FINANCIAL STATEMENT.

Te Aroha News, Volume VIII, Issue 485, 2 July 1890, Page 4

FINANCIAL STATEMENT.

(by telegraph, —press association.) Wellington, Juno 25. Ik Committee of the House of Represent,!, tives this evening, the Financial Statement was read by the Hon. E. Mitchelson, in consequence of the feeble health of the Colonial Treasurer. In its opening remarks the Statement attributes its surplus to the steady improvement in the condition of the colony, and the large economies and careful administration which the present Parliament inaugurated, and has always insisted upon, and which the Government has, to the best of its ability, carried out. Signs of real and very satisfactory progress the Treasurer noted, particularly on the one hand,thatour Crown lands are being rapidly taken up for settlement in small areas, so thatour agricultural holdings are increasing at as rapid a rate as they have at any time during our greatest prosperity ; while, on the other hand, there has been an increase in productiveness of most of our main industries which has been very marked. Then, in the short space of the year just closed it was evident that, with continued prudence, our financial difficulties are now well under control; that if our burden, in proportion to our number, may seem great, our strength and resources are far greater still, and capable of indefinite increase, and, although we must not in any way relax the care and vigilance with which we have watched our expenditure for the last three years, and have striven to extend settlement and protect industry, yet we have reason to feel sure that prosperous times have again dawned upon us, and that, humanlv speaking, it rests with ourselves to make this prosperity permanent. Indeed, this dawn of prosperity would now be seen to expand into broad daylight if we would only look fairly at the bright side of things, and dwell as much on the blessings and advantages which we have in this country as upon the temporary difficulties and troubles which beset us from time to time, and upon which some are too fond of dwelling. It is, no doubt, a plain duty to keep the latter in view, so far as needed, to insure their removal, but it is suicidal to ignore the counteracting facts, and our great and manifold advantages. EXPENDITURE AND REVENUE OF YEAR 18G9-90. The estimated expenditure for the year 1889-90, including charges under special Acts and the supplementary estimates, amounted to £4,150,703. The actual expenditure was £4,020,242. There was, therefore, an unexpended balance of the amount authorised of £28,861. Appropriations will be found in the appropriation account, and in the tables appended to this Statement. There are no items in this expenditure of so exceptional a nature as to require my calling the attention of the Committee specially to them. THE ESTIMATED REVENUE OF THE YEAR 1889-90 including the primage duty was £4,187,800. The actual amount received was £4,209,247 The total revenue therefore exceeded the estimate by £21,447. The Customs were less than the estimate by £49,126. The stamps exceeded the estimate by £24,755, and the railways by £63,340. The profit for the year of the Public Trust Office, amounting to £5,182, has not been brought to credit. LAND FUND EXPENDITURE AND REVENUE. The estimated expenditure of the land fund, including supplementary estimates, was £128,149. The actual expenditure was £121,919. The actual receipts were £87,692, as against £136,100 estimated. The expends ure having been £121,999, and the receipts £87,692, there was a deficiency of £34,227 for the year 1839-90. The deficiency I may say would have been less by £14,000 if land to that value which was sold had been paid for in cash instead of as it was in scrip issued for military services, and under the Forest Trees and Planting Encouragement Acts. The significance of this deficency must not be misunderstood. It means only that our anticipations regarding cash sales of land have not been realised, the preference being given by settlers to the system either of deferred payment or perpetual lease. It will be apparent that the short-coming of the revenue of the land fund to meet the cost of administration and survey must under such a system be only temporary, and if we are to continue the perpetual lease tenure, as we ceitainly shall, further financial provision must be made for some years to come. THE SURPLUS.

The surplus for the year was £115,074. This surplus, of course, includes the primage duty, amounting to £55,826. It will be in tho recollection of members that I expressed a hope when the primage duty was imposed, notwithstanding the fact that it was only estimated to produce about £116,000 in two years, that I should be able within that period to pay o(T tho whole balance of the deficit of £128,605, which stood at the end of the year 18S7-8S unprovided for. At the end of tho last financial year, the results of which we are now considering, the primage duty had only been in force twenty-two months, and the amount it had reached was only £101,958 ; yet I have found myself in a position to pay off the whole of the £128,605 to which I have alluded, some months within the period originally anticipated. This fact will, I am sure, be a cause of much satisfaction to the Committee. The primage duty, as hon. members will recollect, was only imposed for two years, and expires on the 50th instant. IV hether or not it will be desirable to continue this dutv for some time longer is a question upon which I shall have something to say presently. The final result for the year, after paying what was left unpaid of the deficit of £128,605, namely £78,605, is a balance of £36,569 with which to begin the current year. FUND. It will be in recollection of the Committee that my hon. colleague, the Minister of Lands, estimated he would be able to sell sufficient land to make this account selfsupporting, but he found that unless he made it compulsory on the part of the purchasers to take particular blocks for cash—that is practically restricting them to a particular class of tenure—it would be impossible to obtain the amount of cash which he had estimated to receive. Such a restriction would not have been in accordance with the policy of the Government, or have met with, the approval of the House. It was therefore thought better to leave intending settlers as free as possible to compete on equal terms of selection, and leave to themselves the tenure which would best auit their circumstances, cash purchases, deferred or perpetual lease, and not to make an attempt to balance the account by forcing the sale of land for cash. It is clear however, that if we are to continue this ’system of free choice of tenure we must face the fact that it will be impossible to carry on the settlement of the country without large extnaeoua ah 1 to th« land

