PARLIAMENTARY.

Poverty Bay Standard, Volume I, Issue 163, 21 June 1884, Page 2

PARLIAMENTARY.

[Per Press Association.] House of Representatives. FRIDAY, JUNE 20. FINANCIAL STATEMENT BY THE HON. COLONIAL TREASURER (MAJOR ATKINSON). Mr. Hamlin, —The task which I have before me this evening is comparatively a light one, as I have only to submit for the consideration of committee the financial results of the past year, and ask for the grant of a sufficient supply to carry on the public service until a new Parliament can meet for the despatch of businesss which I hope will be within two months from the present time. I desire at the outset to assure hon. members that .the financial difficulties with which we have had to cope during the current year, are by no means of so serious a nature as some seem disposed to think. I am satisfied that there is nothing in the difficulties of our financial position to make us doubt our ability to meet and overcome, without placing any undue burdens upon the taxpayers of the Colony. It has been my pleasing duty, for the last two years, to announce a satisfactory surplus at the end of each financial period, but I regret to say that the serious depression under which New Zealand, in common with a large part of the civilised world, has been suffering for Bume Lime jjubl, iihb euuacu. a, COnSltieTuuie falling off in some items of our revenue, and has thus transformed it to a deficiency. The small estimated surplus of £8,295 with which I hope to have ended the year. ORDINARY REVENUE ACCOUNT 1883-84. In the statement I had the honor to make to the committee last year, I estimated the total expenditure for the financial year ending the 31st March, 1884, at £3,661,497, of this amount £1,645,694 was required for interest and sinking fund, and for the civil list and other charges under permanent acts, and £2,015,802 for the services for which an annual provision is made by Parliament. The sums voted on the supplementary estimates, however, increased the amount of the annual appropriation to £2,040,360. This sum therefore with the estimated charges under permanent Acts amounting as I have just stated to £1,645,694, gave £3,686,054, as the total appropriations for the year. The total actual expenditure on this account during the year proved to ba £3,681,320, being £4,734 less than the estimated amount. Payments under p .rmanent Acts were £506 in excess of the estimate, and those under the votes of this year were £52,041 within the amount authorised. Taese are the net results. Hon. members will find on looking into the appropriation account already laid before Parliament, that in some cases the votes were exceeded, and that in others the amounts authorised were not all expended. Eliminating the imprest advances outstanding at the close of the year which the law requires the Treasury to include in the appropriation account, but which do not form part of the final expenditure of the year. The payments in excess of the votes of Parliament amounted to £27,962, to which, however, should be added £7,266 for services unprovided for, making the total unauthorised expenditure £35,128 chargeable against the £lOO,OOO provided for this purpose by the Public Revenues Act. On the other hand, the unexpended balance of votes amounted to £40,369. As information relating to the socalled unauthorised expenditure and unexpended balances has already been laid before Parliament, it is unnecessary for me to refor to them further. During the year 1882-83 the total expenditure out of the ordinary revenue amounted to £3,638,384, as against £3,681,320 expended last year ; the expenditure of 1883-84 being, therefor, greater than thr t of 1882-83 by £43,000. It will be seen from the table which will be found appended to this statement when published that the classes of expenditure mainly accountable for this increase are education(£l2,29o) and railways (53,700), but a saving of £39,200 was effected in the Constabulary and Defence Services. The liabilities of these accounts on the 31st March, 1884, were estimated at £166,757, being £8,773 less than the amount out-standing on the 31st March, 1883. Particulars of these liabilities have already been laid before Parliament for the purpose of enabling hon. members to compare the liabilities outstanding at the close of the last financial year with the liabilities of the three previous years. The present mode of treating liabilities having now been for years in existence. I have had a table prepared, which will accompany this statement when published. The ordinary revenue of the year 1883-4, that is the revenue exclusive of the receipts from land sales was estimated in th„ financial statement for 1883 at £3,573,800, the subsequent increase, however, in the property tax of one farthing in the pound brought up the estimate to £3,658,800. The actual amount of ordinary revenues received and brought to account by the Treasury during the year was £3,493,659, being