FINANCIAL STATEMENT.

Wairarapa Daily Times, Volume 6, Issue 1716, 21 June 1884, Page 2

FINANCIAL STATEMENT.

Mverod Juno 20th, 1884, by the ; Colonifil Treasurer, the Honorable Major Atkinson, Mr Hamlin, tho task which I havo before me this evoniug ia cpmparativoly a light one as I havo ouly- "to submit for the codsidetatiou 6f the Committee tho financial results of the pnat year, and ask for a grant,pf,!a sufficient supply (o carry _ on the,' public service until a now Parliament can ineot for the despatch of business, which I liopo it will do within two montliß from the present time, I desire at tho outaot to BBsure honorahlo memhorf that thoinaucial difficulties with which we have to cope during tho current year aro by no moans of so serious a nature as sonio seem disposed to think. I am satisfied that there is nothing in the difficulties of our financial position to make ub doubt I our, ability to meet and overcomo them without placing any. undue bnrdens upon tho tax payers of tho colony. It has been my pleasing duty for the last two years to announce a satisfactory surplus at the end of each financial period, but I regret to say that the serious depression under which New Zealand in common, with a largo pa; t of the civilized world has been sutlciing for some lime past, has caused a -considerable falling off in somo items of our revenue, and has thus ti'iinsformrd into a deficiency tho small estimated surplus of 18,295 with which I hoped to have ended the year. Ordinary roveuuo account 1883 84, In the statement I had the honor tomako.to the committee Inst year I estimated- the total cxpeudituro for tho financial year ending 31st March 1884, at £3,6G1i49G, Of this amount <£1,645,G94 was required for interest and sinking fund, and for the civil list and other charges under permanent Acts,_ and £2,015,802 for tlio fßtvices for which annual provision 'is maue by Parliament. The sums voted on tho supplementary estimates, howovor, increased the amount of the annual appropriations to 12,040,3G0, this sum thorefore, with the estimated charges, under permanent Acts amounting, as'l havo just stated to £'1,045,694 gave £3,686,054 an the total appropriations for tho year, t v o total actual expenclitiiro on this account during the year proved to bo £2,681,320, being £1.734 less than tho estimated amount, llio payments under permanent Acts were £506 in excess of the estimate and those under the notes of the year were .£4,241 within, the amount authorised, Thcso aro the net results honorahlo members wili find tn looking into tho appropriations account already laid beforo Parliament that in somo cases tho votos woro- cxceoded, and that: in others tho amounts authorised wero not all expended. ■ Eliminaliiiij'lhe imprest advances, outstanding at tho elbso of tho year, which tlio lav/ requires the treasury to include in tho Appropriition Account, but which do not'form part of tlio' final expenditure - of tho year, tho payments in excess of tlio votes of Parliament, amountod to £27,8C2, to which, howovor, should be added L7,2GG for sorvices unprovided for, making tho total unauthorised expenditure L3o"l28, chargeablo against the LI 00,000 provided for this purpose by tho Public Rovcnuoß Act. On the other hand, tho unexpended balances of votes amounted to L40,3G9. As information relating to the so-called unauthorißod expenditure and unexpended balances has already beon laid beforo Parliament it is'unnecessary! for mo to refer to them further. During tho year 1882 83 tlio total expenditure nut of tho ordinary revenuoamouuted to L3,G38,8841 aB against L 3,681,329 exponded last year; tho expenditure of 'B3 and 'B4 being, thoreforo, greater than, that of'B2. and 'B3 by about L 43,900. It will bo peon , from the table, which will - hi found 1 appended to this statement when published, that tlio classes of expenditure 1 , mainly accountable for this inorease are education . L 12.200, and -.railways' 153,700, hut a saving of £39,200 was effected in tlio constabulary and defence services. The liabilities of this account on tho 31st of March, 1884. were, estimated at L1C6.757, being less than the amount outstanding on the 31st March, 1883, particulars of theso liabilities have already been laid before Parliament, For the purpose of enabling honorable members to comparo the liabilities outstanding at tho cloae of tlio' last financial year with the liabilities of the three previous years, (the present, mode of treating liabilities having now been four years in existence,;. I have jiad a table prepared, which ■■yijl -accompany this statement when , p'ubUijhed, the ordinary revenue of the year'B3 and 'B3, that is tho ■ revenue exclasiro of tho receipts lrom land sales, was estimated in the financial statement': 1 ' of 'B3 at L 3,573,800, the' subsequent increase, howover, iu tlio property tax of one farthing in (bo pound, 'bonght up the estimate to L 3,658, The actual amount of ordinary, revenue received and brought to accouut', by' the treasury, during tho year- was 13,483,659, being thus L 165,141 undor the estimated amount. Tho usual comparative return , of tho estimated and-actual-receipts will bo laid boforo honorable.membora, itwill ! be Been that the main branches of revenue in which the estimated receipts have not . been realised aro customs and railways, In customs the amount: received was i L 123,313 short of tho estimated amount, • which.was L 1,520,000, In railways tho mount estimated to ho reoeiyed waa

