HOUSE OF REPRESENTATIVES.

Lyttelton Times, Volume X, Issue 593, 14 July 1858, Page 2

HOUSE OF REPRESENTATIVES.

Thursday, June 10. the financial statement. The House having on the motion of Mr. Staffokd, (Colonial Secretary,) resolved into Committee of Supply Mr. Richmond (Colonial Treasurer) said—Mr

Carleton, Sir—l hope the statement it devol upon me .to make this night to the Commit? 8 will in itself in-some measure account for the'i parent delay that has "taken place in comnh/ " with the wishes of the House—which we ha" 8 earnestly desired to do (hear). I rise about th* middle of the session-—it is now the loth of J u which I think may be said to be about the niirt' die of the session, for I do not think weca hope to dispose of the business much under fr> months from the 10th of April. And this is i strict accordance with the Parliamentary tjrao tice at home, where the Givil Service Estimate are on an average of years brought down about the middle of the sessiion. Ido not want to re new the controversy that has taken place on this subject; but-It; is only due to the Govern ment of which I am a member that I should make this preliminary statement. I believe ex perience will prove that the course we have adopted this session, whilst it is strictly pursuant to parliamentary precedent, is also best adapted to meet the public convenience, The practice of the House of Commons upon such matters is based upon long experience; and I think colonial representative bodies should pause and consider before they depart from the precedents so established. But enough of this; I have no wish to renew the controversy. I propose, in the first place, to give some account of the permanent debt of the colony—how we found it and how we leave it; and next, to lay before the committee my. estimate of the revenue and expenditure of the.current financial year 1857-8, and also of the year 1858-9. In doing this I have a lons task before me, and I must draw largely on your patience in endeavouring to guide you, and carry myself, through a labrynth.of "details, to: a clear and satisfactory result. , In the discharge of this task, I shall have to make frequent reference to what Imay term par excellence " The Financial Resolutions of 1856"—the resolutions ;of 2nd July—for those-are the resolutions on which depend the present state of the colonial ;debt, ond the adjustment of the burdens of the colony as between the several provinces—the arrangement with the public creditor outside, and the arrangement—;l may call it the domestic arrangement-— between the provinces and,the General Government. I will therefore commence with reading resolutions 4 to 8 inclusive— •

4. That as provisional arrangement for satisfying immediate liabilities, providing for the purchase of native lands - and for general services, it is desirable to raise upon debentures a loan not exceeding _?!100,000, at interest not exceeding 10 per cent., payable off at the option of the colony, in one or two years. Any portion of such loan, which, in excess of the amount: required to complete existing contracts, shall.be expended in the purchase of native lands, to be repaid with interest out of the permanent loan of _?180,000j to be provided for effecting such purposes.;'

5. That it is expedient, as part of a general and permanent arrangement, to redeem the New Zealand Company's charge on the Land Fund upon the terms offered by the Company, and assented' to by. the Imperial Government, viz., that payment.be made,to-them on the sth of April, 1857, of a sum of .#200,000, towards which all monies in their hands at that date," in excess of the interest, shall be applicable by way of reduction, the Imperial Government guaranteeing a; loan for that: object of ■uf 200,000, to be obtained in England, upon the most favourable terms practicable, ... -.',"■; ■

6. That as further paTt of Such general arid permanent arrangement/it is expedient ./tbi exonerate the' Land Fund ;frora its liability for the pnrehase of native lands, and to provide a capital fund for carrying on such purchases; with whii'h object it is expedient to borrow a snm of _f 183,000, to form such capital fond ; such sum to be raised and made available as circumstances may require, in such manner, and subject to such conditions as to the application thereof as the legislature might direct;; and that it is expedient to make application to the Imperial Government for a guarantee for a, loan for such purpose of _? 180,000, to .be raised in. England upon ;the. most favorable terms practicable. ' , •-.'.-1- ...... -

7. That, as further part of such general and permanent arrangement, an-order' to ■ pay ; off the before mentioned provisional loan and the old debentures, but exclusive of land scrip, it is expedient to make application to the Imperial Government','for its guarrantee for a*further loan to be raised in England upon the most .favorable terms practicable. „.

• 8. That the aggregate of such loans ought not to, exceed .af 500,000. And that such loans should be secured on the General and Territorial revenue of the colony.

