No. 7, Financial

1. Resuming the subject of my Despatch No 4 of 23rd January 1866,
I have the honor to submit for your information the following account
of the further proceedings of the Legislative Assembly in relation to
the Estimates of Expenditure for 1866 gathered from the Reports in
the local newspapers extracts from which I enclose.

2. By the statement which I now transmit the Assembly appear to have
reconsidered the vote by which the duty of the
Treasurer was to be performed by the Harbour Master, and to have
voted a salary of $1700 (£350) for the former, and a like sum for the
latter (being $300 more than the amount proposed) and have
"amalgamated" the Harbour Master and Postmaster. The salary of the
Treasurer is thus reduced to the same amount as that of the Clerk of
the Legislative Assembly.

3. The Assembly have concurred in my recommendation for the
employment of the steam tug for the conveyance of coast Mails—they
have voted the pay of her crew and have largely increased the sum
proposed for her fuel and stores, under the head of "Surveyor
General," but have disallowed the sum proposed for the particular
service upon which she will be employed, viz, "Conveyance of Mails
between Victoria and Comox"—thus improperly increasing and
diminishing the expenditure under the respective heads of service.

4. The salary of another School Teacher is raised. The Vote for
Victoria Hospital is further increased from $5000 (£1030) to $8000
(£1649). This Hospital I may observe is an institution the
expenditure for which is wholly beyond the control of the Executive
Government.

5. The item for clothing for Police is disallowed with a view to its
being sold to the Municipal Authorities of Victoria who are to be
empowered to manage the Police Department by a Bill as yet not even
introduced, and which may never become law—but leaving out of sight
altogether the fact that the sum proposed was for the clothing of the
Police throughout the Colony and not for Victoria only—and that the
clothing having been purchased upon the faith of a vote of last year,
the disallowance of this vote is in effect a repudiation of a Public
Debt. The sum proposed for clothing for Prisoners has been reduced
by one fourth and that for clothing for Warders disallowed. Votes of
money have until now been annually granted under each of these heads,
the Police and Warders being allowed clothing as part of their
emoluments. I found that the clothing procurable in the Colony was
unsuitable unless made expressly, when its cost would be manifold
that of clothing procured from England and accordingly I forwarded a
Requisition for a supply in my Despatch No 7 dated 24th January
1865.

6. Whatever may be the object of these proceedings the results of
them if carried into effect, are very obvious, namely, that the only
paid Magistrate provided for, and the Police (an Inspector, Serjeant
and five men) should be exempted from all Executive control and
placed at the disposal of the City Council, a Body who have
heretofore shown a greater tendency to violate than to uphold the
law.

7. The vote proposed for provisions for prisoners is reduced by
nearly one half regardless of the fact that the estimate was for the
probable number of prisoners at the actual cost.

8. The small sum of $500 (£103) proposed for miscellaneous
charitable purposes is disallowed, thus leaving the Executive
Government without any means of relieving cases of casual and
occasional distress in a Colony where there is no legal provision of
any kind for poor or destitute persons.

9. The small amount of $600 (£123) for a tower for a fogbell at Race
Rocks Lighthouse is disallowed notwithstanding the fact that the fog
bell was procured from England at the instance of the Lighthouse
Commissioners among whom at the time were two of the Naval Officers
on the station—that it was intended for the benefit of shipping in a
dangerous locality where fogs and strong currents are prevalent—and
that in the absence of the means to place it in position, it will
together with its machinery lie useless and deteriorating.

10. The vote for Indians which was in the first instance disallowed
 has now been passed at the reduced amount of $500 (£103) a sum wholly
 insufficient to meet expenditure in connection with the Native Tribes
and which must often be incurred on grounds of public policy.

11. The sums proposed under the head of "Education" which were in
the first instance reduced or disallowed have been since voted in
full, and the total amount now voted for Education (inclusive of the
sums by which some of the proposed votes were increased and of sums
voted without being proposed at all) viz, $16,630 (£3408) is equal to
nearly one twelfth of the estimated Revenue and when divided by the
maximum number (404) of children attending the schools gives as the
average cost to the public of the education of each child, no less a
sum that $41.16 (£8.10s nearly) per annum.

12. In conclusion I would call your attention to the fact that in
addition to the foregoing, the Assembly have, under the head of
"Roads, Streets, and Bridges," voted ten sums of money not proposed
to them in the Estimates or initiated by the Governor, amounting in
all to $42,800 (£8824). These votes appear to have been come to by a
process which can only be described as a general scramble among the
Members of the Assembly.

13. The Assembly do not propose to meet this expenditure by
appropriations out of the incoming Revenue but by "loan or bonds not
payable before the expiration of five or more years or by issuing
Exchequer Bills drawing interest," an arrangement in which I need
scarcely observe I feel it impossible to concur having regard to the
extent to which the finances of the Colony have already been crippled
and burdened by the £40,000 loan and the debt to the Bank (upon both
of which I have already commented) and by the interest payable thereon.