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[No. 53.] Downing Street, 9th July, 1842. Sir,—With reference to my despatch No. 26, of the loth March last, I transmit to you herewith a copy of a despatch which I have received from the Governor of New South Wales, reporting that he had drawn bills to the amount of -£5354, on the Lords Commissioners of the Treasury, on account of the debt due to that government by the colony of New Zealand. I also enclose for your information and guidance, a copy of the despatch which I have addressed to Sir George Gipps upon the subject. I have further to intimate with reference to my despatch to you above alluded to, that in consequence of arrangements subsequently made by Her Majesty's Government, the advances from the colonial funds of New South Wales for the service of your Government, are to be liquidated by payments from the local revenue of New Zealand, or from such portion of the proceeds of sales of Crown lands within the colony as may not be specially appropriated to expense of Immigration, into the Commissariat chest on the station, and you will lose no time in taking steps for the liquidation of this debt, by paying to the officers of the Commissariat, at the end of each quarter or half year, such sums as may remain available out of the funds above mentioned, after defraying the charge of the authorized establishment and the expense of the colonial govornment. No accounts have yet been received from your government of the application either of the sums advanced by the government of New South Wales to the acting Treasurer of New Zealand, or of the receipts from revenue or from land sales, and I have to call your attention to the provisions in the instructions relating to the expenditure of the local funds and the mode for accounting for them, which were transmitted to you with my predecessor's despatch, No. 11 of the 25th Februrry, 1841, which require the transmission of the Treasurer's accounts quarterly to this country for final audit. You will take care that those provisions are duly carried into eflect without delay; and you must bear in mind that the exoneration of yourself and of the Treasurer, or of any other officers concerned in the receipt or expenditure of the colonial funds from pecuniary liability will depend upon a due conformity to those instructions. I have, &c., &c., (Signed) Stanley, To Governor Hobson, &c., &c.

No. 146. 9th July, 1482.