B. —No. 1a

XV. DESPATCH EROM HIS EXCELLENCY SIR GEORGE GREY, K.C.B. TO THE HON E. CARDWELL, M.P. Government House, Wellington, April 8, 1865. Sir, —My Responsible Advisers have requested me to transmit the enclosed Memorandum in which they place before you the present financial position of the Colony of New Zealand, and the line of policy which they propose to pursue, I may in a few words state what is the result which may be gathered from this Memorandum. 2. The Colony of New Zealand proposes for the future to dispense with all military assistance from Great Britain and in all other respects to rely upon its own energies and resources. One of the results which the Colony hopes to obtain from this policy is the relief of the mother country from that large annual expenditure which has hitherto entailed so considerable a sacrifice on the British taxpayer, which sacrifice the Colony recognises with gratitude. 3. In pursuance of this policy and in order to make provision for its debt to the Imperial Government, the Colonial Government has transferred to the Imperial Treasury £500,000 in Debentures bearing interest at the rate of 4 per cent, aud it will continue to meet the interest and sinking fund on account of these Debentures as provided for in the Act of 1863. 4. It has also made a considerable increase in the taxation of the country by raising the Customs Tariff to the extreme limit which the Colonial Ministers think practicable. It has also under consideration a plan for the imposition of direct taxation and has made and is continuing to make all possible reduction in the expenditure. 6. You will find by the statements made by the Colonial Ministers, that they undertake these responsibilities from a sense of duty, but with serious apprehensions as to the difficulties which may possibly fall upon the Colony, from the magnitude of the liabilities it is about to incur, and they submit that at such a time, the Colony has a reasonable and just claim upon the mother country for some pecuniary aid towards euabling it to bear the heavy responsibilities it is about to undertake, and that they trust therefore, that the Home Government will extend its aid to the Colony, either by covering the remainder of the Three Million Loan by the Imperial guarantee, or by making to the Colony an annual grant-in-aid of the extraordinary expenditure for the next four or five years. 6. Upon this subject 1 beg to report, that the Colony has already raised, without the Imperial guarantee, one million of its Three Million Loan. The amount, therefore, they ask to be covered by the Imperial guarantee is two millions, instead of one million, as recently authorised by Act of Parliament. 7. My own opinion is, that to place the Colony in a position of security and prosperity, an additional million would be required in excess of the amount stated by my Responsible Advisers,

25

FINANCIAL STATEMENT.

-A.J. V . Colony •F New Zealand.—RETURN OF REVENUE, Imports am to 1865, shewing the amounts of each per head for the res] I Exports for the years 1859 lective periods. Reven E. Impor 1 :s. Expor •s. Year. Amount. Per Head. Amount. Per Head. Amount. Per Head. 1859-60 60-1 61-2 62-3 63-4 64 to 31st Mar., 1865 202,007 6 1 229,790 13 6 381,696 18 9 550,704 0 3 706,683 1 0 2 16 6 2 17 8* 3 17 1 4 7 Bj 4 7 2 1,566,027 0 0 1,780,652 0 0 3,821,054 0 0 5,310,243 0 0 7,650,235 0 0 21 18 0 22 7 3 38 11 9 42 4 1 47 4 2 630,021 0 0 655,538 0 0 2,506,076 0 0 2,941,761 0 0 3,467,162 0 0 8 16 2 8 7 2 25 6 2 23 7 8 21 7 11 772,867 5 10 4 9 11 4,72),746 0 0 36 12 2 2,569,110 0 0 19 18 5 |£2,843,749 5 5 124,848,957 0 0 |12,768,668 0 0 For Great ] Britain in the 3 year 1861 the amounts were as follows :— Rei Im Ex] 'enue ports )orts ... £2 8 4$ per head. 7 9 9| 5 9 ll| Treasury, Wellington, August 28, 1 .865. J Woodward, Assistant Treasurer. •