THE Financial Statement,

Waikato Times, Volume XXIII, Issue 1904, 18 September 1884, Page 4

THE Financial Statement,

Ix Committee of Supply on Tuosd.iy, 10th September, 18S4, the Colonial Ticasuiei (the Hon. Julius Vogel) made the following statement : — Mr Hamliti, — The usual cirly Financial Statement may be somewhat cm tailed in its length and deprived of its dry detail-, because of my predecessor has ing alieady 1 elated .1 history of the year ending the 3Lst Match list and its results I will bnefly epitomize. Tlic position he desenbed in the yo.u 1 «S.S3 8 1 \v,ib commenced with a sin plus of t3">,. r >lo, and it ended with a deficit of U 1.52,112. Tins result was lcpicscntcd in the TiciMiry at the end of Match as follows: Thoieweie outstanding deticicucy bills still eurient amounting to €308,000 ; to meet them theic was cash €203,117 and impiest advances. To oniceis of the Government £42,341. Taken the last as cash, it will bo seen that the deficiency stood at the amount btated. The revenue and expenditure of the land fund which, though kept in a separate account foimcd pa.it of the consolidated fund, shows th.it during the past year the payments exceeded lecoipls by €0,117. The balance of £81), 5(51 with winch the yeai began and which was chargeable \\ ith a sum of €75,203, trausfciiablo, m i expect of the transactions of tlic yeai ISS2-83, to the main Hinds account. In the Public Works Fund under "Tho Roads and Budges Construction Act, 1882," thus became 470, 117 at the close ot tlu year without the icpayineut to the main loads fund having been made. The sum of €75,203 due on tl.e ttansactinns of 1882-83 thoicfoie still lem ims unpaid to the main loads account. On the 31»t Match, 1883, tbeie was m the public woiks account (I quote my pudecessoi foi the lomauid'U of the sentence), "an unexpended balance of £877,912, but of this €202, 181 was ad - yancesin the hand- of ofiiceis, and as honourable membeis who follow the pubheaccounts know advances out standing, should included m balance in hand, aie not usually available for oxpendituie." The baLmce included the whole proceeds of the second million of the thiee million loan and also the piocecds of that odd little colonial m.sciibcd loan of €210,000 who wa 1 - taken up by post office public debt of colony on the 31st of Maich, 18SI. Aftci deducting sinking fund the acciued debt amounts to £'29,571,002. The annual chaige in ies])ect of which amounts to €1,578,70*. This debt was exclusive of dehciencv bill- amounting to €308,000, issued m aid of lovenuo and lemaming outstanding at the close of the year, as also of €100,000 of deficiency bills issued to facilitate ipinittancos which I consider a contingent though i emote liability. The Colom il Tieasinei • (M v) u Atkinson). After piociiimg his Kxeellency's assent to a dissolution obtained tompoiaiy supphos and in ouloi to pioMdc for th> % m seemed also ai'thontv to piovide foi them. lie s-yuied, aho, nuthonty to i-.-uo oxtia deficiency bills to the amount oi €.500,000, to lopiesent, fiist the deficiency of thepist mmi, amounting to €150,000, and second, €">O,OOO .idclition.il to the €100,000 of bilK ahetdy autiioiwd foi the cmi .nt i 'tos within eich veu\ and thirdly, €100,000 in aid of tlio Public "Woiks Fund. Tho-e aids, the Tioasiuu stated, would cmy him on to the Ist September, and lie was about accuiate in saying so, but .iftci him c.imc the deluge. Taking the date of my ace '•-.ion to oihtJ as the Ist of tins month, the immediate financial pi o-pect- weio as I am about t> desenbe. It must bo undei-toorl that the .Stateui"nc is not a book-keeping one, obtained fioin a balances ol the account-, but nioi ely an p-limato of fcho cash lequuements for the mouth. That estimate showed that taking into coiiMdeiation the piobabh 1 income of the month and the liabilities which it is known will have to be satisfied the consolidated loan fund bo a few thousands sboit, notwithstinding that all deficiency bills authoiis-d by law veie issued and disposed of. Thoieis.i fuithei note not cstnn ited which has come foi pay ment but about this I shall say nothing at piesent. As icg.uds Public Woiks Fund the estimate showed that at least €100,000 will have to bo hoi i owe], m -otnc shape t > the end of September, and that the like piocc--s wil hive to bj gone thiough for meeting liabilities until the bullion linn was negotiated next year. The loan conveisions of last yeai, as descubed by Major Atkinson, consisted of €.