fund. During the three years the late Government were in office the receipts from sales of land fell short of the charges fixed by law, and the costs of survey administration, by £147,200, without counting the amount expended from other funds in the purchase of the land, or on roads to open it up for settlement, or in settlement itself. For the two years and a-lmlf to the 3ist March last, during which the present Government have been in office, the receipts proved inadequate to meet the ordinary charges by £90,354. THE PUBLIC DEBT ON THE 31sT MARCH, 1890. The gross estimated public debt of the colony amounted to £38,667,950, and the accrued sinking funds to £1,383,432, leaving therefore £37,284,518. Of this sum there remained unexpended about £961,300. (The Colonial Treasurer then proceeded to give a number of details respecting loan conversion operations.) It is gratifying to note, as an indication of the growing confidence in the credit of the colon}’, that since the last loan was issued it has risen in price to 99. PUBLIC WORKS FUND. It may be as well to remind hon. members that since the year ISSS-86 the public works fund has been divided into three part 3. Part 1 consists of the balance left of the loans existing prior to the 31st March, 1886, supplemented by one-half of the loan of one million authorised in 1888 for roads, purchase of native lands, telegraph extension, and harbour defences. The expenditure from this account during the year amounted to £1 66,513, tho princi. pal items of which were, roads £84,031, and public buildings £35,472. The unoxpended balance at the close of the year was £233,675, and the liabilities weve £114,308. Part 2is tho account of tho million loan authorised in 1882 for the North Island Main Trunk Railway. The expenditure in the year was £48,822, leaving a balance of £386,985. Part 3 is the account of loan of £1,525,000 authorised in 1886 for the construction of certain railways, supplemented by one-half of the loan of one million authorised in 188 S. The expenditure during the year was £194,385, and the balance on March 31st £426,806, with outstanding liabilities amounting to £190,929.

Summarising the transactions of the year, we find we began by a balance of £1,445,670, increased to £1,458,195 by certain receipts, £12,525 that we expended, £410,729, including over £28,000, for the purchase of native lands, and that we had a balance in hand on the 31st March of £1,047,466, against which there were liabilties outstanding amounting to £514,932. GOVERNMENT LOANS TO LOCAL BODIES. Up to the 31st of March, IS9O, the Treasury had for tbo above purpose £250,000. The debentures issued for this amount bear interest at the rate of 5 per cent, per annum, and mature on the Ist March, 1892. The present Government has continued the issue of short-dated debentures until a fitting times arrives for their redemption by the issue of a 4 per cent, or 3} per cent, loan, when it is proposed to ask Parliament to make provision for the sinking fund prescribed by the Act. EXPENDITURE FOR YEAR 1890-91^ The estimated ordinary expenditure for the current year is £4,127,417, full particulars of which will be found in the Estimates. With the exception of the Postal and Telegraph Department, salaries have been increased in very few eases. The aggregate increase which has taken place in the Post and Telegraph Department amounts to £5,270. The Government have thought it desirable to classify the po3t and telegraph officials under a system which it is proposed to apply to the whole service, should the Civil Service Bill pass which the Government will introduce shortly. Before the several classes have obtained their maximum salary the total increase will be £19,569. This will take between five and six years to accomplish. This Department, considering the responsibility devolving upon its officers, has, as bon. members know, heretofore for a long time been underpaid in all its branches. Of the total proposed increase for the year, £4,471 goes to officers whose salary is £2OO a year or under. In education there is an increase of £6.000. In tho Native Department the increase of £4,400 is entirely owing to the appointment of additional judges in the Land Court, and the expenses of the Committee under the Act of last session. In working railways there are additional expenditure proposals of £IB,OOO. This arises from additional mileage opened for traffic, and tho increased cost of iron. In the public buildings there is an increase of £27,400, mainly for school buildings and a building for the deaf mutes. In defence there i 3 a small increase, but the government are of opinion that the provision made is not sufficient for such a force as our defence works require, and it is the intention of my colleague, the Defence Minister, to bring the matter before tho House, and if his proposals are approved further provision will have to be made in connection with this matter. As to the question of our contribution under the Imperial Act, it is possible that a payment during the year will have to be made on this account, but as it is uncertain, I don’t propose to ask a vote. The payment can only be small this year, and if anything has to be paid, I propose to make the payment out of unauthorised expenditure. THE SAN FRANCISCO MAIL SERVICE. Members will observe that there is a large reduction in the Postal and Telegraph Department. This arises from no provision being made for the San Francisco mail service after the expiration of the present contract, and from other items, a full explanation of which will be given by the Postmaster-General when the Estimates come before the Committee. I much regret the San Francisco service is likely to fall through for a time, as the New South Wales Government have positively refused to join in the subsidy, and I fear that there is small hope of the Imperial Government agreeing to pay for the conveyance of the mails to and from London and San Francisco. I cannot, however, believe that we are likely to be long without a good steam service between Auckland and San Francisco. THE OCEAN POSTAGE RATES. With reference to Mr Goschen’s proposals for the reduction of the postal rates to 2-Jd, the Postmaster-General, when making his statement with reference to the mail services, vdll explain fully as to how the proposal can be given effect to without loss of revenue to the colony. PROPOSED APPROPRIATIONS. Hon. members will be pleased to observe that the amount of tho proposed appropriations for the current year is slightly less than the amount voted last year, the respective totals being £1,983,332 and £1,987,237, notwithstanding the fact that the Railway Commissioners require £IB,OOO more than they did last year, and that we propose an extra expenditure of £15,000 for school buildings and £I,OOO for an institution for deaf mutes.

