TUESDAY, MARCH 20th, 1866.

Southland Times, Volume III, Issue 231, 21 March 1866, Page 3

TUESDAY, MARCH 20th, 1866.

(Mobmtng- Sitting.) The Speakek took the chair a few minutes after 12 o'clock. Present — Messrs. Cuthbertson, Blacklock, Wood, Holmes, Menzies, Cowan, and Armstrong. FESTAL CIAL AFFAIRS. Mr. HOLMES moved " that inasmuch as the General Government has undertaken to meet the liabilities of the Province of Southland, and, in order to extinguish the same, has assumed the entire control of the Provincial Estate. " The Southland Provincial Debts Act, 1865," proTides that claims unpaid at the end of two years shall be paid by Debentures having a period of not more than thirty years to run, such. Debentures being unlikely — judging from the state of the money market for some time past, and the rates at which Jfew Zealand Debentures have been sold — to be saleable at par, would, if accepted by the banks which have advanced monies to the Province, in liquidation of their claim 3, entail on them a serious loss. Seeing, then, that the arrangements which would be effected by the abovenamed Act would inflict a loss upon the Creditors of the Province, and being desirous that all claims against the Province should be fairly and equitably adjusted, tbi3 Council is of opinion that the provisions contained in 'The Southland Debts Act' for settling those claims should be altered by an ' Amendment Act,' which would provide that after the lapse of the two years specified therein all outstanding Debts should be covered by the issue of Debentures at par, having five year 3 to run, and bearing six per cent interest. This Council is also of opinion that the provisions contained in the 15th Clause of the ' Southland Debts Act,' whereby the Governor is empowered at any time to alter or lower the price of Land in the Province, has led to the expectation that in case large sales should not occur in the course of the next eighteen months the price would be lowered. This anticipation, as this Council has good reason to believe, prevented intending purchasers of large areas from investing, thus defeating the chief object of the Act, which was passed with the view and in the hope that large sales would in a few months give material relief to th« Province from the pressure it sustained. This Council is well aware that the frequent changes in the price of Land which have taken place within the last few years, have acted injuriously, by stopping the sale — the public, looking forward to a probable reduction in price, bought very slowly. A similar result is likely to ensue, so long as the price can be at any moment altered by an Order in Council under the provisions referred to. This Council is therefore of opinion that Clause 15 of ' The Southland Debts Act' should be repealed, and some provision enacted whereby the price should be fixed for a term of years. This Council approves of the present price of One Pound per acre, and it suggests that it should continue at that price for a period of ten years." — The hon. member said it is necessary to bear in mind that the General Government has assumed the position of trustee for the purpose of administering the estate of this Province for the benefit of its creditors, whom, under ordinary circumBtances, it is usual to consult, being the parties most interested, as to the best means of realizing the estate ; but instead of acting in this manner, a law is passed preventing Provincial creditors from having their usual recourse by action at law. The next step is the seizure of all the revenue derived from the sale of lands, although some of it had been specially set apart for the payment of specific debts ; and a portion of what has been so set apart has been sold, and the proceeds applied to the extinguishment of other debts, not connected with the parties on whose behalf the land was set aside. By the Southland Provincial Debts Act, 1865, the claims of Creditors for an adequate rate of -"nterest are completely ignored, and although the current rate now 8 per cent, in England and 10 to 12 per in the Colonies for long dated bills, or overdrawn accounts, the creditors coming in under the Act are required to hold over their debts for two years at the option of the Colonial Treasurer at 6 per cent, interest, and at the expiration of that time, accept thirty years debentures bearing 6 per cent, interest at par, and payable whenever the Colonial Treasurer may think fit. As it never could have been the intention of the Provincial Government to make anything but an equitable settlement with its creditors, the action taken by the General Government appears arbitrary and unjust, more especially as the assets taken over by the Government were fully sufficient to cover all the debts. The course recently pursued of allowing " greenbacks ' to be taken in payment of land before a settlement had been come to with