PARLIAMENT.

New Zealand Times, Volume XXX, Issue 4482, 31 July 1875, Page 2

PARLIAMENT.

HOUSE OF REPRESENTATIVES. Fkiday, July 30. The Speaker took the chair at half-past two o'clock. PETITIONS. A petition was presented by Sir George Grey from a number of early settlers praying that their claims for compensation for privations endured in the early days of the colony might be taken into consideration. It was read and ordered to be printed. Several other petitions were also laid on the table, NOTICES. A number of notices were given. By Mr. Steward of his intention to apply for leave to introduce a Bill to legalise marriage with a deceased wife's sister. Mr. Peahce of his intention to ask the Government whether it was intended to construct a deep-water wharf at Wellington. PAPEKS, A return was laid upon the table showing the amount of money received from the Manawatu district. The return was laid vipon the table in pursuance of a resolution of the House passed at the instance of the hon. member for Manawatu (Mr. Johnston). Mr. BUNNY asked permission to also place upon the table a return of the in the same district, which he said would show that the sum actually received from the district was ,£126,800, whilst a sum of £122,000 had been already spent, in addition to which sums to the extent of £12,000 to £14,000 had been voted during the last session of the Provincial Council, which were to be spent almost immediately. It was unfair for any member to make such statements as had been made by the hon. member for Manawatu, and he (Mr. Bunny) trusted the House would consent to the second return being tabled. Mi-. JOHNSTON expressed great pleasure in learning that the Provincial Secretary had made out such a return. The Hon. Mr. FITZHERBERT commented strongly on the conduct of the hon. member for Manawatu in making the assertion that the money might as well have gone to the Emperor of China as to the provincial chest, and referred in humorous terms to a paragraph on the subject which had appeared in the New Zealand Times. He considered it disgraceful to any member to make such a statement. (Hear, hear, and Order.) He said it was a disgrace to the hon. member. The SPEAKER : Do I understand the hon. member to apply that term to the hon. member for Minawatu ? The Hon. Mr. FITZHERBERT said he did. (Order.)

The SPEAKER informed the hon. member that such a term must not be used. The Hon. Mr. FITZHERBERT then would say it was not creditable to the lion, member to state that which was utterly repugnant to facts —(hear, hear) —and which he could not justify. If he had made the remarks wilfully, he deserved the severest reprobation, and if he had said it in ignorance, he (Mr. Fitzherbert) was sorry he had not taken more pains to find out the truth. There had been too much of this sort of tiling, especially during last session, of speaking without reference to facts, to the injury of others, merely for the purpose of making a point with constituents ; and in tliis case the hon. member, in endeavoring to ingratiate himself in the favor of his constituents, had been led to state that which he knew or ought to have known to be untrue, in order to inflict a public reflection upon the Superintendent and provincial authorities of Wellington, —a course which he (Mr. Fitzherbert) did not hesitato to say was thoroughly disgraceful to him. (Order.) He asserted that the West Coast for years had had money derived from the East Coast expended upon it; and now, when., the good result of that expenditure began to be felt l>y Increase of- revenue, it was not too much to expect that some of the revenues derived from the East Coast should be expended upon other parts of the province to produce a similar result to that which followed the expenditure upon the West Coast of money derived from the East Coast. He defended such a course, and said the returns would show that the district had been liberally treated; in point of fact, that more money had been expended upon it than had been taken from it, and concluded his address by again censuring the hon. member for his conduct, and asserting that the way in which he attacked the Provincial Government in the Assemby, in- . stead of getting the information privately, showed that the remarks he (Mr. Fitzherbert) had made were justified. Mr. JOHNSTON, in reply, quoted from Hansard to show that he had merely spoken from the representations which had been made to him by his constituents, and that he himself had not expressed a definite opinion. He merely wished to get the information, to see if the complaints of his constituents were justified, because the result would influence him in determining whether the interests of his district had or had not been prejudiced by the existence of provincial institutions. The provincial question was coming on this session, and he desired the assistance of this information in enabling him to form an opinion on the subject. (Hear, hear.) If that return satisfied him that thedistrict had been fairly dealt with—that the whole, or nearly the whole, of the amount taken from the district had been expended in it—and that such expenditure was not taken merely from loan, but that the district had received a fair share of the land revenue, he should admit that there was no ground of complaint, and should not hesitate to tell his constituents so plainly. He should be only too pleased to find that the Superintendent was right." (Loud cheers). Mr. THOMSON complained of having been accused of being incapable of seeing a joke —(laughter) —as the paragraph in the New Zealand Times had asserted, and thought it libellous on the part of Sydney Smith, who had been quoted, to have made such a remark about Scotchmen, who were quite as capable of taking a joke as Englishmen and Irishmen.