H ,020,000, but tho amount brought to account proved to be 1962,119, being thus L 56,881 under the ostinaato. l -1 liave-; already stated to I ho committee that tho total eppendiinro out of the ordinary revenue of the consolidated fund: duringthe year 1883-81 was LG31.320, and that 1 the revenue amounted to L' 3,493,659. To the latter sum I add,- however,- llio balauce at credit of the account nt I lie beginning bf tho yenr, L 35.549, making the total receipts L3,82p.1308. Honor-: .fiblo ijaonjLora -will thus bob that the transactions : of '. the ; consolidated fund for tho financial year ending the 31st March last resulted -in a deficit of L 152112. I may perhaps here be permj[t4(li Mr Hamlin, to : point out the great - difficulty of making an accurate estifnate bf revenue, Experience teaches a Verv slight alteration in the price of either wool or grain very materially affects our incomo,. In some years when our staple products soil al a good price wo suddenly find an overflowing treasury, On tho other other hand when prices are low wo find ourselves face to faoe with that unpleasant fact for a treasurer, a deficit. In so small a country as this we shall be always subjected to sudden rises or falls within certain limits in our revenue, and we must from time to.time expect to have to face a deficit unless wo tiro prepared in Our annual budgets to leave a much wider margin of surplus .'hftn. seorua to mo either desirable or necossary, for a large surplußin my osperi" once geuerally moans pressiug demands for greatef expenditure. It also means that ■more money has been taken out of the pockets of taxpayers than was necessary for tho service of tho year, and this Ihave always endeavored to avoid doing, holding iis I-do tho belief that no Government is justified in collecting move money than is sufhcient to carry out. the services voted by Parliament. Land fund' account 1883,1884: The amount to bo expended during the year out of monoys derived from sales of land was estimated at £238,162, of which £30,600 was for payments under permanent acts of the General Assembly and L201.5G2 for, payments under votes for the services of; tho year. Tho actual expenditure was L235,(362, or LSOO moro than estimated amount, The moneys handed over to local bodies for expondituro on road maVns: from moneys derived from lands Bold on deferred payments was 123,358,'; There was also, paid to local bodies during tho. year L 45,456 . for rates under " Tho Crown and Native Lands Rating'. 'Act, 1882," . making a total of £68,804 handed over to local bodies to bo expended by them. The expondituro in respect of the Grown Lands Survey and other Departments, amounted to £158,373, being £3,190 within the amount authorised. Tho amount trans* ferable under Section 4 of "The Roads and Bridges Construction Act,; 1882," to the main roads account in tho Public Works fund on account of the transaction of tho years 1882 and 1883; was found to be £75,203, but no transfer was made necessjtyfor doing so not having arisen. The liabilities su,(standing on tho 31st March, 1884, on this account, amounted', to £33,577) exclusive of tho sum of £75,203 .transferable to the main roads account, in respect of tho transactions of the year 1882-83. The estimated revenue during the year. from sales of land was £275,600, but the actual receipts proved tojbe £232,545, boing 143,055 under the estimated amount. Tho revenue derived from cash sales was £163,758, and from sales on deferred payments£6B,7B7, To the rovenuo I add the balance with which we began the year £86,564, making the total receipts £319,109. Deducting from this amount the expenditure amounting to £238,662, which includes the sum of £68,804 paid to local bodies, we get a balance at the close of the year amounting to. £80,447) subject, to. thochargo of £75,203 transferable to the main roads account, The publio debt on tho 31st March, 1884, tho gross public debt of tho colony/amounted to £32,307,711, and tho accrued sinking fund lo £2,792,808, tho net public debtwaß theref0re£29,574,903,' Of this sum, however, there remained unexpended £877,912. In tho ' financial statement which I made in 1883, I informed the Commitleo that whenjhe amount represented by Imperial guarantee and other debentures