PROVINCIAL COUNCIL.

Southland Times, Volume III, Issue 232, 23 March 1866, Page 2

PROVINCIAL COUNCIL.

TUESDAY EVENING MAECH 20, 1866. The Council met at 7 o'clock, and the minutes of last meeting were read and confirmed. NOTICES OF MOTION. - Mr. ARMSTRONG- on behalf of Mr. Stuart asked the Government what it proposed doing with the Oreti Railway. ' The, PROVINCIAL TREASURER replied that the Government had resolved upon nothing as jet in regard to it. He said it was the intention of the last Government to ask permission of the Superintendent to lease the line. Mr. AdM jriiO^a- on jj behalf of Mr. Stuart asked the Government the nature and cause of the late accident on the Oreti Railway," near the Wakivi Bridge. Mr. COTHBERTSON in reply kid upon the table a report on the subject by the Railway Engineer, which he desired might be read. The PROVINCIAL TREASURER seconded. Report read. . } Mr. ARMSTRONG, on behalf of Mr. Stuart asked the Government the nature and extent of the works or repairs at present being made on the Easb Road. Mr. CUXHBERTSON said, in the absence of the Koads Engineer, he could not give full particulars, but the late Government had promised to give land to the extent of £250 for the repairs,, the settlers making up the balance to the contract price. The same had been done on the One Tree Point road. The settlers in one case have to pay £100 more than the Governmeut. Mr. ARMSrRONG on behalf of Mr. Stuart asked the Government what it has done to carry out the suggestion of the Council made at its last short session to apply the provisions of the 3b"th Clause of the Southland Waste Land Act^ 1865, to the various roads in the Province. Mr. CUTHBERTSON said it was evident this question should have been asked of the late Government. He was led to suppose that the contract for £226 bound the settlers for one half. This was all that had been undertaken by the late Government, and said thatihere were grave doubts entertained as to whether it was possible to carry out the provisions of this arrangement at all. Mr PEARSON — Sir, before moving the resolution standing in my name, I trust the House will pardon me for detaining it tor a short time - while I state my reasQns for bringing it before the Council. This Province, Sir, began its young career under more favorable circumstances than any other Province in New Zealand. The early settlers were not obliged to camp on the Bea beach, like the Pilgrim Fathers of Canterbury and Otago, till, with their right arm, they had carved a home in the wilderness. The country was already settled, roads formed, and all the earlier hardships incidental to colonisation, pretty well overcome. We had a large and valuable landed estate — the garden of Otago — we had postal communication with other Provinces, and steamers called at our ports. Still, Sir, with all our natural advantages, separation was a problem. Providence came to our rescue. The gold discoveries in Otago gave a wonderlul stimulus to the prospects of the new Province. The Land Fund which, from the 31st Maich to tue 31st August, yielded only £956, rose, during the next five mouths, to over £19,500. The ordinary revenue for the same period, rose accordingly from £475 to £1,323. All went merrily as a marriage bell up to the fifth session of the Provincial Council in October, 1853. The financial year, ending 30th September, 1863, was a most prosperous one, more prosperous than we shall see for some time. We commenced that year with a credit of £15,581 Bs. sd. The revenue, at its close, amounted to £103,942 os. 7d., exceeding the estimate by £8,410 12s. 2d., and yet, Sir, the ordinary expenditure exceeded the income by £40,721 165. lOd. When, therefore, his late Honor met the Provincial Coaucl, it was the first opportunity which calied lor the display of linanciai ability, or ordinary capacity, since he had obtained the reins ol power. Up to that time mouey had been plentilui, nothing to do but to sp^nd it. The (Superintendent ol" Mariborougii, under similar circumstances, warned his Provincial Council to retrench. Unlbitunately the mental caiibre of the two men is different. At the opening of that session his late Honor ought to hare warned the Council not to expend a shilling untd some provision had been made for liquidating the overdraft. Ho ought to have told them ol the already exisung liaDiiities hanging over the Proviuce and counseled retrenchment. The Council naturally takes its cue from the Superintendent's speech — if it is told that there is every prospect of money bemg plentiful, the members are obliged, injustice to their constituents, to obtain a fair snare ot' any i undd to be expended in roads in their respective districts. His iate Hunor of southiaud, so far from advising economy opens his address with the I'oliowiug : — " The continued prosperity of this Province is a source oi much gratification to the Provincial Lroverninent. ainue the last meeting of this Council it has steadily advauced, antl the Province is rapidiy attaining an important, position in point of material wealth." Wiiy, Sir, we were hastening to ruin as hard as possible, and Dr. Mcnziestook care that he would spare no pains to elieot it. The revenue for the quarter ending 31st. .December, 1863, was... £14,766 17 10 Expenditure 52,596 4 9 Overdraft ... • ... 37,829 611 For January, 1864— Revenue ... ... 