A motion having been made that the two returns be printed, it was agreed to. EXPLANATION. Mr. STEWARD, Chairman of the Reporting Debates Committee, gave explanations respecting complaints made the previous day against Hansard reporting. In one case a page or two had been accidentally omitted by the binder in a few books, one of which doubtless the party making the complaint had got hold of. In another case the member who complained of not having been reported had spoken on the first reading of a Bill, and such speeches were never reported ; and in another instance the speaker had been inaudible. Mr. Steward counselled all gentlemen who wished to be reported correctly to speak up. QUESTIONS. In answer to questions, Ministers stated that it was not intended to remove the Heleusville railway station. That steps will be taken to determine the line from Eeatherston northward on the Masterton line of railway after the surveys have been made. That the Masterton line will be open for traffic to Silver Stream early in November. That the Great Northern railway, in Canterbury, will be opened at the latter end of December. That the memorial requesting sittings of a District Court in Wanganui and Rangitikei would receive consideration from the Government. That the papers in connection with the inquiry into the case of John Anderson would bo laid upon the table of tEe House so soon as received. That no information had reached the Government beyond the newspaper telegrams, as to the outbreak of a disease among horses in Australia, bat that if such information were received, the Government would consider it their duty to immediately take steps to prevent diseased stock coming into the colony. Progress was being made towards the erection of lighthouses on Cape Maria Van Diernen and the Island of Moldhinui, Wangarei, the material having h»en ordered. BILLS INTRODUCED AND READ A FIRST TIME. By Mr. Curtis : Bill to authorise the raising of a loan of £IO,OOO for the extension of gaa and waterworks in the city of Nelson ; Becond reading qn Wednesday.—By Mr. T. Kjelly : Bill to amend the Waste Lands Act,

1874 ; second reading, Wednesday.—By Mr, Sheehan : Highway Boards Empowering Amendment Act Bill (No. 2) ; second reading, Thursday.—Hon. Mr. Reynolds : The Marine Act Amendment Bill; second reading, Tuesday. —Hon. Mr. Richardson : Inspection of Machinery Act Amendment Bill. ABOLITION OF THE PROVINCES BILL. A message was received from his Excellency the Governor, bringing down the Abolition of the Provinces Bill. (Cheers.) The Bill was read a first time. Sir DONALD McLEAN moved that it be read a second time on Friday next. Sir GEORGE GREY urged longer delay before the second reading was taken. Ten days, at least, should be allowed for them to consider so important a measure. Mr. O'CONOR supported the suggestion. The Hon. Major ATKINSON explained that the Government intended to give an explanation of the Bill on Friday, and should then be agreeable to allow it to stand over for some time longer, to allow hon. members to make up their minds on the matter. Mr. REID asked for much longer delay, in order that the constituencies might have an opportunity of expressing an opinion. If they got the explanation on Friday, he hoped there would then be a delay of three weeks. (No, | no.) He did not come there to express the j opinions of the Government, its suggestions, or even the Opposition's, but his own views ' only, and he considered that delay was required. Mr. WOOD considered Friday a most inconvenient day, and urged that the second reading should be taken on Tuesday week. Messrs. Luckie and Sheehan supported the motion, but the latter gentleman wished to know whether the Government intended to telegraph the Bill to all papers.

The Hon. Mr. BOWEN said it would be telegraphed in full to every paper in the country. Mr. FITZHERBERT followed in a long speech, in which he referred sarcastically to the promise made by the Premier last session, that a barrister of large colonial experience should be employed to draw up a thorough scheme, and in order to render the details of this scheme most complete, he should by personal observation, during the recess, ascertain the circumstances of the various districts. The hon. member asked who that gentleman was, and where he had been employed? After some further discussion, in which Sir Geok&E Gkey enquired why the constitutional practice had been departed from, by the Bill being introduced by Governor's message? and was answered by the Speaker, that as the Bill provided for an appropriation this course was necessary ; and Mr. Swansox, in answer to n. question, was informed that the Representation .Bill would be placed on the table as soon as possible, The motion was carried. LOCAL GOVERNMENT BILL.

