B.—No. 2.

the end in view. You might sweep away the Provinces and Provincial Institutions by legislation, but you could not destroy those feelings of separate and distinct interest which have grown up with the settlement of the Provinces. In the course of time, as the separate interests become blended, the distinctive sentiment will subside; but time and the progress of settlement and intercommunication must work their undemonstrative yet inevitable effects. To attempt to anticipate their action would be to induce an exciting political struggle, in the determination of which public attention would be so much absorbed as to lead to the neglect of the great Colonizing question. We say that we attach far more importance to the progress of Colonization than to the maintenance of any particular form of Government ; but we say, also, that we see that Colonization can be best promoted by; using, as far as they are capable of being used, those institutions which already: exist, making only such changes from time to time as circumstances demand. Therefore, we do not pretend to determine that either of the plans I have referred to must be adopted to the exclusion of the other. In the cases where railway construction can be carried out by the Provinces, we are of opinion that it is desirable the Provinces should be charged directly and immediately as already explained; but we are not willing to exclude the Colony from undertaking the primary liability, and in some cases, as proposed by the second plan, we think it should accept as a satisfaction of the liability, a fair equivalent in landed estate. Let the railways go on, we say, and from time to time the internal policy in reference to them can be adjusted. Supposing them to be commenced under Provincial and General Government auspices combined, there will be nothing to prevent their being, should it ever be found necessary, consolidated into one entity. In justice to the Provinces, and to my own opinions, I must say that I' think, in relation to Provincial Institutions, we are apt to mistake cause for effect. I admit that the Provincial divisions of the Colony make it a work of enormous difficulty to come down with any proposal for a comprehensive scheme of colonization. But to suppose that those divisions are consequent upon the political institutions of the Provinces is, as I have said, to confound cause with effect. Provincialism, as it is called, is consequent upon, and not the cause of, the manner in which the country was settled. It was an ambitious effort to attempt to settle the Colony from so many points; but the effort was made, the work was effected, and its consequences survive : you have to deal with a number of different communities. Provincialism represents not only their different ideas and the different circumstances in which they are placed, but it represents also their strong protests against an indiscriminate, precipitate, and arbitrary fusion. If Aye were dealing with colonies having each only one metropolitan centre, we should propose to apply a new colonizing scheme gradually commencing from one point. But to do so in New Zealand would involve gross injustice, not because of the political organization of the Provinces, but because those Provinces contain different communities, composed of men who have built up the Provincial edifice on the clear understanding that something in the nature of proprietary rights attached to it. "We may undervalue local distinctions, but why should a the inhabitants of one Province submit to a lengthened period of depression, £ whilst the means they partly contribute are devoted to consolidating the prosperity o of another Province ? It is very avcll to talk about narrow views, but one body of settlers is entitled to just as much consideration as another. If the settlers in any Province understood they were occupying an outlying district which would only be entitled to attention after more favoured districts had been served, we might then deal with this Colony as we would with another; but it is quite otherwise. Each Provincial community has been taught to believe itself on a par with its neighbours, and a colonizing scheme, to aid which the credit of the whole Colony was pledged, would be looked upon as a gross injustice, if it did not provide for due consideration to every Province. That is why we must pledge ourselves to a large scheme if we wish to do justice to all. Interprovincial barriers will in time be removed; but the removal should be effected through the agency of prosperity, not of adversity.

but can be made most useful-

Why Provincial feelu_3wlllcontinue

and why any Coion™gs*™emust be a comprehensive one.

15

FINANCIAL STATEMENT.