>,5">5,.'500 530 dobentuic-, and €',832,000 shut-dated debentuics, but the tiaiisactioiis consequent on thoso com ei -ions aie --till not com])leted A con-ideiablc quantity of the ronvcitod shoit dited debmimcs lermm to be sold whilst only ipoitionof the "5-30 is-ue h.is come in. Xotice h.is hovcvei, been given to ]>iy off a- ninth of the balance as came, f) p"i cent intoio-t m Januaiy next. On tho whole, the annual saving- of tho con-■vei-ions of last yeai nomui'lU .liiiountod to about €J0 000, and some £'5,000 nioie will bo gained by ciiuvoi-ion of the bilance of the 5 per cent "> 30, and another efFect of com ei -ion has bei'it t]io po-tponemi nt of the payment of about t "50,000 foi inteie-t fiom ad ito within the pie-oiit hiiaiiLi.d ye n to next yeai. ]t is niucli to be ie<;ielt< 1 that tho convci-ion was commenced with the") 30 loan in-t<, id of v ith th ' c >'i-oh-dated loan of 18'i7 IS7O. which cmi'swith it an accumulation Dimin^ on inking fund, the ")-30 cmilf] li u » 1> n pud of) ,tt par at any time on m\ month's notice This is ie.ill> now \, hit it has been found npce-su v to d > « ith tln> pi m< ljilr put of tho "3-30 loan bi-anni, "> pi l ci'nt inleiest Only half a million ol th' -n v<'ie b-ouyht in ; the bulk of th, 1 ~>-.io '\ 'ii'Ji c inn in lvm l\ pei c< nt intfii'-t r i".e\ i'ii'>uiitnl to J j3,0"i3,000. Tin 1 jnoht on tin ai v\ as coin )-aiativelv tnMiii^ aft 'i ]).iMnent of expenses and pieimmii. but th> v -t uid in the way of fuithei opei.itmiis, liccuiso of <i huge mas, ot ln-oiiboa *to<k tint lepw sents thorn on th' iniikct ; they ought to have been about the 1 1st instead of the hi-t secinities opeiated on. The opei ition in connection with the sboifc d.ited dcbentuies was moic m tho natuie of asile than con■\eision. They h.ulnevu Ij^pii ])1 ici-rl on tho English maikot, and the leal obiect w.is to di-po-e ot the bulk (jf them. The diffeience m tho late of mteic-t between a floating and a funded dibt cm hanllv be all called pioht; that is why 1 used tho wind "nominally" 15, foio fmthci to de>enl)o the pie-ent ])osition and futiue ])lans, it w ill bo noil wlnKt the ■ übl>xt is in the memoiy of niembei-. to di'.il with the question of deficiency, bill- They amount to €l."i 0,000 foi List je.u s dohciency, €iio,ooo for cm 1 cut expenses on tho yeai's (Joiisobfl ited Fund Account, and €100,000 foi Public Woil s Account Time :<ie, beside- the €100,000, contingent liability bills. M\ fiunds, ] daie say. Y> ill think mo \e,iy good natuied, — not to say stupid, to tioublp invself vwth vvoiking out my piedecessoi's dilliculties by adding to the permanent debt so much of this floating debt as will leave yon without any anxiety foi tlie futme, and ,-tait on a fie,h caiecr of manuf ictuiing a new floating debt. T slnll not do anything of the kind J am piofoundly iinpie sed v\ith the cou\iction that it is nitiicato pnt.ingloni^nt lather thin a ieal difficulty with which New Zealand has to contend. 1 believe her finances can be put in oidei, and that we may count fiom to yeai on such an impiovement m the levonue that so much of the present floating debt as does not come within the citegoiy of meic aid within the year can be discharged within a leasonable poiiod. The €1 "50, 000 I shall consider as stiictly aid within the year, and 1 shall ask the Jfouse to incieasP the amount by another €">O,OOO My piedicessoi stated his opinion that the .€400,000 was not sufficient, and expeiience lias shown that an additional €"50,000 for which he obtained authonty is still not enough, for as 1 have told the committee there is beyond all the deficiency bills a deficiency of a few thousands m the estimates of the piesent month. I shall ask then for anthority to add £">O,OOO of the £4")0,000 strictly for the purpose of anticipating revenue within the yeai- The €1 "50,000 for last years deficiency I. shall pay oft within the next two yeais or so. Tlie £100,000 for Public woiks can either be allowed to lapse or continue to be used as means of adjustingthcPublic Works revenue within the year. As to the contingent £'500,000. I have had to take tlie estimates very much as I found them. The hon. member for Kgmont, in his last Financial Statement, led the committee to believe that he proposed to effect a great saving in the Civil Service votes, and also that he intended to amend the Service by classification and promotion. lie did not particularise these pioposed reforms, and he thought it undew'rable to leave a lccord of them behind him. The type even of the bill said to have been prcpaied was brokon Tip. As to promotion by tho classification byhtein, inespectivc of meiit, I am not an advocate of it. Tt reduces olliceis to a dead level, and leaves little incentiv o to individual exertion. I will proceed and state tlie principal alterations we piopose in the estimate-. One is the i eduction of the armed constabulary oxppnditure at the rate of £20,000 a year, but it van only come into force for tho