Sir DONALD McLEAN, by leave, introduced the Local Government Bill, which was read a first time, and a motion made and earned for its recond reading on Friday next. COMMITTEE OP SCPrLT. The House then went into committee of supply, and an imprest supply vote of £250,000 was proposed by the Colonial Treasurer. Mr. WOOD moved that the committee should report progress, and obtain leave to sit again after the delivery of the Financial Statement, and said that after reading the correspondence which had taken place between Sir Julius Vogel and the other loan commissioners, with reference to the negotiation of the four million loan, every member must feel the desirableness of knowing something of the real position of the colony before voting away this large sum of £250,000. After having the repeated statements made last session by the then Colonial Treasurer, that there was sufficient money in hand to meet all the engagements of the colony up to the end of the financial year, every member must have been astonished on roading that it was necessary to immediately negotiate the whole of the loan, at any rate three-fourths of it, and that the liabilities of the colony were so pressing that half of that amount in one year and the other half in another year would not be sufficient to meet the engagements of the colony. Every one must have read that statement with the greatest surprise. Then, again, the country had some years ago, under the direction of Sir Julius Vogel, embarked upon a great commercial speculation, which they had been told when they entered upon it was to be a very paying one, and that if they expended £7,000,000 in four years, they were to have an annual return of £IO,OOO, the next year £20,000, and so on. But it was well known now that they had not yet received a single sixpence, whilst they had expended large sums upon railways and other works. He trusted the House would demand a thorough explanation of the financial position of the country, before any sums of money were gi'anted. He contended that the country had been deceived, and expressed a regret that the Finance Committee had not looked more into matters for themselves, instead of having trusted to the words of the late Treasurer.

The Hon. Major ATKINSON said that the hon. gentleman must know that whatever member might occupy the Treasury, the business of the Government must be carried on, and this vote was always passed without difficulty. If the hon. member had wished to propose a vote of want of confidence in the Government, he should have done so in a proper manner. The hon. member himself was chairman of the Committee on Public Accounts, and he should have taken precautions against the country being so deceived, if what he had said was true. He would place before hon. members directly a full exposition of the finance of the country, and they would thus be able to see ho.v the country stood. Mr. FITZHERBERT supported the amendment, and in doing so, asserted that the House had been systematically deceived as to the condition of the finances by the late Colonial Treasurer, and the extent of those deceptions would never be found out till there were other men on the Treasury benches, although he believed the present occupants were as ignorant of the state of the finances of the country as any member in the House. (A laugh.) Mr. WOOD, in reply, said if he had desired to move a vote of want of confidence, he should not have moved in any doubtful way. Want of confidence in the Ministry was arising in all parts of the House, and lie did not know but it might be necessary to move such a vote, for with regard to questions of finance and administration, he could say from what he had seen that the Ministry were perfectly incapable of managing the affairs of the colony. The amendment was negatived, and the motion having been carried, the committee reported, and an Imprest Supply Bill was passed through all stages. FINANCIAL STATEMENT. At 7.30 the House was crowded with spectators. The House having resolved itself into Committee of Supply, The Hon. Major ATKINSON rose and delivered the Financial Statement. He said that he did so under a strong sense of responBibility. There had been so many positive statements and intangible rumors discrediting the financial position of the colony, that he desired at the outset to give them an official refutation. He thought a plain unvarnished statement of the true condition of our monetary position would be the best possible answer to unscrupulous slanderers ; while it would enable honest doubters to ascertain £« r themaelvcs the truth or falsehood of what they Wl read or heard. His subject naturally divided itself into two parts—Loans and Revenue. LOANS. With regard to the raising of the four million loan, it must be remembered the Immigration and Public Works scheme when originally submitted by Sir Julius Vogel was intended to extend over a long period, but it had been impossible to resist the pressure to hurry on works. In obedience to the desire of the Assembly, immigration and public works were both pushed on vigorously, and as a necessary consequence loans had to be raised more rapidly