amounting to £723,300 temporarily taken up out of tho moneys - at, credit of the publio works fund and which was notthereforeinCludecl in the publio dobt of tho culony, had been raised, tho net debt would amount to £28,508,581, During tho past • year £599,300 of the sum mentioned has been rawed, leaving unraised, which I accordingly deduct and get £28,384,581, DuritlE! the year there has also been raised the second £1,000,000 of tho loan of three millions authorised in 1882, together with the £250,000 authorised by "The Colonial Inscribed Stock Loan Act, 1882," llio debt has further been inoreasod to tho oxtent probably of £101;300, by the conversion to which I shall preseutly refer of a largo amount of 4} and 5 por cont'-fivi thirty debontnres into 4 per cent inscribed stock. At thoEauk of England tho reduction in tho rate of interest in respect .of. this portion of llio dobt, has, however, caused a large auuual saving, Tlieso increases of tho public debt, amounting to £1,411,300, added to £28,384,581, gives a total of £29,795,881, l' t'om this- sum, however, I deduct tho sinking funds accrued during tho year, estimated.at£22o,979,leaving£2o,s74,9o3, which, as I havo already slated, represents tho net public debt'of the colony on tho 31st March, 1884. A loan of £1,000,000 was raised in January, 1884. Last year I had occasion to congratulate the. Commit-. tee on tho unprecedented-success which had attended the negotiations of the first instalment of- the loan of three millions authorised in 1882, That loan, as Honorable Members • are > awaro, was offered to the publio through the Bank of England in the, form of a 4 per cent inscribed stock,- at a minimum of L9Blos, the averago,price nt which it was placed .baing L9812s sd. The second instalment of one million was raised in • January of this year, Sir P. G, Julyan and Sir F. D. Bell again acted as agents, and the loan was offered to the publio in the same form as on the former occasion, and at' the same mimimum L9Blos. The tenders received at the Bank-of. England were 607 in numbo", amounting in tho aggregate to L 5,073,000 at prices varying from the minimum of L98lo? up to LIOO 16s 6d, being iio less than LI 14s Id in ( .advance of tho price obtained for the first million. There is therefore 1 s'ill greater room for congratulation on the present occasion at this renewed expression of confidence in the resources' of the colony, and at the prospect which lha state : of. our credit affords of our being able;if to manage our affairs with prudence, to obtain the necessary loans for our public works uprjn very : favourable- terms. Papers relating t") tho negotiations of tho loan will : as,usual be laid before ParHamont at an .early date, Colonial ,:, inscribed, :Btock: is I have already.-Etated, tho loan authorised by " The Colonial Inscribed Stock Loan Act, 1882" was raised-last year, It was taken ■ up by tho Postmaster General at par as an .investment on account of tho Post Offico Savings Bank, and it bears interest at the ralo .of 5 per cent per annum. Tho proceeds .were in accordance; iwitlf. the Act paid into tho public, works-iifuiid, It was found whoa preparations were , being made for offering tho Block :to the publio that tho Act would require^amondme»t : in certain directions to render it workable, and as it .was proposed io - offer, the stock through tho, medium of tho post office tho whole of the loan has been .temporarily

taken up; by tho postmaster general .until" the Act ran bo amended and a favorable ; opportunity-arises for disposing of the stock ! to tho public,, . Conversion of debentures. Last year in adverting to the. troasury bills amounting to 11,832,000, exchanged on tho 31sc December for debentures, having a •cmtcncy of tli;:co years, issued under-tho '■ Treasury Billti Acta of 1879 and 1880 to. j)o converted into 4 per cent insbribed stock.: I stated with* reference to tho proposed conversion that circumstances had not ..proved i sufficiently favorable for a successful operation; but that the Govern, mcnt intended to inscribe the debentures as soon as a fitting opportunity offered. The desired opportunity [prcscntod ■ itself last' year, and under. the wise and skilful management of Sir P. G. Jul yan and Sir I', Dillon Bell—tho stock agents under Act of 1877—tho operation l .lias been carried to a successful isstio. Bfc > was not • however, restricted to.tho conversion of tho debentures for £1,832 000. Honorable members who ■ are familiar with tho form and currency o our debentures will .recollect that a portion of them was issued with, a currcucy of 30 years, redeamablo at tho pleasure of tho Government in any year after the sth year from the date of issue on tho Government giving six month's notice by advertisement of its intention to pay them 'off, The Government .had long contemplated the conversion of these fi>3o