Colonial Despatches

I have had the honor to receive your letter of this date forwarding for my perusal a communication from the Lords of the Treasury on the subject of the financial arrangements of British Columbia, and likewise the draft of a despatch which the Secretary of State proposes to address to the Administrator of the Government when forwardingit it.

I feel that it would be hardly safe for me, separated from the official records of the colony, to attempt a minute explanation of the irregularities alluded to in Mr Childers' letter. I have no doubt however that much light will be thrown on the matter by the proposed reference to Mr Birch. I would however now venture to mention that it is almost impossible to calculate with certainty the amount of revenue which the year just commenced will produce when the estimates are laid before the Council in January. Everything depends upon the number of miners who may be attracted to the gold mines during the summer. The fixed population is, I regret to say, still very small.

As regards the estimated expenditure, votes for the outside limit of the cost of all public works are generally taken. It does not at all follow that because a certain sum has been placed at the disposal of the Governor by the Legislative Council that therefore it will be expended.

Gigantic public works have been completed in 1865 and the whole proceeds of the loan lately raised in England have been spent in permanent improvements; with two exceptions, however, we have had to pay £10,000 to the Imperial Treasury for the huts left by the Detachment of the Royal Engineers which are valueless to the Colony, and locally, about £17,000 in the suppression of an Indian outbreak.

I fully concur in the prudence of the caution about to be given to the Administrator of the Government, but I am aware, from private letters which have passed between us, that Mr Birch will use every exertion to place the finances of the colony in a satisfactory position.