THE FINANCIAL STATEMENT.

Waikato Times, Volume XXVI, Issue 2166, 27 May 1886, Page 2

THE FINANCIAL STATEMENT.

Iv Committee of Supply oh Tuesday the Coloni il Treasurer, Sir J. V< gel, delivered the Financial Statement, whicli we giirc below iv a uomewhat <• indented form :—: — KKVnNUK AND JAI'KXIHITItK OK 188") f). The last financial year cnmineiicod with a surplus of £1!»,,S5)1, ;\nd closed with u surplus of £35,85.). The result lins already been shown in the published .accmtnts ttf receipts and cxpendituie, a tiblc of which will be appended to tho Statement I atn making. It is arrival at thus «nnply : Tho balance of ci-li .md of .nh-inms in tho hands <if officers at the end of the yp.ir amounted to £112,850, and them \\eie £75,000 of deficiency bill-, outstanding. Deducting the one from tlie other ymi haivu the .surplus I hnvo mentioned. When I< uride the Supplementary Stiteinent last year the surplus estimate u.i.s £1(1,000. But increased supplementary vote iind an over-estimite of £5800 of the accretions of the sinking fund dissipated the sui phis, and left, uccoiding to the eshnntes of expenditure and revenue, a deficiency of £l>2. The estimated revenue h.t- proved le~s than was .uiticip'tt u d bv £W>4, and the cxpunditme le^s bv £39,875. Deducting the £i>s a,nd the £1954 from the sued e\j)°nditure you hn\o tlie same lesult of a tmiplus of £37,851). It i" always well to prove figures by arriving at them in two w.i vs. The double view I have given yi.u uhows the actual reiulti, and also of those results compared with tho estimates formed of them last ye;ir. The pi iucip.il reduction on the ontiiiMtud expenditure >v««, in the item of «üb•idie>) for loci bodies. A great de.il of it, however, .vill come in for payment during the jirewsnt quuiter. There wan u Having in the defence expenditure of £l<i, 16(5, and variou-. reduction* in other depai taif nti», In-injjing tho total savings up to i' 190,240. But, on the other hand, there were extosen <>f expenditure amounting in all to £<W,3C5. The principal items contributing to tint, amount were interest and sinking fund under-estimated : Charitable aid, £13,034 ; printing and stationary, £1(522 ; property tux (on account of triennial valuations), £2545 ; jMist and telegraph, £227S (for repair-) ; and £4742 for b muse-t c irned by innil bteamci'n in excess of estimate ; and services not provided for, £«)23D. The revenue, as I h i\e said, falls short of th° eitiuntn bv £'11154. The Customs duties weie £15,175 shoit ; the stamps, £43!>1 ; the railwaj'K, £5(J!)5 ; the Marine, £1S8(! ; and the depasturing licenses, £13,1G(i. On the other hand, there was an excess on th« item legislation fee.s of £1000, anil £37,819 on the item miscellaneous. Of the latter incienbi) i' 25,000 is due to sinking fund released under the Public Debts Sinking Fund Act, 18(58, tm nccnint of excessive accumulation, and £li), 000 to interest received on public money. The total amount of revenue under tho estimates is £41, ."39, and the estimate £39,58."». The diffeu'uee between the two gives the net uudei-e-tim.ite of ie\enue £1954, to which refeionce has be.en made. T have explained the transactions of the year on the ordinary le venue of the expenditure account as much at length as tho c mimittee will desire. There is one circumstance I should mention, and that is, of the debautines created for accretions of sinking fund, £10'!,!)00 were p ud off out of receipts from converted bonds of the 18ii7 loan, drawn for payment. This amount was in addition to £72,400 paid off on account of the. drawing in 18S5. I have to give(an explicit denial to the statement that liabilities were unusually hold o\ or to swell the surplus. The liabilities at the close of the year are not )tnore than ordinarily is the case, whilst the advances have been more closely brought to charge than in the previous year.