debentures which amount to L 7,250,000. The 5 years from date of issue having expired, and the stock agents woro empowered to convert them and were only waiting for a favorable opportunity to do so. Tliey determined ,therefore to combine, in one large operation the two classes of debentures amounting to L 9,082,000 not however by the compulsoryciillingiin of the '3ve thirty debentures, but by giving to ilia holders the option d£'. •'COnvertbn on certain torma,-" Accordingly'.iff September 1883; an an-' nouncemont waS made piiblio through the Bank of England llmt up to the 30th November 'applications for convertion would be received in respect of tho following debentures :-LG,000,000 44 per cent fife thirty debentures ftt.LlOS of stock for overy LIOO in debentures; L 1,250,000 5... per cent five thirty debentures at LlO3 10s of Block: and L 1,832,000, -5. per cent debentures at LIQO of Btook, Tho result of the invitation was. that the following debenturgs were brought in and converted, namely, L 3,053,000,4 per cent five tliirjy debentures ; .L 503,700, 6 per cent, five thirty debentures ; . and L 1,832,000, 5 per cent, debentures, .making a total of L4',388,700 converted out of L 9,082,000, Full accounts have not yet been received from tho-Block agents, but it is calculated that after Betting aside a sum by way of sinking fund to cover the iucvoase of debt arising from tho conversion, a sura of about L 28,800 will bo annually saved to the Colony by the reduction of tho into of 'interest, a result which j think the Committee will agree with pie may fairly be'characterised aihiglily satisfactory, I may inform the Committoe that tl>e whole of the debentures for L 1,832,000 were held on behalf of the sinking fundß of Now Zealand loans, the Post Office Savings Bank, tho.Govorumontlnsuranco Department, the Public Works and oilier funds,- and that' the ' right ■ to placo immediately L 500.000 of tli'o 5 per cent during tho years .1883 and • 'B4, tho inscribed stock'on the London market was reserved, When, the proposed conversion was announced an undertaking having been given not to soil tho balance before the third instalment of the loan of three millions was raised. I may further state that the Government have received from the agent general advice by cable of tho sale of. stock to : that amount in favorable tormas; Public Works Fund: For.the yoar ending-the.3lst March last Parliament voted out ?f the Public Works Fund L2,014,'/57, exclusive of the voto -for land purchasb', 'L771000. The actual expenditure exclusive of ■the ■ erponditprfi. for 'iland purchase, amounting to L2<f,4Bo,,iind also exclusive of 'tlio expenditure tiiidor " The Roads and Bridges Construction Act, 1882," amounting to L10G,398 ( . for which, as hnjioiirable members know no vote is lakehin tlie annual appropriations, The chiotitoms of expenditure were: railways, L 061,845.; roads.. 1,222,343; public buildings, L1G4.375 f immigration, L 107,041, and.other services, L 123,202, A retutn of this expenditure will be found in a _ table annexed to this statement. The liabilities outstanding at the end of tho year, exclusivo of those for land purchases amounted to L 997,443, which, added to tho sura "expended, 'L1,278,710, gives a total of L 2,276,153 as against 12,014,757 voted for tho year in' speaking of tho expenditure out of tho Piiblio Works Fund. The liabilities at tho ond of tho year 1 liavo excluded, both (ho expenditure and liabilities in respect of land purchases, and also thoao incurred under tho Roads and Bridges Construction Act, Tho land purchaao iabilitios on tho 31st. March last as shown by tho return laid upon tho tablo. of tho Hou?o according to law amounted to L 285,400 as against L 309.299 shown at the conclusion of the provious year, but, as honourable members aVo aware, only L2OO;0OO was sot apart under tho" Throe Million Loan Act, 1882" for purchaao of native land, tho House having approved of llio abandonment of such of tho proposed purchasos as tho Government did not think it dnsirablo to proceed with. Of this L 200,000. L5G,400 has been spent up to tho 31st March last, and it is estimated that by abandoning such purchasos as I have referred. to tho balance of L143,G00 will bo sufficient to coyer the liabilities,.: Out of L 350.203 standing to the credit of tho fund available undor the Roads and Bridges Construction Act . L 109,388 lias been appended,. Of this L 79,490 waa on 'account of main roads, and L 10.902 o i a«count' of district roads. Tho liabilities outstanding on the main roads account are L1G0,483, aud upon the district roads account L 43,777. The balance i)f il! tliB public works fund remaining unexpoiided on the 31st March •last including balaiico' L389',000 of tho seoond instalment of the loan of 1883 not then received',"amounted to L 877,912, One effect of lirqjting tho expenditure of tho