5,559 11 8 Expenditure 15,009 19 6 Overdraft 9,450 7 10 For t cbruary and March — Revenue 16,925 3 3 Expenditure 26,434 3 8 Overdraft 9,509 0 5 Thus, the total overdraft, during the six months amounts to £56,788 15s. 2d. ; adding the overdraft for ordinary expenditure, on the 30th September, 1863, viz., £40,724 16s. lud., we arrive at the respectable overdraft of £97,513 12s , ex" 5 pended in little more than* six months. To:givo the House some slight idea o' how it has been expended, I will read a return from the Roads Department of fresh liabilities incurred, when in reality we were hopelessly insolvent— For the quarter ending 31st December there were contracts let * to the extent 0f... £14,899 410 In the month of January, 1864 ... 4,837 16 10 Do. February, „ ... 4,180 8 7 Do. April, „ ... 62 0 4 Do. May, . „ ... 1,757 13 i 0 £25,737 4 5 Yet, Sir, there was not a shilling wherewith to pay this expenditure, and, what is more, no hope of obtaining money. I have shown, Sir, that the revenue since tho 30th September, 1863, to end of March was exceeded by the expenditure to the extent of £56,788 15s. 2d.— irrespective of the former overdraft of upwards of £40,000 — thus it is evident enough that there was no money, ihe only excuse which bis late Honor, Dr. Menziea, could possibly have had for supposing h e cqi}l4 meet-til? J wjil gun? wm I

fallacious one. He - had entered into an agreement with the Bank of Ofcago regarding an overdraft for ordinary expenditure — an agreement, the utter absurdity of which staggers belief : I will read, Sir, an epitome of it. — " Ordinary Account — The Government to be allowed to overdraw to extent of one-half year's estimated revenue, on which overdraft seven per cent, shall be charged : if overdraft shall remain a year uncovered a " Loan Ordinance " to be passed to discharge the overdraft to be held until Government redeem the debentures by sale of land. The entire revenue of the Government, from whatever BOurce, shall from time to time be paid into the creditof the Government in account current." Now, Sir, I need hardly say that such an agreement is totally illegal and thoroughly absurd, so much so that the Colonial Secretary, Mr. Fox, in his letter of 7th May, referring to it, writes :— " The Bank probably will be soaaewhat dissatisfied with such an agreement, but as the advances were made without any security, or reasonable prospect of eecurity, it can have no good grounds of complaint, for it could have no right to expect that a 'Loan Ordinance' would be passed to enable the money it was advancing to be repaid by th 9 sale of debentures" — so much for the promise of paying the overdraft by a Loan Bill. As regards the hypothecation of the land revenue, we all know that the General Government, not long after the agreement was made, impounded the Lan.i Fund ; the futility, therefore, of such a promise is apparent. It may be asked, why did Mr. Bathgate agree to it ? I presume because he had only recently.arrived in the colony, and the powers of Superintendents were, when he left Europe, not clearly known ; he was a stranger, and his late Honor, Dr. Menzies, took him in, [Dr. Menzies : When did he arrive ?] That I cannot say, Sir ; I presume he must have been here, otherwise he could not have signed the agreement. (A laugh.) I know he had not b«en long in the colony, aud naturally supposed, I would imagine, that the head of the Executive Government of a Pro voice would not propose an arrangement contrary to. the " Constitution Act." Well, Sir, the Bank of Otago began to grow alarmed at the rapidity ■with which its funds were being absorbed by the Provincial Government. I find that while for Borne time Mr. Bathgate has been urging the Provincial Government to recoup the bant for its advances, on the sth of April, 1864, he writes decidedly that the limit for the advance on the Oreti Railway is £50,000, and assigns limit for the overdraft on ordinary account. As to the probability of obtaining the assent of the General Government to a " Loan Ordinance," the Colonial Secretary, on the 20th February, 1864, declines to assent to a Loan Bill to cover the ordinary expenditure, and warns the Superintendent "not to incur any liabilities in the expectation of the General Government assenting to the proposed Loau Bills :" every succeeding letter shows the determination of the Colonial Secretary not to assent to such a loan until the 7th May, when he definitely refuses, characterising the expenditure as extravagant and imprudent. And yet, while the bank refuses to advance, and tli9 General Government to sanction a loan to cover any expenditute, I find hi 3 late Honor letting fresh contracts even in May — incurring fresh liabilities without a shadow of a chance of being able to liquidate them — heaping up further embarrassments. I now come to the manner in which the loan for £40,000 was negotiated. The Provincial Council passed the " Debentures Ordinance, JS'o. 1, 1864," for raising a loau for £40,000, in which it is stated distinctly that the money raised is to be spent for the making and extension of the Bluff Harbor and Invecargillßailway. The Genera Q-overnmsnt, while refusing to grant a loan for ordinary expenditure, sanctioned this loan for the completion of the Bluff Harbor and Invercargill Railway, being informed by his late Honor, in his letter of 16th March, 1864, that it would accomplish this. What are the facts, Sir ? His late Honor made an agreement with Mr. Green, the Inspector of the Bank of New South Wales, to the following effect.