last quarter. We propose on the other hand to add 5s to tho capitation allowance of Voluntceis. This will be lor the last six months of the year at the rate of 10s yearly, at which we piopivc it should con tmue'. We ah.ill also ask anthonty foi appointing a commanding officer of Vcluntcin, and mo shall place a sum on the estimates to defi.iy tho expends of mombois attending the mimnl com|)otitio<i of thiKse singulaily meiitorious and valuable bodies the Volunteer Fne Brigades. The^o thiee items will appear on thesupplimcutaiy estimate*. As regauls tho Doputmont of Education, wo think the tune has come, when the large annual inciua.se of scholars rendci.s it uunocessai v to allow the oxtia. capitation tee of 5s a head outside of provision made in tho Act. This reduction we piopose shall commence with the last quarter in the year, so that it \\ ill only amount to Is 3d a-head. We shall ask the House to exempt tho schools in Wostland piovincial distiict, the funds of which aio smiewhat contracted. Then 1 ha, been no tune to minutely analyse the leceipts and expenditure of the Hallway Depaitment. We aio of opinion that a dnsci ,\iu\ moie intimate business inspection will matoi tally aid the economy and efheicncv of the management of the l ailways. Wo design n > lcflection on the present inanagei. I know of many systems of railway ., not ho large as that of New Ze d. mil, w lino it would be thought absmd ti>kM\oto one man vutiuilly the le&ponsibility of contin], 7io inattei what his expeu i.i ce and though ho was loioiving live times thesalaiyof the piescnt managei. llowcvci good a m m.t^or may bo, ho denve.s uumeustt htioui^tli fiom being aide to icfei dimuilt ))on\ts In the calm considciation md judgment of a- boaid of able businesslike men. The expense of such aid i-. nothing when \t>\\ have to do with an undi i taking letuining over a million a-vcai of levrii'ie, and absorbing over half-a-nulliou of o\pendituio. At tho same time, the session b"ing so much wasted and s>> much ioniums to be done, that it is possible wo in iv not pio~> oiu j)io))osals foi local boaids I'nis year. L hope to make a taxi"'-! 1 of oxpoiuhtuie and to make benehcial lefoims in connection with the piosont system of audit and of keeping accounts. Vntually .it piesent thiee sets of books of tho accounts of the colony aie kept by tin oo independent Depaitments, each Depaitmout, besides the Tieasiuy and tlie Audit iJcputinent keeps so\oi.d. It scums th»y aie not pi easel v the saino books, but they aio ot an allied character and they ,uo kept by se panto stalls. 1 am disposed to eifoct an outue chaigo by wlno!) the Audit Depmtmeut and nc^ountmg poition of tlio Tioasiiry would be abolished and to substitute an AccountantOoiKMal's JVp.utment. Tho Ammnt.int(ionoi.d \»ould like the Auditoi-( Jonoial bo a l'aihainontai ) oflicei, and base all the powiis of Ciiutiollini, exponditiuo of leCMpt-, and lopoiting t<> L'ailinnent that tho piesent Vnditoi powers, hut he would al->o koii> tho books of the colony, md hi, <iihv,i l ■. would koop tho books o f dopaitniunt. oi io<;ul ito the way m which thov, a io kept. Tin 1 alt'M.ition would 1<» id J believe to coiisideiably saMiig but th.it would b" lbs Joist nient Its gn>at ailvantii^o would bo that it wo.ild a--sist in co. meeting the dep utiik'iit-. and in the i j.lu'.ti.m then sopaiate action tho way- of con ti ictmgli ibihtie-. 