loan of 82 to about one million a year was not, I think ioreseoii when the Act was passed,. . For example, to exactly spend L 1,000,000 per' annum on public works with only L 1,000,000 per annum in cash available would, under any circumstances, be next door to an impossibility, and in case of raikay?. it is altogether impossible, Tho work may be divided into throe classes, viz., (1) formation and bridgos; (2) materials for permanent way; and (3) platelayings and stations; and oach of these items absorbs nearlya third of the total amount, If therefore, the formation on most of tlie line 3 bo done daring the first year, it would be no:cssary that the . whole of the works in the country should be stopped during tho second, year in order to pay during that year for the rails, and .sleepers, and then to proVide for tho' laying of tho rails and the making of tho stations during tho third year. If, however, th o work in the country he continued dtuing the second year, it is evident that the rato of expenditure originally proposed must bo over, run and this in fact has to some extent occurred, ■ Tho Government-have, therefore, whenever circumstances appeared to justify such a course, .ventured to Slightly exceed tho riutoority directly given by Parliament in ordering rails, and. .rolling stock, eo as to provent the work standing slill longer than 1 was absolutely necessary, -and this action on. 1 the'part o' the Government will explain to 1 bonorablo members how .it comes to pass 'that ' tho iexnehdituro ; and liabilities | together -recced the votes by the sum ' of L261.3G9. I'noW; inform the. Oommittco ■ "that tlierq is material to; the 'value of about j. L 300,000 consisting of rolling stock ,not sot ' up, and rails cither in tho'hands of tho

Governmenfc.on the sea or being mado to the order of the Agent Geueral, I desire to call the uttcutiou ; of tho Committee to those facts bccauso I think no Government should exceed _ tho votes of Parliament in committing tlio ; country to cxpandituvo ov liabiiitios : without tlio attention of Parliament being specially callod to iV it will bo jot Parliament to deter« mino if tlio action, of tlio Government, in thus exceeding the votes, by liabilities, for material for futuro use was justifiable had vie not acted as wo have dono, One of two things must have happoned, either Borne £260,00P less must have been spent on the works on the lines thus rendering the depression still greater than at present, or rails and rolling stock to that amount must havo remained unordered to the great delay ot the works generally in the future, In the Public Works statement made in 1882, it was pointed out that a large expenditure would be required for works upon the opened lines, and it was proposed to allocate a large sum out of the balanco of the. five million loan for this purpose. The sum available has, I regret to say, been found quite inadequate to meet tlio necessary expenditure. Relying upon that proposal as being 'sufficient to aieet the requirements of the public service, no futthor direct provision was ma-Jo in the schedule to the threo million loan act for the necessary improvement on the open lines which the increasing traffic is peoxetually demanding; such for instance as increased rolling Btock, further station accommodation, heavier rails sidings, and water supply, : It i 3 true that a large portion of this expenditure might, under the loan act, 1882, bo charged upon the lines named in tho schedule, but this mode of charging does not seem satisfactory to the Government, and no provision has been mado for a number of the open lines upon which a lurgo expenditure has been found necessary, At any rate • it is plearly a question which requires tUa special consideration of- Parliament, Under the authority of the votes of Parliament, liabilities have been incurred and expenditure mado upon the opeu lines during the two yeirs since the 31tt Maroh 1882 to the extent of £830,000. Of this £460,000 has been charged against the five million loan, leaving £370,000 which is at present charged under section four of the Appropriation Act of last year to the loan account and for which further ways and means will have to bo provided or the amount will have to become a permanent charge against the loan, It will bo also necessary to make some provision for .urtbti 1 expenditure upon open lines which cannot'possibly bo avoided. I.fear that a sum of not less than £IOO,OOO will be required to ho_expended annually upon the open lines besides all charges for renewals, maintenance and repairs," which are, of course charged against tho receipts,, ifthe railways are to keep pace with tho increasing traflio. Under ordinary circumstances Mr Hamlin it would now be my duty to submit for the consideration of the Committco, the proposed expenditure of tho ordinary revonue for the current yeay, and