— That the bank advanced 80 per cent, on the debentures, oi which £26,000 was to be retained to cover liabilities due to it, the balance — a mere trifle — was to be devoted to railway purposes, for which the whole had been intended. Part of this £26,000 retained by the bank was as follows : — About £6,0d0 Town Board overdraft, guaranteed by the Government ; Campbell and .Robertson, upwards of £1,000, contract for roads; and on agents dralts, £11,000 ; Harnett and Co., for printing, between £200 and £300, and so forth. Thus a loan for the specific purpose of completing the Bluff Harbor and Invercargill Railway was dissipated in other ways, which were never intended by the Council" which passed the bill and the General Government which sanctioned it Dr Menzies had thus acted quite illegally, for he had no more power to make such an arrangement than he had to fly — he had broken faith with the Provincial Council and deceived the General Government. There was only one thing left, to deprive Southland of her honor, and he did it. He sent two gentlemen, not connected with the Goverrment, to break the agreement, when he was shown the folly of it, not telling them beforehand that he had made one. What was th* result ? Mr. Green, of course, held to his agreement, but the honor of the Province was gone. I was standing, Sir, in the passage of the Bank of New South Wales, talking to air. Green, wheu Mr. Davies presented a cheque, signed by the late Superintendent, after the attempted repudiation Mr. Green- said, "Your Superintendent, Mr Davies, is troubled with a short memory I d»n't ike dealing with people with short memories ; when the agreement is signed by Dr. JJieuzies before witnesses, I will honor your cheque, and nottill then." This, Sir, has be-n toid at every club table in New Zealand, till the very name of Southland stinks hi the nostrils of every denizen in tiie colony. The hon. member for Oteramika, Mr. Holmes, can corroborate my statement. Next we have Mr. Davies's claim. X will quote from the contract — " l Monthly payments on account will be made to the contractors, at the option of his Honor the Superintendent, on the Engineer's certificate, to assist the contractor in carrying forward the work." Thus, when the Province got embarrassed, ail that there was to do wa3 to withhold the payments and insist on the works being completed by the contractor. Such a course would have "compelled Mr. Davies to come to terms — to have given up ail claim to his patent rights and compensation tor breach of stove coutract, or anything cisc whatever. Such a course any man of the most ordinary business capacity would have adopted. Dr. Menzies, however, roke the contract by instr.ica.ig Mr. Davies toib top the works. Thus the first claim for com-s. pensation was established. The only member of his Executive utterly repudiated the action, m. the letter which I will now read you. [The hon. member here read a letter from the Provincial Treasurer, the late Mr. Taiiton.] A fresh arrangement was come to for the resumption of the works. By this, Mr. Davies was to be paid monthly for certain, getting a month's notice beforehand that the payments would not be made. Before three months were over, will it be believed that Dr. Menzies again broke the agreement and with his eyes open, being warned of the consequences, as I will prove. Mr. Davies was requested by his late Honor, Dr. Menzies, to push on the Oreti railway works between Invercargill and the Makerewa, so that it might be opened, I presume, beibre he was turned out oi office, as he naturally expected to be. Opening it for that distance was useless, as far as the public was concerned. Mr Davie3 employed men night and day to do so. He was promised faithfully by Dr. Menzies that he would get £3,000 at least of the last of the money advanced by the General Government through the Sub-Treasurer, Captain Elies. Before this payment came due the Sevilla arrived — payment was demanded of £1,113 passage money, if 1 recollect right, for the Girvan weavers. 'Ihe Bank of New South Wales applied also for £883 3s. sd. Dr. Menzies requested the Sub-Treasurer to pay it. Captain EUes told him that this was the last of the money, that it had been promised to Mr Davies, that it these items were paid there would remain only a trifling balance, and his Honor's word Vould be broken. Dr. Menzies insisted on the Suoney being pai-i j and Mr Davies, on completion ofhia work, when he demanded the£3,uoo WfeW 'jwffljwfl $®i «N* #f§l esty W&s

was the consequence ! He had to go to Australia to avoid incarceration at the hands of the men he had employed. He offered his certificates for work done, at 10s in the pound. No one would buy. No one would trußt such a Government as that of Southland. Its reputation for honesty had got acros3 the water. At last Mr. Da vies had to take Southland's circulating medium, the celebrated greenbacks. These he sold at 45 per cent, discount, and thus 8 heavy claims for compensation were established, all owing to the utter incapacity of his late Honor, Dr. Menzies, to manage the affairs in his charge — to his having misappropriated the funds raised under railway loans. The difficulties, Sir, of the Province commenced when his late Honor, Dr. Menzies, determined to govern in defiance of the Provincial Council. The first time the Council became alarmed .at the autocratic powers assumed by Dr. Menzies/was at its sixth session. There was a considerable amount of sparring between the Council and Superintendent as to their relative powers ; throughout the whole, Dr. Menzies will be found quibbling, as he always does, by referring to the " Provincial Q-overnment Gazette," No. 11, of 21th March, 1564 The Government brought in an " Executive Council Ordinance." The Council altered it completely. It came in one shape, and passed out in a totally different one. The Government was defeated, or