JMSI) FUND. The land fund account had a balance at the commencement of the year of £31,1)31, and at the end of the year there was a deficit of 520.354. I find that besides Crnwn land, departmental, and survey expenditure charged on the land fund there is debited to it tho amounts paid for Crown , and native land rate*. Increases of thes<! rates and delays in the receipts of amount* falling duo under the deferred payment system have lessened the revenue of, and increased the chaige.s on, the land fund. Tt was from this fund that the Ko.ids and Liidges Act was to b", supphc.i wit'i means, and it; seem-, to mo th.it t!ie Act fell tlnoutjh when all cliancu of moneys beincr available for its purposes from tho land fund ceased to be possible. Tho ite'ii ot nati\e r<ites charged to the fuud ii a di-<-tinbinfj one. The be>,t remedy Icm ]>n>pDse is that the total ammiut of theso ]>avlnents shall be treated :im alliances from the public works fund, reducible by receipts from timo to time recovered from the n.xti\c c .

i'L'iji.ic \vokk*> rcxn, 18S5 G. There have not Ween any new loans negotiated since tliD House \v«i<» last in session, but an instilment of the third million of the three million loan, and proceeds of the million and a-h.ilf loan have panned to the c edit of the fund since the end of the financial year 1884-5. Including the balance at the end of that period, the total leceipts of the fund amounted to £3,844,1G(i. An amount of £000,000, reprerenting temporary advances of the previonyear, was repaid dining last year, and £185,300, distiict railway-;, appear* on both mOc-. of the account, thu purchase price and the value of tlie denontntex representing it having pas-* d thiough the fund. The expenditure out of the fund during the year was £1,287,08(5. This and the other two amounts mentioned, from which -hilling* and pence have been omitted, deducted fiom the total will leave n balancp to croiit nt tho end of March last of £7GS,7SO, which includes advances in the hands of importees. As pointed out on previous occasion^, there is always less money really available for expenditure than appears from the gross balance. The obligations* which remain to be fulfilled make it necessary that fresh means should be promptly provided. At present the only other means existent i< the North Island Trunk Railway loan. The law, unreservedly, n< I think, allows this loan to be used for any purpose authorised by Parliament to be. provided out of the public works fund. The Government ha\e baen desirous to avoid enabling the money to be diverted from the purp-iso for which it was unquestionably intended. At borne rUk therefore, I have avoided negotiating, as the early meeting of Parliament will enable a decision to Iks more promptly arrived at regarding n new loan. I should like to send home the necessary authorities for raising such (i loan in time to enable them to be used at any early date. The nominal effect only, which is aivpn to the pnrpo«es for which money is borrowed, is mischievous to the colony and unfair to the lenders. To show the extent of the Hi version, I may mention that there were certain purposes set forth in the schedule to the Three Million Loan Act. That loan has been expended, besides which there have been raised two loans — one for a quarter of a million, and the other for a million and a-half. Deducting the balance on the 31st March last, there was at the time about four millions of borrowed money expended since the authorisation of the three million loan. Nevertheless there remained unexpended on the objects provided by the schedule to l the Three Million Loan Act, no less a sum than £4573,000. The Government think that the proceeds of the future loans and the loan for the North Island Trunk Railway should be tied down for tbe purposes for which they are borrowed, and provision to give effect to this restriction will be proposed to the Assembly. This will not. however, Parliament of the power of controlling its expenditure. It will bo placed to a separate fund, and be uscable only for its designed objects; but within those objects it will be competent for Parliament to decide the' amount to be expended each year.

THE PUBLIC DEBT AND LOAN' CONVERSIONS. The amount of public debt on the 31st March was, as nearly as can be estimated without an exact analysis of the late conversion, £34,%5.222. The amount i.i the accrued sinking fund was £3,2715.873, and the net debt was therefore £31,(i88,34'J. It in to be remembered that the tendency of the conversions which have been going on so eagerly is to increase the nominal amount of the dftbt, but to decrease thfl annual charge. To show the net result of ths conversion operations, which have proceeded on a large scale, I may mention that nince the meeting of Parliament bonds to the amount of £10,0?3,fi00. for which terms of conversion were offered, £4,137,700 have been brought in. The Agent-General has cabled to me the actuarial estimate of the result as follows :— Firstly, augmentation of charges for the first six years. €42,22!) ; and, afterwards, an annual reduction of £4<>,842; thirdly, total reduction of charge, £20,179. The results are, I think, very gratifying. Soon there will be no pai t of the debt bearing interest of more than 4 per cent., and the grateful ta«k will fall on a futnrp Treasurer— l venture to predict— of c >uvarting the 4 por cent, into 3 or 3i per

THK lO'lCir OK IW3-4. The House ]<t*t xusoion flirj not appear to haye -m}- desire t<iM»c the deficit of 1883-4 H|M«lily oxtinu'iii-hed out of current revenue. [ prnpn-e to prmido fur it by tr«n«feiriiißit to five years' d»>li(>itturcK, to be helil w itini) the roli.Dy. They can be takoo iin and e\tin£u;hlip<] us circum<>tiincei< ju»f ify «uch a c"iir»c.

