***Part of the increase of Customs duties is owing to increase of duties on spirits, wines, and some other items; and ad valorem, on the other hand, credit should be given for some articles which have been admitted free. Taking the balance as the amount accruing from increase of duties, it may be put at 12,000 pounds on the last year. ****It will be observed that for some time, until better seasons returned and measures bore fruit, I had to a slight extent to rely on the surplus found in the chest to make Revenue and Expenditure meet. To have starved the Expenditure at that time would have been to have damaged the future progress of the colony, and the Legislative Council opposed several reductions that I thought might have been effected. On the 30th September, 1874, there was a sum of 36,616 pounds 3 shillings 5 pence in the chest, and something like this sum will be at the disposal of the Legislature at their meeting, beyond current revenue. 40. I need hardly say that the commercial state of the colony is admittedly sound, and I am informed in a more prosperous condition than at any previous period of its existence. Landed property, especially about Perth, has lately risen immensely in value, and the rise is, I hope, spreading and will reach the outlying districts. Perth has lost its dilapidated appearance, and neat cottages and houses are springing up in all directions, and the same progress to some extent is noticeable in Fremantle and elsewhere. 41. I will not conclude this Report without recalling the success which attended the efforts made by the Government, to which my private secretary Mr. Henry Weld Blundell largely contributed, to represent the products of Western Australia at the Sydney Exhibition of 1873. Much of this success was attributable to the exertions of Mr. F.P. Barlee, Colonial Secretary, then representing at Sydney this colony in the intercolonial conference. In that conference, the first to which a representative of this colony was admitted, and which therefore marked an epoch in its political existence, Mr. F.P. Barlee took a prominent part, ably upheld the trust I placed in him, and received a most marked and cordial reception from our colonists on his return. 41. I have further to express my obligations to that officer for the assistance he has ever given me; were it not for his fearless and loyal support, for the confidence which is placed in him by the very great majority of the colonists, and for his fidelity in following my instructions and carrying out my policy, it would have been impossible for me, under a form of government most difficult to work, to have carried to a successful issue the trust that has been imposed upon me, and to have left this colony prosperous and self-reliant.