rather Dr. Meuzie3, their Superintendent. Constitutionally they ought to have resigned. Such a course would have forced ihe Superintendent to get an Executive out of those who had opposed him. He had recourse to his natural lailing. The Government did not resign, the Council passed the "Appropriation Ordinance." The Superintendent, in proroguing it, refused his assent to the "Provincial Government Ordinance" and " Representation Ordinance." The very Ordi- ] nances which had' occupied almost the whole of the time of the Council. It was a question- j able subterfuge, but he did it. He had deceived them, and all they had to do was to repent the folly of trusting to such a man's honor. He was forced, however,, by his embarrassments to call the Oouucil together again soon after. I had then entered the Council, and was sent for to form an Eieeutive. I proposed fair terms, which will be found in the blue book of ihe house ol representatives. 1864, B, No. 3. The substance of them was to have entire control over all matters purely Provincial — the Superintendent to do as he pleased with his delegated powers. His lato Honor resorted to his usual quibbling ; nothing was done when the Province might have been saved from much debt and interest on money. The Council passed resolutions condemning the course of the Superintendent to be forwarded to the General Government : Dr. M^nzies did so in his letter to the Colonial Secretary of Ist August, 186 i, stigmatising tliem as " a series, of .weeping assertions, unsupported by^-ahy detail" of facts or train of reasoning." Thtfcool pleasantry'of this will be better undtamood when it is recollected that the Colonial Secretary, in his letter of 7th May, 1834, already' referred to, treats the mismanagement of the ifnauces of the Province in rather stronger terms. It was stated in this morning' 3 debate that his. late Honor, Dr. Menzies, was not solely to blame for the embar- ' rassments of the Province. I say, Sir, he is solely. He mi^ht have had an Executive, and would not. The only other member of this^sham Government wa9 the late Provincial Treasurer, and we have evidence. in his letters that he repudiated Dr. Menzies' actions. All our misfortunes have arisen from the time when he refused to have an Executive ; he, then, is solely to blanie. It was only at the urgent solicitation of a gentleman, who has been made a scape-goat for Dr. Manzies' incapacity, that the seventh sessioa of tiic old Council was called. It is the old story, " Les absens son toujourtort." On reviewing the past one may well be staggered. The deluge has been so vast that there is not one spot of ground on which the foot of partisanship can plant itself, one spot which can be pointed to as an oasis in this desert of incapacity : it has been so devastating that there is not even an olive branch left for the hand of friendship to pluck, and hold aloft a3 a beacon of hope — a promise of a brighter future ; all is one dark, dense chaos, and it will be many a day before the troubled waters wid subside ; and yet, Sir, his late Honor, the member for Invercargill, Dr Menzies, has the astounding presumption to second a vote of want of confidence in the late Government. Why? What for? Because, Sir, the Augean stable left by him is so heaped with the accumulation of tilth of every description that it is beyond the power of a Provincial Government to cleanse it, and will tax the ability of the General Government to the utmost. If in endeavonng to clear it away an odour \% created, whose fault is it ? the fault of those who seek to remove it, or of him who deposited it ? I have trespassed thus far ou the time of the House to explain the history of the past in order to allow the Oouucil and public to understand the position of the present. His late Honor, Dr Jlenzitis, had large means and he dissipated them No work has been completed, no roads made j.'ne late Government had nothing but a legacy of iiitu, the accumulation of four years of misrule — the oilspnrg of an effete Go"ermneut — and were expected to do everything. I trust, 6ir, that after the explanation of the past which I have just given the Council it will deal more justly and leniently with the Government .which lias just been formed than they did with th.ir immediate predecessors. I will now move "' Tnac a select committee be appointed to enquire into ihe causes which have led to the financial embarrasuients of the Province, and consequent stoppage ot" the railway works, with power to call for I papers and hear evidence, such committee to consist of Messrs Cowan, Cuthuertson, Macdonala, and the mover." Dr. MENZIES said as no one seemed inclined to addi-eds the chair, ha would make a few short remarks. Iv the exceedingly lengthy exposition which thehon mymber £>r Waianiwa had given, he (Dr. Menzies) did not intend to follow him out iv the l'ud charge which, as champion of the Jate Government, he had made against the one preceding. He regretted their SL-iectioa oi a champion had nut been a more judicious one. The hou. member (Dr. Menziesj said it would have been unnecessary lor him to ha> c answered in detail these charges (seeing a U-ov eminent commission was to be appointed to investigate them) ; but the matter^ Had not received that expiaaaaou out of doors, which he should like — 3eeing the character oi the remarks made by tue mover might lead to iu.creuces which the circumstances aid not warrant. The remarks of the hou member for Waiauawa had bei.