KIS.WL'K OK I.Or\l. KODIES. It is essentially nei e-wary that I shouM explain to the committee the \iew« of th« Government on the fni.mers of Wai hodita. The subject is mo.st difficult tn deal with, for two rc.i-.onH : Firstly, there exists a wide difference of circumstance ntid condi* tion in the country di-ttiut» <if the colony; secondly, beside the pu'fciences cnnnequent on the difference of co»diti< n, n*age, nd c.istom. have inteusihVd the feelingH in favour i>f this or that plan of finance. A solution of the matter that would satisfy all local l bodies i*. tliPi«*fore, very difficult of attainment. In anticipation of the repeal of the ttoad-, nn I Bridge* Construction Act, xvi' |ir»i|io«cd last year a plan of Knanco based on fixed annual milwidie*. I'xtLMwhnjf ovor a Ion"? period of year*. WliL'ii tlm intmise of Custom* duties w,-w refused the Got eminent signified at once thac tliey would withdiaw the pioposnl to fit the subsidies for i tiMin of ve.ir-i. and they merely sought foi th° sub-idy for the year at the i ate of one-half the amounts indicated by the schedule to the Bill. This plan received the s>s%cnt of Parliament, and the Roads and Bridges Con.struction Act was repealed. Provision was mnde for redeeming the liabilities continuing under this Act, and, a< the<e were \ery large, it was not immediately necessity to make further pro-visi'-n for local works. But the GoverntniMit were not unaware, that a substitute for the repealed Act required to be found. I wish to touch on controversial points as little as possible, but it is clear that as the surplus of the land fund, on which the conception of the Act was based, had ceased to exist, flic Act must have remained in operative, unless, as was the ca«e, it became a merely borrowing Act. The principal points of the Act were :— (1) A division of local work* into main districts; (2) the borrowing by the colony to enable both •\\oiks to be carried on, the borrowing being part of tho railway loans ; (8) the supervision by the Riilway Works Department over the iintme and causing out of the |\voiks;(4) the approval of the main roads by Pallia ment ; (.")) the charging the local bodies oin> quarter only of the cost of main toads, and lending them that quarter; ((I) the li>n Hng to lornl bodies the full anioti'iN for district wmks by terminable annuities of !l iu»r c«*nt. for 1(5 years. The l>n»«.ont Government disapprove of those points. They doubt the necessity or expediency of drawing <*•> broad a line ltetvwen main and district woiks. They think it unwise to provide fund* for local bodies out of loans raised for colonial purposes. Thcv disapprove of the responsibility cast on tho Public Works Department, 01 «.f lcquiring Parliament to determine the main road*. They do not see sufficient reason for applying 1 to the two classes of works different plan* of obtaining money, and they think a system of finance of a more liberal character should be accorded to local bodies. Shortly, their proposal is thit on the ratepayers fchall depend the responsibility of determining and accepting or of refusing works, and that, when ratepayers approve, money should be provided to the local bodies on \ery liberal terms. These terms are a payment of 2 per cent, per annum for 2tf years, secured on special iates, the colony to be responsible for the ptymentof the principal sum, and to meet I it by setting acido yearly a sinking fund of 2 per cent, to redeem the debentures at maturity. I need not how enter into details, or explain how, in a measure, the 2 per cent, will he reduced by a part of the interest being available. E-en were it not so, the Government hold that it will be advantageous to the colony to contribute £20,000 yearly for every £100,0000 expended on local works, with the eruarantee for their usefulness afforded by the willingness of the ratepayers to pay for a term of years the interest on their cost ; nor n««ed I. now explain why the machinery designed j will fr?e tho proposed sinking fund from I the evils inherent to that system of payment. I may, however, observe that it is proposed that Parliament should determine from year to year the limits of the amount to bo available to the local bodies, but thnt in the absence of any other provision the amount will stand authoi ised at not exceeding t'200, 000 annually. It is intended that these loans sSall only bu for country districts, and that the storage of water for irrigating and mininsr purposes shall be amongst Upj objects that local bodies mar eirrv out. 1 have thus explained to you the substitute for the Roads and Bridges Constructi m Act. It will involve, in the cmirec of time, a considerable charge on the consolidated revenue, but a charge which will be well repaid in kind by the increased \alue of property throughout the col»ny. It is evident, however, that, with this prospective charge, the Government cannot recommend tho subsidies pioposed last year, which in a large part were meant to provide a substitute for the repealed Act ; bnt they are reluctant to do away with subsidies altogether. It was, in a measure, on the strength of them that the Charitable Aid Act was passed. With regard to the Act I must interpolate a few words. The object of the Act was not so much to save the colony from expenditure as to relieve it from duties it could ill discharge, and to cast them on the local bodies and private individuals who were well able to fulfil them. The Act has answered on the whole. The management of the institutions will be improved, whilst a great many have attained to the highest condition of development, in the shape of separate incorporation. The future least^ satisfactory is the disposition to raise special rates instead oi leaning on voluntary donation*. Reluctantly the Government yielded to the pressure everted to give the same amount of subsidy on account of money raised by rates on account of voluntary donations. They will propose now to slightly increase the subsidy on voluntary donations to arrest the tendency to which I have referred to, raising by special rates the money required. To return now to the subsidies. The Government propone to limit the annual sum to £150,000, of which half will come out of loan money. For the present it is not intended to make the appropriation permanent, although it is believed that the Government should each year make a like provision. This amount, it is estimated, will provide, besides the liabilities, the same subsidies as we granted to*t year, namely, half the schedule rates included in the Local Bodies Finance and Powers Act, but only three-quarters to be payable within the financial year, and the fourth quarter during the three following months.

