SUPPLEMENT TO The Ashburton Guardian.

VOL. IY.-No. 981.1

ASHBURTON. THURSDAY. JUNE 28, 1883.

[PRICE—.ONE

FINANCIAL STATEMENT.

[by telegraph] Wellington, Yesterday (.ThqCoLpNiALTreasurer said, MrHam lin, it will be within the recollection of the Committee that one of the objects which Parliament had in view in 1879 in making the financial year terminate on the 31st March, instead of the 30th June in each year, was to enable the Financial State meni and the Estimates for the yearto be prepared and placed before Parliament as soon after its meeting as the convenience of members would permit. In accordance therefore with the spirit of that arrange ment I have selected this evening as the most convenient for delivering the annual budget, and placing in the hands of hon members' the Estimates for the year. In submitting the budget thus early for the consideration of the Committee, I venture to reiterate the hope which I expressed last session, that the House will .consent to the appointment of an early day for the discussion of the impor tantdqnestion of finance/the Government being most desirous that the subject should .receive, the early attention of the House, in order that it may be fully and exhaustively discussed, while hon members are fresh and yigopoUß Last year I had the plea atfrebf announcing a very substantial sur plus upon the financial transactions of the year, and although 1 am not in a position this year to show so large a surplus, for reasons which I will presently explain, the financial results of the year have been satisfactory; - -the surplus, although small, fully justifying the action of the House in reducing taxation' fer the finan cial year which ended on the 31st March last. It will not be necessary, I am happy to say, to trouble hon members on the pre s§g| occasion, at any great length, as the form of our public accounts now permits statement of ir our trans actions land position to be made within a very reasonable compass j but 1 must ask. for the kind indulge .ee of the Committee while submitting some details of past transactions, and the proposals of the Go vernment for the present^year. ; I: follow the ' hsuai d.nd most ‘ convenient course, considering first, the. EXPESOjITUBE otf THk bRDINAhT REVENUE OF THE YEAR 1882 3.

Themzpenditure for the year under per manent Acts of Parliament was estimated at 1*1,627,512, including L 1,284,848 for interest and 1*270,000 for redemption of deHrand.ftha aoaountvoted for depart mental services was L 2,166,706. The total estimated, expenditure, therefore, sanctioned by Parliament was L 3,694,218. The total .expenditure proved, to be 1*3,638,484; being L 55,834 less than estimated. The only item in the expendi ture which calls for special remark is that of Defence. Hon members will see when the Accounts are clearly laid' before them that for tile first time for some years the total oott of thik service has been paid out of the ordinary revenue, without any con tribution in aid from loan. - This we were enabled to do in consequence of the large surplus qf 1*203,683 brought forward from the year 188182, but the principle ofpaylng the whole coat of. the. Armed Constabulary out of revenue has to much to commend it that I hope we shall not again consent to charging any part of that coat against loan, while it ia possible by any reasonable effort to provide the necea v sary means from ordinary revenue. With regard to Railways, 4he amount expended Was only slightly in excess of the vote, notwithstanding a very considerable in crease of traffic daring the year. Full particulars of the expenditure in connec tion with the service will be given by the Minister fer Public Works when he makes his annual Statement, mamma outstanding 31st march, 1883.

ojutatandipg liabilities of the. ordin ary account on the'Slat March, 1883, were.eatimated at L 176,530, particu hus of which have been laid before the House by the Audit Office* under section 9 t'Of;: the Pdblio Keren lies ; Act,’‘ 1882. These liabilities are, as hpn members know, included In the estimated expendi ture for the current year. The liabilities outstanding on the Slat March, 1882, amounted to L 164,394. At the close of the previous year , they amounted -to LI 65,614. It wiU thus be seen that in the ordinary course < of. things, without either hurrying Or delaying expenditure, the liabilities on this account from year to year may be' fairly estimated at from L 160,000 to 1/180,000. The practice be gun in 1880-81 of making the payments within the financial year the expenditure ol theyearfj with regard to date of-service or supply, and so abandoning the method of. throwing.back on the revemle of • the previous year expenditure made in respect of liabilities outstanding on the Ist March, has greatly simplified the public worked satisfactorily. OBDINABT BEV3SNUB Or TEAK 1882 83. The estimated revenue, for -ihe, year, exclusive of the cash derived from land sales, was L 3,393,500. The actual amount paid into the public account after deduct injgsefnngs was 143,470,250, beingL76,76o in ekcess of the estimate, and reference to the comparative returns of-,estimated and . actual receipts, which will be append- d to this Statement when published, will show hon ‘members the extent to 'which the Several .heads, of receipts .exceeded or fell short of the estimate. It will .he. observed from that return *<foly c class of revenue which fell short of the amount estimated ,was Customr/ tho tefebipts being L 1,494,463 as ‘ against last year of L 1,500,000, or than- estimated. The total amount yielded in excess of the estimates by- the others classes ■ of revenue was 182,287. Of this sum L 23,690 came from registration and other fees. This large in crease is attributable to an under-estimate of t]he .probable receipts of duty on leases and conveyance of native lands. It will he .remembered that the Stamp Act of 1881 offered the alternative of anticipating the annual payments of these duties by a composition paid once for all, a provision which has been acted on. Beyond my Conjecturalestimate from this source of revenue, we received L 26,251 during the year. The revenue from stamps was L 18,389 in excess of the ' estimates. The amounts included in this class are the duties under the Stamp Act, Postal revenue fees and fines of the Law Oourts, Land Transfer fees, i for all of which there is now only one : description of stamps in use. The Trea sury is consequently unable to apportion r : the moneys received from sales of stamps to the classes of revenue to which they ■ffelaha The same course, that of per^ ; suiting one kindof stamp to be used for all purposes, has been followed to some «atant «a o>tlrer ooloniea -and in England, and no, 'practical inconvenience taw re sulted* while to the public the change has been a great advantage. The Telegraph - ' revenue ,wauLß,l3s in excess of the esti ' pate. The receipts from depasturing ilr. : c j 1 J r

licenses, rents, eta, were also in excess L 10.073. The railway receipts, notwith standing the large reductions in the tariff, yielded more than the estimate by L 14,740. This has been due to a con siderable increase in the passenger traffic and in the tonnage of goods carried, and to an unprecedented increase in the quan tities of live stock moved, the latter result being doubtless due, to a large extent, to the activity of the new refri gerating industry. The previous bad Season has led to a somewhat, diminished grain traffic during the year. The traffic arising from the last grain season chiefly falls in during the current year, so that We have not yet realised the results. LAND FUND, 1882-83.

