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passed shortly after our accession to office. This new arrangement has hitherto worked well, and promises greatly to facilitate the production of wool, the staple commodity of the colony, to the equal advantage of its inhabitants and of the British manufacturer, at the same time it avoids an impro- vident waste of the resources for supporting future emigration, by not allowing the premature aliena- tion of these immense tracts of land before they have attained the high value they must soon acquire.

In South Australia the wishes of the colonists have been attended by the abolition of the royalty of one-fifteenth of the produce of the mines which it had been attempted to levy. And to both New South Wales (including Port Philip) and to South Australia emigration has been carried on to a very great extent and with most gratifying success.

In Van Diemen's Land and Norfolk Island, in which a most frightful state of things had been produced by the reckless manner in which vast numbers of convicts had been sent without any adequate provision for the maintenance of discipline, most important reforms have been accomplished.

The number of convicts in the custody of the Government in these islands has been greatly reduced, and far more effective arrangements than heretofore have been made for the maintenance of proper discipline amongst those who remain.

A correspondence with the Government of New South Wales on the division of that colony and the alteration of its constitution has also now been brought to a stage which has rendered it practicable to prepare a Bill with a knowledge of the wishes of the inhabitants for extending the benefits of Representative Government to those parts of Australia which do not now possess it, and this measure will almost immediately be submitted to Parliament. As a consequence of these changes arrangements are also in progress which will very greatly diminish both the amount and the cost of our military establishment in the Australian Colonies.

In New Zealand during the last two years almost marvellous progress has been made. Not only has