-ii so very discursive, aud touched upon so many points of no importance, that he ! (Di\ Menzies) would only nonce two or three, I and give his own views upon them. The Council j might remember that when it lirst determined upon forming a railway system, the original iaea was to start with the Bluff, and almost at the same time the idea was started ot having some communication to the .ftorth, other than tne mere road. The Oreti Railway was not initiated »t tiiat tune. The Council agreed to the construction ot the Bluff railway. The Bluff .Railway Ordinance had been assented to, and contracts taken. What the Council lor the time being really agreed to, was the maldng of the railway to the Mokoinoko. with a branch to the Green Hills. The Government wasnot authorised^ extend the railway to the Bluff. The intention was in the year of 1863 to form a railway towards the North, so a3 to secure the traffic of the goidiields. it was felt at the time that the dufioulties and the expense of forming a road through the extremely thinly populated country, leading towards Winton were 3uch that it would be mucn more economical to form a railway. The matter was fully discussed. Tae member for Waianawa if he had selected or desired to select the bringing this idea prominently before the Council which he did not desire, could have found that in February, 1b64, a letter, from the Government here, to the Colonial Secretary entered fully into those views, and met with his approbation. 'The whole scheme of having railway communication from the Bluff to Winton. and beyond that, oi reducing the distance at a reasonable charge in order to secure the Goldfields IVatfio was the uiaui object which the Government thou had in view, and these expenses were undertaken iv a great. $Bssm§ wfo % wv-ta gepwra {bio fttowwg?

The Railway was begun before the Wakatipu was developed, and it was found necessary to form some communication between the nearest stone quarries and the town, in order to get metal to form the roads to other portions of the country. It was found that the nearest quai'ries were at the Green Hills, and it appeared evident that the most economical manner of getting stones from these q names was by making a railway. By extending it to the Bluff it would add most materially to the benefit of the Province, by having a direct road to the interior from the nearest seaport. These were the reasons which lead the Government to the initiation of those works which have involved the Province in such a very large expenditure. The plan was clearly concieved at the time, and laid before the Council and Government, and met with approval. The Colonial Government assented to the first loans. In course of time it was found that those works required a larger expenditure, and the Colonial Government sanctioned this expenditure. Afterwards it was found still further expenditure was required to meet those works. Then the Colonial Government objected, and said the whole had been wasted. We had gone on without authority, therefore they would not sanction further loans. It was a gross injustice to the Province of Southland for the Colonial Government to object to those further demauds. When the expenditure exceeded the original estimates, it first of all approved, to a certain extent, then suddenly stopped. The Provincial Government having broached the idea — having shown the advantages to be derived from the works to be prosecuted, and having the approbation of the Colonial Government to carry on these works, although it did turn out owing to the mismanagement, the expense of these works very far — not merely the first, but the second estimate — yet under these circumstances the Colonial Government did not perform its functions fairly and honestly towards Southland in deserting the Province in the hour of its need The Colonial Government for the time was pefectly persistent in the course which it took. It first agreed to make advaree3 fora period of three months; subsequently it agreed to extend that period, to four months — then it suddenly stopped. The General Government, although repeatedly referred to by the Provincial Government, evaded giving direct advice as to the mode in . which those liabilities would be met. It rromised that alter the English mail came in, when the General Government would hear of those debentures, &c. The time never came, the Debentures were saleable at a discount. It was in funds, and therefore was not in a positian to give the assistance previously, given. The Colonial Government was not able to alford any advice to Southland as to an alternative by wlii-jh relief could be afforded. The case of Southland as dealt with by the General Government was N«xtremely hard — was unfair. The gentleman who refused to aid Southland in the hour of its need, holds now the office of Superintendent of Auckland and has beeu under the necessity of craving assistance from the Colonial Government. Within the last four months the Government have granted him far more to save the Province of Auckland from bankruptcy that was refused to give to Southland. As to the agreement with the Bank of Ota^o Dr. Menzie3 confessed himself edided by having a special pleader on behalf of the bank, saying that it had been overreached. It certainly was the first time he had heard any such supposition expressed. It appeared to him that the prevailing impression was that the case was all the other way. It was gratifying to find, a^ all events, that (it the idea of the member for Waianiwa was correct) the Government was not oblivious to the interests of the Province. The agreement with the bank was a provisional one, and so long as the advances before referred to were made by the Colonial Government the Provincial Revenue could be relied upon to repay the banks. The hon. gentleman hero went into a detailed explanation of the circumstances under which the advance was granted by the bank, and stated that — With reference to the agre menfc with Mr. Green of the Bank of Hiew South Wales. Dr. Menzies said the hon. member for Waianawa had been a member of the Executive, and ii' he had consulted Che minutes ha would have seen the memoranda of agreement, that it was made with due care. I admit it without hesitation, but that it was misconstrued. 