[In reading these resolutions, the Colonial Treasurer observed as to No. 4, that the term for repayment of the temporary loan.was afterwards slightly extended by the New Zealand Debenture Act, 1856; a,s,to No. 6, that though the £180,000 was spoken of as a separate loan, it Was a portion, of the half million loan, and that the committee must bear in,mind the tripartite division'of that'loan, viz.: £200,000 to the New Zealand Company's Debt; £180,000 for the extinction of the Native Title; and £120,000 to redeem the old Colonial debt, •and to. defray other Colonial liabilities, Hon. 'members were also to keep distinct in their i minds the half million thus made up, and the temporary loan of £100,000. This temporary loan was to provide means, pending the raising :of the English loan, for the prosecution of land purchasing operations, and for meeting the immediate liabilities of the Colony, and was to'be ultimately paid off, partly out of the £120,000 and partly out of. the £180,000.] —I now return to the 4th of these resolutions; which speaks of " immediate liabilities'." What were those immediate liabilities for the redemption of which this temporary loan was; to be raised? This will be. learnt from the 3rd resolution, which states "that amongst the liabilities to be provided for by the colony, this House recognizes the~foilowing— ' i '#■■

1. Balance due to the Bank of Australia. 2. Deposit Accounts; • . 3. Arrears of Fourths to the New Zealand - Company. 4. Balances due to the Provinces. 5. Outstanding liabilities on contracts for purt : chase of; Native lands. —Now, in order that you may see your way clearly in this matter, you must bear in mind the very peculiar position of the Government of New Zealand as to its revenues, owing to the vested interest which, under the Constitution Act, the provinces have in the surplus revenue ,of the ; colony. The authorised expenditure of the Genera! Government, (that for which provision has' been made by this House, or by the Constitution Act) together with the distributable surplus, of course equal the whole revenue. The equation stands thus: authorised expenditure plus Provincial shares of surplus equal revenue. Hence it follows, that the unauthorised expenditure must always be a deficit. Thus suppose the revenue £100,000 per annum, and