LOANS TO I'AIUIKH.-. OX MORTGAGE. The Government have not overlooked the report of the select committee last year on the subject of reducing the rates of interest farmers have to pay for loins on mortgage. Interesting information relating to the course of procedure in some European countries will be presented to Parliament. I regret to say lam not able to make » proposal on the subject. If the Government were to enter tho fiold us it lendet of money it must obtain that uioaey somewhere. In European countries where Governments do this sort of business there is a sufficient market for the securities that provide the money, but in the colony there is not at present, though I do not think that it will long be so. There is no scale for 4 per cent, securities at even large discounts, and 5 per cent, bonds hardly command par in small quantities, whilst considerable quantities could not be placed. To lend, by giving the borrower debentures which he would have to sell at « discount, would mean to give him less money than the loan purports, lint there are come who say you can make these debentures worth par by legislation. You can insist on their being: in the shape of bank notes, and making them a legal tender for the amounts they represent. It is quite true that you can for all purposes of payment within the colony. You can declare that as such it will be receivable as revenue, and that for future debts contracted within the colony it shall be deemed the mode of payment. But those persons who sell crouds or lend ti.oney may make their own bargains, and add whatever margiu they please. What they ask a pound for in gold they can demand 30* for in paper. The Government revenue, unless increased, would enormously suffer, but no legislation could compel anyone to gi\e a golden sovereign for a paper pound. Therefore it is that legislation can no more make a paper pound, that is not redeemable in gold on demand, worth a golden pound than it can make 1001b of sugar weigh 1121b. The law might inako the term "hundredweight " to represent 1001b instead of 1121b, but the value of le we would be proportionately reducod. There lemauih the alteruativu I have already mentioned of the <»<>v6rum«nt borrowing money iti limjknd ami lending it out here. This would b« quite posstwe if it were deeweU qspedjent.

and recognised .na a legitimate function of the Stuto. I was onco inclined to see it tried, bnt I inn compelled to say that I do not consider it would be desirable at pio■ent. The time will conic, and in my opinion it is not f.ir distant, w hen coloin.il loans will be in such demand that the present rate of inteie«t will be lower, and largerflinonnti be obtainable; but there will simultaneously be a 1 eduction in interest, and a larjrer demand for mortgage investments. The stand the Government now tnkeuthntat present the colony's credit would, suffer by their entering into the business, and that they me hopeful private enterprise will give Mich relief t<> the small farmer* as will render Government interference unnecessary. They lecogiiiHe, however, that the subject should be watched, and further considcntion given to it.

