No. 45, Financial

In the state of uncertainty which exists as to what the Legislative
Assembly of this Colony will or will not do in reference to the
finances I deem it my duty to keep you informed by placing the
following Address from the Assembly and my reply thereto before you.

You will observe that on the 21st May the Legislative Assembly
called for a Return of all moneys borrowed from the banks in 1865-6,
and also "A Return showing the authority under which the Governor
negotiated such loans respectively."

My reply dated 26th May 1866 fully answers both these questions.

The Bank of British North America taking alarm I presume at the
doubts thrown upon the legality of my proceedings by the Assembly
addressed the letter (herewith) dated 31st May 1866 to the Colonial
Secretary stopping all further credit.

I enclosed a copy of this letter in my confidential Message dated
1st June 1866. I have not received any reply to either of my
communications to the Assembly. The necessary consequence has been a
stoppage of payment at the Treasury since the first of June a fact of
which the Assembly are quite aware.

I observe from newspaper reports (being the only information on the
subject which has reached me,) that a Bill authorizing a loan of
$90,000 has passed a Second Reading, but when it will become law I am
unable to anticipate.

This Bill if it become law will cover the debt to the Bank and leave
a margin to carry on the public service till the Real Estate and
other taxes are received, the machinery for assessing and collecting
which is radically faulty and requiring amendment by law.

You will see from my Message dated May 26th that I have kept the
Assembly fully informed of the financial condition of the Colony, and
I may add that I have in every step acted with the advice and
concurrence of my Executive Council.

The Assembly has been in Session since last November and up to the
present time has failed to propose or pass any rational measure for
providing ways and means for carrying on the Government of the
Colony. There is the less excuse for this state of things inasmuch
as the audit of the accounts for 1865 shows that the total amount
voted by the Assembly for the service of the year amounted to
$313,558 while the expenditure reached $267,294 being $46,264 less
than the sum voted.