i -»«p_ )§xpen<iipr i elf£ r6b,(i|b6 jfjJWlproyihces,'. thaS'l Ves'teasiSddfe'alißle 'right ;' Tl! e%A-r« If-'the * Geneva.)/GoVe-rtitherit'Jspend-J bX^instead>of;*he:-^ £ ti'oritv-Ithere!musts>ea! deficit in! such' easei; the exterjt of. £ip,QOQ^( o '3)here i iinu^)al«fayS!: J° a deficit .tp^^(the.extept.pfijjn^uiaiflrised^'xp/jn-;, f're',''But; ther£,.is, ijanptber;,point;^tq.-be;',at,-'. f ried'to'.i' Thpjamojmt.of,^unauthorised-ex-ten^uiire' "is'the,onlyr''deficit wbich; under/d.ur . H^MM^m exikt -Tkmuse^er; a ronriatea the. whole riren^;1;of'! l„hything ; mH&mw &o.< Mp To.^'those's^rvi-ea'wHic-;'' are.1 liofde'r Lpr6vitiV'al sidniini^ratibnii Thei<e .syneVe^-as'ln other i mintries, an-.excess jof authorisbduexpenditmrq; ver revenue; nenditure ( can i .,nhder ( P'Ur>firr/i.ngements,,creftt6: $6 deficit.'.-. I ■ have,jjthenprpvedj < .that, ; ;the 7 »ji l i! authorised,' expenajtuf^ ment must, occasion a .de^i^ and secondly,, tttat . it must be 'the. only deficit o w^ich, under.^the, JAct.ca'n•exilst., 'Jtbtrto anply:;this £"thestate'1 bf^fiW^on'ithPsotli'/uf^i-Se'. p r oirtKe~pr'in^ thai; the 'only diabiUty-^ apart frb'rn^the'oldi^aebts'1 of tli&'«ountry,«cdntra'etedi:prio!p''to Jthe^Cohsti- - tution!Act^i!Ke%nlyiU'ad)ilJty,!:li Say-; beydfld a_-i sets, thit ccouldi.exfiat at thatsdate, must befithe ; iunauthorisgd ySspeMi*l*feb&nce o l*Jt< January 11853.,,',N0w wJiat >w;as)tl^^ a^jountjpf.this^-jjfPn.; lieferendeil^to,- the^general_,ac£ount,.up .to; 3Qth ; I JuneV lS's6,>W|liiek'has;^een^^ lit will be Ise.en that the amount' .'flown-, to ithe '3bth': Ju^e,H;B^6^is';^3_!;,tiß^'2s.\; i 6i'd. | :fSee ' I Account' ICuribsfc' f(H i-typage ;:27,/bf Wold acicounts.O" .Of 'Ibis' amoiiht 1' '£7,'214(2 s;' ;6<3h' -'is; on'/ |account:; of :the'^ §1853;' and" this1 buntfisihe'dififere'ricdbe"tw.een rffc._.e favailable .caste balalnc- !ini:hand» onvthe>3lst Uec.;' 11852,. and; (the* expenditu!f ey jsuWequeht tjtoj; that i pay, oh account* the period-endedt onlthaft iday. t p9,429. |6s, rs(Jj.is,r;the,^naut^prisgd... expenditure' lon account iof n tfie^is_e,mo^hSj 'end^djSOt^, .Sep.,.: 11853—the'- first- firianof^peri^ ißtitutipn Act, ( £10,6^6'^55. 3;d;'isttMe ; u'n^hor-: Ksed'e'xp;eHdirar^!6ri 'Account/ df fendedi'3'oth,' J3'une; >i 85r4:.,.' r ___!? 93." ofr'acIpouihVdf 'the'-year ;£haed* '.June53fltli| cl^s.'£3;s7G! ■ 9s. l\o\. on accouW'bio-JthV^eaT^e^^ &u_ejilss&.« ;The .whblfeiOf;*Hese f;suinSiprodu'cing= la tdtalasJl.'.havelbefQreistatedofii£32,i7l6>2si'6id;'' p negd:notj.afitaiiif/tho feoinqu.ttee;by tshofcrln'gliow;' fell thrums, >: pro^ ar T > |rivedLa^,.j3ut,.wiUjrfilfer r b.o / n. mj^hprf [tojjAppen- - fdices^iLG,.!^ |couhourrenfc,;whi^ |by which yj'^ is, Ithrown^o'fl^'^My'position'..lnert ist'this, $idt .-that' fsuni! df }_e_i_;,-7;t6 ;2'sy vis._ { dt!Vas' utiiei deffciency on. |the 30th- June, I!i'Bsiß; r for rwMbKypu-^a#td provided iThe 'in'tixt^'pbiiit^is/^hat? sums ydu' kuthori^edtusftoi-defray lout bfrthe loan? oil! have < talready ffiewnwhat ihefinariciaire'solutiohs recog-; Inised as liabUitiesyltq;b!e;ijaettO]_t;ofj|he loan;!arid phe : .\terag o wgre; ;.|rjsn^rr€;d ingnearly-. the; ?sanie i KermMntoljhe^pßrqpri^ti^ Act, r|§sg; viz-r^bal-,j feoOOO—New Zealand Company's fourths,-£ 16,000. |1 pass over for the prgsep^ >i/h§ (£40,000 for land fourchases,,andvarious sipaljlitems madechargefable'bn'the loan, faW'bbn_inb.' lniy'sel- tW;'the'se; |three-iteihs'^n«„ll:'J £3S^q6.f! 'ti, l |that these threp;t^ums;>'w'ere^ id@bt rs^c^ntE^^ |to defrays th& unathorisedidxpenditnre 6ftfc*mer> iyears.iiiT-hat 'jexpenditurfio H&dis beehrs defrayed, |but. .the., idisbu^emen^ pfecessarilyv/bn. ithe prin- i Icipl^riX.-haxe.rStated;,; gr^ted;-;a ;j v^cjUTim : «in the • |treas,uryi 'ches^^JTbe j-.treasury^ balance,^was, a iuiinus jquanlti|yV.'!.'.3Jb.e oiij? ] <ifbi , .eouf^ .not, be; d&T ( Ifrayed' wit'h Jbut i''contracting 1 "another; 'for' the^ ! General Government,. as ( J b.a,^'e„ sho^yn ? .. coul.d j I nevef^iavie \& Euiifplus.'{s Now if/^wjll' be' iseeri Ithe 'ftmquhte.'of the? d'ebf/'/ib'-'tfife !ttriioii BanSv"' idepositi acc'6uiit^'iand-' i tKe' ;iisrewoZealahdi C'om^'; Ipany's fourths, r tally pretty exactly'Ayith'^he 1 I amount oof .'ithe r unauthorised ; expehditur;e?i ?Iil! ;fact,.t.heiHouseiir_^authorising--the Govemnieht; ito defrayrthfts^f'suit^s^outpf tfie teniporaryHoah, [authorised; t]\eipaymeii 1 t J of, ? :the,ex^ ~yond,.the ) .app'rppriatipn r) ofj,the !^ [dent;tQ^lst.. (^^yj^ißs6^-r itnesie sumjs., masked—r \aa it we're-^t^e una^fjhpri's^di^p'en^if^im lAppropriat'ibn Jau^ |ment:;to''take !^3^obb"fbr'ffi^ J £40,000 ';ori "accoun1!; '■ ■ Of, 'land'; purc.ha:^es,"m'akihg! £75^000; out5-of'" the-temporaTV'loan.' ; rj' Bwill uot^i notice :th_i small 'item's^ .chargeable; oil' Stheloantasdthey::are 'generall M view of ithfi'finahcial pbsitionbf the eouiitry.3 The' Kresult we have.npw arriyfed attis/this^thatrthe'; Kout-standing' Hapilities/X^xclusiv.e ipfland, pur-! pehases) on *^lie :30th". p| June, ; .IBjs'p, amounted,., to; p£32,716,2-.^6'^dj,rand^ tlpt" ; this [ ampunt,is .rn.ade ; m chargeable oh\the; 'K.i.;hb>y pr^b',-, pceed'to corisid^r'wiiat'' has"'lae'eii'"- done towards. d raising' this; 'tenipbrai'y foah"?:'''; trlider' Jtfie! New | Zealand''Debentures' Act^'i'SSey:we t>!Hh J ve'!sbl'd ' | deben'tures:^o,:, : the''>_lll6unts 'o^.'^'p^^bb;" which" t sum- is carried! toCredit> iriHh,e, ar ceoufit'I 'e'urreht' to 30th,Sept.v 1857',:(p. ;4? new aeeountsv)'nThe |^ates ofr.issue -.arid,^^particulars .are ; as follows:^.I iSoy. 20th,!1556,'£20,00Q.at tender cent interest,; I which were., ,spld ; . in ,at, .about-/four j; per | cent.pi;emium, andj^ill/bp.payable.lst-January, I l*? 9-tt^\®&,yf&y glad'of it.'for'it is.'ah'eaW $ ra^.^°t^es;t. '^ilear:)," 'The : nextrlbt; were; | sohlin March.lßs7;W^eight^er;cbnf;sat ua Very I i^i^^ff^'f?^^^ b^come payable Ist July,; I 185 9;'.The'nexrip^sp-oob/f^subaJul^e^S^ | at eighti.p^penv;sbia'yerysw%ip^>;ah^avefag^ | premium^ofiSOs:^.- cenVandiare paydble on; =lst; | January ? llßßo,nThet riext issued'in .NewrZea^ i' ia^i^ JulJV^BfvibK : £7.7ooJ,als6 payable Jan, | i, iB6O, were sold,safcpar (I-believe-they. realised | one guipea .premium)-and yet tjiis, ..was^the most I advantageous, transaction,of all,.since being sold' I tore, commission and,remittance'tb Sydney of i ' I^s^ 1 /lisjiyreiiiittance^was; ; saved, because at "the 'the-Go-' ! government pliad not ;lbarnt;;ffib cohclusibn of ' lvhi^X^ gerhm' '^h: *^ie';Uni^n^ahkVuhder' E fundreifher ( m England; Wu™y>\ o?^ercolonywit\iO n v extra Charges, am + .° 3 V 1*^8* on.-tliese^debehturesis £5816, ' Sni^-'W cash,reali^d, .exclusive'^-theipre-', Sun?'i^Vnn aye Tbeea cai:ried *P revenue ™- cou nt ,is £07,700. lam now come to-a difficult < SiS-?'ii^k • -Wo.had,got ,£67»,7,00 hi tho\ J# 92 ''?°^ WaS Cre(^ted t0 the colony in «to account current. How was the remaining

