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one side, and including the whole expense, in detail of the police in the Estimates on the other side, because the grant in this case is not specifically appropriated to any particular salaries by Her Majesty's Government, and the Legislative Council is therefore entitled to consider in what manner the sum may best be applied t the object in view. But the other items should be thrown into an entirely distinct statement of salaries defrayed by contribu- tions from this country, and be added to the Esti- mates as an appendix.

4. Your remarks upon the advantage of making the provision for the sick, aged, and infirm poor, a local charge, are important. I concur in the opinion which you express, and I think also that in order to guard against the danger of those abuses

which experience in other countries has shown to be so likely to arise, it would be highly desirable that relief to those who require it should be given exclusively by admitting them into well-managed hospitals or workhouses, which ought to be esta- blished in each suitable district. With such esta- blishments, houses of correction might, with great advantage, be connected for the reception of persons committed for not more than a few days for trifling offences. Four or five airy cells would probably, for the present, suffice for this purpose.

5. Closely connected with this subject is the general question of the local organization of the colony. My opinion, as you are aware from my despatch of the 25th of November, 1848, is de- cidedly in favour of the establishment of municipal corporations, wherever they may be practicable and suited to the wants and circumstances of the inhabitants; and in the Constitutional Bill which is now before Parliament, it is proposed to invest you and the other Governors of the Australian Colonies, with power to form such corporations upon the petition of the inhabitant householders of the districts for which they may be proposed.

6. The insertion of half the land revenue in the income to be appropriated by the Legislative Council is open to objection. The most complete accounts with respect to its expenditure should be laid before

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the Council, but that body cannot properly be called upon to vote the services which are to be defrayed from it. The expected income and the intended expenditure of this fund should be presented in a separate statement. In another despatch of this date I have entered somewhat fully into a con- sideration of the principles which ought to regulate the expenditure of the land revenue.

7. The protest of Mr. Leake has not failed to receive a due share of my attention. I fully appre ciate the motives which he has stated for adopt- ing this mode of recording his opinions, instead of opposing the Estimates, and thus incurring the risk of throwing the affairs of the colony into confusion; and I am very sensible of the tone of moderation which distinguishes his remarks. At the same time I cannot concur in the view which he has taken of the subject. While Her Majesty's Government readily acknowledge that the colony ought not to be put to any expense by the continuance of the practice of introducing convicts, but that, on the contrary, this measure ought to be so managed as to contribute to its material advantage, I cannot doubt that this is already the case. It must not be forgotten that a very considerable proportion of the colonial revenue is derived from the consumption of those who are or who have been convicts, and that in addition to this, the large expenditure of the Home Government connected with the Convict Service creates a demand for the produce of the colony, and is one of the chief sources of its wealth. I cannot doubt that if the additions thus made to the income of the colony could be accu- rately ascertained, they would be found very largely to exceed the extra expenses imposed upon it by the reception of convicts.

8. On the subject of the contribution of this country for police and gaols, Mr. Leake's opinion seems to rest on u misconception of the state of the facts. At the time when it was strongly urged upon the Treasury by this department that some aid should be granted Van Diemen's Land towards the expense of its police and gaols, a sum equal to two-thirds of the rate of expenditure existing at that period was taken as the