SCHOOL AND ASYLUM BUILDINGS. PRIMAGE DUTY CONTINUED,

This brings us to the question of ways and means for the year. Before 1 go into this, however, I wish to call the attention of tho Committee to two subjects about which there is much difficulty. I refer first to the question of providing the necessary means for school buildings. This expenditure, as hon. members know, has been charged to the consolidated lund for the last two years ; secondly, to the provision required for lunatic asylum buildings, which have hitherto been charged against the balance of the loan money originally set apart for the purpose. The question of locally charging, if not the whole, at any rate a part of the cost of school buildings, has been mooted from time to time, and the matter has been carefully considered by the Government. Wo have come to the conclusion, however, that it would be very difficult, with fairness to several localities, to make such a charge, and that it might seriously injure our system of education in country districts to do so. Yet we do not see our way at present to charge the consolidated fund with tho school building vote as a permanent thing. We think the whole matter stands in need of further consideration, and I am of opinion it would be wise for the House bo make extra provision for school buildings, and also for lunatic asylum buildings, which, I regret to inform the committee, are not nearly equal to the present requirements. This extra provision should be made for a limited time only, during which period I trust the growth of our ordinary consolidated revenue will render it possible to charge the school buildings against it, if Parliament shall determine that it is a charge which ought permanently to be borne by the ordinary revenue. The Government therefore propose to continue the primage duty for another two years ior the purpose of providing funds for school buildings and lunatic asylum buildings. The Government think that the time has arrived when the Minister of Education should have more direct control over the vote for school buildings than has hitherto been the case, and we shall ask Parliament to amend the law so as to enable the Ministers to have on effecfeivovoice in determining what buildings are unnecessary. We think, also, that whenever possible, future buildings should bo of stone or brick in preference to wood. My colleague, the Minister of Education, will shortly go fully into this matter for the information of the House. PROPERTY TAX.

The Government have had under their careful consideration, during the recess, the question of the incidence of tho property tax. The strong antagonism which seems to be felt against the tax in some districts of the colony would alone have demanded an exhaustive reconsideration of the subject, and such a consideration the Government have given the matter, but, I regret to say, without seeing their way to reduce, much le“3 abandon, the tax in the present state of our finance, our present necessities making it impossible to forego any appreciable part of the sum now raised. That sum, it must be remembered, is estimated at no less than £355,000 for the present year, and the practical impossibility of obtaining anything like that amount from property in anything like as equitable a manner must be obvious. The great diversity of opinion among the members of the present Parliament, as shown in tho discussion upon the amendments of the Act proposed by tho Government, render it unlikely that it can be satisfactorily dealt with during the present session. Tbo question of a change in the form of our direct taxation must be loft to another Parliament; but it must bo remembered that, in one form or other, substantially the sum I have named must be found. OTAGO CENTRAL AND PUIIIPUHI LINES. In my last years Financial Statement I submitted proposals to raise the necessary funds to extend the Otago Central Railway to Eweburn, and to construct the Puhipuhi forest tramway. Unfortunately, the House rejected those proposals when they assumed the form of Bills. The Government have had the question of these works again under consideration. They still think them of great importance, and should bo executed, but after the action taken by the House they do not think it their duty this session to again propose their execution. TAXATION. The Government would have been pleased if they could have seen their way to make any proposal to reduce taxation. Wo are confident that it is impossible to make any further appreciable reduction in public expenditure, unless we are prepared to largely curtail the public conveniencies which are now enjoyed, and the absence of which would be felt as a hardship. I feel sure the inhabitants of towns will not give up their conveniences, and I fear if the country people are deprived of theirs it will be another obstacle to settlement of country land. It must also be remembered, in reference to the reduction of taxation, that there are services still chargeable upon the balance of the old loans for which provision must be made upon the consolidated revenue in the near future, if we are to keep sound finance. But although we do not rind ourselves in the position to propose any reduction of taxation generally, the Government will make proposals with the view to give effect to tho recommendation of the Slining Conference as regards the abolishing of gold duty, and submit the substitution of other revenue in its place. ESTIMATED RESULTS OF THE YEAR 1890-91. The estimated total ordinary expendiditure for the current year amounts to £4,127,417, the estimated revenue to £4,159,000, to which I add the surplus of £56,509, with which I have shown we began the year, after paying off the balance of the deficit of £128,605. We shall, therefore, if our Estimates are realised, have a surplus of £68.092. subject, however, to a deduction of £20,000, to which I shall refer presently, leaving an estimated surplus of £48,092. SETTLEMENT OF THE CROWN LANDS. It is estimated that even with only th® present amount spent upon roads in th e next two years, a million acres will be taken up on settlement conditions, and that probably considerably more would be occupied if greater facilities in the way of roads were given. How, then, is sufficient money to be obtained lor surveys and administration without unduly forcing the sale of Crown lands for cash, finding,-as we do, that people prefer perpetual leasehold tenure ? it seems to me that, for a time at least, it must be borne by the consolidated revenue. I shall therefore ask authority for £20,000 as a grant in aid for thiß year, that being the estimated amount required. This brings me to a second question, how are we to get funds to make the necessary roads to render our Crown lands acceptable for settlement ? Now, it is clear that money tor this purpose can barely be obtained in one of three ways —from loan, from the consolidated funds, or from the land itself. The Government are not prepared to recommend a resumption of ordinary borrowing for this or any purpose. It is clear from what I have already said that we cannot spare the necessary amount from ..the consolidated fund;

