P.S.—If after a consideration of the circumstances stated in the accompanying letter Your Excellency should recognise my claim on H.M. Government, I hope you will receive with favour a proposal, which will essentially benefit me, and instead of expense be attended with advantage to Government. From my report on the Newcastle Coal Works, Your Excellency will perceive that the expense of conducting that establishment is greater than the return it yields. In that report I pointed out improvements which would have gone far to have rendered the Coal Works profitable to Government, but verbally suggested to Your Excellency the expediency of letting them, as I conceived that it would be difficult for Government to manage them on the same economical terms as a private individual. The manner in which the working of the coal has since been continued, as shewn by their quality, is a proof that even with such minute directions as I then gave, a system of gross mismanagement has prevailed, and which will render a steam engine much earlier necessary than under a different system would. page 654 have been required. And it will readily occur to Your Excellency that the addition of a steam engine, besides the increase of expense would only open the door to further mismanagement. At the time I reported to Your Excellency on the Coal Works. I had no intention of proposing to take them myself. But within these few weeks my oldest son has arrived from England, and as my knowledge of mining would allow me to work the coals with profit under circumstances which would perhaps be unprofitable to any other individual in the colony, it occurred to me, that with his assistance I could manage them without interfering with the remaining time of my engagement to Government, or being prevented from affording my advice and assistance when it should be required, after the period of my engagement had expired. Without entering into particulars, which it would require a minute examination into the past management and present circumstances of the Coal Works to furnish, I would propose to take them on the following principle, viz.: I would furnish to Government the coals required by them at a price which, besides the improvement in their quality, would be an absolute saving on what they have hitherto cost, or would cost, were the management of them still continued in the hands of Government. But as in any circumstances a steam engine will very shortly be required, it will be necessary for the Government to advance the capital for its purchase, and for the sinking of the engine pit, and receive the repayment in coals gradually and at a distant period.