than at first proposed. Out of the £7,750,000 I authorised between June, 1870, and June, 1874 it was not generally understood that nearly , £2,000,000 still remained unraised. This fact had an important bearing on the action lately taken by Sir J. Vogel in placing the whole £4,000,000 in the market at one time. The expenditure out of loans during four years, IS7O to 1874, was £4,289,877, and it was last year estimated that during 1874-5 £3,300,000 would be required. In addition to the above there was at least the expenditure for current financial year to provide for, say £2,250,000. Out of this total expenditure of £9,539,577 to be provided for, only £5,795,200 had been raised, and it became necessary therefore to provide the balance of £4,044,677. Government decided to sell the whole £4,000,000 if possible, and appointed Sir J. Vogel, Sir P. G. Julyan, Dr. Featherston, and Mr. Sargeaunt agents for the purpose. Grave difference of opinion arose between Sir J. "Vogel and his coagents. The former wished to sell the whole amount at once through Rothschild's, while Julyan, Featherston, and Sergeaunt thought a better price could be obtained if the requirements of the Government permitted the loan being sold by two instalments. They ultimately agreed, however, to adopt Sir J. Vogel's plan. The loan was to be raised by Rothschilds at ninety-four, out of which. Rothschilds receive a commission of two per cent.,, they taking up three millions immediately, and the remaining one million within a year. The net price received by the colony is £9O 19s. Id. By this arrangement the colony were to obtain the necessarymeans to carry on public works and immigration, whether Rothschilds successfully floated the loan or not. This fact is particularly commended for consideration. The report received from Sir J. Vogel and that from the other three agents, although differing materially in opinion on some points, concur in the result as successful. Dr. Featherston and the Crown agents write, " that considering its magnitude, the terms upon which this transaction has been carried out appear to us exceptionally favorable." With these facts before them, the Government are decidedly of opinion that the course pursued was the right one, that the operation was marvellously good,, and that to Sir J. Vogel is due the successful' termination of the negotiation. Rothschilds, placed the whole loan, and £3,167,571 had been paid to the credit of the public account at date of last advice (31st May). On comparing the loans, the average annual rate of interest of the previous loans since 1870 is £4 19s. 6d. per cent. The last is £5 2s. per cent, and the average of the whole £5 os. 7d. per cent., which is very satisfactory when it is considered that in the original estimate introducing the Immigration and PubHc Works policy, it was calculated the money might be obtained at 5i per cent. The balance at Bank of New Zealand, London, on 31st May, had been partly reduced by a repayment to the Bank of England of the £600,000 that had been borrowed on the £BOO,OOO of Imperial guaranteed debentures to £2,056,716, against which drafts had been discounted by the bank in the colony up to the 30th June of £1,050,000. The Bank of New Zealand now pays interest at the rate of f per cent, below current Bank o£ England rates, instead of 1 per cent, as formerly. The probable average balance for the year is estimated by Sir J. Vogel at £1,500,000, and he proposes to invest any sum in excess of that amount in Exchequer bills.

The history of the loan raised prior to 1870, and the unproductive nature of at least £3,000,000 of the amount, are too well known to requiraexplanation. Only the loans raised under the Acts of 1870, 1873, and 1874, are reviewed.? • Out of the £790,000 authorised by the Defence Loan, 1870, to be spent within five years for purely defence purposes, only £651,703 has been spent. There is also a balance out of the £210,000 authorised by same Act for other purposes. Out of the total of £1,000,000 authorised, there is still an available balance of £125,315, les3 expense of raising. The unraised portion of this loan amounts to £179,700, of which £52,700 has been hypothecated to - the_Bauk .at-Kew-Zealond-for a nominal advance of £50,000. Before remarking on the operations exhibited by the table showing the expenditure on the General Purposes Loan, 1573, reference is made to the extraordinary misapprehension which appears to exist even among well-in-formed people, with regard to the extent to which interest is paid out of borrowed money. This misapprehension arises x>robably from two causes, viz., from payments made in London apparently taken from loan, and from the item of £300,000 voted under this Loan Act for " repayment to Immigration and Public Words Loan for interest and sinking fund paid or to be paid therefrom." As this is a question closely affecting the credit of the colony, an explanation is given, showing, as regards the first mentioned cause, that out of the Consolidated Revenue raised in the colony there are charges payable in Loudon for interest and sinking fund, while on the other hand, there are large sums raised by loans at credit of. colony in London, of which a considerable amount is required to be expended in the colony. The practice is to pay in London such portion of the interest and sinking fund chargeable on revenue as is required to be paid there out of the funds raised by loan, aaid on the receipt of the Crown agents account in the colony, charge the interest and sinking fund so paid to the Consolidated Revenue. The whole transaction is merely a convenient mode of avoiding the paj meat of exchange, and nothing more.