1 also very tirmiy assort no member of tho present Government can understand the difficulty of selling debentures at the tuna Provincial Loans are in a state of depression. Mr. Green bought those debentures at 90 per cent. In a conversation with Mr. Green, there were various other matters irentioned in' the negotiation, some of wjiieh I, as Superintendent agreed to, some I did not. One of the latter was the advance to the Town Board. Nearly ail the others had reference to Railway works. To none of thO3e did I object but to others I did. To the advance to the Town Board 1 most decidedly objected in the agreement with Mr. Green, ao far as my share of the agreement with Mr. Green went, the advance of £6,000 to the Town Board was not to be covered oy aa. equivalent amount out of the £10,000 loan. But although in this conversation Mr. Green desired tha,-. >his advance should oe included, and I objected to it, unfortunately tne memoranda of agreement simply stated that the advance should oa so mudi per cent. The circumstances which load to tue matter being conducted in this unbusinesslike way was the fact of a cheque having been two or chree days before presented for payment and refused. This cheque it was important, should be paid, and this first mo.de the Province particularly aware of the extreme embarrasameut caused by its large liibiiities. It was extremely desirable that this cheque for the sum of two thousand pounds in the o urse of a particular day, alter endeavoring i to negotiate with che New Zealand Bank, should be j uouorea, the Government found none of the Bauks I would have anything to uo wituthe debeutui-es, except the Inspector of ttießankof iS'ewSouth Wales; to prevent immediate clamour for wages b^ the workmen who iiad been employed on the public works, an advance was taUen. The agreement was in the meautime couched in general terms ; since then, the matter has come to be spoKen of, in a manner winch had uo^, in his (Di\ Menzies^ opinion done much credit to the Inspector. The ou-inoei 1 for Wainawa said t!iat at his (Uc. Jtleuzies) desire, two geutiemen had called on Mr. Green with the object to endeavor to induce JVIi 1 . vireen to alter the terms of agreements ; out that Mr. Gascii stuod upou ins rights and would not consider the proposition of cue Frovindal Solicitor, and Mr. lireen further informed the gentlemen that he had a letter from the Superintendent giving him authoncy to include tne Town Board advance. Now, Sir, said Dr. Menzies, the full particulars wore known to Mr. Green and> myself only, and I say I did not agree to the Town iioard Loan beiug considered a ,jart of that advanecl. Mr. Green says he understood i did. The question rests upon the comparative credibility oi two men. On returning from this interview wita Mr. Green, the Provincial Solicitor reported what had passed, and though he did not give expression to his feelings I saw irom liis manner that the letter to winch Mr. Green had referred was something winch was entirely new to him, and which he thought had given great offence, it was thought better to let the letter stand than to repudiate and hold to my opinion of the verbal agreement. In order to avert the scandal of apparent repudiation, ie was advised that this claim by Air. Green should be allowed. The hon. member proceeded to say, that seeing the multiplicity of charges, it was to be regretted that the hon. member lor Waianawa did not leave the name of the then Provincial Treasurer alone, seeing his bones were at rest. As to Mr. Davies'b claim for patent rights, whatever the claim may be, now the original position was that the whole consideration of the question of the wooden railway was referred to engineers. .Four engineers were concerned. ' After some consideration they came to the conclusion that it was desirable to construct a wooden railway rather than un iron one, seeing the wooden uuu could be constructed in a shorter time, i'he putjnt question was loit opou, and depended upon the successof the railway. Tho late Government condoned this claim and a certain sum was paid lor this patent though, it

Mr PEARSON Baid — The member for Invercargill, Dr Menzies, in the defence which he has justmade has sought, as usual, to mystify tho Council by introducing the subject of railways into the discussion, and, as a matter of course, thrown the entire blame on the G-eneral Government. As to that part of the business, I deny, Sir, that the General Government is in the slightest degree to blame ; I say it has acted most liberally in that matter. It has granted loan after loan to complete the railway works, th» money obtained from which has been misappropriated by the late Superintendent, Dr Menzies : nay, it has gone further ; it advanced £60 000 in money to complete them, Bouie of which was also misappropriated by him. He has introduced this subject to mislead the House, because he dare not and cannot answer my charges. I, Sir, have been speaking about the ordinary expenditure ; I have accused him of miserable incapacity in the conduct of affairs