ESTIMATED KXPKNDHTKi:, 18S(>-S7. The estimates expenditme during tlic present financial \c,ir amounts to £4,070,203, which is £4U,1."i3 in excess of the estimates and rate*, and £89,030 in oxcess of the expenditure of last year. The increase is fully accounted for by three items viz. :u " education, £20.078 is estimated to be required more than last year ; on subsides to 1 >cal bodies, £31),3(>8 ; and on working railways, £(>7,22.3. The fiist of these increase* is leprescntativo of the yearly growing educational demands ; the second has been already explained ; the third is consequent upon the l.irges milage worked. The purchased district railways now appear in the Estimates on both bides. The increase in expenditure is compensator! by the larger revenue received. The nut profit on railways is estimated at £38,471 in excess of last year. When the increases which I have explained on the three items are reduced the balance of the Estimates shaws a- less total anticipated expenditure duriug the year than the actual one on last year of £38,040. I wish emphatically to states that the Government have reviewed the Estimates carefully, and reduced the expenditure wherever they considered it could bo done with advantage to the public service.. I do not mean to say that a less expenditure could not be adopted. Theie are dozens of branches of the public service, in the way of post offices, mail contracetn, schools, telegraph offices. Resident Magistrate's Courts, offices for registrars of various kinds, the volunteer defence, which is an insurance against disasters in cose of war, and other items which the public have grown u«ed t'>, and tho supply ot which gieatly encom <i«res aettlement far from the larger towns. Tlieio have been the usu»l additions to salaries . under £120. The proposed increase of salaries above that amount are \cry few. T entreat lion, members not to do old and tried officers the injustice of coming to a' decision without hearing the reasons fur each of the few increases submitted.

KXHIDiriONS. The Industri.il Exhibition will require - £T»00 The expenditure <>f last year's vote • was considerably exceeded. The Exhibition has cost £'8000 net, a much larger amount than wan anticipated. I utttibnto the chief increase of expenditure to the pleasing fact that the Exhibition h.id to l>» made more extensive than wa& expected, because of the liberal ie«pon-e made to the invitation for exhibit*. The Government consider that tho Exhibition did most valuable service in the encouragement it gave to local industrips, and the knowledpfl it imparted to those interested in them. It is proposed that the next Exhibition shall , take place in Dunedin or Climtcliurok about the end of 1887 in tinu to forward the exhibits, if it be so decided, to the Cen--tennial Celebration Exhibition to be held in Sydney in 1888. The Government arc of 1 opinion that an International and Inter- ■ colonial Exhibition should be held in Auckland about 1800 to celebrate the opening of the through railway. The Colonial and Indian Exhibition absorbs a largo vote. There are few members who will not recognise that this colony should be adequately represented. On an occasion so momentous' to all Her Majesty's dominions, New Zealand was wiled to assert the strength of her resourced in friendly competition with other colonies.

EXPENDITURE AND INTEREST AND SINKING FUND. The othftr brandies of the expenditure will ba explained by the Ministers in charge of them when occasion serves. I have reserved for tha last reference to the expendi- , ture on interest and Kinking fund. Tlie estimated utnouct required for the^e items is £1,0)4,509, showing a leJuction of £34,8115 on -'the sum actually evpraded last year. Bjsirloith.it, t!m estimitii includes some £4(5,003 more than Use year for interest on loans newly raised or to be raised. Thrt Tieasurer then gave in tabular form, tha proposed expenditure for the year, with the amounts voted and expended last year. The totals are u<» follows :—Permanent appropriations, civil li-it. Estimate, £2!) 7s "«i ; amount voted previous , year, £29,730 ; amount expended, £28,079. Interest : Sinking Fund. £l,l(i4,500 ; J81,6Ji7,875 ; £1,(589,347. Under special acts, £231,054 ; £177.484 ; £14(5,109. Annual .appropriations, £2,154,901; £2,145,91'!; ' £2,018,403. Total?, £4,070,208 ; £4,021,104 ; £3,971,339,

land rt'No, 18S0S7. ' The expenditure for the current year is estimated at £108,753. The revenue for the year from land sales is estimated at £148,700. It i* proposed to make an account of' native rates, &c, which will leave the fund about balauced at the cad of the year.