With regard to the second cause of misapprehension, the total sum ever asked for or granted for this purpose, was the £30'0,000 above mentioned; of this only £218,500 ha 3 been expended, and as no more interest will be paid out of loans, the balance of £81,500 will be otherwise appropriated. But against this payment of interest out of loan there has been contributed to public works a sum of £179,303 out of stamp duties, and the contribution will be increased by the end of the year to £241,800, so that there will be contributed out of revenue towards loan purposes £23,300, over and above all interest paid out of loan, which contribution will be further augmented year by year. The absurdity of the assertion that Government has been paying interest out of loan, is shown by the fact of no less a sum than £2,354,942 having been paid from revenue.since 1870 for interest on loans. Last year all interest was paid out of revenue, and this year the same course will be followed, notwithstanding provision has to be made for interest upon the additional £4,000,000 raised. Out of the General Purposes Loan, IS/3, for £750,000, a sum of £463,000 is yet unraised, but the Bank of New Zealand holds hypothecated debentures to the value of £210,500 against a nominal advance of £200,000. The available balance on this loan, less the charges of raising, is £106,500. In explanation of the hypothecation for the above advance of £200,000, and of the £50,000 under the Defence Loan, it is stated that it was proposed to sell in Sydney £300,000 of General Purposes Loan bonds at par, but only about £50,000 have been sold, and the remainder withdrawn. The hypothecated debentures have thus been unredeemed, for although the colony has large funds at its disposal, the wholesome restriction exists which forbids the ways and means provided by Parliament for one ser%'ice from being applied to another. The liability for interest, however, has been annulled by depositing with the bank £250,000 of the Immigration and Public Works Loan, . bearing same rate cf interest as the advances. The three Immigration and Public Works Loans of 1870,1873, and 1574, are,f»r thesake of clearness, tabulated together, with the following result: — Authorised.. .. .. .. £10,000,000 Expended to 30th June, 1575 .. 6,474,695 Liabilities .. 3,095,902 Available balance .. .. 429,313 The items of expenditure will be explained in full detail by the various Ministers in the departmental statement shortly to be made. The summary of the loan tables shows «s follow : '•"■-. Authorised £11,750,000 Expended to SOth June, 187 S .. 7.739.41 S Liabilities .. .. .. 2,531,923 Available balance .. .. 1,478,66* Balance yet to be raised.. .. 1.054,800 The public debt on June 30 was £17,671,106, less accrued (sinking fund, £1,074,647. The

annual charge for interest, £835,150, and the sinking fund, £110,635. Of this debt the colony has a,,, balance in hand of £2,167,596, being cash raised but not yet expended, although subject, of course, to outstanding liabilities. Besides this the accumulated sinking fund, £1,074,647, really represents the extinction of so much indebtedness. When the amount still to be raised is obtamed, the total indebtedness 'Trill be £19,350,906, and the totalannual charge thereon £1,035,775. But before this prospective debt is reached the whole of the balance now available, plus the proceeds of the portions of loans yet to be raised, m all £3,877,696, will have to be expended. Assuming this to be two years, the accumulated sinking fund will by that time have practically reduced the debt to £17,930,906. Some of the loans forming this debt are specially secured on the proceeds of land, which will accrue at intervals.