thus £165,141 under the estimated amount. The usual comparative return of the estimated and actual receipts will be laid before the members when it will be seen that the main branches of revenue in which the estimated receipts have not been realised are Customs and Railways. In Customs the amount received was £123,313 short of the estimated amount, which was £1,520,000. In Railways the amount estimated to be received was £1,020,000 ; but the amount brought to account proved to be £963,119, being thus £56,881 under the estimate. I have already stated to the committee that the total expenditure out of ordinary revenue of the Consolidated Fund during the year 1883-4 was £3,681,320, and that the revenue amounted to £3,493,659. To the latter sum I add,

however, the balance at credit of the account at the begir .ring of the year, £35,549, making the total receipts £3,529,208. Hon. members will thus see that the transactions of the Consolidated Fund for the financial year ending the 31st March last, resulted in a deficit of £152,112. I may, perhaps, here be permitted, Mr. Hamlin, to point out the g at difficulty of making an accurate earin' ate of revenue. Experience teaches us that a very slight alteration in the price of either wool or grain very materially affects our income. In some years, when our staple products sell ata good price, we suddenly find an overflowing treasury. On the other hand, when prices are low we find ourselves face to face with that unpleasant fact for a treasurer —a deficit. In so small a country as this we shall always be subjected to sudden rises or falls within certain limits of our revenue, and we must from time to time expect to have to face a deficit, unless we are prepared in our annual budgets to leave a much wider margin of surplus than seems to me either desirable or necessary, for a large surplus, in my experience, generally means pressing demands for greater expenditure. It also means that more money has been taken cut of the pockets of the taxpayers than was necessary for the services of the year, and this I have always avoided doing, holding, as I do, the belief that no Government is justified in collecting more money than is sufficient to carry out the services voted by Parliament.

LAND FUND ACCOUNT, 1888-4. The amounts to be expended during the year out of the moneys derived.from sales of land was estimated at L 238.162, of which L 36.600 was for payments under permanent Acts of the General Assembly, 0rL201,562 for payments under votes. For services of the year the actual expenditure was £238,662, or £5OO more than the estimated amount; the expenditure under permanent Acts being £34,843, and under the votes of the year £224,919. The monies handed over to local bodies for expenditure on road making from monies received from lands I hold on deferred payments was £23,358. There was also paid to local bodies during the year £45,446 for rates under “ The Crown and Native Lands Rating Act, 1882,” making a total of £68,804 handed over to local bodies to be expended by them. The expenditure in respect of the Crown Lands, Survey, and other departments amounted to £158,373, being £3199 within the amounts authorised. The amount transferable under section 4 of “ The Roads and Bridges Construction Act, 1882,” to the Main Roads Account in the Public Works Fund on account of the transactions of the year 1882-83 was found to be L 75,203, but no transfer was made during the year 1883-84, the necessity for doing so not having arisen. The liabilities outstanding on the 31st March, 1884, on this account amounted to L 33.577, exclusive of the sum L 75,203, transferrable to the Main Roads Account in respect of the transactions of the year 1882-83. The estimated revenue during the year from sales of land was L 275,600; the actual receipts’ proved to be L 232.545, being L 43,055 under the estimated amount. The revenue derived from cash sales was L 163,758, and from sales on deferred payments L 78,787. To the revenue I add the balance with which we began the year L 86.56 making the total receipts L 319.109, reducing from this the expenditure, amounting to £238,662, which includes the sum of £68,804 paid to local bodies, we get a balance at the close of the year of £80,447, subject to the charge of £75,203, transferrable to the main roads account, the public debt on the 31st March, 1884, the gross public debt of the Colony amounted to £32,367,711, and the accrued Sinking Funds to £2,792,808, the net public debt was therefore £29,574,903 of the sum however there remained unexpended £877,912. In the Financial Statement which I made in 1883, I informed the committee that when the amount represented by imperial, guaranteed, and other debentures, amounting to L 723,300, temporarily taken up out of the monies of credit of the Public Works Fund, and which was not therefore included in the public debt of the Colony had been raised, the nett debt would amount to L 28,508,581. During