The total amount expended during the year out of money derived from sales of [and was- L 197,100, of which L 41,758 was expended under permanent Acts of [he General Assembly, L 155.343 out of the votes for the services of the year. (The amount estimated to be expended Eas L 41.500 under permanent Acts, and 195,337 under the Appropriation Act, inaking altogether L 236,83- The actual expenditure was therefore L 39,736 less than the estimated amount. This result is mainly due to the absence of expendi ture out of the vote of L 30,000 for rates under tho Crown and Native Lands Bating Act of last year. The liabilities outstanding on this account on 31st March, 1883, amounted to L 27.440. At the close of the previous year the amount was L 25,188. The former amount is ex clusive of rates on Grown lands for the past year, estimated atL2O,OOO, in respect of which no demands h-»ve yet been made, in consequence of the valuation rolls which the Property. .Tax as directed by tfib.Bating Act, 1882, has to return, not being^oo applet ed,* No moneys Were count during-tm'past''year, no demands on the Treasury for payment having been made on that account. The receipts from sales of land amounted to L 272,305, con sisting of L 225.858 for cash, and > .46,447 from sales on deferred payment- The total amount estimated to be received was th©;reoeipts thfiftfore led sKoyt iof the estimates by L 81,695, the receipts of the year having been L 272,305, and the expenditure LI 97,100, in excess of the receipts, amounted to L75,2?04. Adding to this sum the balance of L 11,360 in hand at tho beginning of the year, we get a credit balance of L 86,564 on this ac count at the close of the year 1882-83. The whole of this balance being within the sum of LIOO,OOO authorised by the Beads and Bridges Construction Act, 1882, to be transferred to the main roads account, to which I have just now re ferred, will be so transferred in such a way as may from time to time be re quired.

1 PUBLIC WOHKS FUND. The appropriaticmVgranted out of the Works Fund for the year ended 31st March last amounted to L 1,727,729, exclusive of the vote for land purchases (L 82,455). The actual expenditure was, however, only 1867,194, exclusive of 129,843 for land purchases. The princi pal items of this expenditure were : [Railways, L 430,529; roads, L 210,650 ; public buildings, 153,071; and other ser vices, 167,989. A good deal of misappre hension appears to exist in f the country, and is not] altogether absent from the minds of hon members as to the reason for the great difference between the amounts voted and that spent upon public works, the Government often being blamed on the one hand for asking for votes for very much larger sums than it is intended .to expend,' and on /other band for "not spending within the year the whole of the sums voted. It is practically impossible that the periods of execution of large works adjusted exactly, or even very closely, to the periods of the votes. These latter are, in fact, authori ties for the payments of the year, and. for engaging sthe cplbnV jn u operations; "which must' extend beyond fho year, and the engagements of one year become in part necessarily and properly expenditure of the next and following years* and the only means by which Parliament can ob tain practical control over the expenditure is by voting such a sum- in respect of such works as it may determine shall be under taken as will cover not only the probable expenditure within the year, but liabili ties incurred under contracts or engage ments which may remain incompleted at the end of the financial year. Particu lars of the expenditure of the past year will be found in a table annexed to this Statement, but of course much fuller in formation on the subject will in due course be given by the Minister of Public Works. The liabilities outstanding at the end of the year, exclusive of those for land purchases, amounted to 1861,861 which, added to- the amount, expended :(ESfe7,l94) gives a total <Sf 11,720 665; as against L1,727,729v0ted fortheyear. Hon members will perceive that in speaking of the expenditure of the Public Works Fund and the outstanding liabilities at 'the close of the year, I expressly excluded the expenditure and liabilities in respect of land purchases. I did so because I ithink it is desirable to.keep th- liabilities 'on account of land purchases entirely dis tinct from the other liabilities of the ‘Public Works Fund, as they stand on an entirely different footing From the re turn of liabilities laid before the House by the audit office it will be seen that the land purchase liabilities on 31st March ;last amounted to L 309,299. At the close of the previous year the amount w.is 1338,876, and last year the House was in formed that probably not more than 1200,000 would be required to complete the purchase of those blocks which the Government had decided to acquire. No new liabilities have been incurred on this account, and, as already stated, the amount expended last year was L 29,843, out of a vote for 182,455, the difference between the amount voted and the ex penditure being attributable to th'e non completion last year of the purchase of the blocks of land in the Provincial Dis trict of Hawke’s Bay. The balance of the Public Works Fund remaining unex pended on 31st March last, including the balance of the loan of 1882 to be received, estimated at L 66,000, amounted to L 1,007,726, consisting of cash. THE PUBLIC DEBT. On the 31st March, 1882, the gross public debt of the colony amounted to 129,946,711, subject to a deduction of 12,266,418 for accrued sinking fund. On the 31st March, 1882, the debt was 13,035,741, and the sinking fund in creased to 1.2 571,829, the net debt being thus, 127,786,281, or 1104,989 more than it was in the previous year. The only addition to the public debt during the past year was the loan of 11,000,000, authorised last session, of which 1 shall have something to say presently. During the year we were enabled, however, out of moneys at the credit of the Public Works Fund requiring temporary Investment, to reduce the amount of guaranteM'-debenturea outstanding on Slat March 1882, by 1264,700, and to