all the creditors, is neither more nor less than showing a preference to these parties, detrimental to the interests of those who have not come under the Act, and which, in the case of a private individual, could be reduced by action at law. The 15th Clause, although perhaps not intended to be acted upon, except on some extreme emergency, has had a most injurious effect on the sale of land, so many changes is ■Drice have been made within the last few years' that the mere knowledge that the Governor had the power of lowering the price at his discretion, taken in connection with the generally received idea, that in the event of extensive sales not being made at or before the expiration of two years, the price may be lowered to any point sufficient to insure a sale. With the possibility of such a depreciation in view, could it be expected that capitalists would invest their money.' The runholders, also, instead of purchasing largely have limited themselves to spotting the best portions of their runs, looking forward, as they do to getting the remainder at a much lower price. This portion of the Act, therefore, has defeated the object for which it Vas framed, and nothing short of a repeal of the clause in question will satisfy the public, the question of a sufficient price may be left to the General Government to determine, but when it is once fixed, the dedesire of the colonists is that it may not be lowered again for a long term of years. We have already suffered from the frequent changes and can bear testimony to their ill effects, not only on those residing in the colony, but on immigrants coining hither, it being almost impossible to satisfy the latter as to what may be the price of land when they would arrive. Within the last few years it has been at 10s, 20s, 40s, and again 20s. My own opinion is that the land law recently passed by this Council and approved of by the Legislative Assembly, is the best solution of the question that can be obtained. If land is wanted a large portion of what we have to dispose of is worth 20s. If there is no demand now it would be folly to throw it into the market at a depreciated price, to the injuiiy, not only of this province, but also of Otago ; and it therefore appears evident to me that a complete change in the financial system of the colony should take place. Instead of each Province being permitted to negotiate its own loans, thus competing with all the others in the London market, and thereby injuriously affecting their price, the "whole should be consolidated into one loan, and floated by the General Government. From my ?m 3ao.wle.dge X csw atate that when the. news

arrived in England that the Weld Ministry intended adopting such a course, Otago debentures rose from seventy to ninety, but on the following mail, taking the intelligence of the fall of the Weld Miuistry, and the abandonment of such a consolidation of Provincial loans, it had the effect of causing _ the debentures to fall to the former price, and entirely suspended all operations in them. _ My own opinion is, that no time should be lost in urging upon the Government, the immediate necessity of such a consolidation, not only for the benefit of the Provinces, but also of the General Government, as the loss sustained by the present system, must be evident to the most casual observer. It has been customary of late, to hold up this Province to contumely, in consequence of its indebtedness, but it would now appear that in placing its assets against its habilities, it will bear a favorable comparison with any. of the other Provinces ; but unfortunately it is so far removed from the seat of Government, that it receives none of the bounties so liberally conferred on the Provinces in the more immediate proximity. For example, Auckland hasj had 1, 000,000 acres of land handed over to it, and £100,000 in cash and the promise of £150,000 more, although it is now an ascertained fact, that the expenditure there has been more reckless, and the value received for the outlay less than it is in Southland. Then there is the Province of Canterbury, heretofore held up as a model to all the others, burdened with a large permanent debt, its debentures unsaleable in the London market, and an overdrawn account in the colony exceeding £100,000. It is not necessary to follow up the comparison with the other, but taking their assets with their liabilities there is scarcely one of them in a better position than we are. I feel satisfied that it is not the desire of any member of this Council that the claims of the creditors of the Province should be compounded, but that each of them should receive twenty shillings in the pound for his claim, and the action of the General Government in desiring to compel them to take less than this, does uot meet with the approbation of this house. Mr. COWAN spoke in support of the resolution — he said, I have