1 1 v ould aKo lead to ,i inucli needed lefoim in facilitating the dischai D e of accounts, liefeired on a pi evioas occasion to tlio tenons com pl.iiiit-s made as to difhculty of obtaining pigment of moneys duo to ( Jo\oinnient. It would lead also, J" think, to making it choapoi to obtain the lctnin-, which aio luquned f(-i so many puip>os But all these aie opinions foi mod on theoiy, and befoie J can give clioct to thorn T must n.uiowlv. investigate piactical opinion. I <U/i ha\ mg liiqiin y made nit > tho subject. At .my late, thee seems little doubt that tho Tieasuiy book.s ma/ bo kept with uiOiO cconoinv. I have, I think, been able to effect smnp nnnioveniont in the Telognph sei \ ice, though without the e\peuditiuo of money tho use of stamps for tho piyment of telegiams will gieatly facihtite keeping the accoants of the de))aitment. The abolition of loceipts for telegiams will save the lecoivois of those documents and the depaitment a wholly unnecessary tumble. V'lothoi change has not as vet been made public. I hue boon much lmpic-s^d by the inconvenience occasioned by closing a Luge number of ofhecs at the caily houi of j o'clock. [ have anangod that these oflices shall bo opened between 7 and 8, and closed foi halt an hour in the middle of tho day b 'tween half past one and two. These changes will take place on the 31st October. I should also c ill the attention of the committee to tin: seuous lo^s the colony has Mifloiod and is siilti'iui'4 thiough the diversion of a 1 uyo p ut of its Enyl'sh ennespondenco to the Bimdisi iout\ The ICngh'-h postal authoiities have to my mind behaved most unw.ii lantably in the mattei. The kind io\onuc and e\penchtiue on account of tho land fund other than the levenue fiom loiso-i cannot be piononnced satisfactoiy. It must bo lenieinbeied theio is i gie it p.ut gone, and 1 am giving the X ult ,\nd anticipations ;is 1 'ia\c found ihcm My colh-i^uo, the Minister for Laud-, i>i!l Diobabl\ nuke an exposition of Ills \ie\\s o,i the subject l.itei in the session. I v ill be ob-oi\od fiom the statement that the J .7'i,^oi; due to the main loads account ii'id"i tlio Jloads and l'udgc. Cmisti uction V< L I-. ct imp iid. It wis dno it the end of I l^_* }>'>. and as niv pn dece— -oi loft it so long mi]>aid, 1 do not see that it is of pii-ssing lmpiitinco foi mo ti> disehiige it. Jn lact, other piovisioiis will hive to be mad', foi the puipi~e of the Roads and 1 5i id'jt's ( !on->tiuction Act if it is t<) lemai'i on th" st \tute ft w ill abs'iib tho v\ hole of that colonial nisuibed stock loan winch vas .aithoii-od foi tlio pmpiso of bei.i^ talvi'ii up fiom tune to tune as peoplo leqiiiu'd it hut which \>.is absoibcd in the biilk b\ the post othco leceipts and expendi tiii c of tho V'ai 1 pioceed with the stateniout of the e-ti mated (^penditme of the a o u with such ti u alteiatioiis as [ have descubcd, and al o I yive statement of the expected io\i line, supposing tho io\envo is iaiso<l on ] > i o c ' oh the -ani" tcinis as l.it voai includnii, r a tluoe fai thing Fio])eity Tax. The estimate of leuMiue is modoially stated, and 1 behove lion meinbeis count on the amendments set down bunj veiiiied. Tlie estimated loceipts and espenditiue of the cons'ilidated fund foi tho fm.incial veai endlno.ilst.YLiich 18S~),uo" — Oidui uv Kovonuo Customs, i'],3r>,ooo; stamps €"327,">00 ; PiopoiU - Tax, £J7"),L10; l.cci J)utv, t")"i,nOO ; ladv.^s 1v1,1J0,000 ; telegiaplnc, t'M,OOO ; legi tuition, and othei fees, L' 37,000; niuine, ]d 000 ; miscell moons ■ir>,OG'O. ToLU, :',,'»:"■), »00 Tomtonal levenue: Dopastiumg license-, tents &c , 4;lf^,000. (wand total, <0.%722,~>00. HvIK'iulihue. IViinaiiont apjnopn itions — Civil list, €-'0,7")0 : nt'T^st and sinking fund, 1 1, ")">'), 1 l"i ; undoi Special Acts of the Legishtuie, KTA,724 ; U>ti\, t],(»12,")50. Annual appiopnation . Lv j gislatiue,t(»7 ) '"»J^; Colonial .Societal y, tJ3B, i?>~) ; Colonial Tieasiiioi. i;"il,()"ij ; iUunstor of Justice, t117,(>2"i; pot oliico .md tolo",iaph, ■fj". ),32J ; customs, UJWiI; stamps, £37, H>L; education, y32">,10J ; native, 117,311 ; mines, (J21,305 ; public woiks, £740,(i(>0 ; defence, €173,427 ; total, t'2,132,">f53. (4 land total, ">2. The Committee will ob-eivo that this shows a deficit of £~i6,(n2. Let us now see what we may do in the wiy o' con vei ting this deficiency into a, surplus. T have described to the Committee the icsults of thepievious year supposing we left it to run its com so without .alteiinsr the exponditme beyond what 1 have already st ited is proposed. J ut I ha\ c to call the attention of the committee to alaigc item of expenditme which should, in our opinion, be lolioved, and tin ough the instiumentahty of .such relief the countiy would be saved a considerable poition of its heavy taxation. I have freely stated that this was feasible, and have been met