take up temporarily debentures for L 319.400, issued under the Treasury Bills Acts of 18<Td-BQj and upon which advances had been obtained, also L 3,300 out of the Immigration and Public Works Loan of 1870. We also redeemed out of special feinking funds L 2.200, debentures of the North Otago District Public Works Loan, which, with L 67,800, previously redeemed, completed the redemption of the deben-, tures of that loan. Farther, the sinkings funds were increased during the year by L 305,411. These sums added together give L 895.011, which deducted from L 1,000,000 leaves L 104.989, the sum by which, as I have stated, the public debt was increased during the past year. When, however, we have raised the amount represented by the Imperial Guaranteed Debentures in hand (L 400,000) find debentures for L 323,300 temporarily taken up out of the moneys at the credit pf the Pubiic Works Fund, the net public Idebt .pf . the colony will amount to L27,785,J18L Ini) Accordance with ; the pro visions of the Treasury Fills Acts of 1879 land 1880, the wh do of the Treasury Bills issued under this Act amounting to L 183,000 were oi the 31st December, 1832, ex changed for debentures having a cur rency of three years. It will be remem bered that the Government proposed with jthe concurrence of the House to convert these debentures into 4 per cent, inscribed ktock. I regret that circumstances have bot yet proved sufficiently favorable to a feuccessful operation of this nature, but so soon as a fitting opportunity offers, it is the intention of the Government to in-j scribe- these debentures. U)AN OP L 1,000,003 RAISED IN JANUARY, 1883 Papers relating to the negotiation of the loan of L 1,000,000 raised last January will shortly be laid before hon members. It will be remembered that the loan was issued in the form of a 4 per cent, in scribed s'ock, and that it was offered to the public by the loan agents through the Bank of England, at a minimum of L9B. 105 per cent, the average price at which it was.placed being JL9B 12s 5d The stock js ndri quoted at 102 J The total amount paid by the Bank of England to the loan pgente after payment of commission, Stamp duty and other expenses was L 927,297 lls 9d. On no previous occa sion has any loan been raised at a price so favorable to the colony. The success which has attended the judicious negotia tions of the loan by the loan agents, Sir Penrose Julyan and Sir P. DiUon Bell, and the present price of the stock are therefore a fitting subject for congratula tion. Prior to the loan being of fered to the public, full information re garding the progress and . prospects of the AustralaSiah coloniek in general; includ ing New Zealand, was published in Lon don by the Agent-General in a very able paper read at the Colonial Institute, and fully discussed in the public Press. Not only the favorable rate therefore at which the loan was placed, but the present prices of our 4 per cent.- inscribed stock and other loans show that notwith standing reiterated statements to the 'disparagement of our credit there is in the money market of the world con fidence in the resources of the colony, and in its ability to meet the charges of its public debt. So long-as our finance is prudently managed and the affairs of the colony are secured so as to promote set tlement on its lands and the develop ment of local industries, there is no rea son to doubt that our credit will be well maintained and that we shall be able to iobtain from time to time upon reasonable terms such moneys as will be required to ! carry on our public works, .

SAVINGS BANK AND THE GOVERNMENT IN SDR ANCE DEPARTMENT. J should like here, Mr Hamlia, to refer very briefly to the growth of business (during the past year in connection with the Savings Banks and Insurance, as affording a vary fair criterion of the con tinued improvement whichjs taking place in<thG'Cultiyation of habit's /of economy and prudence amongst the pebble. ‘ln the ‘Sayings Banks of the colony on the 31st December, 1881, the amount held on de posit Was L 1,519,505 at the credit of 61,054 accounts, or an average of L 25 7s 7d fot each account. On 31st December, 1682,. the .amount was L 1,832,047, an in ci ease 0f.1.6,835 accounts; the average amount being. L 26.165. > There Was thus an increase of L 182,632 in the deposits nt the close of the year 1882, and 7,294 in the number of accounts open. Of the large amount of L 1,832,140 accumulated in the Savings Banks of the colony L 1,470,950 was deposited in the Post Office .Savings Bank. Considerable at tention has t een bestowed on the work of the Insurance Department in the direction, of-extending its usefulness and especially in bringing its benefits more readily with lin the reach of those who may desire to 'insure for small amounts. The result has 'been very satisfactory as regards both branches of the Department, the business, [which now exceeds a million sterling per jannum being double the average amount [hitherto annually attained in ordinary 'branches. The assurances in force number lover 17,000 policies, insurances upwards of [five and a half millions. The new insur ances average at Resent nearly LlffOOO per mottth/and theabcu mutated fundi" of the Department now amount to more than three-n uarters of a million. These figures appear to denote that a growing .section of the general public possesses the 'means and the desire to make provision for the future, and are availing themselves of the advantages which the Department ! offers.

LOCAL FINANCE. ' The passing ef the Roads and Bridges ! Construction Act has, I am glad to say, enabled, the Ippal bodies to begin, jnany useful-wbrks/brft owing* to the fact that the money for the construction of main roads was not available until about Feb ruary the work completed under the pro visions of the Act has been less than would have been the case had the money been available in the spring, of the year.. The ' aihouht available for’ construction .of main roads vas estimated at L 200,000, but applications to the extent of L 640,358 were received, there-ult being that the applicants were only three-eighths of the amount of their applications, the Act providing that should,* a larger amount te -applied for than was available, the grants should be reduced pro rata. The applications for district roads only amounted to L 61,795, so that the whole of those applications which were in proper form and received 'the approval of the ratepayers were Igranted. That Act seems to be working bn the whole well, but will probably re quire some amendment in the direction of limiting the amount which any local body may apply for. This matter is under the consideration of the Govern ment. LOCAL INSCRIBED STOCK. It will doubtless be in the recollection of hon. members that an Act was passed last session authorising the issuing of a ■local loan of a quarter of a million as in scribed stock. The scarceness of money

