Colonial Despatches

In connection with the Appropriation Ordinances passed by the Legislature of British Columbia, No. 18 of 1864 and No. 9 of 1865, upon which I have in another despatch of this day's date signified to you Her Majesty's decision, I have the honor to forward to you herewitha a copy of a letter which has been received from the Board of Treasury.

This letter enters fully into the financial condition of the Colony for the years 1864 and 1865 and adverts generally to the financial policy pursued by the local Government.

In the observations of their Lordships I must express my entire concurrence, and I by that of the future proceedings of your Government in its financial arrangements may be regulated in accordancewith with the views which their Lordships define.

I observe from the Returns which accompanied your despatch No. 11 of the 12th of February last that the debt due by the Government of the Colony to the Bank of British Columbia was on the 1st of January last £33675 whereas in January 1865 it was £27209. I call your attention to this fact as it is evident that the expenditure of the Colony has been continued throughout 1865 at a rate out of all proportionwith with the resources at its disposal. It is apparent also that notwithstanding the experience of previous years the error has been again committed by the Colonial Authorities of over-estimating the Revenue of 1865.

I have therefore to instruct you that the expenditure of this year must be reduced to such amount as may be covered by a Revenue calculated on the actual average receipts of the last two years, and that any further large expenditure on new Roads and Works of that nature mustbe be postponed until the resources of the Colony will admit of their being undertaken with less pressure on its finances.