REVENUE. t Turning now to the question of revenue the estimate formed has been exceeded by £108,402, the revenue received being £,600',000, or £154,755 in excess of previous year. Under every head there has been an increase over the revenue of the year previously, and only on two items has the estimate fallen short "by the small amount of £2441. The total Consolidated Revenue for the last year, including £96,357 assets yet to be realised, and £205,500 surplus from the previous, year, amounted to £1,906,860, and the expenditure to £1,786,414, leaving a surplus of £120,446. Of the £500,000 Treasury bills outstanding last year, £IOO,OOO has been paid, and the power to borrow £30,000 for advances to provinces has not been used, the advances having been provided out of revenue as well as an advance of £20,000 to the trust fund, against Treasury bills held by that fund. The total amount of Treasury bills now current is £400,000, which have been renewed durino- the year at a more favorable interest. Tins amount is less by £310,000 than the amount outstanding in 1872. The total receipts from confiscated lands for the two years ended 30th June last, amounted to £80,826, and the expenditure to £94,779. The time has arrived when these lands should become subject to the ordinary land laws, and a proposition will be submitted thereon for approval. "The ordinary land fund has amounted to £773,265, showing a considerable falling off from the previous year, owing probably to the purchases in 1874 having been in excess of requirements. The Government are anxious that the public estate should be conserved, and in their opinion it has become the duty of the Legislature to consider carefully the matter, and insist that the public estate shall not be sacrificed or dissipated or the proceeds misapplied. The Savings Bank returns show for the first time a decreased balance, the withdrawals being £40,791 in excess of deposits. This does not arise from a diminution of the saving power of the colony, but to the high rates given by the Banks; the principal amounts withdrawn being for large sums. As the Banks have now resorted to more moderate rates, the deposits will probably again considerably increase. Thus far the statement has been a narrative of facts of the financial position to June last. The expenditure for the current year involves the great question of the abolition of the provinces, in obedience to what the Government conceive to be the desire of the Legislature and a large majority of the people of the colony. THE BUDGET. The Budget has been prepared on the assumption that the provincial form of government will be abolished throughout New Zealand during the present session of Parliament. The proposed expenditure is as follows: Permanent charges £950,176 Public Departments , •• 74,400 Postal and Telegraph 222,009 Law and Justice 03 'iT." Customs 57,203 Miscellaneous •• *J^ Native 36,191 Militia and Volunteer 22,5« j Public Domains and Buildings .. .. 23,351 Railways open for Traffic 244,318 . Armed'Constabulary 91,000 Grants to Municipalities and Road Boards 80,000 Provincial Services for eight months, from Ist November, 1375, to 30th June, 1876 230,322 £2,142,125 To this must be added— Capitation and Special Allowances to Provinces for four months .. •■ 02,275 Advances under Provincial Public Works Advances Act, 1874 45.500 Moiety of Stamp Duties to Public Works Account 02,500 Local Public Works in Out-districts .. 00,000 Total Expenditure chargeable on Consolidated Fund £2,405,400

The above contains four new items. Kailways.—This includes the expenses of railways under Government control for the year, and of those under provincial control eight months. Armed Constabulary.— five years appropriation under the Defence Loan Act having expired, the charge is now borne on Consolidated Revenue. The Native Minister will give particulars upon this subject when the Estimates come on for discussion.

Grant to Municipalities' and Road Boards. — Under the provisions of the Abolition of Provinces Bill there will become payable to munipalities and road boards, out of the Consolidated Revenue, one pound for one collected upon general rates up to one shilling in the pound. These payments will be in addition to the amount payable to road boards from Land revenue. For this year the Legislature is only asked to provide eight months' subsidy, i.e., from Ist November next. Provincial services for eight months are required in the anticipation that Parliament wdl decide this session to abolish the provinces, so that provision may be made for carrying on all necessary departments now under the control of the provinces. This could be done in several ways: Government might have submitted detailed estimates of all the provincial departments, but there are obvious objections to such a course before the provinces are abolished; or Parliament might be asked to permit the present Provincial Appropriation Acts to remain in force, and given authority to continue the services at the same rates for such period as might elapse between the date of expiring of the several Acts and the 30th June next. But looking to all the circumstances of the case, the Government have thought it better to ask for the vote in its present shape. The expenditure for lands and surveys is, under the Abolition Bill, made a charge upon the land fund, and it is proposed to continue to charge against that fund the departmental services for local public works. The advantages of this mode of procedure are apparent. Itbrings under the notice and control of Parliament the total expenditure required for the services to be taken oyer, while it insures the continuance of the several departmentsuntil the Government have had an opportunity of seeing where and how they may be advantageously consolidated. The Government are anxious to consolidate offices and reduce expenditure, but they will be very careful that no reductions shall be made which will at all impair the efficiency of the public service. The proposed vote of £OO,OOO for local pnblic works in out-districts will enable the intentions of Provincial Governments to be carried out with regard to many necessary works in districts hitherto receiving scant justice ; ordinarily, these works will be charged on land fund, but this year, in consideration of the possible inequalities incident to the proposed changes, it is thought fair to charge it on revenue, and it will, therefore, be in addition to the expenditure provided out of land fund.