• £25»000 fp\ be' accounted for? : Hon.1 members ' who w&fe Lp;resent'lastsessidn,would remember ' •the-WiMmg-up^At'fcVauthoWshiri'g the Govern--" menttodpsetheaffairs bfthecolohialbank of issue, and invest the'ca'shand'other assets of'thebank in colonial'debentures. .Under the authority of ; thij. ,ai_t,'theGovernment'.made a nominal sale .to thfe/banki'at„par,. of £25.000 debentureSr-the . .prbceeds making, with the sum of £67,700 realised by sales, to , the, public,, the full sum of £92,700 appearing in, the account current. /We .^pqk £25,000 of the'bank*s money arising from the 'investment "in consols, less. a: small* loss of '£289 :Bs;' ph.- : the ■ sale, and; have actually handed 1 . over to ithe bank the £2: 5,000 debentures. -Since I ■i this (.transaction, however, the-Government: has ;-.withiits ownfundsj through ithe agency of the iUriion ißankr*/retired: the note circulation;of the ..bank of-.issue, with the exception of £8861 still put-standing./ "The account between the bank.and .the. treasury iipJto: the Ist of June, 1858, J;herefbre, stands, thus—•"'.'. , ..,..; I' , . Bauk Dr. .■ ' Bank Cr. '..'.: TolNotes, redeem-, .'. New Zealand '; Government' '■■■■ ed by; Colonial: ■' ; ' ''Debentures in charge of' ■o'; Treasurer .;;;;23,139: 0 0 ' -the Manager of the Bank iTo-loHs.on.sale ;„. 289 8 0 of, Issue at Auckland.— . „ Balance /.. 1,571 12 0 '■'•'.,- - "'''--' "'.— ■ '"' By principiil money. '-'"' . •':>.:'. :_?25,000i0 0 • secured■■:'.•■■>2s,ooo 0 0 Oh payment of the balance, of £ 1,571125., shown hy this-accoiiht, the Treasury will be entitled to 'the debentures. I(The Debentures will be what j the lawyers call > -"- at home," and may be torn up." 1 It ithus appearsithat'the;£2s,ooo. Debentures in the hands of-the, Bank may be regarded as un--issued,' .and 'that ,v there ;\ are only . :£&,%00 of jthe "new.Debentures to be redeemed. : The-cash, then we have.to account for. is £67,700. .WTtiat did .we ,do'iwith. that money..? To see' this' we must" iobk.tb /the .Accounti Current £111) to:3oth", June,. '185.6,/p".. 27 of .the old .accounts, whe'reybu.will find thatlofteh-TQentibhbd sum of -£3(2,716,'-2s. '6|d. charged-- against■ the __oah; on -Account of the old excessive expenditure ; and then turnito the"; Account Current (111) to 30th September, 1857, p: 5: of the-new accounts; where *- you find £3,i,;2.75 95.; for expenditure since" 30th June, 1856 .;.,chi^fiy-on ALand "Purchase account. : , The .details of this last expenditure; you. will see, ; developed in p. 6, of. the new accounts. It there that, £28,075 75., 3d^ had been disbursed: iip to 30th September,'lß's7, yiz.-^- : '.'] : \ '".'. . ;.' .-For IJepartmental Expanses.and Surveys, i .#4,966,3 -11. . ;Lahd Purchasis'iri Auckland , ji?8,402 10 0 /.. ' i Ditto ';;in Wellingtbri;^ 14,406;13 r4 -• -' '■'''' I Ditto:.' ;-VwCanterbury's' 200 : o^o .'•' ■■'•'■•' •'• >. %>;/• -iv V. ■■:-. vy- >:-■>/ .. -^—i —-' 23,005h3-»4: fTakirig-Qp-SpecialjSerip issued';..•-.... -j '' ," r " i toNgatitoaCh'ie/s' '. .. . ; .:... . . -.1000.0 '* S ';;-; ■-'•'■'-;-;-;.-;'-- ■''-'■ '';•' '• ';•■='. -' „?:28.075! ty 3 . But, in fact,'the'£4o,ooo for Land Purchases has -'beprt nearly, 'if ; nbt'"-c__ite,expended, though" riot: '■ ye^t hbrought' ito < account;;' The return s- of the •L4.nd ; Purchase! department,l on/the table of the •Hbus'ejishowvthe following, totals-^- r '-; 'Laud'Eurchasesiih Auckland;;,,:.,'..i :.. .-. . :__*14,85;5-.0. 0 ; Ditto., .;.,.;in,Wellington- .■„ . ..: . 14,925 0 0 Total "Purchases in Northern Island 7 '.'.- .. '. ,29,800 6 ' 0 ' : 'Tos which ■ 'add for/ Departmental -!;E„pciises ' ' / .' and Surveys, say v;;. ; v '.">'.'.•'■.<■■'.''.■■ . 0- Jo< I /.'; ,- "-.. >•;■•:,/ .Gross Total :. .:. ..- .. j&3:6,3qb 0 ; . .0

