_August 30th._--I was just setting off to Tottenham Park yesterday, when Graham sent for me. It was about the affair of the Guernsey duties, concerning which the Government have got into a scrape. The whole revenue of the island is derived from a duty on wine and spirits, which is imposed by an Act of the States, confirmed by an Order in Council, and it is imposed for a year more or less, and from time to time continued by subsequent Acts and Orders. The last Act expires the day after to-morrow. The Queen is in Germany, and there is no power to renew it by Order in Council till she returns. The people in Guernsey are aware of the blot, and intend to avail themselves of it to introduce spirits duty free. In this dilemma Graham sent for me, to desire I would search the Council books and see if there was any analogous case and any precedent for continuing the duty without an Order, and he had already sent to the Law Officers for their opinion whether an Order could be passed with a retroactive effect--meaning, if it could, to order an account to be taken meanwhile, and to levy the duty afterwards. I found him and the Chancellor of the Exchequer together. I told him that this matter would be infallibly taken up as proving the necessity there had been for a Regency, and that those who had argued for one would, of course, triumph in the proof thus afforded that they were right. He said he was well aware of this. I then told him Melbourne's opinion, and that he thought if the matter had been properly explained to the Queen, there would have been no difficulty in satisfying her. Goulburn said Peel was much annoyed, as he had particularly desired that everything there was to be done should be brought to the last Council, and notice be served on all the offices to that effect, and he thought the fault lay with the Council Office. This I denied, and Graham at once said it was _his_ fault if anybody's. The fault really lies with the people of Guernsey, whom it immediately concerns. I looked into the books, and found there was an analogous case, in which the same duties had expired, and orders were sent to levy them, with a notification that an Order in Council would be passed as soon as a Council could be held. It was a case exactly in point as to the principle, but differed in some of the official details. I went to Graham and found the Attorney-General there. He had brought the opinion of himself and the Queen's Advocate, which, much to my surprise, was, that an Order in Council might be made with a retroactive effect, and accordingly Graham determined to act upon this opinion, and to signify, by a letter to the Government, that an Order would be passed to renew the duties as soon as the Queen came home. I proposed to him to let the communication go from the Council Office, following the former precedent, and suggesting that they would be more disposed to defer to the authority of the Privy Council, to which they