The Government recognise education to be of vital importance and colonial concern, and they therefore desire to feel their waymost carefully before moving in it. Education is now being carried on more or lesß successfully throughout the colony, and the Government do not desire to alter until they are satisfied they can improve. For the present year, it is proposed to let education matters remain practically as they are, seeing however that proper provision i 3 made where it is now wanting. While education is properly a charge on Consolidated Revenue it is proposed this year to defray this charge, if necessary, out of land fund. A vote for £50,000 will be taken out

of General Purposes Loan for school buildings, to immediately satisfy the want existing in some parts of this colony. It is proposed to pay the capitation and special allowances to provinces for four months at same rate as now existing, except in the case of the extraordinary allowances, amounting to £40,000, granted to the provinces of Auckland, Nelson, and Westland. The capitation allowances amount to £92,275, and payments under the Public Works Advances Act to £48,500, viz., Auckland, £16,000 ; Wellington, £5500 ; Nelson, £23,000 ; Marlborough, £4OOO. Loan expenditure.—lt is proposed to make the following appropriations out of Defence and other purposes loan :—Defence, £20,000 outstanding liabilities ; New Zealand Settlements Act, £45,000. Also, out of General Purposes Loan, school buildings, £50,000 ; in aid of lighthouses, £30,000, Also, out of Immi. gration and Public Works Loan, railways, +'767 400 • immigration, £392,348 ; telegraph extension, £29,700 ; public buildings, £75,779; lighthouses, £91,700 ; Public Works Department, £77,134. Making the following totals : Out of Defence Loan, £65,000; out of General Purposes Loan, £SO,OOO ; out of Immigration and Public Works Loans, £1,434,063. In most of the above cases the amounts are merely re-votes, and will appear in annual estimates. WATS AND MEANS

next claim attention. The estimated revenue for current year is £2,355,747; to which add surplus from last year, £120,466; total, £2,476,193; leaving a surplus over expenditure of £70,793. The total revenue as above includes £118,370 taken out of land fund to meet interest and sinking fund on permanent debts of provinces, after deducting from the debts of Canterbury and Otago £600,000 and £270,000 respectively, as the value of provincial railways to be taken over by the colony. It also includes £127,520 charged upon the land fund for interest payable by the provinces on the cost of railways completed and to be completed during the year. It includes likewise provincial revenue as estimated by Provincial Treasurers for eight months, deducting therefrom all receipts for auctioneers', publicans', spirit, and trading licenses, &c, &c, the whole of which will be handed to municipalities. The land fund is not, as in other colonies, included in revenue. This year the amount is estimated by Provincial Governments at £702,192, but returns already received show that the land revenue is much under-estimated. Gold duty not to be abolished or reduced, but as roads and other means of communication in goldfields are large and imperative, the Government recognises the necessity of meeting these requirements, and proposes to apply the whole of the gold revenue to roads and public works on goldfields. Future finance as affecting immigration and public works has received careful consideration. It would be unwise to enter the London market with any ne%v loan for sojae time to come. It is proposed to expend the considerable sums yet available, amounting to about £4,000,000, over a period of two years. This will enable the formation of main trunk lines, immigration, and other important works, such as lighthouses, telegraph, and public buildings to be gone on with.