the last year £599,300, of the sum mentioned, has been raised, leaving L 124,000 unraised, which I accordingly deduct and get L 28,384,581. During the year there has also been raised the eannnd £1.000.000 nf the loan of three millions, authorised in 1882, together with the L 250,000, authorised by “ The Colonial Inscribed Stock Act, 1882.” The debt has further been increased to the extent probably of L 161,300, by the conversion to which I shall presently refer. Of a large amount of 4£ and 5 per cent, five thirty debentures into 4 per cent, inscribed stock on the Bank of England. The reduction in the rate of interest in respect of this portion of the debt has however caused a large annual saving there increased by the public debt, amounting to £1,411,300 added to £28,384,581, give a total of £29,725,881. From this sum however I deduct the Sinking Funds accrued during the year, are estimated at £220,979, leaving £29,574,903 which I have already stated represents the public debt of the Colony on the 31st March, 1884. The loan of L 1,000,000 raised in January 1884. Last year I had occasion to congratulate the committee on the unprecedented success which had attended the regulation of the first instalment of the loan of three millions authorised in 1882, that loan as the members are aware, was offered to the public through the Bank of England, in the form of a 4 per cent, inscribed stock, at a minimum of L9B 10s., the average price at which it was placed being L9B 12s. sd. The second instalment of one million, was raised in January of this year, Sir P. J. July an and Sir F. D. Bell, again acted as agents, and the loan was offered to the public in the same form as on the former occasion, and at the same minimum L9B 10s. The tenders received at the Bank of England were L 607 in number amounting in the aggregate to L 5,073,000, at prices varying from the minimum of L9B 10s. up to LlOO 16s. 6d.. The average price obtained was LlOO 16s. 6d, being no less than LI 14s. Id. in advance of the price obtained for the first million, there is therefore, still greater room for congratulation on the present occasion at this renewed expression of confidence in the resources of the Colony, and at the prospect with which the state of our credit affords, of our being able, if we continue, to manage our affairs with prudence to obtain the necessary loans for our public works upon very favorable terms. Papers relating to the negotiation of the loan will as usual be laid before Parliament at an early date.

COLONIAL INSCRIBED STOCK. As I have already stated, the loan authorised by the Colonial Inscribed Stock Loan Act, 1882 ” was raised last year. It was taken up by the Postmaster-General at par, as an investment on account of the Post-office Savings Bank, and it bears interest at the rate of five per cent, per annum. He proceeds in accordance with the accounts paid into the Public Works Fund. It was found when preparations were being made for offering the stock to the public that the Act would require amendment in certain directions to make it workable, and as it was proposed to offer the stocks through the medium of the Post-office, the whole of the loan has been temporarily taken up by the Postmaster-General until the Act can be amended or a favorable opportunity arises for disposing of the stock to the public. In conversion of debentures last year, in adverting to the treasury bills amounting to £1,832,000 exchanged on the 31st December, 1882, for debentures having a currency of three years issued under the Treasury Bills Act of 1879-80, to be afterwards converted into four per cent, inscribed stock. I stated with reference to the proposed conversion that circumstances had not proved sufficiently favorable for a successful operation, but that the Government intended to inscribe the debentures as soon as a fitting opportunity offered. The desired opportunity presented itself last year, and under the wise and skilful management of Sir P. G. Julyan and Sir F. D. Bell, the stock agents under the Acts of 1877, the operation has been carried to a successful iesue. It was not, however, restricted to the conversion of the debentures for £1,832,000. Hon. members who are familiar with the form and currency of our debentures will recollect that a portion of them was issued with a currency of thirty years, redeemable at the pleasure of the Government in any year after the fifth year from the date of issue, on the Government giving six months notice by advertisement of its intention to pay them off. The Government had long contemplated the conversion of those five-thirty debentures, amounting to L 7,250,000. The five years from date having expired, the stock agents were empowered to

