LEGISLATIVE COUNCIL. Saturday, April 5, 1845.

New Zealand Spectator and Cook's Strait Guardian, Volume I, Issue 33, 24 May 1845, Page 4

LEGISLATIVE COUNCIL. Saturday, April 5, 1845.

Present — AH the members. The minutes of the last Council were read and confirmed. The Governor observed, that before proceeding to the regular business of the day, he wished to make some communication to the Council on two matters ; on one of which he should wish to hear any observation any member of the Council would feel disposed to offer. The other subject was merely to communicate to them a step he intended to adopt with regard to the arrears of the salaries of public officers. For some time past, thGy had not received their full pay, and as he was still unable to pay them up, he thought it right to give them the best security that he could, therefore he should pay the arrears with the new debentures of £50 and upwards, which would bear an interest of 8 per cent. Where the sum to be paid was less than £50, it would be paid in the small debentures. The resolutions of payment only of half salaries would be rescinded, and the new debentures would be, if not actual payment, a security until he ascertained from England how far the Home Government would assist us. In immediate connection with that subject, he now intimated to the Council that it was his intention, on Tuesday next, to propose the abolition of the Property Rate, and to move the postponement altogether of the Licensing Dealers' Bill ; and then to re-establish the Customs. It might appear a very sudden act, but circumstances were completely changed. Six months since, when he proposed the Property Rate and abolished the Customs, he had hoped to avert insurrection and a collision with the natives, and that was his principal motive. That now unfortunately had taken place, and therefore the reason no longer existed. At that time he had no idea that the residents in the southern settlements, who had been so clamorous for the abolition of Customs, would be so slow in assisting the Government in these measures. The revenue from the Property Rate in those settlements was perfectly contemptible ; by taking legal measures to enforce the enactments, would be to proceed against half the population. The plan of the Property Rate has failed with the European population, and the abolition of Customs has also failed to quiet the discontent among the native population. The military force we had received in addition to what was expected, would insure protection, and induce a system of concentration of the settlers, and after recent circumstances at the Bayof Islands, persons would not be scattering abom so x^fech : — this would render it more easy to levy the Customs, and there would be less likelihood of the population to interfere with the natives. There would be also less ports for vessels to discharge cargoes. The naval and military force would enable the Government to prevent smuggling, and the men of war would render their assistance. Since September the Property Rate had had a fair trial. Circumstances were now quite .altered, and a different line of conduct must v?g adopted for the whole colonial system. On Tuesday, on the second" reading of the Property Rate amendment, he should move that it be itself abolished, lie had no idea what might be the view taken by the Legislative Couucil, but the Executive Council had determined on such course, and he had brought the subject before them to-day, in order that there should be some expression in the shape of a resolution. He doubted not there would be a great charge against him of inconsistency. His only idea of consistency was the best steps for the colony ; the conduct to which alone he attached any merit, was that which will best promote the colony. Mr. Heale hailed with sincere satisfaction the return to the only sound policy and measures for raising a revenue. He wished to ask with respect to the debentures, whether the small debentures were to be withdrawn by the large debentures. The Governor observed, that he could not work supernatural impossibilities. The small debentures were to be withdrawn in a certain manner. The issue of the few large ones to satisfy outstanding salaries, could not prejudice any one. There was no doubt a supply of specie was on the way, which, when it arrived, would enable him to withdraw the small debentures. The amount of salaries due was only £3,000,