FINANCIAL EFFECT OF ABOLITION. Below is stated the financial effect the proposed changes will have on the municipalities, road boards, and other public institutions in the provinces of Auckland and Canterbury. These provinces have been selected, the one as representing those provinces which are practically unable to perform the duties of governing, and the other as being the most favorably affected by the proposed change. It will be admitted on all sides that the present financial position of the province of Auckland is a public scandal, and the continuance of such a state of things as now exists there ought not to be permitted. The necessity for a remedy is imperative and immediate. It is for the Parliament to determine what that remedy shall be, and how it can best be applied. The people of Auckland require to be placed in a position of financial independence, and the proposals of the Government will satisfy that demand. The province, as a whole, will be provided with all necessary institutions of a provincial character its police, gaols, harbors, lunatic asylums, and educational establishments will be provided for out of the revenue of the colony, and its larger public works will also become matters of colonial concern. The cities will receive the revenues arising from auctioneers', publicans', and other licenses for trading, within its boundaries —together with a contribution equivalent to the rates counted up to one shilling in the pound. The out-districts will receive the revenue from publicans' and trading licenses within their boundaries, the tolls on roads and bridges, and a contribution equivalent to two pounds for every one collected as rates. Under prudent local management each of these communities can secure its own independence, and it will have an income growin" with its growth and adequate to its own wants. The Thames will no longer be governed by or dependent on the city of Auckland, but will have the administration of its own funds. The out-districts, such as Tauranga, Waikato, and the Bay of Islands, receiving, besides the items of income referred to above, an addition of two pounds for each pound collected by rates, will possess larger and more certain means for improving their several districts than they have ever yet enjoyed. The Government have no doubt that the City Council of Auckland, with the aid of the license fees collected in their city, and a contribution equal in amount to their ordinary rate, could govern themselves without the aid of a Superintendent and Provincial Council. They believe that the citizens of the Thames would accept the same obligation on the same terms, and, as an old country settler, I know well what the outlying districts will say to proposals which give them the means of real local self-government. The proposal explained above with regard to provincial debts when applied to Canterbury, will place that province in an extraordinarily favorable position. Speaking broadly, most of her public debt will be cancelled, leaving her land fund free for public works within the district, besides having all necessary departments of Government carried on as now. Christchurch will obtain what she has so long contended for—tha licenses and fees collected in the city, besides the contribution of one pound for one collected by ordinary rates. It may be said the Government have proved too much. It will be said that if there is money enough to carry on the provincial districts in so satisfactory a manner, there must be money to carry on the Provincial Government ; but this by no means follows, nor, if it did, would it be any answer to the proposal of the Government ; for, in the first place, the proposed method of local administration being simpler, will be much less costly and much less wasteful. Secondly, the statement of this evening has, the Government submit, conclusively proved that the revenues of the colony are amply sufficient to meet all its liabilities, and provide efficient Government. Yet the experience of the last twenty years has shown that with the present provincial constitution it has been practically impossible for the General Assembly to distribute the revenue equitably so as to meet the requirements of the people. Ah the capabilities-of the colony to bear the burden of its debt is a matter of grave uneasiness to some people, a detailed statement is entered into, showing how the increase from immigration, railway receipts, and other means are calculated to enlarge the revenue, and make it fully sufficient to enable the colony to meet its requirements. The House is reminded that a very considerable part of the debt has been incurred for railways, which are now a realisable asset, and might be disposed of, if the country were foolish enough to desire it, for a very considerable sum, say at least £8,000,000.

It is impossible to deny or ignore the laws of necessitude which seem to govern human affairs, and after the unexampled prosperity of the last five years, we may have from time to time periods of depression. There is no sign of that depression at present, but if it come, the facta and figures adduced give abundant ground for confidence in our future.

The Financial Ftatement concluded as follows :—ln making this statement, I have kept

two main objects in view: first, to give a full and intelligible account of our finance ; secondly, to show the bearing upon our finance of the proposed constitutional changes. lam fully aware that even the financial advantages of abolition—and I say nothing of others not less important—are susceptible of far more complete and convincing treatment than they have received at my bands to-night. Indeed, I have assumed that it was my duty rather to. indicate than to enlarge upon those advantages. The figures I have adduced do not need much comment. They show beyond doubt that our financial condition is at once sound and exceedingly prosperous. But whoever reads these figures irx the light of a knowledge of our political history must be well aware that there is in our finance a disturbing element which one day might—l had almost said, which, inevitably must, _if not soon eliminated —land us in financial disaster. The continued existence of the provinces means the continued and constantly increasing pressure upon the Government and upon this House for money, in the interest of a locality, without any reference to the necessities of the colony as a whole. Ido not for a moment deny the public spirit of the gentlemen administering provincial affairs ; I only deplore that this public spirit should be circumscribed by the boundaries of the particular province within which they live. I could easily give instances forcibly illustrating what I have said,, and which have occurred within the present month—l might say within the present week —but I am sure they are not needed. It is not necessary that I should prove again what is obvious to every one who will only open his eyes. Last year this House resolved that the time had come when this great danger in our path should be removed. That resolve has been approved by the country; the Government have now given it form ; and it remains only for this committee and the Legislature to to give it effect. The hon. gentleman, who had occupied two hours and ten minutes in his delivery of tho Statement, resumed his seat amid applause. After a few words from Mr. Sheehan, the Chairman reported progress, and asked leave to sit again on Tuesday, which was formally granted. The remaining orders of the day were postponed, and the House adjourned at 9.55 p.m.