No. 62.
His Honor the Superintendent, Otago, to the Hon. the Colonial Secretary.

Sir,—

I have the honor to acknowledge the receipt of your letter of yesterday's date, intimating that the Government is prepared to pay over to the Provincial Treasury the arrears of rental which have accrued in respect of the Princes Street Reserve, Dunedin, upon condition of my entering into an obligation to refund the amount in the event of an adverse decision of the Supreme Court as to the right of the City of Dunedin to the money in question.

I regret being unable to concur in this proposal, because such concurrence would imply a doubt on my part as to the rightful ownership of this money, and because it appears to me to be inexpedient to expend money to which there is not an absolute right.

I feel, moreover, that however improbable it may be that the Supreme Court will give other than an equitable decision in this case, yet I am not warranted in committing the Province to the chances of such a contingency. I may add, further, that on consulting over the matter with several of the Otago Members, they are of opinion that the most advisable course will be to submit the question to the Legislature, with which view Mr. Dillon Bell has been good enough to agree to introduce the Bill which received the assent of the Lower House last Session.