convert them, and were only waiting for a favorable opportunity to do so; they determined therefore to combine in one large operation the two classes of debentures, amounting in all to L 9,032,000, not, however, by the compulsory calling in of the five-thirty debentures, but by giving to the holders the option of conversion on certain terms. Accordingly in September, 1883, an announcement was made public through the Bank of England, that up to the 30th November application for conversion would be received in respect of the following debentures:—L6,ooo,ooo 41 per cent, five-thirty debentures at LlO3 of stock for every LlOO in debentures, L 1,250,000 5 per cent, five thirty debentures at LlO3 10s. of stock, and L 1,832,000 5 per cent, debentures at LlOO of stock. The result of this invitation was that the following debentures were brought in and converted, namely— L 3,053,000 4| per cent, five-thirty debentures, L 503,700 5 per cent, five-thirty debentures, and L 1,832,000 5 per cent, debentures, making a total of L 5,388,700 converted out of L 9,082,000. Full accounts have not yet been received from the stock agents, but it is that after setting aside a sufficient sum by way of sinking fund to cover the increase of debt for the conversion, a sum of about L 28.800 will be annually saved to the colony by the reduction of the rate of interest, a result which I think the Committee will agree with me, may fairly be characterised as highly satisfactory. I may inform the Committee that the whole of the debentures for L 1,832,000 were held on behalf of the Sinking Funds of New Zealand Loans, the Postoffice Savings Bank, the Government Insurance Department, the Public Works, and other funds, and that the right to place immediately L 500,000 by the 4 per cent, inscribed stock on the London market, was reserved. When the proposed conversion was announced an undertakding having been given not to sell the balance before thirty instalments of the loan of three millions was raised. I may further state that Government have received from the Agent-General advice by cable of the sale of stock to that amount on favorable terms.

PUBLIC WORKS FOR YEAR ENDING 31st MARCH LAST.. Parliament voted out of Public Works Funds L 2,214,757, exclusive of the vote for land purchase, L 77,000. The actual expenditure was L 1,278,710, exclusive of the expenditure for land purchase, amounting to L 24,480, and also exclusive of the expenditure under the Roads and Bridges Construction Act, 1882, amounting to L 106.300, for which, as hon. members know, no vote is taken in the annual appropriations. The chief items of expenditure were :— Railways, L 661.846; roads, L 222.243 ; and other services, L 123,202. A return of this expenditure will be found in a table annexed to this Statement. The liabilities outstanding at the end of the year, exclusive of those for land purchase amounted to L 996.443, which added to the sums expended L 1,278,710, gives a total of L 2,276,153, as against L 2,014,757 voted for the year. In speaking of expenditure out of Public Works Funds and liabilities outstanding at the end of the year, I have included both the expenditure and liabilities in respect of land purchase, and also those incurred under the Roads and Bridges Construction A.ct. The land purchase liabilities on the 30th of March, has, as shown by the returns laid upon the table of the House according to law, amounted to L 285,400 as against L 309.299, shown at the conclusion of the previous year, but as hon. members are aware only L 200,000 was set apart under “ The Three Millions Loan Act, 1882,” for purchase of Native land, the House having approved of the abandonment of such of the proposed purchases as the Government did not think it desirable to proceed with. Of this L 200,000, L 56,400 has been spent up to the 31st of March last, and it is estimated that by abandoning such purchases as I have referred to, the balance of L 143,600 will be sufficient to cover the liabilities. Out of L 350,203 standing to the credit of the fund available under the Roads and [Bridges Construction Act, L 106,398 has been expended. Of this L 89,496 was on account of main roads, and L 16.992 on account of district roads. The liabilities outstanding on the main roads account is L 160.483 and upon the district roads account L 43.777. The balance of the Public Works Fund, remaining unexpended on the 31st March last, including the balance. L 389,000 of the second instalment of loan, 1882, not then received amounted to £877,912. One effect of limiting the expenditure of the loan of 1882 to about one million a year, was not I think foreseen when the Act was passed, for example, to exactly spend L 1,000,000 per annum on Public Works, with only L 1,000,000 per annum in cash available would, under any circumstances, be next door to an impossibility, and in the case of Railways, it is altogether impossible, the works may be roughly divided into three classes, viz.