iii tho local market has rendered it inad visable in the opinion of the Government to place this loan. No action has, there fore, been taken under the Act, further than to make the necessary arrangements for issuing the stoci.', should a favorable turn in the market render it advisable to do so. FINANCIAL RESULTS OF THE YEAR. I will now briefly summarise for the con venience of hort the : general financial results : of the year, which I have just given in some detail. Wo find, as 1 have already stated, that the total expenditure.pf t&d ordinary revenue of the Consolidated Fund was L 3,638,384, and that the revenue amounted to L 3,470,250. To this must be added L 203,698, "that' sum. being the balance standing to the credit of the ac count on March 31st, 1882, . and thus we obtain as the total receipts of the' year. Deduct ing from this the expenditure, aipounti(ig ~to 1i8,638,384, a balance of L35;54d is' obtained' aa the surplus with which_the year 1882 83 terminated. This result the’ Committee will, I hope, think very satisfactory, especially when it is re membered that taxation was remitted last year to the extent of about LBO,OOO, while for constabulary ‘ L 75,000 was charged against the revenue, which before had bean borne- Upon the loan, and the extra charges for education and interest had to be provided for to the extent of L9(i,600. If, therefore, the remission of taxation had not taken place arid extra charges had not been required, the year should h.ave terminated with a .surplus, about as. large as - that of 1881-82. ,It should also be specially borne in mind that during the past year the amount con tributed out of revenue was not leas than L 270,000 to the sinking fund for the re demption of our public debts. Ido not of course mention this sum as an excep tional charge on the revenue of the past year, though it included L24j000 for arrears in respect of the sinking fund of Im parial Guaranteed Debentures, 'which wah exceptional, but I rrfar to the facT for the liQJCjiosft of drawing attention to . .the large arttF'Honually increasing'"sum which tho colony is periodically setting aside for the cancellation of the public indebted ness. In the figures which I have just s onmariaed 1 have not, of course, in cluded the proceeds of land sales, which are kept in a separate account and applied after the payment of authorised charges to local public works. But when we come to consider the transactions of tho Consolidated Fund of the year, tho proceeds of the land sales and the expenditure charged hereon must be included in the account. We find then that the total revenues received, includ ing the proceeds of land sales and the balance with which’ wo began the year, amounted to L 3,957,599, and that the total expenditure, including charges against proceeds of land sales, was L 3,835,486, thus showing a surplus upon the whole transaction of the Consolidated Fund for tho year of L 122,113. As I have already stated, the surplus of the ordinary revenue account at the close of the year was L 35,649. The real credit balance of that account, however, as hon members will see on reference to the ac count which will be appended to this Statement, was L 85,549: The diffetehce, it will be observed, arises from the addi tion to receipts of the year of deficiency bills for L 50.000, which remained unre deemed to the 31st March, 1883, but as the balance of the'amount was L 35,549 in excess of the amount required to re deem these bills, I have thought it better in speaking of the receipts to exclude the 1/50,000, in order to simplify the state ment of the financial results of the year.

STATE or TRADE. Before 1 submit for the consideration of the Committee-the estimated expendi ture and revenue for the current year, I am desirous «f calling attention to the condition and prospects of tljo, trade an 4 commerce of the colony. ' -The-subject; irf very important, and I am sure hon mem bers will not think a little time misspent if devoted to its I prp pose to look back a little in order that we may see more clearly the general tendency of our trade. I take for ex ample the three quinqennial periods beginning with the year 1868, and ending with 1882. I find that from year to year the, fluctuations of both imparts and exports is only such as might be reason ably expected in so young a colony. While marking large expenditure upon, public vvorKs' which HaS been going on for the last ten years, the rapid and on the average steady increase in the imports is not more than might have been antici pated from the impetus given to settle ment and speculation by the introduction of the immigration and public works scheme. The amount of the imports for the period ending 1872 was L 23,822,033, for the period ending 1877 L 36,494,260, and for the period ending 1882 L 39,358,574, giving a grand total for the fifteen years of L 99,674,867. Of this total probably about Aj35,5)0,000 repre sents in round numbers the capital for which we have to pay interest to persona not resident in the colony. We may divide this gross amount as money bor rowed by the >State and municipal bodies, , about L 25,000 000, and by private per sons, about L 10,500,000, the whole for the development of our resources. The bal ance, after deducting the amount thus borrowed, is L 64,174,267, being the pay ment we receive for our exports and the half uf personal property imported by settlers which has not to be "paid for, being their own. The value of exports for fhe period ending 1872 was: L 23 949, 563, for period ending 1877 L 28,691,204, and for the period ending 1882 L 30,930,392, making a total of L 83,471,159. Deducting t&s sum from the value of the imports just given, we find that the value of our imports during the 15 years under consideration was L 16,203,708 more than the value of our exports. Now, if it is true, as I have assumed, that of our total imports L 35,500,000 worth was property of non residents, or, in other words, capital sent here for investment, it will be seen if we take this amount from the total value of our imports, viz., L 99,674,867, that the value of imports for which we paid from our own resources was only Lf>|,174,867. Our exports, however, were worth L 84,471,159, so that we have paid for interest during the past 16 years to non-residents the differehce betwe n these sums, L 18,291,292, in addition to that portion of the value of our imports which represents capital in troduced and owned by our own settlers, which may be estimated at about L 6,000,000. Thus we have paid for in terest outside the colony about 125,296,292 in fifteen years, between 1878 and 1882, or an average in round numbers of nearly LI, 700,000 a-year. This, of course, is a serious drain in one sense upon our productions, and the fact must never Le lost sight of if we desire to understand our real financial position. But if capital borrowed ia being employed

