A.—No. 1

DESPATCHES EROM THE GOVERNOR OE NEW

72

would accept them or not. They may be thankful any of them, were to cease to exist? It is perthat the General Government has thought it ex- fectly well known that as the recipients of any pedient to enhance the value of their debentures part of the public revenues raised by the General by professing to make them a charge upon the Assembly, whether Consolidated Fund or Land consolidated revenues of the Colony, but they Fund, some Provinces are already extinct, cannot honestly or legally be compelled, against their will, to part with the security they already possess. Tet this is precisely what they are called on to do by " The Public Debts Sinking Funds Act, 1868," against the allowance of which I am now respectfully protesting. The amount of outstanding debentures of the Province of Canterbury, held by those who have not yet assented to the offered exchange, is £121,700, as I learn from a statement made a few days since by the Crown Agents for the Colonies. Up to the Ist of September last I believe not a word was heard of any intention on the part of the Government of New Zealand to attempt to lay hands on the accumulated Provincial sinking funds. But, unfortunately, the Government of New Zealand was in want of money, and on that day the Acting Colonial Treasurer, the Honorable John Hall, made his Financial Statement to the House of Eepresentatives at Wellington, and, taking it for granted that "it was an evident " omission in the Acts of last Session that when " the liability for the repayment of Provincial " loans was undertaken by the Colony, the control " of the sinking funds by which that repayment " was to be provided for was not vested in the " Colonial Government," proceeded to say, "the " first question to be settled is to whom shall the " Provincial sinking funds, as they become freed, " be paid over, and it is, of course, a question for " the Legislature to determine. The Government " is of opinion that if the Colony absolutely un- " dertakes the payment of the Provincial debts, " it is but fair and reasonable that the Colony " should have use of whatever provision has al- " ready been made towards such payment." This proposition may at first sight appear plausible, but a little examination will demonstrate its fallacy, and inapplicability to facts; and it is literally the only reason I have ever heard or read of for seizing on money in the possession of other people. Mr. Hall avowed that the Government had no intention whatever of appropriating these accrued sinking funds to their original purpose, viz., to the repayment of the debts for which they were provided as security, nor in diminution of the £7,000,000 consolidated debt. One of the resolutions 7 moved at the close of 7lt is not necessary to remark upon any statethat financial statement was that "£90,000 out ments made by a Minister in the course of debate. "of the proceeds of the accrued sinking funds What was ultimately decided was, that the released " ' (including that of Canterbury) ' shall be paid sinking funds should be left for appropriation by "to the Province of Nelson, and £15,000 to that the General Assembly. It can return them to "of Wellington." Mr. Hall's general financial the Provinces if it chooses. If it chooses to spend proposals were opposed, defeated, and withdrawn; them, the Provinces are to that extent relieved of but in the last nights of a protracted and ex- the charge. In other words the Provincial debt hausting Session, when half of the members for is to that extent diminished, and the general debt Canterbury had left Wellington, or were disabled is increased. by sickness from attending to their duties, the I have already said that the question is one Public Debts Sinking Funds Bill was intro- which may fairly be argued as between the duced into the House of Eepresentatives, and was General and Provincial Governments. If the rushed rapidly through all its stages, sub silentio, General Assembly appropriates the money no without debate, or reason given for it. longer wanted, under the contract with the bondI believe that the Eoyal Instructions to the holders as sinking fund, to any other purpose Governor of New Zealand require him to transmit than to the Provinces themselves, they may put to the Colonial Minister at home a statement of forward a very strong case, but that never has the reasons and of the occasions for proposing been done as yet. all laws assented to by the Governor in the name The Assembly may still use the money for of Her Majesty. I have not, of course, the advan- paying ofr part of the public debts, or it may give tage of knowing, as your Lordship knows, what it all back to the Provinces. This part of the the statement so transmitted by Governor Sir question has got to be argued when it is proposed