we must, therefore, fall back upon the land itself, if this can be done without a deterrent effect upon settlement, in consequence of the apparently enhanced price which our proposals involve. Parliament has already determined that intending settlers should have the choice of one of three titles under which to hold their land—viz., by land purchase, deferred payment, or perpetual lease, with the right of purchasing the fee. The perpetual leasehold seems to be the title which the public prefer. It is growing in public favour, and will, I have no doubt, practically supersede the other two titles. All the costs, thereforo, of placing a settler upon the land, being tho purchase of the land from the natives, the survey charges, tho cost of making necessary roads, have to be provided in cash before any return in the shape of rent comes back to the Crown. Since, therefore, perpetual leaso is the form of tenure for which we have mainly to provide, it is clear that provision must be made for purchase of land, for surveys, and for roading, and the sooner we determine how this is to be done the better it will be in the interjfcsb of the colony. The Government have given the matter careful consideration, and, as I have just said, are of opinion the land must be made to bear the cost. We think that the necessary amount can bo obtained from the land in such a way as nob only nob to retard but really to promote settlement. 1 do nob proposo now to enter into the details ; that will be done later on by my colleague, the Minister of Lands. I may, however, say the general outline of the scheme will be something like the following : A block of land, for instance, say of 10,000 acres, is to be opened for settlement. The roads will be laid out, and sections surveyed. The cost ot forming apd metalling the main road through the block should be estimated and added to tho cost of clearing or forming the district roads. The total amount thus ascertained, we will suppose, is £5,000. A rate under the Rating Act would then be struck over the block to cover thac amount, less tho present value of the thirds, as though it were a distinct loan under the Government Loan to Local Bodies Act, and the County Council in which the land was situated would be asked to superintend the execution of the work under regulations approved. We should propose that in bush districts all road-making except the first clearing of tho main road should be offered to the settlers in the first instance, so as to give employment to them for the first year or two, when work is required near home by small bush settlors. If this system is carried out we think it will give great ' satisfaction and confidence to intending settlers, by insuring the making of necessary roads as they are required, the money being at call and depending upon no contingency, and enabling the small settler to earn a fair amount of cash at a time when he most needssuchlielp. No fresh borrowing powers will be required if this plan meets with the approval of Parliament, as there is ample pro vision under theGovernm6nt Loans to Local Bodies Act. A slight amendment of that useful Act, extending its provisions to land about to be opened for sale, is all that is required, the purposes for which the advances are proposed to be made being identical with the purposes for which the Act was passed. Honourable members will, perhaps, say that this is only another form of borrowing, and that is true ; but it is a form of borrowing for a purpose already approved by Parliament, and within the limit now fixed, the only difference being that the money will be provided at a more suitable time, and consequently will be more useful to the settlers. Provision will, of course, have to be made, as I have just said, to give the purchasers of the land credit for present values if the thirds which would, in fact, instead of being doled out as they camo in half-yearly, be available as a whole at once to the great advantage of all concerned. I submit that if we are to dispose of our lands upon perpetual lease or defeired payment it is clear we must make provision for roads, and it seems to the Government that this proposal is by far the simplest and safest way of raising the necessary funds. No fresh strain will be put upon the colonial revenue, settlement of land will be made self-supporting, and if Parliament thinks it better bo render any direct assistance, by charging a lower rate of interest than will have to be paid by the colony for the money, the public will know definitely what the amount is. I want the Committee to clearly understand that it will be impossible that after this year the present, arrangement, which is to find money out of loan in aid of settlement, can continue. As a matter of fact we have during the last five years found no less than £260,600 for this purpose, and the loan balance which is yet available will be completely exhausted by the and of this year. The Government have under consideration the question of any possible amendment of the land laws with a view of still further increasing the efficiency in the promotion of bona fide settlement. I think that an amendment is desirable, increasing the power of Boards and the Minister to prevent dummyism, although, as far as can be ascertained, there is in fact little now practised ; bub however little it must be stopped. We are also of opinion that in bush districts, and where drainage is needed, it would bo of material assistance to settlers of small means if the rent for the first two years could be postponed, and distributed over the rest of the term ; but in the case of perpetual leaseholders and deferred payment selectors, a Bill to give effect to these proposals will be introduced shortly. PURCHASE OF NATIVE LANDS. If the settlement of the North Island is to be pushed forward, provision must be made for considerable sums from time to time as opportunity offers for acquiring native lands. Authority has been granted by Parliament to temporarily apply a portion of the loan for the North Isjand Main Trunk Railway, to the purchase of native lands within the prescribed railway area, and about 759,431 acres of land have already been acquired, and much larger areas are : now under negotiation. Tho Government propose to ask for £125,000 more this year for this purpose from the same source, and as hon. members know, it is proposed by tho sale of land so purchased to recoup the loan and the amount lent, and separate account is kept of all sales made within the prescribed area. But there_ is a large quantity of native land outside the railway area which in the public interest ought to be acquired by the Crown and settled. Hitherto funds have been provided for this purpose by ordinary loan, but no attempt has been made by setting aside a portion of the proceeds to create a fund for further purchase. We propose to ask the House to create such a fund, by setting apart a block of say 250,000 acres in the North Island, and by paying in future into a separate account an uncertain percentage of the proceeds of all such lands sold for cash or deferred payments, and also of the rent of such lands let on perpetual lease. This land has in part been handed over to the Crown Lands Department, and the balance of it has only lately been acquired, In the meantime, pending the disposal of the land set apart, it will be necessary or three or four years ccrfciinly to have cash available at a rate. of about £30,000 a year, for buying native lands. This money will,of courge, have to be raised. The Government will ask Parliament to