to advantage, as we have good reason to suppose it is, it is clear that the transaction must be a profitable one for the colony, for although it is true that we are sending a large portion of our produce in payment for the use of this money, it is evident that it would be impossible for us to ex port anything like the quantity of pro duce we do without it, and the practical -question then for our consideration is, are we producing.enough tof pay our debts, to live comfortably and gradually increase our capital ? Now, in order to answer this question, it will be necessary to analyse the figures which-1 have-given. In relation to our exports, we want to see if, as a people, we are directing our at tention to the development, of those in dustries which will enable us to increase our exports in proportion to the wants and increase of our population ; and to, do this, the best plan will be to eliminate for the present both gold and wool from our inquiry. Hon members will find upon reference to the tables which will„ be published with this Statement, that out of the total export of L 83,471,159,, no less than L 24,680,658 was for gold and L40,339,98l for wool, or a total for gold and wool ;o£ i L 65,020,639. Now, the alluvial gold industry, although it was at one tima the principal production of the colony, stands upon quite a different foot ing from either agricultural or manufac tures. Alluvial diggings can only be of short duration in suchi a country as this, and as a matter of fact we fin-i that the produce of gold has gradually: fallen off from L 2,492,793 in 1868 to L 921.644 in 1882. Of the amount exported last year about oue-third was the produce,of quartz reefing. There is good reason, I think, to expect in the future a considerably larger yield of gold from quartz reefing than has hitherto been obtained, but judging from the gradual falling off for many years past of the produce of alluvial finds we cannot rely upon maintaining our gold export at more than, an {average of the last three years—that is,, at slightly over one million a year. The export of -gold for the first/iperiod .wasTL-U,517,655, for the second L 7,645,396, and for the " third L 5,557,607- Eliminating the gold export, we find the exports for the three periods which we are considering to be L 12,431,908, L 21,045,808, . , and L 25,313,785 respectivaly—a total of L 58,799,501, of which wool co i ■ rib i f ed L 8,735,785, L 15,907,346, and L 15,616,850 or a total of 1-40,339,981. From this we see that the value of our exports of wool rose rapidly during the second quinqen nial period, nearly double, but that it slightly decreased in the last quinqennial period; not so, however, I am glad to say, in the quantity or quality, the decline in value being due to the fluctuations of the market. This industry is gradually changing its character, the production of wool by small farmers now being very considerable and likely greatly to in crease. The importance to the colofty of the wool industry cannot well be ex aggerated, for we may be said to have paid the whole of the interest due to out side creditors out of wool during the last fiiteen years, and to have recovered in addition a balance of about one million a year for expenditure within the colony as its results. If we now also deduct our wool export from our total, we find that the exports other than wool and gold during the period ending 1872 were in value L 3,696,123, during the period ending 1877, 1-5,058,462, and during the period ending 1882, L 9,695,935. From this we see that the value of our exports other than gold and wool has very largely increased during each period, and was, for the five years ending 1882, nearly three times as much as for the period ending 1872, while our population had only about doubled in the same proportion of male adults to the whole population. After eliminating gold and wool there has been, for the three periods under consideration, L 8 10s 2d, L 9 5s 7d and 114 6s 8d per male adult. This is a very, satisfactory result, and our satisfaction is increased when we come to examine in more detail the progress of industries which have produced this re ■ suit. We'find large and steady advances in the export of grain, flour, gum, leather, potatoes, sheepskin, tallow anti ) sawh-i timber, and last year there is en tered for the first time amongst our exports a new industry which promises to be the . greatest advantage to the community. I refer to the export of frozen meat and dairy produce. This trade, as soon as it can be fully organised, should enable us to bring into profitable cultivation a much larger area of land in proportion to our population than we can use at pre'- sent for mixed farming. Nor must we forget that we have, among others, fully established woollen mills, soap and candle factories, clothing factories, iron foun dries, tanneries and agricultural imple ment factories, whiph will tend .to in crease proportionately our exports, oi by reducing our imports to liberate an equivalent part of our exports for pay ment to ' outside creditors. For these reasons I think we may safely conclude that we are not only giving our attention to necessary indu tries to tyhich 1 have referred, but that they are already per manently established. But notwith standing the -fact that these results, as I have said, are most satisfactory, as show ing that we aro rapidly developing indus tries which will bear almost unlimited expansion, we must not forget the present in prospect of the future, for although, as I have just shown, we have begun in earnest to develop these industries which are most essential, if we are to prosper, it is, nevertheless, also true that taking our exports, including wool. and gold, the value of exports per head of the male adult population has, for the three periods we are considering, steadily diminished. The exports were L 55 2s 5d for ths first period, L 52 13s 8d for the second, and L 45 11s 5d for the third per head respec tively. Now these figures, if taken alone, would give a very erroneous impression of what is really going on with regard to production in the colony, and they would have a very serious aspect indeed if onr exports other than wool and gold had not both steadily and largely increased during the same period. But fortunately exports other than wool and gold have largely increased, and have already shown from 1.8.10 s 2d in 1872, to Ll 4 6s 8d in 1881 per head of the male adult popula tion. I have said that we have paid annually on the average for interest out side the .colony during the last 15 years nearly L 1,700,000, but it must be borne in mind in considering onr present posi tion that we are now paying not less than L 2,500,000 a year for interest to non residents—in other words, rather more than one-third of our exports do not belong to us. That is to say, they have to go to pay our debts abroad and bring us no re turn whatever, except the difference be tween the interest and what we pay for the use of our borrowed money and the profit we make by its use, which is pro bably not more than 2 per cent directly for that privately borrowed, although the indirect gain must be considerably more, i

