.) the article on the occurrence published by the "Sydney Morning Herald," the leading journal of the Colony, which has always strongly supported the character and privileges of the Legislative Council. The resolutions of which I gave notice in the Assembly and afterwards withdrew (Appendix marked B.) correctly state the case as between the Council and the Country.

It appears to your Excellency's Advisers that they can look forward with little confidence that any measure passed by the Assembly and supported by public opinion, however important its character may be, will be considered by the Council with due regard to the interests affected by it and the expressed wishes of the people, after the course adopted on the Border Duties Bill, which embodied a policy so clearly and emphatically supported by the elective branch of the Legislature and by the Constituencies.

Under these circumstances, it devolved upon your Excellency's Advisers to decide upon the course they were prepared to take on the loss of a measure which they considered necessary to the good government of the Colony. Possessing the support of the Assembly, and sustaining defeat in the Council by a few gentlemen in the party interest, as they believed, of the late Minister, who had been defeated alike in the Assembly and before the electors, they considered it to be their duty to persevere in their line of policy on the Border question. It did not appear to them, however, that the occasion called for advice to your Excellency either before or after the defeat of the Bill. They were aware of the views on the question of appointments to the Council maintained by Sir John Young at the time of its reconstruction in 1861, under the provision of the Constitution for life-membership, and of the understanding, concurred in by men of political prominence, that a maximum of 27 Members should be generally recognised—though it is right to observe that it is within their knowledge that Mr. Cowper (now Sir Charles Cowper), who was then at the head of the Administration, has denied that he was a party to any such understanding. (Appendix C.) They were also desirous of avoiding any course which might have the appearance of tampering with the Constitution to meet a sudden emergency; but they were not the less sensible of the abortive and incongruous state of things into which the Colony was brought in the conduct of this question. The late Legislative Assembly in February was dissolved, because it was in favour of the policy of the Border Duties Bill; and a direct appeal was made to the Constituencies on the question, as is proved by Sir James Martin's address, when seeking re-election (Appendix D.) The result of the dissolution proved that a majority of the electors were in accord with the Assembly; the new House affirmed the same views of policy by large majorities; and the measure which was produced by these causes, and received the constitutional sanction of these events, is defeated in the Legislative Council in July, by a majority of one, without calling forth any exercise of power to avert or moderate the consequences. This state of things, they felt assured, could not fail of giving rise to popular dissatisfaction and an angry feeling in the public mind : and, after mature consideration of the case before them, your Excellency's Advisers arrived at the opinion that the action of the Legislative Council on this occasion, viewed in connection with the unsatisfactory character of certain appointments in past years, and the facility with which, in their belief, outside and merely personal influences could be exercised upon the Council's deliberations, afforded signal evidence of the failure of the nominee principle. Nor could they conceal from their view that the working of the principle on which the Council is page 89 based, had invoked the interference of Her Majesty's Secretary of State in a manner not expressly sanctioned by law, and which, with expressions of deep respect, your Excellency's Advisers cannot but consider incompatible with the rights of self-government secured to the Colony by the Constitution.

Your Excellency's Advisers have therefore decided to introduce, in the next Session of Parliament, a Bill to reconstruct the Legislative Council on an elective basis, which they feel assured will receive the support of a large majority in the Assembly and throughout the country. Although this part of their policy does not of itself require any explanation at the present time, still it -cannot be contemplated without the prospect of a contingency in respect to which it appears to your Excellency's Advisers desirable that their views should be communicated to the Right Honourable the Secretary of State. They cannot entertain the hope that the measure which they contemplate will be carried without much difficulty in the Council, whose Members will have a life-interest in its resistance. In this event, which is regarded as most probable, the legislation of the Colony will still have to be carried on, possibly for several years, with the continued existence of the nominee principle in the Council; and your Excellency's Advisers are compelled to weigh beforehand the considerations which ought in their judgment to determine appointments to that body. Considered as a matter of argument, they could not recognize the wisdom and sound policy of a low maximum; but, if an arbitrary rule were to be kept in view, they are of opinion that a maximum equal at least to one-half of the Assembly would be safer for the public interest, and more likely to secure a true representation of those elements of political experience, mature judgment, and the distinction and authority arising from public service, which ought to prevail in the Legislative Council, and would afford better guarantees against small personal organisations and clique influences. But so long as the nominee principle exists in the Constitution, your Excellency's advisers must continue to recognise the full force of the principal argument employed by Mr. Wentworth in support of its introduction, which was its expansiveness; and they cannot admit that the letter of the Constitution should be refined away by any unwritten arbitrary rule whatever. They respectfully submit that all appointments to the Legislative Council should be determined by the circumstances of each case, the exigencies of the time, and by grave considerations which cannot be foreseen and estimated until they arise; and that it was intended that they should be so determined by the framers of I he Constitution. While dutifully expressing their loyal attachment to the Throne and institutions of the Empire, your Excellency's advisers cannot, even by implication, consent to relinquish the smallest vestige of the liberties of this colony, or concur in any rule or instruction at variance with the absolute right of its people to govern themselves in all matters within their own shores, as secured to them by the Constitution.

They respectfully request that your Excellency will transmit this minute, by the outgoing mail, to the Right Honourable the Secretary of State for the Colonies.

The Attorney General was unavoidably absent from the meeting of Cabinet; but he concurs in the views herein expressed. I append copies of the Division Lists on the Border Duties Bill in the Assembly and Council (marked E. and F.)