then to apk the attention ot hor,, members to the estimated revenue with which it : was intended to meet such expenditure, but as matters Btand in this House, I have only to ask the Committee to grant sufficient supplies to carry on tho public servico until tho new Parliament, and to make temporary provision for the deficit of last year, and such further provision for public works as may be required until the new Parliament should havo decided how the oxpendituro upon the open lines is to bo ultimately charged, I do not propose to ask the Committee to consider the estimates of expenditure either of tho Consolidated fund or of the Public Works fund, but to obtain the necessary authority for expenditure by an amendire it of the Public Revenues Act, which will extend the appropriations of last year with such few additions as maybe necessory until the end 'of August next, 1 shall ask the authority, of Parliament to issue £150,000 deficiency bills to provide for tho deficiency in the Consolidated fund to the 31st March, last, Theso bills will bo in addition to the £400,000 at present authorised to bo raised temporary out of tho rovenue, I may liore say that I am of opinion from the experiences 1 of last year that £400,000 of deficiency bills are barely sufficient to carry on tho public service without the risk of. incurring serious difficulties, These difficulties arise chiefly ■from our having to p vy at certain periods ot the year large sumi for iut'-rcst and sinking fund before tho eoßsiliilntol reveuuo lias accumulated sufiieienily to meet' the necessary payments Too revenue comes in irregularly from ciutoim and railways, and especially from tho property tax, which is collected only once or twieo a year, I propose therefore upon tho present occasion, as tho property tax cannot bo collected during tho current halt year, to ask for further power to issuo deficiency bills to tho extontj of £50,009, with the additional amount of Ways and means, and if the Housj sees fit, to grant authority to raise tho extra £150,000 of deficiency bills to meet tho deficiency in last year's rovenue, I think there will be no difficulty in making all necessary payments until tho meeting of-tho now Parliament. With reference to the public works fund, I have stated that there was an unoxpended balanco of £877,912, but of this £202,484 was advanced in the hands of officers, and as honorable members who follow tlio public accounts know, advances outstanding, although included as balance iu hand, arc not really available for expenditure; those outstanding advances vary from tioio to time from £60,000 to £300,000. Tho expenditure during April and May has b»eii rather heavy, amounting to £278,804, thus leaving tho unoxpendod balanco of tho fund on tho Ist June last, £078,221), but of this amount £299,734 was advaueed, The expenditure forJuuc, July, and August will bo less per month than the expenditure for the months of April and May, The expenditure for April and May, though largo, would bavo been gradually tapered off month by month until tho floatine of the next million of tho three million loan, but owing to tho large cxpondituro which has been found necessary during tho last two years upon the open lines, and tho action which the Government has taken in ordering rails, sleepeis, and rolling stock, so as to expedite the works, it will be' necessary to obtain some temporary aid for the Public Works Fund until, as I have said, tho new Parliament has determined how the expenditure upon tho opsn lines is to be charged, and until tho raising of tho third million of tho threo million loan. A table showing among other things the expenditure and liabilities of each vote authorised in tlio schedule of tho Loan Act of 1882 will bo published with .this, statement. This table will, I think, enable lion, members clearly to understand the position of tho fund. I shall ask the Houso to permit the issue of Deficiency Bills to! tho extent of £IOO,COO. This will be sufficient until about tho beginning of September. Since the three million loan was authorised, the expenditure out of tho Public Works Fund had been for 1882-83 £897,027; last year it was £1,409,588, making a total expenditure for the two years upon pnblio works, of £2,306,826; but this amount includes £155,127 advanced for purchase of rails; for tho open linos, which will be repaid by the Working 'Railways Department as soon as the rails arrive and aro handed over. The net expenditure for tlio two years of £1,076,294, inclusive of £106,393 oxpended under tho Roads and Bridges Construction Act, so that the average expenditure a little exceeds the one million a year which the Government estimated the colony might safoly spend, and this expenditure would havo been £260,000 less than it is, had not the Government taken upon themselves, as ,1 have already pointed out, to order