—(1.) Formation of roads and bridges. (2.) Materials for permanent way. (3.) Platelaying and stations and each of these items absorbed nearly a third of the total amount. If therefore the formation on most of the line be done during the first year it would be necessary that the whole of the works in the country should be stopped during the second year, made to pay during that year for the rails and sleepers, and thus to provide for the laying of the rails, and the making of the stations, _ during the third year. If however the work in the country be continued during second year, it is evident that the rate of expenditure originally proposed must be overrun, and this in fact has to some extent occurred, the Government have therefore, whenever circumstances appeared to justify such a course, ventured to slightly exceed the authority directly given by Parliament, in ordering rails and rolling stock, so as to prevent the works to stand still longer than was absolutely necessary. This action, of the part of the Government will at once explain to the hon. members how it comes to pass that the expenditure and liabilities together exceed the votes by the sum of L 261,396. I may inform the committee that there is material to the value of about L 300,000, consisting of rolling stock not set up, and rails either in the hands of the Government on the sea, or being made to the order of the Agent-General. I desire to call the attention of the committee to these facts, because I think no Government should exceed the votes of Parliament in committing the country to expenditure or liabilities, without the attention of Parliament being specially called to it. It will be for Parliament to determine in the action of the Government in thus exceeding the votes by liabilities for material for future use was justifiable, had we not acted as we have done, one of two things must have happened, either some L 260,000 less must have been spent in works of the lines, thus rendering the depression still greater, that at present or rails and rolling stock to that amount must have remained unordered to great delay of the works generally, in the future in public works. In a statement made 1882, it was pointed out that a large expenditure would be required for works upon the opened line. It was proposed to advocate a large sum out of the balance of the five million loan for this purpose, the sum available, has I regret to say been found quite inadequate to meet the necessary expenditure, relying upon that proposal on being sufficient to meet the requirements of the public service no further direct provision was made in the schedule to the three million Loan Act for the necessary improvements on the open lines which the increasing traffic in perpetually demanding such for instance as increased rolling stock, further station accommodation, heavier rails, sidings, and water supply. It is true that a large portion of this expenditure might, under the Loan Act, 1882, be charged upon the lines named in the schedule, but this mode of charging does not appear satisfactory to the Government, and no provision has been made for a number of the open lines upon which a large expenditure has been found necessary. At any rate it is clearly a question which requires the special consideration of Parliament. Under the authority of the votes of Parliament liabilities have been incurred and expenditure made upon the open lines during the two years since 31st March, 1882, to the extent of £830,000. Of this £160,000 has boon charge ! against the live million loan, leaving £370,000 which is at present charged under section 4 of the Appropriation Act of last year to the > Loan Account, and for which further’ ways and means will have to be provided or < the amount will have to become a permanent f charge against the loan. It will be necessary I also to make some provision for further ex- 1 penditure upon open linos which cannot t possibly be avoided. I fear that a sum of i not less than £100,060 will be required I J

to be expended annually upon the open li' l6B for renewals, maintenance, and repairs which are of course charged against the receipts of railways if railways are to keep pace with the increasing traffic. Under ordinary eircumstances, Mr. Hamlin, it would now be my duty to submit for the consideration of the Committee the proposed expenditure of the ordinary revenue for the current year, and there to ask the attention of hon. members to the estimated revenue with which it was intended to meet such expenditure: but as matters stand in this House, I have only to ask the Committee to grant sufficient supplies to carry on the public service until the meeting of the new Parliament shall have decided how the expenditure upon open lines is to be ultimately charged. I do not propose to ask the Committee to consider estimates of expenditure, either of the Consolidated Fund or of the Public Works Fund, but to obtain the necessary authority for expenditure by an amendment of the Public Revenues Act, which will expend the appropriation of last year, with such few additions as may be necessary until the end of August next. I shall ask the authority of Parliament to issue L 150.000 deficiency