both upon the public and private borrow ing. Bearing in mind, then, Mr Hamlio, the estimates and facts whic’. I have just submitted, we are now in a position to understand pretty well the meaning of I what is going on around us with regard I to trade and money, so far as these mat ters are governed by what we do here. Now, the first thing that strikes us is the curious coincidence that the total amount of interest and sinking fund, so far ais can be estimated, which we have paid outside the colony during the last fifteen years is practically the same amou it as the money borrowed by the colony and the munici pal bodies taken together. But although this has been the case in the gross daring the last fifteen years, the case has been different for the last three years, for in that period, the expenditure of money borrowed by the Stite has not much ex ceeded one half of the interest and sink ing fund, amounting, as before stated, to L 2,500,000, which we have to pay out of the colony for colonial and municipal loans and private indebtedness, and for the last two'years it has only been a little more than one-third. From this it will at once be evide it, as many of our exports have to iremain the same, that unless there is a sufficiently large influx of capital and the property ; of settlers is maintained to justify the continuance of our imports at their average rate, or unless the produce of our local industries supplying colonial consumption increases to the extent of any reduction that may take place in our imports, commercial depression must fol low. Now, our exports for the last three years have been L 6,352,692 in 1880, L 6,060,866 in 1881, L 6,658,008 in 1882, while our imports for the same years have been L 6.162,011, L 7,455,045, and L 8,609,270 respectively. Our exports for 1880 were L 6,352,692, and for 1882 L 6,658,000, an increase of L 305,316. Our imports for 1880 were L 6,162,011, and for 1882 L 8,609,270, an increase of L 2,447,259. Now, there is reason to be lieve that from the introduction of capital the property of settlers was very large during last year, and to that extent the increase in our imports was legitimate. But making every allowance for this im portant item it is clear to -my mind that our imports last year were at least L1,0G0,000 more than they ought to have ’bean to supply our reasonable wants. That they have been allowed on credit and are therefore pressing very heavily on the commercial classes, and through them upon the rest of the community, it is, I think, clear that until we have worked off : our surplus stocks—and this can only be done by producing means to pay for them which will be the work of time—we can not expect full relief from the present commercial depression, although the gradual easing of the money market in Australia, as it takes place, will give us soma help. But are there any real grounds to account for the present com mercial depression, which undoubtedly exists over a large part of the colony, or . from any deductions which can be fully drawn from the figures that have just been given, to justify us in taking a gloomy view of our future prospects 1 To that question, Sir, my answer is emphatically, “No.” I say distinctly, after a most careful eon si ieration of the whole condition of the country, that there are not only no real grounds for taking a despondent view of our position, but, on the contrary, there is much reason to justify us in looking for ward with confidence tp a future of great prosperity. ‘No doubt, Sir, we, like other communities, shall have our ups and downs, unusual prosperity will be followed by unusual depression, as is the case all over the world. No one, I think, who sees the steady improvements that are going on all over the colony, who observes the very substantial increasing in the Saving Banks deposits, the great increase in the life assurance business, and the rapid development of our manufacturing industries, and who has watched our im port and export trade with care can doubt that we are producing enough to pay our debts, live comfortably, and gradually ac cumulate capital. The present state of our trade is not satisfactory, but we might have avoided it almost entirely had our judgment been a little better. No doubt business men ware tempted by cheap freights and comparative easy money to over-import, forgetting for the moment the effect which would follow the expendi ture of borrowed money—an expenditure which, I am glad to say, Parliament has determined to keep within much nar rower limits than has been observed in the past* The remedy for such a depres sion as we are now suffering from is in our own hands. It is old, very simple, and thoroughly" effective, but unfortunately there is no royal road to it. It consists, Sir, in an amoun* of self-denial and self restraint of which we are somewhat im patient in those days. The remedy is, Mr Hamlin, to live within our means both publicly and privately, and there aro, I am happy to say, many indications that we really are making up our minds to follow the good old plan.

EXPENDITURE OUT OF THE ORDINARY REVENUE, 1883-84 I now come, Sir, to the consideration of the expenditure of the ordinary revenue of the Consolidated Fund for the current year, and following the usual custom, 1 divide it into two parts, viz permanent charge and proposed appropriations for the year. The neces sity for maintaining on the part of the Committee a careful supervision and a strict watch over annual appropriations will, I hope, be sufficient excuse for my troubling hon members at some length with a comparison of the expenditure of the last two years with the proposed expenditure of the current year. The first thing as regards the permanent charge, the amount estimated to be ex pended under this head during the cur rent year is L 1,645.694, of which : L 1,567,430 is for interest and sink ing fund, amounting respectively to Li,309,930 and L 257,500. That is to say, we shall pay L 1,309,930 to the public credit, and set aside L 257,500 during the year r the redemption of our debt. L/ast yea -- (1882-83) wo paid L 1,560,441,560,441 on this account, being L 989 le?s than the estimate for the current year. In the year before the amount was L 1,500,989 or L 65,452 less than last year. This large increase in the amount in interest and sinking fund paid last year is accounted for as follows : vances obtained on the Imperial Guaran teed Debentures, L 13,119 ; sinking fund in respect of the same debentures, L4o,ooo—being L 16.000 for 1882-83, and L 24,000 for arrears of interest on Trea sury Bills, L 12,775. No new Treasury Bills were,' ho sever, issued, the explana tion of the additional interest being that certain Bills which had been taken up temporarily out of the Public Works Fund, and which bora no interest so long as they remain investments of that fund, had been disposed of, and the proceeds . returned to the fund. The sums 1 have mentioned slightly exceed the increase of L 65,452 in the amount of interest and sinking fund paid last year (1832-83), but