-It jis thus 'manifest' that we have not been raising more money <than we' i have required. • The two um5,,£32,716 2s, 6Jd.; and£3:l,27-5 9s.' Od. give as iJtotal of c£63,991 -,-lls. ,6£d. ,charged against- the ; Temporary .Loan./-; "We shall, of .course, borrow no more under the New Zealand, Debenture. Act, ■ 1856.. We have howl done withrthe Temporary. Loan.. 'X. have how to tell the Committee what we liave done about the Half Million Loan. You are already aware, from papers on the table, of the terms of the arrangement'with the Bank. It isienougli I'shOitld remind you that the bonds are ;..-to: be antedated .three - months, and that,; ! under, that - conditions; the Bank negociates:the . loan at par,; and:provides the money without further-charge, either in London,. Sydney, or the ; colony. Things, looked very ; black at the time ■ this arrangement was finally agreed to. As it jturris out, the bank will no doubt realise a hand-, \ some profit (hear, hear, and laughter) but to the polony also the arrangement is most satisfactory. y7e-have already taken up, £300,000 of the haif'MUion loan. Six per cent, for Interest and Sinking Fund on that, amount will become pay-, able from Ist January last, and we have made a iprp visional arrangement for the remittance of the •amount through the Commissariat. I must now again remind you of the threefold division of ithe loan.into the £200,000, the; £120,000, and the ,£IBO,OOO. Taking the divisions in the order .in ..which I have,named them, the £200,000 is to be 'considered as fully raised and appropriated.. The. due-to the .New Zealand Company, on' April,' 1858; as: agreed to by the' Treasury, '[under ,the f'stipulated, terms of the. arrangement •'with.the Company, amoiinted to £167,026 10s BJd, '"wliiich, -'deducted from the £200,000, leaves a of only £32,973 9s.3|d. Sir, I see the hon. member for the.City of Auclcland-. (Mr. i Daldy) pricking up his ears. I hope I shall not .disappoint the hon. member. But that sum,unfortunately: is all we have left of the £200,000, after paying ,the Company all we have left ior 'reimbursingthe Province of Auckland its contributions to the Company's fourths. The sum due t!o the. Province,' as stated by the Auditor- ; GeneiJal,:is £45,036 Bs. 2d. How ai-e we to supply the deficient balance ? This leads me to inform- you' what we are going* to do about the • £.120,000, and how much of the money raised is> sto be; considered as raised bri account of that division of-the loan, and what we mean to do with it. I One thing, I can tell the Committee, so far as Jdepends on us, we mean to do, and that is, to ..stick ■fast,-to the Resolutions; of 1556.. Some trifling modifications it may be absolutely necessary to. admit in giving practical effect to those Rekolutiohs, but the spirit, ' and so far pracficable,':the',letter, of the Resolutions, we adhere : tb.j Well, then, we propose;to charge against the Province of Ancklahd the New Ulster debentures referred to .'by the Resolution—that reduces the