bills, to provide for the deficit in the Consolidated Fund to 81st March last. These bills will be in addition to the L 400.000 at present authorised to be raised in temporary aid of the revenue. I may here say that I am of opinion, from the experience of last year, that L-100,000 of Deficiency Bills are barely sufficient to carry on the public service without the risk of incurring serious difficulties. These difficulties arise chiefly from our having to pay at certain periods of the year large sums for interest and sinking funds ; therefore the consolidated revenue has accumulated sufficiently to meet the necessary payments. The revenue comes in irregularly from the customs and railways, especially the property tax, which is only collected once or twice a year. I propose, therefore, upon the present occasion, as the propertytax cannot be collected during the current half-year, to ask for further power to issue deficiency bills to the extent of L 50,000. With this additional amount of ways and and means, and if the house see fit to grant authority to raise the extra £150,000 of deficiency bills to meet the deficit in last years revenue I think there will be no difficulty in making all necessary payments until the meeting of the New Parliament. With reference to the Public Works Fund. I have stated that there was an unexpended balance of £877,912 but of this £202,484 were advances in the hand of officers, and as Hon. Members who follow the Public Accounts know, advances outstanding, although included as balance in hand are not really available for expenditure, these outstanding advances vary from time to time from £60,000 to $£300,000. The expenditure during April and May has been rather heavy, amounting to £278,894, thus leaving the unexpended balance of the fund on the firtt June last, £678,229 but of this amount £290,734 was advances The expenditure for June, July, and August, will be less per month than the expenditure for the months of April and May. The expenditure ' for April and May though large, would have to be gradually tailed off month by month until the floating of the next million of the three million loan; but owing to the large expenditure which has been found necessary during the last two years upon the open lines, and the action which the Government has ’ taken in ordering rails, sleepers, and rolling- , stock, so as to expedite the works, it will be necessary to obtain some temporary aid for ’ the Public Works Fund, until, as I have said, the new Parliament has determined how the ! expenditure on the open lines is to be charged. ’ And under the raising of the third million of , the three million loan a table, showing among > other things the expenditure and liabilities of I each vote authorised in the schedule of the Loan Act, 1882, will be published with this J statement. This table will, I think, enable , hon. members to clearly understand the posi- > tion of the Fund. I shall ask the House to J permit the issue of a Deficiency Bill to the ; extent of LlOO,OOO. This will be sufficient 5 until about the beginning of September. J Since the three million loan was authorised , the expenditure of the Public Works Fund j has been for 1882-3, L 897.037; last year it ; was L 1,409,580, making a total expenditure ’ for the two years upon public works of j L 2,306,625; but this amount includes ■ L 154.127 advance for purchase of rails for I the open lines, which will be repaid by the ■ working railways department as soon as the > rails arrive and are handed over. The ’ net expenditure for the two years was, ; therefore, L 2,152,498, or an annual average expenditure for the two years of L 1,076,249, inclusive of L 106.390 expenditure j the Roads and Bridges Construction Act, so . that the average expenditure a little exceeds the one million a year which the Government estimated the Colony might safely spend, and r this expenditure would have been L 260,000 less than it is, had not the Government taken . upon themselves, as I have already pointed i out, to order sleepers, rails and rolling stock, in anticipation of requirements of the current J year, and now Mr. Hamlin I should like to j say a few words about the Repression which J prevails in the Colony. In the first place it ' does not arise to any appreciable extent either from defective laws, or errors of administration on the part of the Government. It does not arise from the withdrawal of capital, or from the distrust of capitalists, there is no sign of such distrust to the fund anywhere, as far as I know. Capital can now be obtained in any amount, aud upon reasonable terms, for any undertaking which will give a fair return for the outlay incurred. Capital has not, as a matter of fact been driven from our shores, either by our system of direct taxation, or by the nature of our land laws, or by any other cause. Far more capital has flowed into the Colony during the last three years, than in any equal period of our history, nor