with incredulous smiles. The time has come for me to fully explain my moaning. Jf lion, metnbei shave befoie them the table l elating to the public debt of the colony, which I have cair-ed to be reprinted from the last Financial Statement, together with the separate table I which I have had piepared showing the peioentage of yeaily charges on the nett indetedne&s they will better be able to follow my meaning. They will find that on total nett indebtedness of £29,774,002 we are paying in annual charges for interest and sinking fund the amount of £1,578,79!), or in other woids 5.33 per cent. Although our 4 per cent. ins,ciibed stock is quoted in London at 105^ if we bring our loans down as we may well do to a basis of little over 4 per cent., we may have an annual saving over £300,000. Before I discuss how this is to be done, I will invite attention to the extiaordinary condition of some of the loans— those to which sinking funds are attached. On the 1885 loan there is a nett balance of only £33,000, yet on this we are paying £2,010 per annum interest. Wo weie paying an additional £4000 for sinking fund, but the Loidf, of the Treasury, who had control of the matter— as the loan is guaranteed by the Imperial Governmenthave relieved us from continuing to p^y the sinking fund. The fact, however, remains that we are piling interest at the

rale of 8M) ppr cent on nett indebtedness, but we shall be continuing to pay interest on outstanding amount till tho several instalments arc paid off in 1888-188!) and 18!)4. There will then, it is true, be a Urge balanco fiom excess of the sinking fund, but suicly we ought not to burden pjoplc unnecessarily in the present to lay up excesses in future. The mi-taken policy of Mich a com so is apparent. The heavier the bm den tho le~s productive power of the community. An unnecessary tax theiefoie carries with it a lesson beyond our means t)put in simple font), and one which I entreat lion, meiubeis to keep before their mind.. Supposing wo me paying £10,000 out of taxation this year unnecessarily, but will rccovoi it back m five years with compound mteicst at English nites, will colonist* lose anything by tho operation ? Miht cjitainly they will; they will lose whatever may be the amount of tho contiaction of their pioductive capabilities. Toiesume. The n«\t loan I come t> is that of 1800. In this case theie remains a nett indebtedness of £14,801, with an annual chai go of £7,1 18. equal to 5-28 per cent. I now come to a laige loan, that of 1SI)3. There remain* in that case a nett indebtedness- of £038,740, with an annual charge of £9,(379, equal to 10 per cent. The New Zealand consolidated loan i< yet laigor, or a nett indebtedness of £5,807,(i07. Theie is an annual ch.uge of £4311,980, equal to 0.52 per cent. I need not deseiibe other loans of smallei amounts. Hon. meuibeis will find them in the table which will be laid befoie them. It will be sufficient to say that the aggiegate ye.uly payment of £19,389 on five loans, lepiesenting tespoctivi'ly percentages per annum of 13 7, 27 I, 17 8, 81, and 10 {). Obviously those, cases call foi tieatment, and theie aie otheis aK(> demanding attention, with the \iew of veiy consideiably reducing the yeaily chniges. The chief disoigamsing factor, however, is the sinking fund. It is over se\enteen yeais since I asked of the then Tieasiuor (Sir Win. Fitzherbert) to dispense with tho sinking fund on our loan. Sir Wm. Fit/heibeit was f.u too acute a financier not to recognise their evil, but he had to yield to ciicumstances with the 1807 loan, as I had afteiward-. to do with the 1871 loan. Both iccognised the difficulty, but we were unable to get out of the deep gioo\e into which New Zealand finance had fallen. Theie sue member in the House who oio equally awaie of the objection to .sinking fund-., notably the niombei for Auckland West (Mr D.ugaville) and the member for Gladstone (Mr Suttoi), who leeently addicted me a letter, in which he s.ud \oiv tiuly that the sinking funds weie condemned on eveiy side as exploded fallacies. Tho membei foi Auckland Hast (Su George CJi oy), I am told, dm ing the tune lie was Colonial Troasurei, directed hi . attention to the saino subject, and indeed had a bill piepaied, the nature of which I can't describe, as I ha\e n-)t <cou it. Again, last week the lion, meinbpi forTeAio asked some questions, thu influence from which was that he iealisod thi 1 lehef