:: j £45,036 8 2 i ' .■'•■••■ '--' - 911 8 9 "■ I ■ :' to £44,124 19 . 5 the balance of the £200,000 32,973 9 3£ ' :t j .. " . ' — leaving a deficient balance of £11,151 10 1J

Now we propose in, the first piaceto allocate off 1 the, £120,000/thb_ sum of £11,151 10s. \> 2 a. to' ■ make'gpod'to"theprovince of Auckiahd the full - amount of its refund.; 'I'hope'the hon. membei fpr! the city is^qnite satisfied. .Perhaps he is, pbrjhaps heiis not;: Perhaps the lion, member is thinking :of a little:circumstance which at all-events-has. not escaped us. I mean the interest on tlns£ll,lsl 10s. l£d. If charged on the colonial portion of the loan, Auckland will of course bear her share,'of the interest and sinking fund. I Wbll, as we are,:so nearly arrived at a. satisfac- I toriy .adjustment we'w*on't fall but about a little interest—a-paltry '£200 a year. 'We are 'prepared' to adjust that matter, and to provide for -carry-. j ing to the account Of Auckland an annual sum' equal to^lier actual annual contribution towards thb interest;' which ;bf. course is'easily calculableyearbyiyear. ThatJs;how we mean to adjust this,business. With.the Auckland members 1 am sure such a matter would be more on© of: feeling -than., anything else^this matter I sayhas, been a feeling and a passion'with them; on. its complete adjustment' we shall I trust, see the end of these''heartburnings.'between'.North and South [a voice, the Seat of Government] Ah, yes,'there is'that, lam thinking to-night of only £s.d. - There is that breach still to heal. I will now go on with ■ some other items chargeable ■against the £120,000. and';for which .we want cash. In the second place.then we propose to provide the balance of the £40,000 raiseable for land purchases—leaving it for the present an i open question whether some part of this sum .may hot be ultimately, charged , against the £lßo,oo_>. I will make a proposition to the ; House on this subject on a future day. , Thirdly, we propose to provide a small sum of £318 ss. for making i good an engagement entered into by Sir George Grey, with'themanagers of the Native- School at New Plymouth. I do not at this moment recollect^the precise natureof this engagement, but :Dr.. Knight has reported that it is:an equitableliability. . Lastly, we have out of this part.pf the loan, to .find money, to redeem .the greater portion of the old debenture debts payable ;'6h 13th'July next, amounting to £27,371 Is. lid. These four sums/viz.:— : '•-■ ' __"' '6. fl'." '_*•" . F. d. ,- l.ißalanee of Auckland Refund ; • v - - 11,151 10' \j 2. ;Land Pnrcbas-L-s- 7 ...- . .40,000 0-0- .-■' Legs amount'charged to temporary loan .... * . . 28,~075. 7, 3 '. ;.'':' :: :; 11,924 12 9 -• 3. ilndustrial; Institution, -New:: :' •"•"! ■• . ',', Plymouth.. ; ..i./i.. :., ■. ..... :■■ .]■... -.. 318ld,'0>4.'Debenture Dsbt . . ... . • . : 27,371,.1.11 ■ :." 'Give'a totkl.of:;'•.'.' '' ieb0,765 19 9.

