FINANCE.

New Zealander, Volume 3, Issue 119, 21 July 1847, Page 2

FINANCE.

! (No. 46.) 1 Copy of a Despatch prom Lieut-Governor Grey to the' Right Hon. Lord Stanley. 1 Government House, Auckland, May 12, 181 G. My Lord, On c of the moit important duties which has been imposed upon me by your lordship, is the inquiry into the souices from which a sufficient revenue may be most readily and beneficially raised in this country. I now propose to place before your Lordship the principles upon which I think, the future general financial arrangements of this country should be conducted j and the reasons which have led me to form these conclusions. In the first place, I have anumed the amount lof the European population resident Jn these islands to be 13,000 souls, and the amount of the ■ative population to be 120,000 souls ; these estimates are not founded upon accurate returns, | and probably are each of them, especially the j lutter, far below the real amount oil the populations which they respectfully indicate ; they are however, sufficiently, accurate, for the purposes , of the present inquiry. So great a disproportion existing between the

European and native population, one is driven to the inevitable conclusion, that if any attempt is- made (as was formerly the case) to raise a revenue by direct taxation upon the property of the European population alone, from which the natives are exempted, that it- will be found impossible to raise the funds requisite to provide the establishments required for the. protection and good government of the natives ; indeed it.would be essentially unjust and ruinous to the European population to attempt to do so, Hence in endeavouring to raise a revenue from taxation of this nature, the Government must either, as it, has hitherto done, forego all intention of maintaining such establishments, or must look to the British Treasury to supply funds adequate for their support, It may be said that the former system should be amended, by subjecting the property of 1 Europeans and natives alike to direct taxation ; but this would be to suppose that we were in actual occupation of tile whol y e island!;, (haf establishments existed which could collect these taxes, and that there was a reasonable probability that the large warlike native population, who are as yet for the greater part. ignorant\ of European laws and customs, and impatient of control, would submit to taxes of this nature, every one of which suppositions is directly contrary to fact. Whilst these objections, and many others of nearly equal weight, exist to any attempt to raise a revenue from direct taxation,, I entertain no doubt whatever that a revenue which will amply suffice to defray all the charges (excepting those of military and naval protection) which* neod be incurred, 'in providing, establishment,!, in all respects adequate for. the good government and complete control of both races, can in the course of two or three years be provided' by indirect taxation, that is, by the imposition of |moderate duties of customs upon all imported goods, Since the termination of the war in January last, the receipts of Customs have continued rapidly to increase, and a tradte of great importance is rising between the European merchants and tile. native population.. There^seomsuio neason to doubt that this, trade will very rapidly increase in extent and importance ; ti.e natives aro now very generally purchasing small vessel*, for the purpose of trading; they are ext/emety anxious to prooure' articles' of European clothing, and luxuriesrgenerally, and they possess abun- | dant means of paying in produce foil all such af- | tides- ae. they may^ require. Indeed the consumption of British goods in these islands will soon : become so considerable as to bean object of importance to British merchants, whilst the valuable products which are given in exchange for them will also prove highly advantageous to Bii- < tish commerce and industry. In 1 illustration of this I need' only> slate that the principal articled of consumption heiie.arewoollen.good«, the wool , for which is/chiefly- grown in Australia, carried to England in British vessels,, manufactured there and brought to New .Zealand in British ships, where it is exchanged for timber, flax, copper, and wool in its raw state, which are again carried in British vessels, to England : thus in each stage of these employments an impetus is' given to some branch of Biitish Hade, The extent to which British commerce may be carried on here i» limited, in the first place, by the amount of the population, which I believe has been under estimated by. neardy one-half; and secondly, by the extent to which, life, and property are rendered secure. The short period of tranquility which the northern portion of the country has recently enjoyed, has already given a considerable impetus to trade, and a large augmentation to the revenue, which being raised from duties, ofj customs,, augments in> the. same proportion as the commerce, of the. conn try,, and w.itb its increasing prosperity, affords theGovenir ment the means of still fuilher "securing the future tranquility and order of the colony. It it difficult to see on what grounds this mode of raising a revenue can beobjected to. The natives benefit largely by obtaining those article* which they value. higliJv, and w,ui,ch contribute to their comfort, respectability, and civilization j they also. are now, foi; the first time, begjnningrto feel the advantages of security of persontand property $ in point therefore of abstract, justice, there appears no reason why they sliouldnot* pay for, those advantage!. Whilst upon the ground of discontent,, no objection afc present exists to the payment of Customs' dutie«,,os.tbe native.chiefs are very generally beginning to understand that the Government cannot be conducted .without money j they are also generally anxious to enjoj (he advantages of good government, and, several of the principal chiefs have stated, that? they see, that, so long, as the dutier of customs are. t'.ie payment made, to, the Government, so long will, the wealth, of the. Government depend upon their being rich enough to buy clothing and articles of luxury : that it will thus be the object of the Government to I see them wealthy, and they therefore entertain | bo fear of their lands and property being taken* ! from them. 1 have therefore no intention of, attempting to . raise a revenue by any other means than the imposition of light duties of customs on ali;import«. Ed goods-; and as I have before stated", 1 feel quite satisfied, that within a very few years. from the present time, the revenue, realised. from thi* source, will be found ample to defray the, whole of the colonial expenditure. The present condition of the colony, in re-, ference to its financial state, is different from all other portions of the empire. It is not in the ordinary position of a young country, the establishments of which, could grow in extent, in the same proportion as its population, revenue and commerce. The fact it, that- a largepopulation rapidly becoming civilized, and capable, of, 'immediately affording a, qo.uf ideiabla commerce and revenue, already exists here. ; but no establishments have been formed' for tnoj protection of life, property, or' commerce, or for the- collection of revenue; or indeed, for tlio controul and government of this huge population-, who, if their energies are not directed' into, proper chauuels, and i£ they are not go? veined and, kept, under control, will: certainly., attempt to set up the gpveinraent o ( f,var,iou,s,i ambitious chiefs, and will keep the country in a ■ constant slate of disturbance and war.