whuh was to be obtained fiom tho acci nod sinkini4 fund. The lion, niembei ior W. ltiniata b\ -innlni questions pvidpnced the same acuteness ; lastly, the lion, member for E'inont, tho tin eo or four da\s ho was lecenth in ofKco, seonied inclined to follow in a >-omjw hit similar dnec turn, judging by the telegiam ho sont to tho Agont-(Jenoial, winch 1 loadtotlio House mi Fnday, on which day I saw it for tho fust time. It is not, howc>oi, unraii to suppose that in one 'bape oi anothci he obtained an inkling of my views. I ha\e not talked o\m this subicct foi many yeais with Sn William Fit/dieibfut, but I am quite cci tain ho will bjai mo out m raying that when we weie foi cod to adopt a .sinking fund wo well knew that tho time would come when it would bj so oppips-»i\c that relief in some shape would have to be sought fiom it dm ing tho pi esent century- Ido not think theie have been many, if any, able financeis who have lefiisod to recognise the gieat dictum of Professor Hamilton, that the only tine sinking fund of a countiy's national debt is the e\ce->s of levenue over oxpenditnie. Every other sink ing fund is a delusion and a snare. Tho time has come — 1 think it cmiio some yeais sinee — when the incicaso of taxation was consideiably o\er the intoloiable bni den of tho sinking fund. It must bo recognised that theie is no leason wluto\er why colonists, who aie exciting themselves to lay biw.id and keep the foundations of gioat public woiks which will be a splendid and nngnificent hoi it age to tho^e who come aftei them, should attempt to pay off piecemeal poitions of the public debt whilst, they aio boiiowmg moie, and whilst they aie beaimg the hea\ y buidon of p vying mteicst dining tiie coiisti notion of the woiks. f speak advisedly of this splendid henta<*e. New Zealand is acquu ing a monojxily of i ailw ays, at a tot.il cost of less th in m older countnes. It has to be paid for meioly buying land on which to construct tliom twentyfno jeais honee. Coinpaied with the \aluo of these woiks, the public debt will be a bagatelle; that is if the colony does not do/c dining the twenty-hve >c:us as it has dui/iiig the last hve veais. But o\en though it was do/ing the l.ulways did good wotk. What moie logical evidence of their \alue is requncd than tliat supplied by the llulwaj's J)opai tincnt m its latest lopoit. With lLgaid to the piogiessne inciease of lia'hc, the following is a statement of the pimcipal tiaffic in local piodnets for the past f.\c ,— lB7'l-SO 1 . Wool, tons, 11.89") ; tnnbei, tons, 1 i<),428 ; giain, tons 210,111 ; nunci.ils tons, 321, 0t>0; hoispsand cattle, 30,3<)3 ; sheep and pips, 21)0,810 ;— 1880-81, the lespectne numbeis weie, \'2,?u(, WW)\ 421,142, 40!i,2()(i, 280,083. 1881 -S3, 41,(>81, l')2,!IU"), .'57"), 725, 433,(5")!), 22, H0, 31g,837, in 1882-83. ."> 1,703, 197,231, 3(.7,428, 510,088, 37,4 m, 449,370, 1883-84, (53. 0W), 183,419, 432,223, 574,112, 30,940, ')")(5,(512. Tho Sinking Fund dining the piosont year is Ostuuatod to amount to £241,000, that is, dining the piospnt year we shall reduce oui debt by that amount. If it mo oases pii.giessively. i have li.ul a calculation made which shows tint duimg 10 yeats ne\t ensuing, the pi cent Sinking Fund will be incieased by &.'), 032,<500 ;in othei woid> dining ten-} em s the people of tho col( ny will be paying off tlueo n.illions out ot the ta\ation. The Sinking Fund accuies in difloiont shapes. Tiieie is first, a direct contribution ; secondly, tlio interest, and compound intoiest on accumulations of some Sinking Funds, and thiirily, bv progiess. The increase of annual drawings under othei Sinking Funds. I will not now discuss tho mode by which it i& best to .save tho colony tho annual payment, but I shall bring down a nieasme to deal with the subject. I ,vn quite awaio that othoi obligations, as they exist, must bo fulfilled, novcithcless any time dining the last fi\e yens tho Government by an Older m-Council, with peifect ie^ulaiity, and in a manner no human bei lg could take exception to, might under tho cxistinp- statute law have saved the colony a gieat pait of this hea\y bin den. My proposals are to virtually leheve the permanent charges this yeai to the extent of sinking fund, say, £244,000. I piopose we should not be idiotic (I use a strong phrase) enough to tax the people to pay off a little fragment of our dibt. No other colony does it. Without going into particulars