REVENUE. The Customs revenue showed a deficit on the estimates, us I have said, of £15,175. The estimate lnst ye.tr was a low one, 'amounting to £19,000 only in rA-eesd of the actual receipts uf tho pievions year. Hon. gentlemen will recollect; that Parliament authorised -last session a considerable increoso in the duties chargeable on wines and spirit*. Notwithstanding these increased duties the whole Customs revenue 'only exceeded the revenue of the previous year by £3,723. Judging from the past months' returns and from the continued Operation of the chief cause* that tend io reduce the Customs receipts, I don't feel myself justified m estimating .so large a Customs rev enue as that of last year by about £-3000. If there has been no exceptional causes to keep down the Customs revenue it should by natural increases during the laht few yeais yield considerably more than £1,590,030 per annum, whereas 'I am unable to estimate it at more than "1*1,410,009 for the cmrrnt year. The pie"vailin? depression and lessened scile of e\.- . penditure nave undoubtedly .something to do with the reduction but there are other potent causes at work in the less use of alcoholic drink, and the fall in the value of the good* on which ad valorem duties are levied. There areaLirge number of per-, sons in the colony who aim at the toed abolition of tho u-e ,oF wines and spirits. Wheii asked what would be the effect on the revenue, they answer the Treasurer will easily find a substitute, aa people who save the enormous cost of the drinking Bill are well able to make up the loss. It in manifestly unfair, when the Ti ensure r seeks to perform his duty, to accuse him of increase ing the taxation, when in fact he is 'seeking only to maintain the revenue. There is a certain expenditure that grows every year with the additional wants of the community. The cost of education is a notable example of growing expenditure. Tho revenue should equally grow, and if it does not do so to a fair extent it is actually falling, when the increased number of the taxpayers is taken into account. Although the duty was considerably increased last year on spirits there was a falling off in the revenue on the item of £17,000. A somewhat similar remark may be applied to the ad valorem duties. It is true tho actual receipts from these duties were £15,000 more than - the previous year, because the value of imports subject to these duties was larger, but as goods continue to fall in value the duty on each article becomes re- < duced, besides the reduction of its cost exclusive of duty. The Government think that for revenue purposes it is right to maintain the Customs duties. Those duties have always formed the principal item of colonial revenue, and they should yield agross increase concurrently with Mie increase of population and the large wants of the poople. The reception, however, last year of the proposals to increase the Customs duties was not of a nature to induce the Government to again submit similar proposals to the same House, and with great regret they felt themselves debarred from doing so. The owners of property, whether real or person*], are suffering from the lower values of produce and from less earnings. The tax on farming property fnlls, therefore, with exceptional severity on tho taxpayers, the more especially that the House 1 refused the moderate exception upon machinery and agricultural improvements proposed to it last year. A reduction of the vote of property tax and a smaller increase of Custom duties would benefit every class, and every interest in the colony ; for the community is closely knit together, and the logical reduction of one kind of taxation and the increase of another muat be felt by every one. I cannot say that additional taxation in necessary this year, for it is not. On the contrary, I c*n do wjth less, and. I propose to take

off 1 Kith of a p°nny of the pnnerty t.iv, making it 13-lbths this ye.ir instead of 7 iSths. This is equal to a reduction of £24,000, or over 7 per cent, of tli" estimated yield of the tax. 1 tthuuld h.i\o liked to take off more, and I am convinced that in every way the colony would benefit if thf* House were to sanction the reduction of the property tax to .vBth«, and substitute moderate incre.isp«. of duty on articles (other than sugar and tea, and such like necessaries of life) that can well bear the taxation. The larger tax lnst year ,was consequent on the refusal to increase tariff. Had the proposals then made ■'been accepted we should, I think, have been well able to do with fi\p-eij*hths of a penny this year. Burdening property now, when produce is so low, is n iriwtako, ai witne-h the opinion of the fin.inci<il authorities who conti ol the financial policy of Great Britain :md France.

1 Si'lMAi'hl) KhVhNLK I'OK 18Sfi 87. TLh estimated revenue of the. 3 eai, with tho reduatifii <>f the pmpeity t«v\ which I have described is as follows: — -Customs 151,410,000; stamps, including Post mid Toletfiapli, cash, £'(H7,'iot); property tay, £.'512.000; beer duty, £55,000; 1 .always, £l,T>0,000; 1 castration and otlier fees>, £3fi,000 ; marine, £13,000 ; iniscßllaneons, £44,000; depistuiiiiK liceiiM^. rents, etc., £18(j«?J0 ; debentures foi incieo^esof Sinking Fund. £2")1,000 : Tot.il revenue, £4,074,1)20. The total estimate for la*t year \\.i-. £'4,00J,000, »nd the total revenue £3,!)!)!), 140. The estimated expenditure in £4,070,208| and tho estimated revenue £4,074,1)20. To the lattev ha" to be added the .surplus ot £370,85!) at the commencement of tho year. Together they amount to £4,112,779, and leave a surplus of £42,n71, which will be reducible by any .Supplementary Estimate ;that may be appropriated. I

