15

8.—6

the proportion of the loss to be made good by New Zealand to the cable company, consequent on the reductions in the rates, will not exceed .£7,000 for the current year, a third of which has been guaranteed by certain merchants and business firms in the colony. EECIPEOCITY. During the recess the question of intercolonial reciprocity has engaged the attention of the Government, and representations were personally made by me on behalf of the Government to several of the Australian Governments on this important matter. With some of the colonies the prospects of intercolonial reciprocity were found to be decidedly encouraging; but the financial disasters which have unfortunately overtaken our neighbours rendered it impossible to obtain a proper and full consideration of the matter, and in the meantime the subject is in abeyance. I can assure the Committee, however, that it will have the further attention of the Government, as the advantages to all classes in the country that follow the opening-up and development of trade relations with other parts of the world must be apparent to all. DEFENCE. As honourable members are aware, the Commandant was appointed in January, 1892. On his arrival he requested that he should not to be asked to accept full responsibility until such time as he had an opportunity of personally inspecting the Permanent and Volunteer Forces and defence works in all parts of the colony. This was acceded to ; and the inspection has taken place, the results of which have been placed upon the table of the House. The first portion of the report is of such a nature that it can be made public property, but in addition to this there is a confidential report which more particularly affects the defence works and armaments ; it necessarily follows that this part must remain confidential. There are also two supplementary reports—one on the Westland, Nelson, and Marlborough Districts, and on the Easter encampments; and the other on the South Canterbury District. There is a large increase of expenditure recommended for the completion of armament, submarine defences, torpedo-boat sheds, magazines, purchase of small arms and munitions. A considerable portion of the year having elapsed, it is only fair to the Volunteer Forces not to make any alteration until Parliament has decided on the matter: hence the general estimates dealing with this portion of the defence of the colony are almost on the same lines as last year. PEOPOSALS OP THE GOVEENMENT. Taxation of Native Lands. The Government has had under its earnest consideration the question to which attention was called last year—that of subjecting the Native lands to the taxation to which the private lands of the colonists are liable, in order that these Native lands may contribute what may in all fairness be expected — their proportion of the expenditure which is so rapidly increasing their value. An amendment of the Eating Act will be introduced with a view of initiating this proposal in respect to Native lands in the more settled districts. Another proposal is that the lands to be reserved for the use and residence of and cultivation by the Natives themselves, may be occupied under leases without tender at assessed rentals, and in other respects on the same terms and conditions in regard to rates and otherwise as the leases to European settlers. The Natives who may thus become the lessees of lands comprised in their own reserves would not necessarily pay rent, for it would come back to them as reserve owners. But the assessment of the rental would operate when a Native leaseholder may not own the relative reserve, or when, owning the reserve, he may, in order to obtain the means of paying rates or to secure an income from the rent, desire to sell a portion of the leasehold.

! Intercolonial , reciprocity. I [ ) i ?

Report of the Commandant.

Native lands subject to taxation.