On reviewing the course of their proceedings for the past twelve months, the Committee of the Melbourne Diocesan Society and Church of England Association, would hail their Second Anniversary as an occasion of thankfulness for the measure of success which has attended their labors thus far, and of encouragement for the time to come in their endeavours to occupy the wide and deeply interesting field which is rapidly opening on every side around the few who have as yet been sent forth to preach the Gospel of our Lord Jesus Christ in this land.

In the City of Melbourne much has been done to supply the want of School Buildings noticed in the First Report of your Committee, and they have now the gratification of seeing three substantially built and commodious Schools established for boys, girls, and infants, - namely, the St. James's Schools, for boys, girls, and infants; St. John's, in La Trobe Street, for boys and girls; Bourke Street Schools, for girls and infants. School buildings have also been completed at Kilmore and Little Brighton; and there is a prospect of establishing day and boarding schools at Ballan, and Belfast, and Burnbank, on a plan more particularly adapted for children from the bush. A statement annexed to this Report shows, among other particulars, the expenditure incurred for these buildings, and the sources whence it is derived, including the sums granted in aid from the funds of your Society.

The progress made in the erection of Churches in the Diocese within the past year is also very satisfactory. At Pentridge and Moonee Ponds, Churches are now opened for Divine Service, others are in course of erection at Heidelberg and Richmond, and another is just commenced at Brighton.

At St Kilda, a handsome School-house, capable of holding a congregation of 150 persons, is completed, with the exception of the fittings. Grants in aid of all these undertakings have been made from the funds of this Society.

In addition to the subscriptions for the Schools and Churches already completed or in progress, as above-mentioned, a sum of £l,800 has been raised within the City of Melbourne towards the cost of a third Church, to be named 'St Paul's,' of which the foundation stone will shortly be laid on the site granted for it in Swanston Street.

Plans are also under consideration for the erection of a Church at Williams Town, in which accommodation will be provided for seamen, and for a second Church, so greatly needed at Geelong.

The Clergyman of St Peter's Parish now inhabits a comfortable parsonage, which has been erected at a cost above £700, part of which has been raised by subscriptions, and a grant in aid from this Society, on ground contiguous to the Church and Diocesan Grammar School; and other parsonage houses have also been completed for the reception of Clergymen, in the district of Mount Macedon, Ovens River, and in the neighbourhood of Tarraville in Gipps Land.

The friends of this Society will rejoice to hear that the Mission to the Bush is commenced under very encouraging circumstances. The fund for this purpose was doubled by the collections in the Churches throughout the Diocese on Whitsunday last; and on Trinity Sunday, the Rev. John Herbert Gregory, was ordained, and specially appointed by the Lord Bishop of Melbourne, Charles Perry, to the office of Missionary for the Bush.

The first Missionary journey was untaken by the Rev. Septimus Lloyd Chase, who left Melbourne on the 29th of May, accompanied by a lay assistant. His route was along the Sydney Road to Wangaratta, Seymour, Violet Town, and Benalla. Everywhere he was welcomed, and found great opportunities of preaching the Word, while his assistant was much occupied in selling Bibles and books; no less a sum than twenty-six pounds having been taken in a tour of five weeks, for volumes mostly sold for a few pence, and very few costing more than two or three shillings each. The Bible, of a portable, or pocket size, was eagerly inquired for.

The Rev. John Herbert Gregory has since visited the Western Port District, and is now on his second expedition towards the Loddon.

The necessity of these Missions was allowed, but so much immediate usefulness and encouragement could scarcely be expected from them at the outset. Already, however, the experiment has proved, that frequent Missions of itinerating clergymen would be the best means, in many cases, indeed, the only means, of bringing the Word of Life, and the Sacraments of our Church to the many, who are dispersed in remote districts, and out of the way of any ordinances of religion whatever. Doubtless, the awakening of a Missionary spirit in the Churches of the Diocese, is, in itself, an earnest of more good things to follow; not only in its primary object of relieving spiritual destitution in the Bush, but in its influence on ourselves, and in the reflex benefit to the Towns of true religion among our country population.