does the depression arise from the large amount of interest we have to pay upon our public debt, and private borrowings. We can, I am satisfied pay with ease, all the in« terest we have undertaken to pay, because the employment of borrowed capital has enabled, and is enabling us to produce far more than the share our sleeping partners draw in the way of interest, and this must be evident to anyone who will look at the amount of our exports and remember that this is the surplus after our population has supplied itself with all the chief measures of life, and especially when the enormous direct advantage to the producers which accrue from our railways is considered a saving to the community of at least two millions per year. The present depression is traceable ultimately to three causes, —Ist. the habits of extravagance arising out of the wonderful prosperity, which with only slight and temporary checks we have enjoyed for the last thirteen years, habits which our real circumstances never justified as in indulging of any circumstances could be their justification. This extravagance is now, I rejoice to think, becoming fully recognized as an evil, and successfully combated. 2nd, The class of distributors and middlemen, is far too numerous in proportion to our population, there are no doubt too many merchants, traders, agents. Numbers of these are trading upon capital borrowed upon terms which make it impossible for them to do business upon a sound basis, and the consequence is that they interfere with, and ruin the legitimate business of the responsible merchant and trader, it is generally admitted by all competent authorities that in the year 1882, the importation over goods to the valuo of at least one million sterling has taken place, and I find upon enquiry that the stock in the bonded warehouses were practically equal in value in December, 1883, to those in December, 1882 ; so that the relief which was hoped for last year in the reduction of stocks has failed us for the present. Thirdly, the extraordinary low prices which have obtained during the last year for our chief articles of export—wool and grain. It is said that wool and grain are never low in price at the same time, and this is no doubt true as a general rule. Unfortunately, however, this has not proved true during the last year. The loss to our spending power upon these two articles of export has been estimated at not less than half a million sterling. I myself believe that had wool and grain maintained anything like average prices, we should have had no deficiency or consolidated revenue to provide for. These causes sufficiently account for the want of confidence in our immediate prospects and for tlie depressed condition of trade in some districts of the Colony. Our real circumstances do not justify this lack of confidence, but there can be no doubt that it is an important factor in the present depression, and that we cannot hope for a return of prosperity until confidence has been again restored. As I have on several occasions pointed out, the

action of Parliament and the Government has to a certain extent intensified the depression by the determination which was arrived at two years ago to limit to a moderate extent the expenditure of borrowed money. As bon. members will have seen from the statements which I have just made the Government have not arbitrarily curtailed the expenditure by a hard and fast line, but have endeavored to make the reduction as little felt as possible by increasing the expenditure during the current twelve months to the full extent of the limits imposed by Parliament. How the present depression is to be speedily overcome is a question of great importance to all of us. I confess at once that I see no royal road by which we can be relieved from the present dullness. The only remedies are to live well within our means ; to increase as largely as possible the numbers of producers by settlement on the lands of a class of persons able and willing to cultivate them; by encouraging the consumption of local products and manufactures; to believe in ourselves, and to absolutely set our faces against the expenditure of public money from revenue or loan; purchases unnecessary or unprofitable; while at the same time we steadily push on our public works. If we determine, as I believe we shall, to follow such a course as this, then our prosperity is, I venture to say, already arrived. Had it fallen to my lot, sir, to have submitted a complete budget for the current year, my pro. posal would not have necessitated asking Parliament for any increased taxation for the purpose of carrying on the services of the year, as I saw my way to make both ends meet, with a fair margin for contingencies, by means of the reform of the Civil Sei vice, which the Government have had under consideration ; by the savings which would have been effected under our hospital and charitable aid proposals ; and by the saving upon other votes.