- This: is the whole of the'cash we propose to consider as already raised on account of the. .'£120,000. "i As the new debentures fall hi they will be ■ redeemed1 out of the'same division .of the 10an,.-and. the charges, against the temporary loan' will be. transferred. -. For-you are to regard: the temporary loan as a sort of resting .place for. these, charges, which will 'ultimately: fail ,on tlie £120,000. ..Thearnount of these' charges" I have' already stated at 63,9917. lls.'ejd. :- -~:- r"\ "' ';- — = ■--;•—- '/ _ -■'■• . -•■ . - ;•/.- .;>-- •:•'••-.--'<;.-•-_--■. '-;-'■' ■~~ ■ '--£ h. d. Present oharges against Temporary Loan, ' . ; ;to be transferred t0... 120,000 ..., .-.-.•.; 63,391 U, 6. To which if there be added tbe proposed . .-.•.--. - addition-, charges on .the _rI2OJOOO .'50,705 19 ,9_ You have an aggregate total of .' ".'■'<■-. .114,757 11 4Leaving a balance uuapplied-of •.• ■-. . .-■ . ••■ 5,242 ' 8-8 ;.■ '.' ••■• ; -: ' '".-'.' _?i 20,000 oo This balance is liable to discharge— • .','.■ .1. The New: Ulster. Debentures', :l ;.'... 911 8 9:;. 2. Scoti's Debentures (if the' liability of tho ■■ ■. .colony be established . ...... . . - 3,675 36 0 _?4,587 4 9

—And: leaves you free from all other liabilities. I how come to the £180,000 division of the loan. I have shown you the proposed appropriation of .250,765/. 19s. 9._ d- fof. the eash.iwee have.raised. We shall needj say 25,000/. more for land purchases and 25,000/. lor the proposed loan to' the /New Zealaud Steam Company. These sums will a little more than exhaust the whole 300,000/. As to the steam loan we are not yet in possession of direct official information. You are aware that the Home Government has entered into a contract, with ''.Messrs. Pearson of Hull for the performance of'our inter-colonial and •inter-pro vincia!" steam' service, which has been . provisionally agreed to by Mr. Sewell on behalf of the colony. The gross bonus is 24,000/. per annum, whereof the Home Government pays 14,000/., and the colony 10,000/.—or what is ' stated to be equivalent to 10,000/. One term of the agreement is that the colony is to advance to the Steam Company a '-sum of 25,000/. for two years tmda. half, at 4, per cent, towards repayment of which amount one-half of the bonus is to he retained by the colony.. The Lords of the Treasury, have approved of this arrangement on the understanding that the colony will replace the amount so to be advanced. This of course we will take care to do. We have no idea of spending capital as income. We propose to provide the -whole bonus every year, and to carry the one-half to be retained by the Colonial Government to capital account, to re-coup the loan. Sir, I have now shown two things, first, that the whole 300,000/. is wanted immediately; secondly, that all your liabilities will be ultimately gathered into one—will:be.covered aud comprised in the 120,000/. ■" Sir, we mean to keep out of further debt. We mean to make the year's income meef the year's expenditure. We have old. fashioned notions about these things. We have not studied in a colonial school of finance that I could name, in which 2. and 2 on the debit side make 3, and 2 and 2 on the credit side make 5.. Sir, I heard an elaborate oration pronounced in this House in which it was proved to demonstration, that upon a certain new principle then proposed, on which the revenue was to be divided amongst the provinces, all would gain and none would lose. This was in a speech stuck full of figures—figures as thick as plums in a pudding. We can't pretend to do conjuring of this sort. I will not descend to such ad captandum absurdities. Sir, I pledge myself to tear such, a statement as I'have rderred to tatters. We mean, then to keep out of debt, and, so far. as m us lies to s-o the Provinces.do the like. We think the'colonial burthens are as heavy as, for the present, they should be. The colony now curries its burthens well. Our credit is high, and wo mean to keep it so. The Provinces have borrowed enough for the present. 1 have in my

nand, ; a-list of Provincial Loans, Some of the Provinces, it must be confessed, have opened, their. mHutlis pretty widely. ; : [Mr. Ollivier : f Where ?] I will!read. It appears from.the:1 statement that „-. ; . ■ :,■■•• ?■:.- Itj authorised 16 and has raised ■ . . ; borrow . 'lAneklaud . „: .' . .<-4f>.oMo '"■'■ V. £45,000 - 'Wellington ;. . ...'•. 100,01)0 -.. 100,000. . . iNew Plymouth . . . 2,300 .. none. Nelson. . .... 36,000 ' ' ".. 2,000 Canterbury .". . . . 30,000 .. 30,000, ' Otago .... .. . . 3&!000 ... 20,600 •' _?2'4!?'.300.. :■• _-157,500 . With a quarter of a million we think the provinces ought to do. for the present, I now desire shortly to contrast the position of the colony under its old public burdens with its position under that consolidated debt-'which will be sub- . stituted by our operations/ This is desirable, : 'because there are men who are a sort of mental - fiat-fish, with eyes only on one side. They go skimmiiig over a subject,' capable of seeing only one-half of it. Others again belong to the fly class". -They run briskly, over a wide 'field, and, with: the microscopic vision :of, insects, inspect a few parts. . When. they have completed. their examination they know as much of the matter as a fly can' do of the paintings in the Sistine. Now I don't say there are either flies or flat-fish in this House. I hope not; Yet it is well we should try to. present both sides of the account. Flat-fisTi cannot be expected to make much of finance, which certainly require that you should look at both sides, and not exclusively at debit or credit items. Here, then,- is the account as I would state it. Under the old state.of things, we have the following annual charges:—