sleepers, rails, and railway stock in auticipation of the requirements of the current year. And now, Mr Hamlin, I should like to say a fow words about the depression which prevails in the colony, In tho first place, it does not ariso to any appreciable extent, either from defective laws or errors of; administration on the part of tho Government, It, does not arise from tlio withdrawal of capital, or from the distrust of capitalists; there is no sign of distrust to bo found anywhere so far aa I know, . Capital can now be obtained in any amount bn reasonable terms for any undertaking which will give a fair return for tlio outlay incurred, Capital has not, as a matter of fact, been driven' from onrshores either by our system of direct taxation or by thi nature of our land laws, or by any other cause, : Par mOre capital has flowed into the colony during the last threo yearjjthan in

any equal period of our history, Nor docs the deprossion ariao from tho largo amount of interest wo have to pay upon our public debt at)cl private borrowings. We can, I am satisfied, pay with ease all the interest wejiive undertaken to to pay, beoauso tho employment of the borrowed caoital has enabled,uDd is enabling, us to produce far more than tho sliaro our Bleepin" partners draw w tho way of interest, and°lhis must bo evident to anyono who will look at tho amount of our exports and remember that tins is the surplus after our population has supplied ltsulf with all the chief necessaries of life, and especially when the enormous direct advantage to the producers which accrues from our railways is oonsidered-a saving of at least two millions per annum. The present deprossion is traceable ultimately to three causes. First, the habits- ' of extravagance arising out of the wonderful prosperity which, with only slight and temporary checks, wa have enjoyed for the last thirteen years,-habits"which our real ciroumstanjes never justified us in indulging, if, indeed, any circumstances could bs thoir justification, This extravaganco is now, I rejoice to think, becoming fully recognised as an. oyil, and successfully combated, secondly, the class of distributors and middle men i& far too numerous in propor- ' tion to our population There are no doubt too many merchants, traders, and agents. Number* of theso are trading upon capitalborrowed upon terms which make it impossible for them to .do business upon a sound basis, and the consequence is that they interfere with and ruin the legitimate business of the responsible merchant and ■ trader., It is generally admitted by all competent authorities that iti the year 1882 over importation of goods to the value of at leastiono million sterling had taken place, • ?? > j 'inquiry that tho stocks in tho bonded warehouses were practically equal in value ,in December, ISB3, to tho>e in December, 1882, so that the relief which was hoped for last year in the reduction of Siosi* hi? failed us foi' the present. Thirdly tho extraordinarily low prices which lnvo been obtained during tho last year for our chief articles of export—wool and grain, It it said that wool and grain aro never low in - price at tho samo time, and this is no doubt true as a general rule, Unfortunately, however, this has not proved truo. During the last year the loss to our spending power upon these two articles of export his ben I estimate, not less than half ,■» milliou sterling; I myself believe that had wool and gram maintained anything like averago prices we should have had no defect in Our consolidated revenue to provide for. These causes sufficiently account for the want of confidence in our immediate prosperity Mid for the depressed condition of- trade in some districts of the colony. Our real circumstances do not jnstify this lack of confidence but there nan be no doubt that it ii an important.factor in tho present depression, and that we cannot hope for a return of prosperity until confidence has been rostored, as J have oil several occasions pointed out. Tho action of Parliament and tho Government has to a certain extent intensified the depression by tho determination which was arrived at two years ago to limit to a moderate extent the expenditure of borrAod money. As lion members will have TOh from the statements I hive just made, the (lovotnment have not arbitrarily curtailed the expenditure by a hard and fast line, but liavo endeavored make the reduction as M possible by increasing the expenditure during tho onrrout year to the full extent of the limit imposed by iaiiiament. How the present depression is to be speedily overcome is a question of great importance to all of us. I confess at onco that I see no royal road by which we ■ oan be relieve! of the present dullness. The only remedies aro to live well within our means, to increase as largely as possible tho number of producers, by settlement on tho