Your Committee need not seek a welcome, for the Clergy of the Church of England, but they do earnestly ask the aid of all Christians of her Communion, and, more especially of those, whose hired servants are the chief part of the population of the Bush, for the support and extension of these Missions.

And, here, it may not be out of place to express a hope that the time may come, when the preaching of our Messengers in the wilderness will tend to excite some practica1 Christian effort of our own people on behalf of the Aboriginal tribes around them.

The Moravian Church, so eminently blessed in its labours among the Negro, Esquimaux, and Hottentot races, has led the way in this great enterprise of faith and charity, by sending forth two of the brethren, Andrew Frederick Christian Taeger and Frederick William Spieseke; the former, an ordained Minister, the latter, a lay helper.

Our Moravian brethren arrived in this country in February last, and are now residing on the station of Edward Stone Parker (on the Loddon), lately an Assistant-Protector of Aborigines, whence they will, in due time, proceed to the banks of the Murray, in order to form a settlement among the tribes in that district. They will go forward, trusting in Him, whose Word to us and to them is, 'Preach the Gospel to every creature,' from us, they ask our prayers. If pecuniary aid should hereafter be needed, for the furtherance of their work, doubtless their hands will be strengthened with this also. Meantime, let us cheer them on with fervent sympathy and watch their progress; slow, as it may seem, and, to human wisdom, almost hopeless, amidst so many and great difficulties, not with doubtful, but believing hearts.

The monthly meetings of the Church of England Association on the plan proposed by the Lord Bishop, have been regularly held and well attended from the first - and your Committee have reason to think that they have proved already an interesting means of diffusing information and promoting Christian intercourse among the members generally of our Church.

It may be suggested that they would probably become still more usefully popular, if the lay members would not leave quite so much to the Clergy of Melbourne, but give variety to the meetings by occasional addresses, and inquiries into the infinite subjects of Christian interest which come before them. Short original papers might sometimes be prepared and read on particular questions, or recent intelligence of interest to the members might be communicated in an easy and agreeable way.

The thanks of the Church of England in this Colony are again due to Christian Societies and friends in our native land, for their large and timely aid received and appropriated within the past twelve months.

The Society for the Promotion of Christian Knowledge have placed various sums, amounting in the whole to £2000, at the disposal of our Bishop for the following purposes, viz.: -

£700 for the Diocesan Grammar School,
£300 for Bourke Street Schools,
£300 for St. John's Schools,
£700 for Building Churches.

The last sum has been divided by the Society thus - Brighton, £100; Heidelberg, £100; Richmond, £100; Moonee Ponds, £100; new Church at Geelong, £100, and towards the enlargement of Christ Church, Geelong, £200.

The Society for the Propagation of the Gospel, and the Colonial Church Society have done much to serve us, in contributing to our pressing need of additional clergymen and lay readers. To the former Society we are indebted for the arrival among us of the Rev. James Asche Sullivan, with a stipend from their funds of £100 for two years; and to the latter for George Pollard, a lay reader, with a stipend of £60, to meet £40 from local sources, which condition has been fulfilled from the funds of the Melbourne Diocesan Society.

The Colonial Church Society also promise us another clergyman, with a stipend of £100, to meet a like sum which they expect will be provided in the Colony.

The sum of £1,096 17s 6d has been received from Sir T. B. Blomefield, Bart. of England, being the contributions of himself and friends in aid of the Church of England, in this Colony, of which his son, the Rev. Samuel Edward Blomefield, was ordained a minister on Trinity Sunday, 1849. Of this amount, £300 were subscribed by a lady in England for building a Church, to be used as a school, at Richmond, and £100 more for fitting up the same; the remainder of the donation is to be appropriated to a Church, Parsonage, or Schoo1, and maintenance of a clergyman in Melbourne or its neighbourhood.