there were certain small decreases which account for the difference. I have said that the amount estimated to be expended for interest and sinking fund during the current year exceeds the amount actually paid last year by L 989. As, however, the first year’s interest amounting to L 40,000 in respect of the loan of one million raised in January last, becomes payable this year, it is necessary to explain very briefly how we estimate that we shall only pay L 989 more than we paid last year. The chief reason is that L 24,000 which we paid last year far arrears of sinking fund in respect of the Imperial Guaran teed Debentures does recur in the estimates for 1883-4. A saving of L 2,433 has, moreover, been effected by, exchang ing under the Treasury Bills: Act of 1879 and 1880 L 1,832,000 Treasury bills, bear in < interest at 3§d per cent. for 5 per cent debenture-, and a further sav ing of interest by taking up temporarily a portion of these debentures out of moneys at credit of the Public Works Fund re quiring investment. The remaining per manent charges on the estimates amount t? L 78.264, consisting of the civil list, L 29.750; pensions (civil and military), L 27,641; .other charges, L 20.873- Last year the amount actually expended on these services was L 74 845 ; in the year before it was L 75,964 The amount of the appropriation proposed for the year is L 2,015,802 as against L 1,997,098 actually expended last year, and L 1,698,863 the year before. - These figures show;that our actual requirements last year,were greater than those ,of the year before by L298,23i), and that this year we propose an additional expenditure of L1i,704, thus making the estimated''expenditure, for the current year greater by L 316,934 than the actual expenditure of the year 1881-82. This state of things is rather startling at first jaight, but I hope to be able to explain to the .satisfaction of ; the House that this apparently large increase of expenditure will be either nominator practically unavoidable. I shall first of all refer to the expenditure of last year (1882-83), which, as I have said, exceeded that of the year before (1881- 82) by the large sum of L 298.230, and it will be convenient that I should deal with the several charges of expenditure in the order in which they are placed in the public account and estimates. In class 1 (Legislative)—There was an an increase of L 3,924,. chiefly in expenses of members ; in class y (Colonial Secretary)/ there was a large increase amounting to L 48,465 in the expenditure on hospitals and charit able aid, which is accounted for by the fact that no reserves were made from local bodies, the 1882-83 subsidies having ceased. On the vote for electoral there was a decrease of L 7,825 on last year, the general election for the House having taken place in the previous year, and on the vote for the Registrar-General’s De partment, _thtre was a decrease of L 8.020 after the cenoua of 1881. On the other hand, the expenditure of the stock (sheep, cattle, and rabbits), branch of the Colonial Socretaey’s Department was in creased by H 0,654, mainly owing to the transfer to the ordinary; revenue account of a portion/jf the coat of this service the previous year. The expenditure on Luna tic Asylums was increased gby L 5,957. There , were increases to expenditure in other services to the same class amount ing to L 3,693, and decreases amounting to L 2.659. The net increase of expendi ture last year on the class was, therefore, L 50,164. In class 3 (Colonial Treasurer), there was au increase of L 29,937 Of this sum L 10,843 represents expenditure of the Property Tax Department, in, con nection with the general assessment, which assessment hou members are aware occurs every, three years. Only L 19,000 was for exchange and commission. The increase of expenditure on the latter item is merely nominal, as under the arrangement with the Bank of Aev Zealand for the pay ment of interest in London, by which an additional charge for exchange became necessary, a larger amount of interest is received on. the balances at credit of the public account of the colony. In class 4 (Mutiscer of Justice) there was a net in crease of L 4,646, the total increase being L6,u93, of which L 1,975 was for criminal prosecutions, L 1,473 for prisons, LB6O for Resident Courts, L74CT for coroners, and L 1,055 for other services, the decreases amounting to L 1,445, of which L 962 was for the Juatice. In class 5 (Postmaster-General) there was an increase of L 20,351, the L 7 505 ° r being accountable * or ’ * maintenance of telegraph lines, repairs, etc., LB,lll, and conveyance of mails by sea L 4,128, the. balance being made up of small increases andfdecreases on other votes in the same class. In class 6 (Oomrnisiioner of Customs) there was an increase of L 2,356, L 1,350 being fpr salaries and the remainder for seal fisher ies and the Stella. In class 7.(Commis sioner of Stamps) there was an increase of L 2.672, arising mainly from contingen cies, including commission paid on collec tion of duties on native lands. , In class 8 (Minister of Education) the increased expenditure amounted to L 31,074, partly owing to the restoration of the 5s per head by which the grants to Education Boards had been reduced in 1881-82, and partly to aggregate increase of the average daily attendance at the public schools compared with that of the previous year. In Class 9 (Minister of Native Affairs), the salaries and contingencies of the Native Depart ment were leas by L 905, and miscella neous services, etc., by 1.2,677 than they were the previous year, but the expense of the Native Land Courts was increased by L 1,392. There was, therefore, a net decrease of L 2,210 in this class. In class 10 (Minister of Mines), there Was a reduc tion of L 2,169, chiefly in subsidies to wards the construction of tracks on the goldfields. In class 11 (Minister of Public Works), the increased expenditure amounted to L 57,952. The expenditure on working railtvaja was grea'er last year than the year before by L 43.473. but this increase of expenditure was compensated for by an increise of L46,11l in the traffic receipts during the same period. In class 12 (Minister of Defence), there was an apparent increase of L 109.044. The actual increase was, however, only 134,044, the vote from the Consolidated Fund having been aided by a vote of L 75.000 from loan in 1881-82, whereas last year the whole cost of def‘.nca ser vices was paid out of revenue. The in crease of L 34.044 arose out of the un settled condition of the natives on the West Coast of the North Island. ThJ increase in the actual expenditure of last year over that of the year before may therefore be broadly summed as follows ; —Taking the largest items first—Defence, L 109.000, including transfer from loan (L 75.000), and L 34,000 for services on the West Coast of the North Island ; hospitals and charitable aid, L 48.000 (formerly re coverable from subsidies to local bodies now discontinued) ; working railways,-. L 43,000, for extended mileage and traffic and for increase in the rate oi wages ; education, L 31,000, for restoration of t:e