It appear* therefore absolutely necessary that it considerable annual expenditure in excess of] the revenue should be sanctioned for a few year* by the British Parliament^ to provide for fclie formation ofi Ihe public buildings, load's, and establishments which are absolutely requithe asseition and preservation of British) supremacy, for the control of the turbulent, theprotection of life, property, and commerce, and! the security of the revenue which the country, can at once yield. The advantages which justify such an expenditure are, the impetus which will be given to. the interests of humanity and civilization, the ultimate saving which will be effected to the* countuy by the prevention of expensive internal wars, which would- require the constant presence of a large naval and' military force, the, extension aflbrded to British commerce and indus.ry, and the great increase of the revenues) of the colony, which will shortly enable it tot defray the whole of its own expenses. The amount of such expenditure in excess of the revenue need not at any time be very great. It may, I think be faiily deduced fromi the following estimate :—

Thus leaving the sum of about 4030,000, in addition to the present Parliamentary grant, to bit provided fiom some' extraneous source. It Bhould however, be obsei vad< that this additional .grant, would decrease in amount from year to year,, exactly in.proportion to the progress of the" colony. I beg to assure yonr Lordbhip that 3 after having now visited almost all the irnpontaiifc portions of the colony,! feel quite satisfied thai, the Government cannot, be efficiently conducted for a lower amount than that which I have above stated, and that any attempt to doso will ultimately only result in gieat disaster, and eventually in a much greater expense to the British Treasury than, that which will be incurred under the system I have detailed, and upon, which I intend to act until your Lordship's 'further instructions can reach me. It is probable that I may have stated the estimated revenue at too small an amount,, and I think that I have done bo : but I have thought it better to incur the risk of erring, upon this tide than of; leading your Lordship' to form too favourable an opinion of the present financial state of New Zealand. The next question that arises for consideration is the probable expenditure that' must ultimately bo incurred for the naval and. military protectioaof this colony. So soon as there is an adequate military force in the country, 1 think that the naval force can be very considerably reduced, possibly to one-sleamer, andone vessel of war i but the pretence oC a steamer will certainly be always indispensable upon these coasts. I wilUupon the arrival of a sufficient; military force, lose no time in communicating wiluiUje senior' naval officer upon these subjects,, and, iv reporting my final determination to your, lordship., I propose to address another Despatch tp your lordship upon the subject of the military force which 1 at present think requisite for the maintenance of British supremacy in these islands. But I may state here that 1 have no doubt that the local revenue will shortly afford the meant of supporting so considerable and' efficient a police force, partly composed of natives, that it will be in the power of the local government in three or four years to dispense with the presence of a considerable portion of the military force which recent occurrences have rendered it necessary temporarily to stationhere. I have, &c, Q. Grey. The.Right Hon. Lord Stanley, &c, &c.