while he was iv power, and he has not disproved the assertion ; I have accused him of incurring fresh liabilities when he had aot the slightest chance of being able to meet them — of making totally illegal agreements with the banks — of seeking to repudia c agreements made, ana consequently laying low the honor of the Province — of plunging the province into ruinous liabilities through his utter ■ want of business capacity — of breaking his plighted word knowingly, wilfully — of his setting at defiance the ProvinoLil 'Jouncil and governing despotically, — and yet he has not disproved a single charge — controverted a single argument, for the simpie reason — ho cannot. Of course, he has called me a special pleader — special pleader — special pleader — special pleader — is the cry when anyone stirs the filth of the past. I liave alluded to these transactions simply in defence of the conduct of the late Government, about which so much has been said. I acknowledge no blunder, Sir, on the part of the late Government. Mr Marehant's case would never have been referred to arbitration if the late Superintendent, Dr. Menzies, had displayed the most ordinary business capacity iv making a proper agreement, when he instructed Mr lilarchant to take charge of the Oreti Railway. The only redaction which could possibly be cast on us is, that we did not press on the attention of the House, at its last ! session, the desirability of entering into the question. It must be recollected, however, that the Council was told that Mr Marchant had preferred a, claim for the conduct of the Oreti Railway works, which had been resisted, and that the matter hid been referred, in consequence, to arbitration. The member for Invenar^ill, Dr. Menzies, was told so. Why did he not then and there demand an investigation, which the Government would have beeu only too glad to have aeceeded to. For my part, Sir, my principle through life is to find a Jorkins, and 1 would gladly, in this instance, have lound one in tha Council. The member for lnvercargill, Dr Menzies, has denied having agreed to give anything for Mr Davies's patent ; I can only say, I hold in my hand an extract from a letter of his when {Superintendent, to Mr Davies, of date 22nd October, 1863 — " That the Provincial Government approve of, and is willing to carry out the arrangement with regard to your patent for a wooden railway." Reference to tne contract will ahow the price to be paid for it. The late Government at any rate gave him nothing for it. The member for Invercargiil, Dr Meuzies, says he made the agreements with the banks for tue good of the Provincej much goo 1 has resulted truly : illegal arrangements cannot produce benefit. The £6,000 balance of the £&>,0 .0 railway loan obtained from the bank was usoless to finish the works,- why, then, negotiate at ali and act illegally ? Dr Menzies has sougut to throw tha blame for breach of contract and non -completion of works on the Railway Engineer; 1 oelieve Sir, . that his late Honor broie them himself direct, and not after consulting the .Railway Engineer ; this, however, will be elicited in tlie examination under the commission. I know why the woi-KS were not completed was because he (Dr Aienzias) had misappropriated the fands provned for them ; at any rate, all the reports on the table exculpate the Railway Engineer. Of course the blame has to be 6hifted oil' the shoulders of his late Honor, Dr Menzies. The idea of his lidding fault witii the late Government for making an agreement without consulting the Couucil ia refresniug, and reminds me, Sir, of the old lines — The devil wa3 sick, the devil a saint would be ; The devil was well, the devil a saint was he. As the Government has intimated its intention of bringing in a bill to appoint a commission to institute a iair, just, equitable, and disinterested enquiry into ali inatuera connected with tUe stoppage of the railway works, winch will include the causes of the financial embarrassments of the Province, I will, Sir, with the permission of the House, withdraw my motion. Mr. COWAN said that after the able exposition by Mr. Pearson, and the clear manner in which he had brought ouc the features of tue important enquiry it seemed to Jiun (Mr. Cowjui) tnat very liitle more could be done. He therelore asKed leave that his name as a member of the select committee should be withdrawn. Carried. Mr. ARMSTRONG would not support the motion. There was a Railway Commission Ordinance, and tnat was the most business-like way to investigate the matters in question. Mr. fifiAKSON — No money was ever given for this patent. Dr. MiiNZIES said he did not wish to prolong the discussion. Davis's claim was for breach of contract. This is one point upon winch a serious reproach rests upou the Kailway Engineer. The Government trusted entirely to the Engineer. If he • had reported that any of those works were not performed in conformity with the specificaoations or that the time during which the whole work should have been completed, and at which, in case that work was not; completed, then the breach ot contract would have been upon the contractor. As it was the Government took tlie advice of tae Engineer. In the course which it pursued, it conceived that inasmuch as it was the offending party, it ought fairly and honestly to mccc any iiaouity whicii had occurred oy the transgression, by its o wn action of the terms of the contract. It did not contemplate any question imght arise, which would show that the contractor had failed in any serious way to perform the stipulations ; but if it had conceited tiiis it would have taken measures to become better acquainted with the actual state of affairs. Of course, we shall have it said we were silly in trust- ng to engineers. Allusion has been made to Cdi'tain questions addressed to Mr. Heale by the Deputy Superintendent on Ist August. The letter which enclosed the reply to tnoae questions had not been laid upon the table. The full iiifonnatioii of that lettered not strike him (Dr. Menzies) so forcibly at the moment. 