The sums raised within the colony for local objects are included, with various details, in an appendix to this Report.

The income of the Society for the past year, falls very short of the expectations of your Committee at its commencement. The brief list of subscribers as yet exhibits only the names of a few persons residing in or near Melbourne, who are generally direct contributors to almost every fund which comes within the operations of the Society. It may still be hoped, however, that the transactions of the past year will exhibit the usefulness of the Society in such a way as to commend it to the support of the members of the Church of England throughout the Diocese. I should not be unreasonable to hope that 2000 or 3000 annual subscribers might volunteer to reinforce our ranks, and if the average subscription should be more than £1, how much might be effected by your Society, even in a single year!

Referring to a tabular view in the appendix, of the stations at present occupied by our clergy, and their assistant lay readers, your Committee now beg to offer a few remarks on the present state and prospects of the Church of England in this Diocese. If, from the position at which we are arrived, we survey the length of the colony, mark the points now occupied as to so many centres of evangelisation, and then compare the scene before us with the aspect of the same field of view at the time when this Society was instituted, only two years ago, we may surely 'thank God, and take courage.' And yet what is done, is but the beginning of what needs to be done, - for besides the increasing want of Churches and Clergymen in our growing city, and the stations still unoccupied in the various districts of the interior, there is such a rapid increase of our adult population going on, by the continuous arrival of immigrants, that the very prosperity of our colony is increasing our wants in spiritual things faster than we can supply them, with all the means at present available.

If adequate provision were made for the ministrations of religion, and proportionate establishment of schools among the mixed multitude of immigrants poured in upon us from England there would still remain a vast extent of labour on our hands, needing all our means, and all the aid we might receive from Christian Societies and friends at home. It is on these grounds that we may thankfully and freely accept the 'riches of their liberality.'

The pastoral experience of the clergy, and the testimony of Lay Teachers, and others who have watched the progress of religion among us during the last two years, are such as to encourage them greatly. Our hope for the scattered inhabitants of the bush is most cheering, and while we do not shut our eyes to the disadvantages of their way some circumstances may be operating to prepare the way of the missionaries of the Gospel among them.

We doubt not for instance, that a member of the London City Mission familiar with the ignorance, poverty, and vice, of its gloomy alleys, and the wretched inmates of garrets and cellars, would feel his spirit lightened if he could open his Bible among our shepherds, under an Australian sky, and share with them the abundant and wholesome food they would have to spare. Surely he would find much to hope for many a man, in whose spirit such circumstances would be found to be working for good rather than for evil only.

The committee of this society are well assured of the integrity of purpose and Christian faithfulness of our beloved Bishop. Great cause of thankfulness have we to God for his goodness in having set over us a chief pastor, through whom, as his faithful servants, so many and great blessings have already come upon our land. Your committee have therefore a well grounded confidence that his hands will be strengthened and sustained by the counsels and the prayers of a grateful people. The times in which we live, the circumstances of a young colony, the peculiar position of our church with respect to the State, to the great body of the laity, and her own internal constitution, are subjects of deep and solemn consideration for all who love her Scriptural communion, and seek the diffusion of God's blessings through her appointed channels.

All who pray for the peace and prosperity of our Church must seek that her foundations may be laid deep and broad in the affection of her people, - thus it may be, that the circumstances which to human judgment bear the semblance of weakness, may through Divine wisdom prove to be the bulwarks of her permanence and strength.

APPENDIX.

The Appendix will contain -

1. A list of subscriptions and donations.

2. The cash account of the Society.

3. Statement of the Episcopal Fund.

4. Abstract of sums raised for local objects.

5. Statement of church and school buildings completed, showing their cost and other particulars, as number of children attending them, &c.

6. A tabular view of stations occupied by clergymen and lay teachers, showing the date of their appointment, extent of district, supposed population, &c.