LOANS AND PUBLIC WORKS. ' Hon. members will be anxious to learn what are the proposals concerning the expenditure of borrowed money and the prosecution of public works. . It is natural in connection with thoie subjects, that I should congratulate the committee on there beinsc every reason to expect that the great work of the construction of the lia&t and West Coast and Nelson Railways, now known as the New Zealand Midland Railway, will be curried on by a powerful compiny. 13ut the pleasure this may cause in trifling 1 compared with the rejoicing we should feel m knowing a woik is provided for eolcuLited to benefit the colony in many wavt» to a vast extent. The Government have frequently declared their opinion that a laigcr proportion of borrowed money should be spent on l.uid, and that the railways determined on should bo constructed with \ipour to secure speedy economical ie-Hiilt-s. They have also insisted that whilst I labour U plentiful and money and matoiial cheap, the time is p.irticulaily suitable for proceeding with such undertaking. It has been a matter of anxious consideration with thvMn whether they should biing down propoinlhfor w.uks extending over ,x period of fiom fi\e to ten years and provide a loan to bo b'Tiowed from time to timo as was required to complete these works, or should bo content with makinpr prouo-i.ils to extend over a shorter pei iod. They have decided on the Litter course for more than one reason.

NEW LOAN. I have to announce that the Government will ask for a loan of a million and a-lnlf, to bs devoted exclush ely to railway purposes. They propose that the. Noith Inland Trunk Railway loan shall be made jnalienable from the object for which it is 'intended. When it is negotiated there will be restored tci the public works fund the amounts previously spent on that line from 'the loans. There will then remain a balance in that fund supplemented by the repayment I havo inst referred to. Taking from tho 21st March last it will leave over '£800,000 to be voted as the House pleases on other purposes than railways, such as buildings, purchase of native lands, roads, and other works on goldfields, &c. We look to it yielding at least two ye.us provision ; also, that the railway loan will do the same ; indeed, some of the items of that loan will not be expended in two years. Railway construction will thus be vigorously carried out by the Government, whilst it will also be proceeding on the part of the Midland Railway Company. Though the Government are anxious, as they havo been from the first moment they came into office, to see the Ninth Island j Trunk line completed as rapidly as po«sibl". they find that this, with any inasonabte regard to economical construction, cannot be obtained so mer than in ' four yen-.. They will spare no exertion to get Liv) railway finished during the year 185)0, and tlmy think an event so mouientii. h in the history of the colony a& tho completion of the line between Wellington and Auckland .should, as I have already mentioned, be celebrated by an int°rnational and intercolonial exhibition. They propo«e to leave to the syndicate tint ha\e the TituianjM-Itotorua line in hand a longer period for carrying out their plans. GoA eminent icpretthat they are not aMe to piopose, a line to connect New Plymouth with the Trunk Railway. THK KXPEXDITL'UE OF THE NEW LOAN. • I 'will now read to the committee a list of tho railways to which it is proposed to devote the million and a-lmlf loan : — Extension north of Auckland, £70,000 ; for doubling railway line out of Auckland southwards, £33.000; Thameb-To Arohn, £80,000 : Auekland-Rotoma, £120,000 ; iSapior-Pahueraton, £100,000; Maurice villeWoodville, £125,000; Blenheim- Awatere, £50,000; Hokitika-Greymnutb, £100,000; Livingstone, branch, £15,000; Catlins RivflP ,* £50,000 ; Seaward Bush extension, £26,000 ; Edendalo to Fortrose, £30,000 ; Mosoburn, £5,000 ; Riversdale-Swjtzers, £10,000; Obißii Central, £200,000; Mount Soniers-Alford Forest. £14,000 ; BlenheimTop House, £100,000; We*tport-Inanga-haua, £75,000 ; open lines, £200,000 ; raising loans and contingencies, £53,000; total, £1,500,000,

