8.-6.

the courage of their opinions sufficiently to wish that so vigorous an attempt in a direction fraught with innumerable advantages should be arrested without ample trial. At any rate it is embarked in with the full knowledge and approval of the House. The system involves not only a virtual suspension of cash sales, but also the necessity of spending much money in giving an impetus to settlement by roading, clearing, and general aid. My opinions are well known that no great principle is involved in the leasing system. I regard it as a temporary arrangement, subject, sooner or later, to that complete title in the land the desire for which is an implanted instinct in man. At present, however, or in the near future, it matters little whether the tenure is a lease or a freehold —conditional on future payments —either way money requires to be found for the aid which is being given to settlers. It is of no use to allow deficiencies to accumulate, and to regard them as unexpected, when we deliberately adopt a policy to lead to them. The Government think that for a term of years, until the increasing revenue will permit otherwise, the deficiency between the land revenue and the land expenditure should be made up by charges on the land supplied by such local borrowing as may be required. The rents arising from the land are consolidated revenue, and out of them it is proposed that the interest of any amounts borrowed shall be paid, and the principal recouped by yearly allocations. Under this proposal, the cost of the Land Department, including roading and special aids, will go on the one side, the receipts on the other, and in a very few years they should be equalized. When the Bill is introduced I shall be able to explain the details more exactly. Included either in the same or in a separate Bill we propose to make similar provisions for acquiring and dealing with Native lands. PUBLIC WOEKS EXPENDITURE. There was a balance on the 31st of March, as already stated, to the credit of the old loans account, of £491,245. This amount may be swelled by the produce, if they be negotiated, of the debentures or the inscribed stock which the local bodies were authorized by the Act of last year to give in exchange for the debentures they had issued under the Eoads and Bridges Construction Act. Of the loan of last year there was, on the 31st of March (including an amount still to come in, and since received), a credit balance of about .£713,055 ; and there was left of the North Island Trunk Loan, after deducting the advances made on its account about'£67s,ooo, which, however, will be reduced by the cost of raising the loan when it is negotiated. The Estimates are not finally decided, but I shall not be much out when I state that the proposed expenditure (apart from authority to incur liabilities) out of the North Island Trunk Loan, will amount to about £180,000, and out of the loan of last year to about £487,400. As regards expenditure out of the old loans account, it will partly depend on whether we pass the measure dealing with the cost of roads and roading to which I have referred, and to whether early effect can be given to it. It will also, in part, depend on whether we pass another measure we propose to introduce to enable public buildings to be erected by means of shortdated annuities. We think the system of borrowing in anticipation large sums for public buildings, has led, and is calculated to lead, to extravagance. On the other hand, it appears to us that if the cost of interest and redeeming the principal has each year to appear as part of the estimates of the respective departments, it will result in less ambitious expenditure. If these measures become law, and speedy effect can be given to them, they will lighten the charge on the old loans account. Otherwise the proposed expenditure for the year will absorb fully the amount remaining to credit of the old loans account, and the balance, about £79,000, coming to it from the commuted securities tinder the Eoads and Bridges Construction Act. The Minister for Public Works will, in due time, furnish the House with further details. Members will, however, be able to conclude, from what I have said, that the Government consider that it is expedient to limit the issue of loans in the London market, and that for the present it is not desirable to undertake fresh railways beyond those already in hand.

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