lands of a class of persons able and willing to cultivato them, by encouraging the ■ consumption of local products and manufac tares, to believe in ourselves, and to resolutely set our faces against (ha expendituro of public moneys from revenue or loan unon purposes unnecessary or unproductive, while at tho same time wo steadily push on our publio works, If wo determine/as I delieve we shall, to foliow such & course as tlua, then on prosperity, is I venture to say, already assured.. , Had it fallen to ray lot, sir, to have submitted a complete Ludget for tlie current year, my proposals would not have necessitated my asking Parliament for any increased taxation for the purpose of carrying on tho services of the year, as I saw my way to' make both ends meet with a fair margin for contingencies by means of reductions, under the proposals for tho reform of the Civil Service, which the Government had under consideration, by tho savings which would have beeu effected under our hospital and charitable aid proposals, and by tho savings upon other voces, to which we should lnvo asked the sanction of tho House, In conclusion, Mr Hamlin, I would point nut tint within six months after •'ilio Hall Government took office, which it did in 1871), the Government had to faca a deficit of one million sterling''upon the ordinary rovenno; thii.asi lnvo often said, arose cl'i fI JT fro »i the filling off m the land revenue, upon which wo hid been rclvin K . lho Uovornmentat onco set to work to faco tho deceit, InthoflKtpliieo it excluded the land fund altogether as a sourco from which lho ordinary expenditure might bo mot, charging against it only the cost of its own administration, and tho oliargoi to which it was locally liable, and setting apart the balance for local works, and to theso purposes it has been applied over sinco tho deficit of one milbon for the period ending 31st March, 18S0 had to be met by a pcrinanent loan, and tho expenditure tho following year balanced with the revenue by means of yeiy largo reductions iu expenditure anjy considerable moiease in taxation at Hi,if for somo years preceding and for two years subsequently a large portion of'thocliarco tor Armed Constabulary was borne upon oan. Over hvo million 5 per ce«t loan had been sold m December. 1879, at £97J with tne option of converting them into i per ecu loan at £l2o—ia other words, ourlner centloan then sold for £BIJ. ' This sale was undoubtedly, at tho time, a most successful one, and certainly represented our crodit in its most favorable light, In 1881 there was a small deficit in the consolidated fund. In IHB2 thero was a surplus of £203,000, tho opportunity was therefor taken of transfemng the charge of £75,000 then paid out of loan for Constabulary to tho consolidated fund, aud taxes were reduced to the extent of about £IIO,OOO. Iu 1883 thero was a surplus of £35,000 notwithstanding tho largo reduction of taxation which took place in 1882, and the fact that the consolidated fund was charged for the first time with tho whole cost of the Armed Constabulary—an additional charge amounting to about n In WW we have to face a deficit of £102,000. This has arisen from tho tailing off m tho railway receipts to the extent of £56,000, and iti the Customs duties of L 123,060. Upon looking at tho sireumstances under which the Estimates of 1882 were made, I cannot say I believe either estimate was abovo what might lnvo i n reasonably expected, Tho deficit is to be regretted, but it is certainly not a matter about which wo need feel any anxiety, it can bo provided for without unduly burdening iny class of tho community. Moreover, )ur credit never stood higher than it does :n London than it docs at tho present time! Dur last L 1,000,000 i per cent loan realising ao loss than LIOO Cs Gd per cent. We have, iir, so far as my jiulgmant goes, nothing in nir present circumstances to dishearten us. Nothing, sir, but what should nerve us to. :enew our exertions with the certainty that >reat prosperity will again roward our ifforts:. Meanwhile periods of pressuro may ie on tho wholo beneficial to tlw community -enforcing attention to economy" in our iffairs,.publio'and private, prudcnco' in our peculations and better organisation over ndustries, and over administration.. Wasto s more or less an incident of all human vork, which the greatest skill, sagacity, and irudence cannot wholly olimiuate, and the endoncy in times of oxocssivo confidence ia o neglect tho attempt,. It. ia generally lumittod that but for this- fact' our largo olonial enterprises of tho last 14 years vould have beon a more signal success. If he country and Legislature aro capable of iiolithng by the usej of adversity our future •rogress-as a people-will moro than cmpensato > Q its increased stability for vhatever ifc may sacrifico in

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