i grants tp Education Boards, to L4upß!b i head, and for increased ; attendances , public schools ; Post and Telegraph Diet* i partment, 1,20,000, for additions,; ;to salaries,; maintenance of telegraph and extended accommodation to thepublioj i Property Tax • Department, ; L1(),0Q0 i for triennial assessment,, exchange? aud i commission LIO.OOO, aboat _», jflfimilar. i amount received for additional interest cm 1 public account,, charges ; , other services,. LIB,OOO, including .the 10 per cent, raduc;, i tion of salaries in force for the first three? months oflß§ir92>. making in -all L298,0Q0.i If hop members .will carefully; examine i the accounts of the two,years to which!? i have referred, they will, 1 think, in the • lig <t of those explanations, see that the-, 1 larger portions of the apparent increases. ■ were merely nominal, that;, is, they were • either transferred from, loan or, balanced? • by equivalent receipts on the other, side, of the account, and that such of the_ in-v i creased expenditure as was not nominal I ■ could only have been avoided by inflicting:' ■ undue hardships on the public servants of}- ; the colony, or by causing inoohvei4ei|i»l to the public generally. Having, thus e*^ , plained to the Committee, Intrust; patifrl ; factorily, how apparently the .large'-: in?/ crease of expenditure last year arose,/,!; shall now, proceed to comparß- the.Estic.i mates of last year (1882-83) with those.of n the current year. It is more convenient-, to do so than to compare the .Estimate*.. i for the current year with the actual. e&{ > penditure of,.the past, year, because in,r voting supplies for the service of the,year r it is alw ya necessary to vote such a sum 1 as will leave sufficient margin to cover oaro foreseen contingencies, rather . than Jbe : : , under the necessity of charging such t , expenditure to, “unauthorised,” through 1 ‘having left no margin. . Before doing.so., I must, however, draw the attention of i the Committee to the amount by which,' i in accordance with section 10. of the J*ah}ici i Revenues Act, 1882, several of the votes j • of the Estimates have been abated.' This f amount (L 55,772) repr , eaents the estimated • recoveries to be received daring the Vcar, , Which will be carried to the credit-of the 1 ' - relative votes, and will to that extentin-~ t crease the spending power under the vbfo.; ' i As this is the first time sUch abatements'' s have been made, it is necessary ? orders 5 to institute a fair comparison L votes of last year and the propbShd’-vote* * i for the current year, that the'ae' abate- r ; men ts should be treated as if they had not . s been made. The amount voted by •_ the i Bouse for the services of last year was - L 2.056,706. The Estimates for the cnis' 3 rent year amount to L 2,015,802, biit add-' 1 ing the abatements for recoveries I ing to L 55,772, to which ! referred,-they -3 amount to L 2,071,574 ,! being L 4,868 more , than the amount voted lad year. I should 1 ; explain, however, that the Estimates of i last year inolu led a sum of L 50,000 f6r - harbor defences, which we do not propose ) to re-vote out of revenve, but we shallask 1 r the House to vote out ■of - the Public - . , A orka Fund such a sum as we are likely. 3 to require for this purpose daring the - current year, The real increase in the 3 Estimates' for this year is ‘ therefore t L 54.868, that is, the net' result* 1 shall i not weary the Committee by going into a - lengthy comparison of the two years’ Esti-d . mates, but I should like to draw, attention’ 3 to one or two prominent items.i .lathe! - vote for railways there is an increase of ' L 73.647, partly due to .increased traffic ■ on the lines and partly to extension of. , mileage open, there being now 1,407 miles , :as agains 1,357 last year, and in the vote , f for Armed Constabulary there is a decrease . 3 of L 13,226, our improved relations ; with! ■ the Natives on the West Coast haying? i enabled the Government.to effect a redact s tion in the number of men in the fidld: r force. The vote for hospitals and charity; i able aid has been increased by L16,00Q,. t The total charge ’■ on this account.is.uow; i L 83,900. Some districts, recognising the ■ truth that it is. “ more blessed; to .givo. i than to receive,” still continue Ito snbr. ) scribe to the local hospitals and boheyon, i lent societies, but the general tendency,;!- s am sorry to say, is to more and. morn: I throw the whole burden of relieving) the. poor upon the State. Tha-comfortand-

! well-being in the future of the greatbody i of the people of this country ; ao mushci : depends upon the way in which dtjlnfiyi r be decided to deal with - this important; , question, and public opinion- is so! ibr! E formed upon the subject, that not with 4 * E standing: the many: evident. objections;tfO/ > our present system the Govornmenthavp ) determined to ask tor. a aontinaanes o.fr : the vote in i s present shape*,thus leaving the question comparatively open eto-bei ; dealt with when the matter has been more r carefully considered. Sir,there seems to ’ me to be insuperable objections to a poqr t 1 law in any shape. T believe such Si'-law mot; only to be unnecessary, but'highly; ’ demoralising to any community '/thrift! adopts it. The Governinpnt arbj not therefore prepared to" submit any law having for its object t6 J 1 charge the cost of maintaining the' indigent upon local or general rates/ but with the view of helping to form pabi lie opinion upon the subject, I shall iak' leave to lay upon the table of the House", a Bill for compulsory national insurance,- not with the intention ,of asking the! House to read it a second timp.but with 1 the hope of getting a debate upon it/and then distributing the Bill throughout the; country for public' consideration; Hoh‘ members will see, upon examining the! E tiraates, that the whole of the salaries remain the same as those voted last year/ except in the case of cadets, who rise

from LSO or L6O to LBO or L9O p'yoar, ac cot ding to scale. Those officers who' are classified, and aime half-dozen extra ordinary cases, for which special reasons, will be given by Ministers in charge or the Departments in which increases aria made, the reason why no increases have been made is not that the Government,’ think none are fair or necessary, but be-: cause of the difficulty through the want of classification and the differences in the' pay of officers doing practically the same work, which renders it impossible to make the increases w.th fairness to officers of the various Departments. The Govern ment have therefore determined to sub mit the Estimates as they stand, and tb‘ ask the House to consider a scheme foiT the re - organisation and clasaificatiop of the Service, and I shall therefore propose, in the course] of a., ! feV days, some resolutions the principles which the Government think should be given effect to by’ and after direct discussion T shall:ask that they be returned for the consider*: tion of a Select Committee, consistin got members from both sides of the HoUss, iJ with directions to the Committee, to report' after careful enquiry and consideration of ‘ the subject as to the principles ; jiipbaV which a Civil Service Act should' be" founded. This question is of such impor tance to the colony that I hope that "'Ey; this means we may exclude party feeling" 1 from the question, and that we ; niay enabled to re-organise our Civil|Sorviefi : ,s6' as to render it both efficient and eiipnqhijL-',. cal, while its status and pay will beT smsEj . as to attract men of ability and : ctEah&4&r l