B.—No. 5,

the honor to inform you that it is my intention during the coming Session of the Provincial Council to introduce a Bill for the purpose of negotiating a Loan for obtaining the sum of £500,000, on the security of the L and Revenue of the Province, following the conditions of the OtagoLoan Ordinance, 1861, -which was approved of by His Excellency, a copy of which is herewith enclosed. I append for your information a Memorandum exhibiting the position of the Finances of the Province on the 30th September, together with a Memorandum of the Loaning power of the Government, and to what extent it has already been exercised. I observe that several of the Provinces have, or contemplate having, large powers of raising money on the issue of Debentures ; and as the demands on the resources of this Province are not surpassed by those on any other Province, the Provincial Government expect, and with reason, that the greatest latitude will be given it, consistently with Imperial Insti-uctions. I have, &c., J. Richardson, Superintendent. The Honorable the Colonial Secretary, Auckland.

Enclosure to No. 1. STATEMENT OF LIABILITIES and assets of the pbovince of otago on septembeb 30th, 1860. Liabilities. Assets. £ s. d. loans — £ s. d. Deposit Accounts . . 441 2 0 Dunedin Town Board. 4500 0 0 Debentures Payable . . 23,000 0 0 „ Cemetery . 100 0 0 Union Bank of Australia . . 22,583 4 3 Port Chalmers Town Board . . 500 0 0 Cemetery 100 0 0 James G. Lewis . 250 0 0 Harbour Endowments 11,261 10 6 £16,711 10 6 Due by Home Agents . . 10,485 3 9 Advanced Accounts . . 6,520 11 11 Immigrationßills payable on demand 46,979 1 5 Total . . £46,024 6 3 Total . . . £80,696 7 7 BOBEOWING POWEES. Debentures Outstanding . . £23,000 0 0 Loan Ordinance 1856 35,000 0 0* 1861 50,000 0 0 Public Building, 1862 50,000 0 0 Harbour Endowment 1862 . . 50,000 0 0 £185,000 0 0 • This amount has been borrowed, but £12,000 has been paid off, leaving £23,000 as outstanding liabilities.

No. 2. THE HONORABLE THE COLONIAL SECRETABY TO THE SUPERINTENDENT, OTAGO. Colonial Secretary's Office, Auckland, 6th December, 1862. Sik,— With reference to your Honor's letter, No. 1222, of the 6th ultimo, stating that you intended to propose to the Provincial Council of Otago a Bill for raising a Loan of £500,000, I have the honor to communicate to you the views of the General Government upon this subject. In the Despatch of the Secretary of State of the 15th September, 1857, published in the " New Zealand Gazette " of the 15th December of that year, Mr. Labouchere writes to the Governor as follows :— "I have therefore to instruct you, in exercise of the powers vested in you by the Constitution Act, to require that all Bills of Provincial Legislatures for the purpose of raising monies by Loan shall be reserved for your assent ; not to give such assent in any case unless either the amount is inconsiderable, and the purpose temporary, or the exigency appears to you so great as to render departure from this rule essential for the public convenience; and if ever Loans to any serious amount should appear to be required by a Province, to require that the Legislature should present to you Resolutions to that effect, in order that you may confer with Her Majesty's Government previously to the introduction of any Bill for the purpose."

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PEOVINCIAL LOANS.