1 enquired troni tue solicitor whether thac letter was upou the table. Was that letter forwarded with the other papers ? It was of very considerable importance, because Mr. Marchant's claim is not for equivalent amount ot salary, but lor a certain amount of percentage on additional work thrust upon him, according to the ordinary rules of the profession. The rare, 5 per cent., 1 think I found v the letter of Mr. Hcaie's, thac he says that in the long conversation in which he ascertained the special eligibility of Mr. Marchant, the question of remuneration was not broached. Mr. Marchant suggested chat he should be remunerated at 5 per cenc. if he provided tLe assistants, and at 2fr if the Government provided these. Now, although the Grovernuienc supplied all tho assistants, and Mr. Merchant did nothing but the'supervision, he now charges 5 per cent. Mr. MA<JL>ONa.LD asiied tnat his name should be withdrawn from the committee. In reply to che hon member for Invercargiil, he said cue hon member ought to know that the members of the late Uovernineut did not require to select any champiou. lndividuaLy they were able and willing both to fight, and defend themselves. The substance of what the hon. member said in releronee to the negotiations with Mr. Green, wore substantially correct. So soon as he was made aware by Mr. Green of the existence of the letter ot agreement and understood its terms, he ali once said tlie only course was to abide by the leiter. Mr. Heale's letter referred to by tlie hon. motiHwr lun bs?en forwarded to the arbitration, Mr. UUl'iiiiiittWUjN guye notice that hu

examine into the whole financial circumstances of the Province. If the motion of the honorable member for Waianiwa was pressed he askod tba! his name be withdrawn. He moved that the motion be withdrawn. The members were doubtless edified by such a display of patriotism as they had been treated to — a display rwver made so freely as when houorable members had just retired from office. The honorable gentleman argued that the bill he would move to bring in would meet the whole case. Mr. ARMSTRONG- secondpd. Dr. HODGKINSON said allowance should be made for the honorable member foi; Waianiwa. The Government had been condemned without a hearing. Mr. PEARSON withdrew. his motion. Mr. JOHNSTON moved "that all copies of tenders accepted and non-a.-cepied by the Provincial Government, from the 18th December, 18(55 to this date, be laid on the table. — Tenders were laid on the table. Mr. PEARSON asked "what steps Government intends to take regarding the newly discovered goldfields at Pahi." •The PROVINCIAL TREASURER said the G-overnment had not finally decided what 6teps to take. The Koad Inspector was at present surveying the road. Mr. HAY asked "if it was true that the Provincial G-overnment securities were paid to Mr. Davis after oilice hours ? " Mr. CUTHBERTSON said the question should have been asked of the late Government. The question appeared to him to be of a trilling character. Dr. MENZIES moved " that this Council is of opinion that no member of the Provincial Council should, save members" of the responsible Executive, hold any office under G-overnment, and requests the Superintendent to give effect to this resolution." Mr. HAT seconded the motion. Dr. HODGKINSON moved an amendment, " that this Council is of opinion that any member of the Provincial Council not being a member of the Executive, on accepting office under Government should resign his seat in the Conncil, but should be eligible for reflection." M. NURSE seconded. Mr. ARMSTRONG- supported. Dr. MENZf.ES explained that the amendment did not meet the case. Mr. MACDONALD laid it was a matter entirely between a" member and his constituents. Dr. MENZIES replied. A division took place. There voted for the amendment, Messrs Nurse, Hodgkinson, Clark, Wood, Pearson, Macdonald,Blacklock, Armstrong, and'Cuthbertson — 9. Against, Messrs Hay, Johnston, Swale, Menzies, Cowan, and Holmes — 6. The Committee on Sheep Ordinance, 1866, adjourned till next forenoon sitting. Mr. ARMSTRONG- asked the G-overnment " for all the plans and specifications relating to both Railways, be laid on the table." Mr. COTHBERTSON replied that all tho plans and specifications were on the table. Mr. CUTHBEHTSONf asked " leave to bring in a Bill, entitled, " The Railway Investigation Ordinance, 1866. The PROVINCIAL TREASURER seconded the motion which was carried, and bill was read a first time. Dr. MENZIES moved "that it is tho opinion of this Council that whenever the finances of the Province permit . thfc Government to apply a sum above one thousand pounds for the purpose, it should be devoted to the resumption of limningration. A discussion ensued as to the proper class of immigrants Co be brought out, in winch Messrs Macdonald, Wood, Hodgkinson, Cutlibertson, and Johnston took part. Motion wa3 carried. Mr. CO WAN asked the Provincial Treasurer, " what, balance there was if any, at the credit of the Sheep Department, prior to the collection of this years assessment." PROVINCIAL TREASURER replied £22 7s. Id. ORDERS OP THE DAY. 1. Cattle Trespass Ordinance, 1866, read third time.