Mr. Webster to Dr. Hector.

I have much pleasure in advising you that the contractors now driving the tunnel are likely to carry it through; it is now four weeks since they commenced work, and they have in that time driven 50 feet, cutting the first seam of coal as near as possible at the distance stated in the section you kindly furnished. Mr. Marshall advises me that it is 3 feet, and cleaner than the outcrop, but not clean enough to work; they are now in the hard ground again, and, as you are aware, it will be some months before they come to the next seam; the present contract is 37s. per foot. There are six men employed, and the work is carried on night and day. I have security for £50, and the contractors leave the amount of the first 25 feet in my hands until the contract is finished. The entire distance driven up to Tuesday last is 169 feet, that is made up thus: first contractors, 102 feet; second, 17 feet (for which I refuse to pay at present); and 50 feet by the present contractors.

It is contemplated to make a new road to the Ruatanawa; consequently the old road is not to be repaired. The Ruatanawa has from 12 to 14 feet at low water inside, so that vessels would not have to lie aground at low water; and it is not disturbed with floods, &c.