authorise the Treasurer to advance it from the fund authorised to be raised under the authority given by the Government Loans to Local Bodies Act, the limit set by that Act beingsulficienbto coverall ourrequirements. There is, as no doubt the Committee are aware, power given to the Government under the Loans to Local Bodies Act, to raise money either in London or the colonies. Up to the present time no debentures under this Act have been issued to the public, it having been found more convenient to invest our own funds in such debentures as have been issued, and although they bear nominally 5 per cent, interest, the money does not really cost us more than slightly over 4 per cent. Should, however, the proposal I now submit be acceptable to Parliament, and our Public Works Fund become exhausted, it may be advisable to make an issue to the public, and we think this can be done with prudence and success in the colouy. 1 think that we shall find no difficulty in disposing locally of such an amount as may be required from time to time at 4 per cent, at par. If Parliament will consent, wo propose to allow an issue not subject to the property tax, and if we can issue at that price, it will really be as profitable a transaction for the colony as an ordinary shortdated loan raised in London.

THE STATE AND PROSPECTS OF THE COLONY.

I would now ask the attention of the Com mittee for a short time while I place before it somoimportant facte in justification of the assertion which I made in the beginning of this statement, that the colony was steadily progressing, and that our production in all branches of industry was rapidly increasing, and in some cases in an astonishing degree. I entered into this question somewhat fully in 1883, and made shorter reference to it last year. I propose to-night to go over a slightly shorter period than 1 examined in 1883, beginning in 1885 and in some cases in 1886. The importance of the subject cannot be over-rated, and the facts that 1 am about to state ought to be reiterated by every lover of New Zealand until they have taken a real hold upon the public mind, and become a part of the faith of the people, in place of the false ideas which are now current as to the non-progression of the colony. But I will first say a word about an adverse fact, which has been unduly magnified to our great disadvantage ; I refer to the loss of our population two years ago by an excess of emigration over immigration, not that in any year our total population was less at the end than the beginning, taking births and immigration on one side, and deaths and emigration on the other. The former have always largely exceeded the latter, but in the year 18S8 there was an excess of emigration over immigration of 9,175. I spoke of this at length in my Statement last year, and showed what in my opinion was its real significance, and I should not have again referred to it but for the exaggerated importance which has been attached to it, and the serious misrepresentation to which it has given rise. It has in particular been frequently represented that this loss has been going on indefinitely, but this is quite untrue. Taking the last three quinquennial periods from 1875 to 1889, in one year only, ISBB, did our loss by emigration from New Zealand exceed our gain by immigration ; and if wo take the quinquennial period in which that loss occurs, that is the period from 1885 to 1889, our net loss by emigration amounts to 2,416, this number curiously enough being comprised of women and children, but children mostly, in the proportion of 18 to 1 ; while in “ bone and sinew,” or adult males, as the term is used in these returns, there was a net gain to us of 431. I have said “ curiously enough,” but the anomaly is easily seen to be only apparent. If a married man and five children leave, and another couple without children come, we see our loss of population has been in children. Then I have pointed out that there is and will be a considerable part of the population of all these colonies which, though highly useful, does not readily root itself in the soil, and for this and other reasons is easily moveable, and which, therefore, will at any given time be found in greatest numbers where for a time public money is being most freely spent, and considering the fact that during the last three financial years (18S7-90) our own expenditure on public works was £1,640,309, while during the preceding three years (1884-8) it was £3,477,590, and that in the neighbouring colonies there was and still is a very large public expenditure going on, the surprise is not that we should have lost what we did lose, but that we should not have lost more—a fact which alone, I think, speaks volumes for the inherent attractiveness of this colony to those who really know it, and this remark suggests at once the real difficulty and its solution. SETTLEMENT ON LAND. We are again facing the great problem which has so often engaged the attention of the Committee and of Parliament, to get those who would be glad enough to make a homo here settled upon the land. Now let us see what statistics will show us. I have had a table prepared by the RegistrarGeneral showing the agricultural holdings of one acre and over in extent for the last 15 years, beginning February, 1876. It will be published with this Statement. A study of it will, I am sure, reassure any persons who have doubts as to our very substantial and remarkably steady progress to February in the present year. In 1876 the estimated number of adult males was 115,883, and the number of agi'icultural holdings was 17,250 for that number. With, on the whole, remarkably steady progress year by year, we find the number of holdings increased in February, 1800, to 38,178, and the estimated number of male adults then amounted to 164,392, so that the proportion of agricultural holdings to every 100 male adults had increased from 14'88 in 1876 to 23-22 in 1890; in other words, out of every 100 men in 1876, when the colony was considered most prosperous, there were only 14‘88 men cultivating the land, whereas in 1890 there were 23R So period by period we see a gradual diminution in the average size of the holdings, and the experience of the past year has shown us that the perpetual lease tenure as we now have ic is the tenure which gives most satisfaction to the public, enabling a settler to reserve the whole of any capital he may have for the purpose of establishing himself upon his farm, instead of having to pay it away in buying his land. Lot us see what our industries of all kinds have been doing for the past 15 years. EXPORTS. I have had tables prepared by the Registrar General showing the progress of exports in such a way that the fluctuations in the sereral industries can be traced, and they are very interesting. These tables also bear out my contention of the very substantial advancement of the colony. They will repay the most careful study and consideration. From them also ic will be seen that our agricultural production shows a steady advance with only such fluctuations as can be accounted for by variation in the market price, excepting during the last two years, when the increased value of our export of agricultural produce shows an extraordinary increase from £588,082 in 1877 to £1,434,297 in 1889. Turning to our