and an issue of the large debentures to that amount, would not be very injurious to the money market. The Attorney General said, that with, reference to the subject more immediately before the Council, the expediency of repealing the Property Rate Ordinance, and returning to the system of Customs' Duties, he would say a few words in support of the proposition made by His Excellency, and he thought he could do so quite consistently with the course he had pursued on a former occasion in moving the second reading of the Bill for the Abolition of the Customs. It -nould be desirable to revert for a moment to the circumstances under which that measure had been proposed. It would be in the recollection of the Council that in the month of September last His Excellency, when at the Bay of Islands, and in order to avoid a great threatening danger to the colony, a general rebellion of the native tribes of the northern part of the island, had removed the Customs' Establishment and all Customs' restrictions at that port. One port in the colony having been opened, of course it became necessary that all should be opened. When therefore the Bill was introduced for the Abolition of Customs, it wa& not a question for consideration whether or not the Ports should be opened — the Port of Russel having been opened, the opening of all the other ports was inevitable. Now he (the Attorney General) at that time, and for a long time previously, had been of opinion that a system of free ports and perfect freedom from all restrictions to the resort of shipping could in no part of the British possessions be adopted with greater advantage than in this colony. Looking to its position in these seas — its insular character — its natural productions — and its facilities for smuggling — lie (the Attorney General) had always thought that New Zealand was of all others, the country in which all obstacles to the free resort of shipping to its harbours ought to be removed. Such were the arguments he had then used — what he then thought and then said, he still thought, and, if necessary, was prepared to repeat. JBut the Government were now in this practical difficulty : the Property Rate, which had been substituted in lieu of the Customs' Duties, had failed to procure an adequate revenue : the amount collected of that direct tax but yielded little more than one half of what the Customs would have yielded, and was wholly insufficient to meet the actual requirements of theGovernraent. It had been intended by raising the Property Rate and by the Dealers' Licensing Bill, still to endeavour to raise an adequate revenue by direct taxation, but he (the Attorney General) felt himself bound to confess that by nominally doubling the Property Rate, he thought that the revenue would not be much augmented, and from the Licensing Dealers' Bill it was not expected to have raised more than between £2,000 and £3,000 a-year. And by no system of direct taxation did it appear to him that, after recent experience, and under existing circumstances, could an adequate revenue be now raised. When the Customs were abolished, it was supposed that the measure would meet with the general concurrence of the settlers throughout the colony. -In practice, the colonists had not evinced their approval of the measure. He (the Attorney General) did not allude to the people of this settlement, but in some of the southern settlements the people had not given that support to the measure which might reasonably have been expected from those who were really earnest in desiring its success. The returns made under the Property Rate Ordinance had shown conclusively that that measure in several of the settlements was by no -means cordially supported. The recent catastrophe, and the present state of the natives at the Bay of Islands, had also proved that the Abolition of Customs' Duties had failed to prevent the threatened insurrection. Under these circumstances, what were the Government to do ? The reason for abolishing Customs' Duties no longer existed : since their abolition the threatened insurrection had broken out : the end sought to be attained by the measure had not been effected, and the measure for opening aIL our harbpurs^withoui let or hiudrance to the shipping of aH nations, had failed to receive the practical support of the colonists — the revenue received under the existing system had proved wholly inadequate to meet the necessary expenditure of the-Govern-ment — and there did not appear to him (the Attorney General) to be any reasonable prospect of raising from the colonists by any system of direct taxation a sufficient revenue. A revenue must be had : Customs' Duties would rase £12,000 to £14,000 a-year ; it appeared therefore to him that there was no other course for the Government to pursue, but to return to the system of indirect taxation, and to re-establish the Customs. In taking this course, he thought that the Government were not open to the charge of inconsistency — on the contrary, the reason for abolishing the Customs having ceased to exist, and the substitute for them having failed to produce an adequate revenue, he thought the Government would be acting more consistently and more reasonably in re-establishing the Customs than they would do in persevering in the present system. And for himself, he must repeat that he still thought that if a sufficient revenue could have been raised by direct taxation, and the colonists had cordially supported

the measure, it would have been much tojflie advantage of New Zealand that all restrictionswere removed to the free intercourse of ehippijrf to our numerous Ports and Harbours. «v Mr. Whitaker observed, that on both'sfibjects brought before them he wished to make j ] some observations, but he should have wisned i to have been better prepared by some little time to consider the subjects. As to debentures, as the large ones were not legal tenders, he did not see any harm in the issue of such an amount as proposed would be. \ The Governor here interrupted Mr. Whitaker, and said, that he had not invited any discussion on the question of debentures ; as what he had stated, was simply an announcement of the decision of the Government to take such steps ; it was on the proposed return to Customs only, that he wished to hear the opinions of the honorable members. Mr. Whitaker said, as that was the case, he would confine himself to the proposed alteration ; but as he had stated before, if any suggestion of the Legislative Council was thought advisable to express them so immediately, was impossible. What had been stated by his Excellency as to future measures, had come to him so much by surprise, that he was quite unprepared to express any opinion ; but he had always had such an inveterate objection to both these two Bills, the Property Rate amendment act, and the Licensing Dealers' Bill, that in preference he should choose the Customs. Mr. Donnelly could not but express his unfeigned joy at a return to the Customs. He had always considered that the hope and prospect of producing any thing from the Property Rate Ordinance was quite groundless. There should be no tax on property that was not productive. The Colonial Secretary observed, thatfree trade might be very beneficial to some, but it had been accompanied by freedom from funds, and the Customs was the only chance of revenue.^ The Attorney General stated, that he wished to observe, in respect to the proposed General Dealers' Licensing Bill, that although he was quite aware that it was not popular, he wished it to be understood, that he alone was responsible for the suggestion, as well as for framing the proposed measure. He thought it more manly to avow his conduct on that measure, and he thought he should have been able to have given very good reasons at the proper time, to have induced the Council to have sanctioned it. The Governor said, that he was the same advocate for free trade he had always been ; and knowing as he did, the views of Lord Stanley and Mr. Gladstone, it was with the utmost regret that he found his own countrymen in the southern settlements, support so feebly their Government in measures of direct taxation ; while, at the same time, circumstances in the north have taken such a turn, that the course of policy must be quite altered. His anxiety had been to do that which he conscientiously believed to be the best under the circumstances, and could he go back, he should do the same again. The -whole blame would rest on him, but although charged with inconsistency, he had done his duty to the best of his ability. He should move the following resolution :—: — Resolved, "That it is expedient under existing circumstances, to revert to the system of indirect taxation as established in the colony previous to the enactment of the Property Rate Ordinance."