SETTLEMENT AND INDUSTRIES. I have ill-succeeded in my task if I have nut shown to lion, inembcis that the financics of the colony are in a sound and s itisfactory condition. Public works ahoulcj be carried on with the \ievv of aiding' the great object of promoting settlement on the lands of the culony. We here .iro in the habit of thinking that we are concerned in the controversy that ripe; in the older countries as to the merits of small and huge holdings, but it should be remembcied that our nnia.ll farms are what would be unaided a-> large ones in Europe. The depfe^sion ha 1 * done good by putting a stop to the diopn-itfon to nionopoliso great estates. Jtis frequently a.ilced, How can it be expected that mv.ill propeities with little capital devoted to them can pay better than large ones with capital? It is more or let-b utidci stood, though few ha\e the courage to declare it. I at least may do so, for n6ne can accuse me of a wish tosaeithe hours of labour extended, or tho payment of labour reduced. I | ,hp]d, and • always have held, that high wages are an indication of prosperity. The labouring classes are, in my opinion, the means by which wealth is distributed through the country to fructify in numberless directions. But, whilst no pressure should be put on men to work more than the recognised eight hours' daily, it is well understood that the man who 'is working on his own land and establishing tho foundation of a happy home and future competence feels a delight in every hour of the labour which he and his family give towards increasing the value of his possessions. Therein he has advantage over those who depend only on hired labour. This is the secret of the success of old colonists, and we should aim at placing a like means of working on his account at the disposal of eveJy man who wishes it. Lest it may be supposed that what I have said about the present depression means that I think its principal cause — the reduced value of wool — is likely to continue, 1 must »ay that such is far from lny opinion. Tt seams to mo a sharu rally of prices must inevitably occur. lam one of those who believe that all commodities hive fallen in nominal value because of the appreciation of ' gold, but the fall in wool has been disproportionately great. In cousidering a question of this kind from its theoretical aspect (which is, of course, all I am able to do), two points havo to be specially taken into account : first, is, the consumption of the article likely to increase or decrease ? secondly, is the pi ice to which the article has fallen below that for which it can be pnytbly produced? The answer to the first question is imst cheering. Wool is a commodity for which there is practically a boundless u>e, regulated only i>y the means of consumers to pure-babe it. Every additional fall in value of Mich a htaple opens fiu^h ui'irkoU, besides loading to tho discovery of new u?es and new methods of combination with other staples. The natural consequence of the augmented consumption is, to raise the value. We know that in New Zealand, with its fnrtile laud, cheap carriage to a market, and with lictli n-»k from floods or di ought, wool dors not n>w ' ywld .* fair l'etnrn for the wpital etupioyod. in \U production. $£ueb |

more must thU be the c:ise natural f.icilitips are lessened, and on ac count of crowded population, inoro valuable millions of acr. t juo passing out .«f us>e in •Australia. The Plate liner district is anything but prosperous, and in older countiies grazing interests feel the f.ill most severely. Again, the increase of population xo adds to the want of animal food that this indiiect source of profit to the breeder of sheep is likely to become larger rather than sm, tiler. To sum up, it appears to me that the need of wool is ro confirmed, and so readily open to extension that nothing but temporary causes cati (keep it below the price at which it"wHHvolj-p«iy the producer. The change may not be immediate, but it cannot be long delayed. I hope what I have said will be taken for what it may bo considered worth. I ha\e no special claim to bpeak on the iiibject.

CONCLUSION. The Government wish to make the New Zealand farming fame spread far and wide for opportunities which ;iro afforded, to any person who de-ires it, to live upon his own land. Of course, I include in this term the tenure of perpetual lease as well as that of freehold. Settlers on the land, ho\vc\er, should understand that their success largely depends on the prosperity of other classes. The aitisans of the towns, miners for gold, coal, and other mineral*, and porsons who utilise the timber of the forests and the lish of the coasts, are the best allies of those who gather from the soil its wealth. No one who studies the peculiar features of Now Zealand — its natural-resources and its great coastal extent — can fail to see that it offers the utmost encouragement to what constitutes a countiyV happiness— a self-reliant community firmly welded together by a large variety of common interests. The excitement of public life is apt to make politicians forget now -very little there is to separate them from each other. "The ways 1 they Are many : the ond it is one." That end in the welfaie of the colony that confides to them th« control of its affairs. I venture to say to those who nro inclined to think seriously of any difficulties under which New Zealand labours, that ono has only to read history to recognise that those difficulties are "trifles light as air." Compared with the period of disasters through which almost e\ pry country has had to fight its Way in its early robust youth, the disorders of the colony are of an infantilo description, which cause no anxiety. It is customary to credit me with being over-sanguine. There may be truth in the charge. A man is ill able to judge of himself, and I do not pretend to the po»he&?i">n of that rare quality, self-knowledge. Yet it appears to me that whatever hopefulness of disposition I enjoy arises less from constitutional causes than from experience of Ion? years «f observation. The le-Bun life has taught mo is that theroaie few difficulties which cannot be overcome, tltyt the darkest moment ia nearest to dawn. For tnntyfour years I have clohcly waXchpd the progiessoftlie Aiu.tr j).v>iau colo.ne-. There ha\p been times when it seemed to me that terrible reverses must infallibly o\ertake them, and again and again has the weak.iess of my judgment been 1 educed until I have learned to think that the logic of facts is in favour of recovery lather than of decline. The growth of the*a colonies has been so marvellously rapid tiuit t'.e mind is uuablo to retain the memory of the h ilting periods in the past. In sill humbleness of spirit I dare to predict that many generations will piss away before the colonies beneath the Snithiui Cioss reach t ho culminating gremlins of their destiny.