manufactures for the last fivelyears, weffind that in 1885 the -total value of our manufactures exported was £104,223. By what may be tormed steady advances year by year we find that they have risen in 1889 to £'205,698, or including flax to £569,880. In other words, our exported manufactures, including flax, had more than doubled themselves, and, inclusive of flax, they had increased four and threequarter fold. Let us now see what is the total result inexportsof the work of our manufacturing population, in the several quinquennial periods from 1875 to the present date, in proportion to our number of adult males. I have had tables prepared by the Registrar-General upon this subject. These tables, too, will repay careful study. They show that the total exports of New Zealand produce in 1875 amounted te £5,475,844, and to £669,919 excluding wool and gold. This gives £49 9s per head of the male adults on the whole export, and exclusive of wool and gold £6 Is. In 1889 the total exports were £9 042,008, amounting to £55 8s 6d per head of male adults, and exclusive of wool and gold, £4,280,163, or £2O 6s per head of male adulrs. This, it will be admitted, show's most satisfactory progress. A large part of this progress is no doubt fairly attributable to the public works policy, in facilitatingcommunication and transport, and so enabling us to profitably increaso our surplus products for export. I say “ surplus,” for what we send away is what is left after deducting a substantial and well-earned share for our needs. It is one of the great blessings of this country that notwithstanding tho largo amount which has to beremitted to England for interest on public and private debts there is no sign, speaking generally, of our people having'to stint themselves of any necessaries of life, even of a fair proportion of its luxuries, and there is not, I think, in any country in the world a more hardworking or more successul population of our race, or one which upon the wffiole is enabled to and does take life more pleasantly. FLOCK-OWNERS.

Attached to this Statement hon. members will find a table, showing, from the year 1881, inclusive, the steady growth in the number of small flock-owners. It will be seen, although that, notwithstanding the lavages of rabbits, large flock-ownors, that is those owning 20,000 sheep, have increased in number from 139 to 152, about 10 per cent. The intermediate owners, those holding between 10,000 and 20,000, have increased to 230, or nearly 19 per cent., while the small owners—those holding under 10,000 sheep—have increased from 6,517 to 10,146, or 55 per cent. The frozen meat trade has assumed very large proportions, and is now a settled and important industry of the country. It has grown in value (from £19,359 in 1882 to £783,374 in 1889, and is undoubtedly capable of practically unlimited expansion. SAVINGS BANK DEPOSITS. As one of the indications of the improved condition of the colony, it is gratifying to find from the returns the continued increase in the number of depositors, and in the total amount deposited in our savings' banks. On the 31st of December last there was in all the savings’ banks in the colony £2,075,864 at the credit of 110,480 persons, as against £2 691,692 at thecreditof 103,046 on the 31so of December, 1889, being an increase of £166,952 in the amount, and 7,434 in the number of depositors. It is interesting to note that the number of depositors having sums not exceeding £2O at their credit is as nearly as may be three-fourths of the whole number, and that there has been throughout che four years a steady percentage of increase relative to the number of depositors in each of the eight divisions in which they have been classed in the table. The average amount at credit of depositors in all the savings banks in the colony on 31st December last was £25 17s sd, as against £26 2s 5d on 3ist December, 1888. GOVERNMENT INSURANCE DEPARTMENT. The Government Insurance Department also continues steadily to grow, and to maintain its popularity amongst the people, a large percentage of whom have been educated, so to speak, to make provision for the welfare of themselves and those depending on them. The department last year issued policies for the total amount of insurance of £781,255, which almost equals the amount of the new business done in 1888. The sum of £7,573 was received as the price of annuities sold during the year. This is nearly three times the sum received for annuities sold immediately preceding the year, when the receipts were only £2,795. The total income of the department last year was £298,710, being £16,509 in excess of the income of the previous year. The amount of the accumulated fund at the credit of the office at tho end of the year was £1,582,447, showing an increase of £129,969. The number of policies in force at the end of the year was 27,218, including 100 annuity policies, insuring £7,326,129. The mortality had been considerably below the expectation, and the interest accrued from investments of funds exceeded by nearly £IO,OOO the amount paid for death claims during the year. NEW ZEALAND’S LOW DEATH RATE.

This diminished mortality is a proof of the healthy character of the New Zealand climate, to which the latest statistics of this and other colonies of the Australasian group still continue to testify, as I have shown by tho following figures for the year 1889 :

Although considerable numbers of persons, who are in weak health, came to New Zealand from the Old Country for the benefit of our unsurpassed climate—often, I am sorry to say, too late —wo nevertheless enjoy this very low rate of mortality, which is the lowest in the world. With regard to registered friendly societies, the assets, as at the end of 1888, were returned as of the value of nearly £410,000. An increase of £30,000 may be reasonably assumed for the year ending 1889, giving a total of £440,000. of which £16,000 was deposited in the Post Office Savings Banks. The funds of other societies organised for the purpose of thrift, and registered under the Friendly Societies Act, amounts at the same date approximately to £IO,OOO, and the funds of the registered trade union £6,500.