I may state, that of course the process under which the Sinking Fund will be relieved, and relief, also, given to the anomalous condition of loans nearly run out, on which tho yeaily charges ars so heavy, thiough the process of conversion m one shape or another. And here I must savafew woids, at the risk of rendeiing myself amenable to the, charge of egotism, whereby the piocess of conversion has become so profitable. In 1878 1 was in England on an official mission ; two eminent physicians whom I consulted forbade my venturing to return to the colony in my then state of health. I employed myself in endeavouring to give to colonial loans, through inscription at the Bank of England, the status and character of Consols, or of the Metropolitan Board of Works' stock. I first arranged an agreement with the Bank of England, aud, touching that agreement, it is only required to remaik that through all the changes during these years it has not been found necessary to amend it, though made only by letters between the Bank of England and myself. Eminent counsel have pronounced that it requires no alteration. When tho agreement was concluded, it was, however, discovered that an Imperial Act was necpssary, not to validate it, but to 'enable certain of its provisions to be cai ried out. For over two years I worked unceasingly to procure that Act, and at last my efforts were crowned with success. No financial measure that I know of has met with such success. The Stock Exchange share list shows that already over fifty millions of the debt of various colonies have been brought under its provisions. Bvery considerable colony has, I believe, used it. By the aid of this Act it is that I propose to save the colony £300,000 a- year. It cannot all be done at once, but effected it will be if Government, will allow of its being done, and my proposal is to accept the debt as it at present stands, not vainly to tax tho colonists to pay it off, but by conversion to approach

the result of saving £300,000 a-year. The late Government did something in tho direction of conversion, under the Inscribed Stock Act, The principle on which a great profit is to be made, apart from saving the colony tho burden of a sinking fund, is the higher maiket rato of inscribed stock. Whilst it rules now at about 3| over pur, bearing only 4 per cent interest, $\ and 5 per cent debentures rule at not much over the same market price. It is probable, also, that large masses of accrued .Sinking Fund will be set free dining the process of conversion, and, subject to the control of the Hou->e, will become available for public works in lieu of fresh borrowing. The lion, member for Egmont has again and again claimed for his Government the credit of laising the value of insciibed stock from 80 to 109. This is a \ery dangerous claim. The facts are simply these : In 1879 the Government found that they had brought the colony to a financial condition th.it made a loan of five millions impeiative. Such an amount for a colonial loan was then unknown. The agents, of whom I was one, were told the price was not to bar the way, and they found theie was but one mode of doing it, and that was by the agency of the Insciibed Stock Act. We weie able to effect the operation by giving the option to subscribers of exchange the scrip for debentures for insciibed stock at about <SO, bearing 4 per cent, niteiest, equal to boirowing the money at 5 pei cent. Even then we had to give an assurance that the colony would not bonow fmfcher foi three years. That three ye.iis interval, not the Government, was the seciet of the rise, together with the fact that all colonial .stocks rose as the probability of an eaily conveision of Consols became nppaient. Again, sir, pait of the rise was due to the populaiity of insciibed stock, as may be seen by its comparative value, to which I have already alluded. It may soothe the ruined \anity of my hon. friend if I add a few words. When 1 took office a few weeks since, a remaikable lise in New Zealand stock took place. On the news reaching heie my fiiends weie good enough to ascribe that lise to me. It was merely a coincidence. I had nothing to do with the rise. It was due to Mr Chiklers' operations for converting Consols. All colonial securities rose, and the Stock Exchange and money maiket aie, I believe, quite indiffeient as to whom Pailiament honour.s with the charge of its finance-.. A great effort