CO885(1-2) — Page 646

(No. 195. Executive.)

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No. 3.

Van Diemen's Land Government House, 27th December, 1849. (Received 17th April, 1850.)

I HAVE the honour to acknowledge the receipt of a Despatch No. 130, dated 4th August, 1849, in which your Lordship has communicated to me certain instructions as to the disposal of the money arising from the sale and leasing of Crown Land in this colony. 2. Your Lordship states that you do not consider it an admissible proposal that the claims of the Treasury on the colony for the sum borrowed from the Commissariat chest, with other sums advanced in England for the service of Van Diemen's Land, should be wholly remitted, but that you are prepared to consent to the appropriation of the Land Fund in the first instance to the liquidation of the debt of the Colonial Government to the Commercial Bank, and to the demand upon the Colonial Government for repayment of the amount obtained by the late Lieutenant-Governor from the Commissariat being deferred. 3. I regret very much that your Lordship should have decided that the proposed remis- sion of the debt due by the colony to the British Treasury is inadmissible. I am afraid I must attribute this conclusion on the part of your Lordship to the mode in which I brought the subject under the notice of the Government, and I cannot but hope that your Lordship will reconsider, in connection with the facts which I shall be able to lay before you in this despatch, a decision which will be certain to cause great embarrassment to the revenue, especially when taken in connection with the changes in the mode of raising a revenue which form, in fact, a portion of the proposed Act for altering the constitution of the government of these colonies.

4. The sum which was borrowed by Sir Eardley Wilmot from the Commissariat, together with the amount advanced from the Treasury to the Colonial Agent, may be said to amount in round numbers to about 60,000%, a sum equivalent to two years and a half purchase of the amount paid by the British Treasury, as a contribution in aid of the police and gaols of the colony. This payment commenced on the 1st April, 1846, pre- vious to which these debts had been incurred; the amount expended in the years 1844 and 1845 for the maintenance of the police and gnols, amounted to 38,1267. 18. id, and 38,1627. 128. 2d. respectively, while the revenue for those years, owing to circumstances over which the colonists had had no control, exhibited a marked deficiency.

5. I am aware, that during the period in question, the colony was in receipt of the proceeds of the Land Fund, and that a large amount had been expended from this source for the civil service of the colony, but the accompanying returns will show your Lordship that the amount in question was received principally in the years 1840 and 1841, that a sum of 30,6077. 28. 3d. was expended for immigration, and that a balance of 174,0392 11a. 3d. only, was paid into the Treasury for the civil service of the colony, amounting on an average of years to 13,387. 133. 2d. per annum. In 1844 and 1845, the sum re- ceived from the Land Fund was little more than sufficient to pay the current charges upon it, while the outlay for the police and gaols was in those years very heavy, amounting as I have before stated to 76,30st. 138. Gd.

6. Having thus brought within as small a compass as possible the detail of the circumstances which might induce your Lordship to take a niore favourable view of what are considered the claims of the colony-though I do not put them forward as such, but merely as affording reasons of considerable weight, why Her Majesty's Government should not press for the payment of the amount in question, I may now be allowed to bring before your Lordship such facts as will demonstrate clearly the embarrassment to the revenue which will result in case Her Majesty's Government should follow out the course detailed in your Lordship's despatch, and direct the immediate appropriation of half of the net proceeds of the Land Fund to the payment of the debts of the colony, including under that head the sums due to the British Treasury, retaining the other moiety of the fund for the encouragement of free emigration.

7. By reference to my despatches, No. 137 and 154, dated respectively, 24th September, and 18th October last, your Lordship will see that in consequence of a deficiency in the revenue for 1848, which was due to the commercial difficulties arising out of political changes which took place in Europe in that year, the expenditure of the colony exceeded the revenue to the extent of 664 17. 128. 9d. This deficiency I have been able to reduce during the present year by the appropriation of that portion of the revenue of the Land Fund which would, under the Australian Land Sales Act, have been transferred to the civil service of the colony, and I shoukl by following out the same system, pay off the whole arrears in the course of 1850, together with the remainder of the debt due to the Commercial Bank, leaving untouched that moiety of the Land Fund, which under any arrangement it was intended should be devoted to the encouragement of emigration.

8. By acting, however, in strict accordance with your Lordship's instructions, by pay, ing into the hands of the Commissariat the whole of the proceeds of the Land Fund, and by crediting the colony only with so much of the revenue from that source as would pay off the debt due to the Commercial Bank. I should be obliged to overdraw the account of the colony at that establishment, and should therefore have to create a new debt

in antipation of the revenue for the forthcoming year.

9. I trust, therefore, that your Lordship will approve of the course which I propose to adopt, which will be, first, to pay off, as sanctioned by your Lordship, the amount still due to the Commercial Bank, viz. 10,000/

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Second, To credit the civil service with the amount stated in the supplementary estimate for the present year, viz., 17,4611. 68., of which, as detailed in my despatch No. 154, dated the 18th of October last, 15.000/. was paid to the Bank in the beginning of the year, in part liquidation of the debt due by the colony, and also with such further sums as may, in the course of the year, be necessary to cover any outstanding balance of the expenditure of

1848.

Third, To transfer to the Commissariat chest the balance of the Land Fund which may remain in the hands of the Treasury, after the above-mentioned payments have been made, and to continue to pay over periodically the net balance of the fund, after the necessary expenses of the Survey Department and other charges upon it have been defrayed. By so doing, the Commissariat will, by the end of 1850, have in all probability received the amount of the moiety of the Land Fund which is to be devoted to the encouragement of emigration, with the exception of that portion which has been lent to the Commissioners of the Bridgewater Bridge, as explained in my despatch No. 155, dated the 28th of August, 1848, and which will be in course of repayment with interest, at the rate of 7 per cent. from the proceeds of the tolls.

10. The colony will have paid off all claims against it, with the exception of that of the British Treasury, and any arrangement which your Lordship may, upon full consider. ation, think desirable, can then be carried out, without subjecting the colony to the incon- venience to which I have before alluded.

11. There are one or two points, however, with relation to this subject, to which I wish to call your Lordship's attention.

12. The changes in the mode of raising the revenue, which are brought forward in the Bill by which the constitution of the colony is amended, are very important; they involve on the one hand positive and certain reductions in those branches of the revenue which are at present most productive, such as the duties upon spirits, and the inter-colonial trade, while, on the other hand, it is proposed to impose (most reasonably and justly, I allow,) new duties upon articles imported from England. The effect, however, of these new duties in filling up the deficiencies created by the proposed reductions, cannot be foretold with any approximation to accuracy. Upon the most careful consideration, it appears to me that there will be a falling off in the present amount of revenue.

13. I would submit to your Lordship, that on the eve of a change in the system of government hitherto in fore in this colony, a change which must necessarily involve a certain additional expenditure in the salaries of the officers, and the contingent expenses of the new Council, it would be very impolitic to reduce the revenue to the bare amount required at present for the ordinary expense of the Government.

14. I trust, therefore, that your Lordship will reconsider your decision relative to the remission on the part of Her Majesty's Government of the claims of the Treasury against the colony, and I do so with the more confidence from the circumstance that in the debates in Parliament upon the introduction of the Bill, it was, I understand, stated officially that the appropriation and disposal generally of the revenue arising from Crown lands was to be given over to the Legislative Bodies in the Colonies.

The Right Hon. Earl Grey,

&c.

&c.

&c.

I have, &c.

(Signed)

W. DENISON.

PUBLIC RECORD OFFICE

Reference -

FELTTIC.O.

: 885

2 PUBLIC RECORD OFFICE, LONDON

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