Company's Fourths, on an average of years from __? 1.553 t" 1«56 iixiusive- . . . .';....:. .24,000 Interest of old debenture debt (say) . ." v. . : 2,500 Interest of debt for- unauthorised expenditure down :■■ to 30t!i June, 15s56,"say ._"32,000 at 8 per cent.,- ---... say . ... ... .j ...... ... .. ...... 2,500 Interest of- debt for land purchase liabilities, say „?32,000 at B per cent . . .- .: V . ■;'. .2,500 '....-. Total . . . . . .-£31,500

You seq I,am putting down round numbers, and am taking the New Zealand Company's fourths low enough.' Now for the new state of things. The charge for interest and sinkv'g fund on the new loan, when fully,raised,; will.be as follows:—

Co'oriy on 120,000..' . '. .... 7,200 Southern Islu-nd on 200,000?...:' '.' :. '. 12,000 A uuklarid. on 90,00 01. when fully raised;.. 5,400, -\* 54,Oti0if.wUen fully ruined 3/_4O C< louy: on 20,000Z.' for N^'w-'Plymouth i-,200 New Plvmonlli an 16,001>i, v/hen Vaised ; 9i>o

Total .. " . .__ 30,000 ' The present "charge, observe, is only 1.8,000— momentarily-increased by. an inevitable overlap of interest. ■ Observe, also, that the.new annual charge sinks the whole capital, whereas nearly ..£100,00.0,0f .the old charge would have beeri without a sinking fund. Somebody,' perhaps, .will tell me I.am;forgetting the New ..Plymouth/ guarantee,-which how figures amongst'the permanent' charges. ' But Ido not forget-'it/ When the £20,000 is spent the guarantee-ceases. Moreover, the spending of the money will produce a iland fund at New Plymouth, whrchgoes in relief of the guarantee.- I show .therefore,, that the annnal rdharge, even when we,shall have come to ;-feerthe full pressure of theloan, will.be less than ..it was. "But look at the other results. Auckland is plus £45,000;. ■ You get a land purchasing fund of £lS,bop, for' nothing— absolutely for n'otliiag.. But more than all, you have gone far to."destroy' the old rancours, and heart-burnings between the North and the. South-—to terminate those miserable jealousies—to make the settlements forget their distinct origin and their long hatred, and to prepare them to coalesce in a strong ahdunited nation; . That was our great' political object ; and that I took a part —though a very humble part—-in bringing about such an arrangement, will be to me a source of'lasting pride and satisfaction (hear.). Sir, I have completed my view of the position of. the colony under the Resolutions oi' 15.56, as regards the public creditor ; but before I quit the subject of those resolutions. I must say a word about one part of the domestic arrangement between the Provinces.-• •' We have been: receiving contributions from- the three .""Southern Provinces on account of the interest of the £_dO,OOO since sth April, 1857. The principle we w rent on was this—the principle of the equity Sawyers, that what is agreed to be done shall be assumed as done. The resolutions proceeded .on the assumption that the Company's d_bt would be paid oil' on sth April, 1557, and we thought, and I have no doubt were justified in thirikmg, that everything under the resolutions was to proceed as between the • Provinces, as if this operation had been then effected. I believe we might have gone further, and that the loth j resolution would, have justified us in requiring . payment of the £12,000. from 30th June, 1556. There are, however, inconveniences to the colony in the coui-se we took, and in which the Proviiir cial Governments acquiesced. It is very inconvenient to have the payments from the Southern Island for interest and sinking fund commencing and ending at a different date from the corresponding payments by the colony to the Union Bank. " It implies the existence and maintenance of two sinking fund accounts. On the whole, we . have th. ought it better, viewing the difficulties which might arise, -to recommend that the Southern Provinces have credit given them in their account with the colony for the £9000 paid by them up to Ist January lust, and that their contributions be deemed to commence from that day. This must be counted a prodigious boon to the Provinces. It is the difference to them of, £9000 paid, now, and £9000 payable 30-years' hence. The Provinces are young, strong, elastic creatures; they live in the present, and I will answer for it, not a Province in, New Zealand but what would prefer £1000 down, to £100,000, payable SO years from date (laughter). Valued according to this scale, it is not, I confess, exactly < the way an actuary .would look at the thing— still, th_ boon is a great one, equal to £.9.00,000 payable 30. years hence. At. a future day.we will bring down bills to effect the necessary. . arrangements respecting the Territorial Revenue,. , and to .-secure, the Provincial .contributions'... L leave that part for the present. This finishes > what I have to say respecting the capital debt of the country and its apportionment.

(To he concluded in our next)