(No. 32.) Copy op a Despatch from the Right Hon. Earl Grky to Lieut.-Governor Grey. Downing-ttreet, lit February, 1847. Sir,—l have to acknowledge the receipt or your despatch, (No. 4G) of the 12th May lust, containing a report tipon the general: financial arrangement of New Zealand, and the principles on which you consider it will be proper that they should be conducted, and adverting likewise to the means of securing the future order and tranqnility of the settlement. It hat been u source of satisfaction to me to receive in the clear aud comprehensive form' in which it has been brought under my notice, —the favourable account you bay© there given, of the financial condition, present and perspective, of the colony committed to your government. In the views you have expressed on this fubject generally, as well ai the line of policy pointed out by jou as the best calculated in jour opinion for securing a permanent and progressive increase in, the local revenue, I entirely concur, and you may depend upon ray support in carrying out the measure* by which this end is sought to be accomplished. 1 also Approve of the proposed enlistment of the Natives at a Police Force, and of the immediate execution of thoie public works, which aio necessary for the promotion of peace and, order, and with them, of wealth and social improvement. I now proceed to advert to your statement respecting the pi obable amount of Revenue and Expenditure of the colony during the present year: and from the calculations on which that statement ii.made, 1 have inferred that the total amount of aid which will be required from the Imperial Treasury,, to. enable you to carry on the service of your government, for the. year 1547, ifk £38,865- l fiJI * od '» thereby covering your e»timated deficiency of, £36 h OOO, and allowing you A, probable surplus 01£2,8Q6 156, Qd.

On this subject* Ik have purposely delayed addressingyou until'l should" have transmitted to you tiie instruments by which the intended • change in the form of. Gover-nmentoC NewZea- ■ land will be effoctad.jn order, that L. might at l the same time explain lo you the, bearing of that measure upon )our financial arrangements. 'Bhose instiuments were conveyed; to you in my) despatch of the 23rd ultimo $ it now therefore remains for me to acquaint you that an estimate to the extent of £38,865 15s. Od , will be submitted to Parliament in the present session, for the service of New Zealand j and it is scarcely! necessary to add,, that 1 place a firm, reliance on your availing yourself of every practicable oppoitunity which an augmentation of the colonial revenue may offer, for economising the ap-. plication of that amount, you will moreover bear. JJn mind that, except the small sunr to be' retained for the Civil list, the revenue will, whem the new constitution shall come into operation, be placed at the disposal of the Legislature; but that no grants are to be made not recommended by yourself. It must likewise be explained to those bodies that they, are expected) to pi o vide for the public service of the. colony,, to the full- extent of their power,, and that having the advantage of self government; they must! not calculate upon the continuance, for more thain a very brief period, of the Parliamentary grant., With, reference to your Despatclii(No. 34), of) the 16th Apiil last, relative to the present statei of the Southern settlements, and' the means of holding possession of the territory between Port! Nicholson aud Taranaki, I have to signify toi )ou my approval of the steps you have taken for opening the^ laud communication between Wellington and Porirua, and! of the sanction of Her Majesty's Government for the expenditure incut red- for that purpose. 1 have, &c, &c., (Signed) GREY. To Governor G» ey, &c, Sco, f New Zealand.

a. s. a: I; Probable general 1 ordinary annual expenditure of local government . . 27|000 0 0! Probable exUfa expenditure on account* of natives, police, roads, &c, &c. . 31,000 0 0| Total Expenditure .... 58,000 0 0 ( Probable revenue from this date, bufc rapidly increasing in amount . . 22,000 0 0 ( Immediate annual deficiency, yearly, decreasing in amount . . . , £30,000 0