In conclusion, Mr. Hamlin, I would point out that within six months after the Hall Government took office, which it did in October, 1879, the Government had to face a deficit of one million sterling upon the ordinary revenue. This, as I have often said, arose chiefly from the falling off in the land revenue. This as I have often said, arose chiefly from the falling off in the land revenue, upon which we had been relying. The Government at once set to work to face the deficit; in the first place it excluded the Land Fund altogether, as a source from which the ordinary expendituremight be met, charging against it only the Cost of its own administration, and the charges to which it was locally liable, and setting apart the balance for local works, and to purposes it has been applied ever since the deficit of one million, for the period ending the 31st March, 1880, had to be met by a permanent loan, and the expenditure for the following year balanced with the revenue by means of a very large reduction in expenditure and a considerable increase in taxation at that time. For some years preceeding, and for two years subsequently, a large portion of the charge for armed constabulary was borne upon the loan. Our five million 5 per cent, loan had been sold in December, 1879, at £97|, with the option of converting into a 4 per cent, loan and £l2O. In other words our 4 per cent, stock then sold for £BIJ, the sale was undoubtedly at the time a most successful one, and certainly represented our credit in a most favorable light. In 1880 there was a small deficit in the Consolidated Fund, in 1882 there was a surplus of £203,000, the opportunity was therefore taken in that year of transferring the charge of £75,000 then paid out of loan for constabulary to the Consolidated Fund, and taxes were reduced to the extent of about £llO,OOO ; in 1883 there was a surplus of £35,000, notwithstanding the very large reduction of taxation which took place in 1882, and the fact that the Consolidated Fund was charged for the first time with the whole cost of the Armed Constabulary an additional charge amounting to about £75,000 in 1883. We have to take a deficit of L152,0C0. This has arisen from the falling off on the Railway Receipts to the extent of L 560.000, and in the Custom Duties of L123 ; 000. Upon looking at the circumstances under which the estimates of 1882 were made I cannot say that I believe either estimate was above what might have been reasonably expected. The deficit is to be regretted, but it is certainly not a matter about which we need fear any anxiety. It can be provided for without duly burdening any class of the community, moreover our credit never stood higher than it does. London at the present time, our last LlOO,OOO at 4 per cent, realised no less than LlOO 6s. 6d per cent, we have sir, so far as my judgment goes, nothing in our present circumstances to dishearten us, nothing sir, but what should nerve us to renew our exertions with the certa'nty that great prosperity will again reward our efforts. Meanwhile a period of pressure may be on the whole beneficial to the community in forcing attention to economy in our affairs public and private, prudence in speculation, the better organisation of our industries, and the administration of the waste lands, is moj| or less an incident of all human work, which the greatest skill, sagacity, and prudence cannot wholly eliminate and the tendency in times of excessive confidence is to neglect the attempt. It is generally admitted that but for fact, our large colonial enterprises of the last fourteen years would have been a more signal success, if the country and Legislature are capable of profiting by “ The uses of adversity ” our future progress as a people will more than compensate in its increased stability, for whatever it may sacrifice in swiftness.

DISCUSSION ON THE FINANCIAL STATEMENT. After the delivery of the financial statement in the afternoon, Mr. Thompson spoke till the hour of adjournment, and resumed at the evening sitting, contending that the financial position of the colony was much worse than represented; that its finance was going from bad to worse. Mr. Dargaville condemned the manner in which the quarter of a million of inscribed stock, issued in the colony, had been dealt with, and contended that whoever succeeded Major Atkinson would find an empty chest, and have nothing to spend on public works till the end of the year, unless next year’s loan was anticipated. The statement was intended to mystify peeople. Mr. Richardson strongly condemned the system of railway management, especially running trains at too great a speed on light lines with the present stock. Local officers should have larger powers. He advocated management by a non-political Board. Mr. Bathgate contended that the present Ministry, by bad legislation and faulty administration, were really responsible for the depression now existing throughout the colony, which was very great. The debate was adjourned till 11 o’clock to-day, and the House rose at 9.35. THIS DAY. Mr. J. McKenzie strongly condemned Mr. Rolleston for reappointing the Otago Land Board. Mr. J. Green defended the Board, and Messrs. Rolleston and Fish condemned both. The discussion was continued by Messrs. M. W. Green, Shrimski, Holmes, Fitzgerald, Fulton, and Seddon, until the adjournment at one o’clock until 2.30.