was leeently made at home to altei the standing oi deis of Parliament lelating to private bills, to enable interest dming the constitution of a woik to be added to the capital cost. The effort was not successful because of Lord Redcsdalo's opposition, he being a time honomed authouty on pmato bills, but numbeis of men of high position and weight pronounced m favour ot the change. I am undiM the impiession, though I do not say so positively, that the alteration was appioved of in the House of Commons, but tho altei ation w as not of much consequence, because the same lesiilt is commonly In ought about by ai ranging with coutiactois tv pay to shaieholdcis lnteie^t duung construction. Such a com so does not pie vent it being subset ibed. The annual burden of adding the inteu">t to the cost dining constiuction would ha\e been a ineiotiiflo. Lot me take a case. Lot me suppose a railway comtuicted in tin ee ■\oais at .i cost of a million of money beaini'f intoiost lit 4 pui cent. Tho aveiage mteiest dming constiuction would bo onehalf the amount, and the total would equal, foi thice yeais, i'bO.ooo. ThN, added to the million when the work was completed, would qn e an annual chaigo of C 12,400, instead of £40,000. What would such an addition matter, but the saving duiing constiuction of £20,000 a year would matter gieally to the ta\pa\eis. Sir Williun Fox, just as he was embaiking from Queensland for England, wiote, m that felicitous language which comes so natuially to his bnlhant pen, that he was convinced that New Zealand should make a gieat effoit to seek out maikets foi its pioduce in the islands of the South Seas and in India. I believe with him that a gicat cxpoit trade is one of the objects we should keep in -\iew. Let us sco some of the obvious pioducts we have to send away. The frozen meat industry is in its veiy infancy, and though now we only send it to England, do we not krow that to India and to the Island's teeming with population in tho Indian ocean, New Zealand mutton would be a great luxuiy. But the kind sheep docs not stop at lnoviding meat, foi since 1 have been in New Zealand I ha\ e been stiuck with the Miigulai beauty of the wool fabrics which aie being made in the colon}', and at puces winch J am asMiiod would enable those goods to be piohtably ex-potted. New Zeal uid should a-pne to send away wool m only its lnanufactuied state in the shape offabiics. Do not toll me the pi ice of laboui foi bids it. Would Amenca be w hat it is if tho high pneo of labour had not stimulated the intellect of tho people to chsco\ oi laboui -saving niachineiy ] I met an eminent enginoei a shoit while back who told me ho could do woik oheapot on the Pacific slope with wages at 10s a day than in India with wages at tho same pi ice a month. Brides the high in ice of laboi bungs to us the feasibility of one of the gioatest elements of human piogiess — co-opei ation. Co-opcia-tive woollen factories will open out a gieat prospect of onoi mons woik hoio. Tho laboui er who adds to compaiatixoly small wages a shaiein the piofits will give good sci vice. There aie other obvious industries that will conic to the front. Semi-tiopic.tl giowths, such as fiuits, silk, and othei allied pioducts must take film and pi ofitable loot in this Island. In the fishenes of tho colony gieat wealth lemains to be gatheiod. I do not refer to mineral resomces, for the.so we piopose to make the subject of tho special attention of a Minister, but we also pioposo that other industnes should receiw: the cliiso-t attontum. A Government, at little expense, may do much in the way of lending a piestige to its countiy's pioducts. To give us a knowledge of what producer and manufacturers can do, and the extent of the improvements they make, we piopose that an hidustiial Exhibition shall be held eveiyone oi twoycais, and that two gold modaK, besides othois. of less value, shall bo gn en lo those who do most to develope the industries of the colony by combining excellence and economy. We piopose that the hist exhibition shall be held at Wellington next year when Parlijunent is sitting, and that it -hall be followed bv exhibitions in othei laige centies alternately in each Island. But there is an indushy fioni wliich I believe great results will 'spring, and that may bo assisted indirectly by the Customs. I allude to sugar from beet, and possibly from sorghum. [_Foi continuation sec second pnge.]