No. 124

I have had the honor to receive your despatch No. 52 of
2nd August, informing me that the amount due from the Imperial
Treasury for the excess of Advances made by the Colonial Government
in respect of the Regimental Pay of the Royal Engineers lately
serving in British Columbia had been placed to the credit of
the Colony in its account with the Crown Agents.

2. On the receipt of your despatch, I called upon the Auditor
General to furnish me with a Return showing the state of the
Accounts under the head of Military Expenditure. I enclose a
Report from that Officer by which it would appear that the sum
of nine thousand and fifty-one pounds 18s/1d (£9,051.18.1),
still stands as a debt due by the Imperial Government to this Colony.

3. In support of the Statement of the Auditor General I
beg to refer you to the Duke of Newcastle's despatch No. 123
of 13th May 1862, in which the Governor is instructed, that,
after the arrears of 1859/60, have been adjusted by the payment
from the Local Revenue of the sum of ten thousand seven hundred
and four pounds (£10,704), the amount estimated as the expenditure on
account of the Camp Buildings, the Colony would in future be required to
defray one moiety of the cost of maintaining the detachment of
the Royal Engineers, the other moiety being contributed by the
Imperial Government.

4. I trust you will authorize the Crown Agents to defer making
the payment of the ten thousand seven hundred and four pounds (£10,704)
to the Imperial Treasury, until a final settlement of the Accounts
for Military expenditure has been arrived at by the Lords Commissioners
of Her Majesty's Treasury.