much pleasure in seconding the resolutions moved by the hon. member for Oteramika, after the able exposition of matter by that gentleman, there is littlle left for me to say. I would however, Sir, draw the attention of this Councd to the fret that whde the Southland Waste Land's Act, 1865, was enacted with the view of obtaining relief from Land sales of our Provincial estate, the Southland Debts Act, 1865, acts in a most deleterious manner against the realising of the Provincial estate because while the power exists independent of the Wasts Lands Act to reduce the price of land to an indefinite fisure purchasers will naturally holdback till a reduction takes place, let it be howsoever small, and even the present tenants of the Crown will only purchase those salient parts of then' holdings in the expectation of a reduction in price. When the General Government guaranteed our debts it took over our estate and as a matter of course secured a bill of sale over it. The Soutldand Debts Act, so far as the 15th clause is concerned, is a bill of sale over onr estate, but I think that the provisions of that clause are so sweeping that in order to realise our estate to the best advantage, a modification or repeal of that clause is necessary, and with that view I cordially support the resolutions. Nothing is or can be so detrimental to the best interests of a province as the absence of fixity in its land regulations. Holding that opinion I entirely concur in the part of the resolutions that provides that the price of land should not be reduced for ten years. Mr. ARMSTRONG was in favor of the motion and trusted it would meet with the approval of the Council as also was Dr. Menzies who spoke at considerable length in iis favor. Mr, PEARSON said, I have much pleasure, Sir, in recording my entire assent with the motion of the hon. member for Oteramika. So many arguments have been adduced to shew the advisability of the motion made that I will not occupy the time of the House with arguments in its favor. I will merely say Sir,that the minimum price of the land should be fixed even if it be only 2s. 6d. per acre, but I affirm, Sir, that every acre is worth 20s. and in time will be sold for it. As to obtaining a change in the Southland Debt Act, I don't fear Sir, but what it will be easily accomplished. I think Sir, the real reason why Mr. Stafford's Government refused to grant a loan, is that the affairs of the the Province have been so mismanaged, that until the General Gevernment is assured that his late Honor Dr. Menzies w ill not have any influence in the Councils of 4ie Province, he will decline to grant any loan, lest there should be a recurrence of the disgraceful mismanagement of the past, I am borne out Sir, in this view by the Colonial Secretary's letter of 7th May, 1864, in which he gives his final decision against sanctioning a loan on the following grounds (vide blue book of 1864,) and I say, Sir, Mr. Fox was right. Once established, a a precedent, that a province can incur debt first and then claim the assistance of the General Government, and the colony would be ruined. The reason, Sir, why Mr. Stafford has given such material aid to Aucldand, is, in my opinion, because he has thorough confidence in the gentleman at head of the Provincial Government of that province, Mr Whitaker. He knows, Sir, that Mr. Whitaker is a man of capacity, that he is able to cope with the financial embarrassments of the Province ; that in affording him assistance he is giving it to a man capable of appreciating it, and possessing the ability to take advantage of it. In the case of Southland, Sir, I again state that until he is assured that the man who has hitherto so mismanaged the financial affairs of the Province will have no power to injure her further, he will not grant a loan; and very properly so. I believe, Sir, in the ability and capacity of the present Government to undertake the task they have assumed, and when Mr Stafford is made' acquainted with the change, I have no doubt but that he will gladly hand over the affairs of the Province into the custody of men worthy of the confidence he will show by so doing. The member for Invercargill (Dr Menzies) has stated that, by the Soutldand Debt Act, the neck of the Province has been placed beneath the heel of the General Government. Sir, we have to thank the hon. member himself for it — it is owing solely to his conduct of the affairs of -the Province when he was in power — and we have to thank ourselves for having suffered 'such a despotism for so long a time. I have much pleasure^ Sir, in recording my vote in favor of the resolutions of the hon. member for Oteramika. Mr. CUTHBERTSON was in favor of the motion and deprecated the attempt to fix the ulame, if blame there was, upon any individual, The remaieder of the business was postponed until the evening sitting, and the Council adjourned.