CAUSES OF TRADE DEPRESSION,

Notwithstanding these signs of substantial progress, which are of a most satisfactory nature, it is an undeniable fact that what is known as trade in its more limited sense has for a considerable time been suffering great dulness, and this, of course, is felt chiefly in the centres of population, that is in the distributing centres of the colony. I have considered the matter carefully, and though I do not profess to give a complete explanation, I have no doubt as to the main cause. I believe it is the practical abandonment of our long-continued practice of borrowing very large sums of money in the London market by the Government and by private individuals that is at the bottom of our trade difficulty. We have long recognised in a vague sort of way that the difficulty is connected with the cessation of public borrowing, but few of us have recognised the potent factor which the borrowing by

private persons of outside capital has been, and still is, in our financial condition. It may seem a curious and startling thing“to say, but I believe it to be true : the cessation of private borrowing in the various forms of credit given in London to us has as much to do v’ith the present trade difficulty as the eessation of public loans. The subject is a difficult one, and requires close attention to master it. PUBLIC AND PRIVATE BORROWING. The Treasurer then reviewed at considerable length the statistics of public and private borrowing with the object of showing that the contraction under these headings is accountable in a very large measure for tho depression. He showed that in 1878 British mortgages amountedto£lo,l2s,COO; in 1882 they had increased to £15,018,000 ; and in 1885 they had reached their maximum of £16,852,000, because in 1888, the year of the last return made, they had fallen to £16,205,000. He thought it very doubtful if in 1870 the British mortgages reached more than £4,000,000, but assuming that they did reach that sum, British commerce was pouring into the colony during the fifteen years from 1871 to 1885 at the rate of nearly ono million a-year to assist private enterprise. But against this is to be set the interest paid upon this amount during the same period. The additional debt on mortgages insured between 1882 and 1885 was only £i,soo,ooo, and tho interest paid was probably slightly over £3,000,000. The large trade which had been carried on with tho aid given by this borrowed money began now rapidly to contract, and nothing could stop that contraction unless private borrowing was to continue from the outside. Bub net only did no further borrowing outside take place, but since 1885 our outside mortgages have decreased by £6,270,000. while the interest paid outside the colony since 1885 to the end of last year was about £4,000,000. This striking change in our monetary relations with London must of itself be still producing a large disturbance in our trade. In this estimate no mention was made of our other private outside debts, amounting to at the outside £8,000,000. Bub, of course, they also are being contracted, and tending to produce the same result.

With regard to public loans, the Treasurer stated that during the past twenty years the Government had borrowed £27,000,000, and the total interest and sinking fund had been £20,500,000. The borrowings of local bodies amounted to £4,500,000. The Treasurer entered into tho details of these figures at some length, and then proceeded to say : “ Summarising then what I have said, we find that the total amount borrowed under these three heads from 1871 to 1889 may be taken as £45,300,000, while against this about £33,200,000 has been paid away in nterest and sinking fund, leaving about £12,100,000 free money. The net result lias, therefore, been that from 1871 to 1890 the colony has been able to use as it liked the whole of the proceeds of its exported produce, and has had besides to spend £12,100,000 of borrowed money, or, on tho average, £600,000 per year, tho average gradually tapering off until for the last two or biiree years we have not had any free money coming in, but have had still, of course, to bear our full burden of interest. We have now r-eached a stage when Government and private borrowing in London has ceased, and we find ourselves in this position—that instead ot having the whole of the proceeds of our exported produce, and, say, £600,000 to spend as we please per annum, we have no loan coming in, bub have to find from our exported produce £3,250,000 to pay our London interest. That this is the process which is going on we see from our table of exports, which shows that for the last three years our exports have exceeded our imports, at first by a small amount, and last year by so large a sum as to show, I think, that we have at last reached the full limit of the difference of exports over imports, which our indebtedness to the mother country requires. Unless we make up our minds to pay off the capital of our debts, and are able to do so, it seems to me that we have now practically borne the crucial test, the heaviest storm that can be pub upon us if we refrain from further borrowing, and that we have shown our strength is ample to carry us through. From what I have said, it is clear that owing to the determination of the people to cease borrowing, our distributing trade must be brought down tonormal limits. Anothercontributing cause is thedisinclinationof many capitalists at present to invest in new enterprises. This disinclination is, of course, nothing new, nor is it in any way peculiar to the colony. It always appears when a flush of trade has been followed by a period of dulness, and this tends materially to prolong the undesirable state of things which causes it. At the present time ibis emphasized by the transitional state of the relations between capital and labour. There is another thing which is in part an effect and in part a cause of the dulness. For some years our banks have been steadily, and for the last three years rapidly, contracting, at least that part of their business which is represented by discount, so much so that while in actual amount these discounts were less in 1889 than in 1874, or any intermediate year, they were in 1889, reckoned in proportion to population, barely one-half of the average for the previous 19 years. I will mention one other subsidiary cause. The Savings Banks show, as I before mentioned, a steady increase in the number and amount of deposits. From this and other facts we may infer, what I believe is generally admitted, an increasing tendency to greater thrift, to save more and spend ■ less, on the part of a very largo section of the community. The meaning of all this, as I take it, is obvious —that with a greatly-diminished trade we have practically the same number employed as under the stimulation of a profuse and long continued expenditure from loan on public works. Our trade has enormously increased, and the number of our traders proportionately multiplied. We have in our present circumstances too many middlemen, too many distributors in proportion to the produce of the colony. This again means keen and unreasonable competition, bad debts and losses, small and doubtful profits ; in other words, dulness of trade. Two men are, in fact, competing for one man’s work, and the remedy is equally obvious ; our towns have grown too large for the country yet occupied, and a considerable proportion of our townsmen, if others cannot be gob to occupy more of the land, will have to take to the land themselves, or to some other form of productive industry, before our commercial equilibrium will be restored. If these remedies cannot be at once and sufficiently applied, ib is quite possible, I believe, even probable, that we may yet have some more to add to those who are being forced out of their old employments as distributors and are unwilling to take new ones. Bub this I am satisfied will be temporary, and not to any great extent, and in view of the great and increasing productiveness of our industries, the restoration of this importaub branch of our trade oo a sound and satisfactory condition may be anticipated at no distant date. LAND SETTLEMENT. The Treasurer proceeded to discuss the question whether we could amend the land

