I may here mention that negotiations were nearly concluded with the General Government for handing over the Foxt on- Palmerston tramway, and the Wellington- Hutt railway. The Provincial Government had agreed to the basis on which these transfers should be made ; but the General Government, on re-consideration (and I acquiesced in the reasonableness of their views), decided not to hand them over at present. I make this statement, because lam informed that an impression prevails that the General Government offered to hand over these works, and that the Provincial Government declined. The reverse is the case. I refer you to the correspondence. (Appendix H.) It is not only by aiding in Native matters, and by willingness to take over the tramway and railway, to which I have referred, that %) Provincial Government has shewn, during the recess, a readiness to co-operate in administration with the Colonial Government; but also in Immigration. Although the transfer, as proposed in the circular of the Honourable the Minister for Immigration, of the local administration, of Immigration was not altogether acceptable, the Provincial Executive decided to accept it, and are doing their best. And it is a satisfaction to add that I have proposed arrangements, with the concurrence of the General Government, by which the settlement of immigrants on land will bo greatly promoted and facilitated. I refer you to the correspondence on this subject (Appendix J). 1 regard this whole subject of the settlement of newly arrived people on the soil, if conducted in an intelligent and helpful spirit, as one of the most vital importance : it is the real work of colonization. I had hoped to have been able to have presented to you a special report, promised me by Mr. Halcombe, on the progress of the Feilding and Scandinavian special settlements. By his energy in conducting the practical work of colonization, Mr. Halcombe is rendering valuable service. I have now to state for your information how far the intentions of the Council, as expressed in. the annual Appropriation Act for the year just expired, have been carried out by the Executive. On this subject lam enabled to inform you that the whole of the works under the head of " Roads and Bridges," have been completed, or are in course of completion under contracts, except the Whiteinan's Valley road, which was not undertaken because the vote was quite inadequate. 