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work, the Government being under a legal obligation to complete it, and he dwelt on the injury to the work already done, the serious public inconvenience, and the grave sanitary complications which suspension would involve. On 29th August he again wrote in to shew why, 'in my opinion, the Government need not hesitate to make such a loan, and why they may consider its repayment as well assured.' He said, 'there are not wanting signs of an approaching recuperation.' After giving his reasons for this he proceeds to state that the fall in the rents of houses (of which we heard a good deal the other day) is purely temporary and will soon rectify itself. On this head he writes- The fall of rents has been due to too great haste in building, which has caused the supply of houses, especially of those for Europeans, to exceed the present demand. This, however, is a matter that will be cured by time, especially as the population of the Colony is steadily increasing.' In saying that the fall in the rents of houses would be cured by time, he must have had a very short time in his mind, for under his proposal some of the advances would have been repayable within two years. I may point out in passing that all this materially corroborates the position taken by the Government in regard to the recent motion for the reduction of certain salaries. And as lately as the 20th of last September he wrote: 'the risk run by the Government is really nil. The amount that was required to complete the reclamation, and that consequently Government was under his proposal to borrow from time to time and advance to a very small section only of the community, the marine lot owners, was $2,491,198, or say in round numbers 25 lacs; and the outstanding liability of the Government, supposing every lot owner punctually to repay his advances when repayment became due, would at one time have exceeded 8 lacs, the exact figure being $811,000. Such was the operation which he pressed on the Government as involving absolutely no risk, and yet to-day he is disposed to question the prudence of the Government's proposal at the present juncture to borrow some 14 lacs only on behalf of the whole community by a loan the repayment of which will be distributed over a period of 50 years. On this question of prudence I appeal from his doubts of to-day to his confidence of the 20th September last and I venture to ask him whether, in view of the proposal which I have mentioned and of the arguments by which he supported it, he cannot see his way to voting for the second reading.'

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It is, to say the least of it, very embarrassing to be assured that the financial position justifies the Government in borrowing an enormous sum and lending it to a very small section of the community, that signs of "approaching recuperation are not wanting," and that the fall in the rents of houses is purely temporary and will soon rectify itself—and then very shortly after to be assured by the same authority that the financial position is so desperate that it is essential, especially in view of the fact that the rents of houses have fallen, to effect a (net) saving of some $35,000 by the immediate reduction of certain salaries.

13. In paragraph 12 the Memorialists mention that they have frequently objected to the creation of new offices, but as they refrain from specifying those offices, I am not aware to what offices they refer. No new offices have been created since I assumed the administration of the Government. They also object to "the appointment of additional Cadets when there are Cadets still unprovided for;" they have already been informed that there is no intention of appointing any additional Cadets. And lastly, they object to "the appointment of new men to official posts in the Colony when there are officers in the Colony already quali- fied to fill the vacancies without work to do." The only "new men appointed to offices in the Colony since I came here are the Colonial Secretary and the Super- intendent of the Gaol. I am not responsible for either appointment. I am not aware of any "Officers in the Colony without work to do:" if it be meant that some existing offices might with advantage be amalgamated, I have already recom- mended such amalgamations to Your Lordship when opportunity may offer.

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14. Paragraph 13 relates that the Unofficial Members have repeatedly asked for the appointment of a Retrenchment Committee. As it also draws attention to the "Hansard" reports of the debates on the several motions, I have only to observe that my reasons for not acceding to the only motion made in that behalf during my administration will be found in the report of the 9th May, 1892. The paragraph further gives the total cost of the establishments in each year since 1886. I enclose a list shewing the details of the additions to establishments, and may here repeat that I have already submitted to Your Lordship my views as to the reductions that may be effected therein.

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