system so as to promote settlement. He was of opinion that we could not do so, but, thought the provisions of the Land Act ot 1885, for the acquisition of land for village settlements, ought to be extended so as to cover the case of providing small holdings suitable as well for agriculture in its ordinary sense as for fruit-growing and spade industry. The Government intend to bring in a Bill to make the necessary alteration, but the principle of tae Act, that no land shall be acquired without the owners consent, and no purchase valid until approved by Parliament, will be kept intact. Another point in this connection is also well worth the attention of Parliament. There seems to be a tendency in our educational system, excellent as it is, to give our young people a taste for town life as opposed to country life. It ought fito be considered whether this tendency cannot in part, at least, be counteracted byamodihcation in ourschool course. It seems probable that we might do something towards inducing and developing an inclination for country life and pursuits by following the example of other countries, Scotland for instance, in making elementary agriculture a part of the leaching given in our public schools ; probably, also, we should be helping in the same direction, as well as doing what in itself is good, if we could encourage among our scholars a taste for natural history.

RETROSPECT AND COMPARISON. The Treasurer then adduced figures relating to the expenditure of the past three years, with the object of showing that the Ministry had fulfilled their promise to make reductions in expenditure to the extent of £291,410. With regard to the effect of the additional duties which had been imposed to cover the increased charge on the public debt and the transfer of certain services from loan to revenue, he observed that while the tariff has realised the _ revenue expectations, it has certainly not in any respect injured our local industries, but on tho contrary, assisted them considerably. Our local manufactures exported, exclusive of flax, have doubled in amount since 1887, and other industries have in most instances greatly improved. Take the woollen industry, which we are told confidently is languishing. Let us see what are the facts. We find that in 18S6 there were five mills at work, and they purchased wool that year to the * extent of 1,879,9091 b. In 1889 there were seven mills at work, and they purchased 3,556,004 lb. This shows conclusively that the industry is making real and rapid progress. The whole of the mills are fairly prosperous, and are working full time. The Government have reduced the Public Works expenditure from £966,159, in 1887-88, to £410,729 in the year just closed ; and with respect to the settlement of oui lands, what has been done on this vital subject during the last two years and a-half, as compared with the previous three years ? The acreage, per annum, of all land, nob pastoral, disposed of, has been practically doubled, and that of lands disposed of on settlement conditions more than doubled, while the cost of administration has been diminished by 27 per cent., so that cost now stands at 4s per acre disposed of, instead of 10s, as formerly. I may add that the total settlement land disposed of during the previous three years was 700,000 acres. During the last two and a-half years it was 1,150,000. There are now about 1,000,000 acres in tho market, and more is being rapidly brought in. Even at the very satisfactory rate at which it is at present being taken up, about 450,000 acres a year, we have fully two years’ supply on hand. The increased number of agricultural holdings for the past year, as shown in the returns of the Registrar-General, are 1,000 in excess of the 'annual average increase of such holdings for the past six years. It is most important to note that the proportion of selections voluntarily made under settlement conditions, as against cash sales, has increased from 4 to 1, at which it stood under the administration of the late Government, to 7 to 1, under the present Government. It is very satisfactory thac under the present measure of occupation, the average area under all tenures, including small grazing runs, bub excepting pastoral leases, is just 200 acres per selector. Let me add that it behoves us on all accounts to see to the utmost that settlement is not anywhere stopped or starved for want of roads. It concerns the colony no less than the settlers themselves that settlement should be not only possible bub prosperous. In conclusion, the Treasurer briefly recapitulated the results dealt with at greater length in course of the Statement, and said : —All we require is a steady pursuit of our present policy of careful economy in administration, a steady refusal to again resort to borrowing, and a determination to get our waste lands settled as rapidly and as well as possible, by otlering every facility to those now among us who, dissatisfied with their prospects in thoir present employment, are capable and desirous of settling on the land, and by inducing immigration of a desirable class of persons to supplement those already here. In a few last words I would say that sober finance, extended settlement, increased industries these, with neverfailing confidence in our future, will carry us prosperously on, and leave this land as a noble inheritance bo our children.