work than the constant p^, of warfare, in which the # ct3tl °f Europe at the present time patiflD 30 , What frame of mind is Jtf livjng ,d to 'the mind that was more °PP^t ris t' than the mutual jea i* P suspicions that are encour- cnch a condition of things? i$ , b C is the Prince of Peace; and QtW* L of His Gospel, and the the P< oeace among the nations of are mutually the cause and fc-Sdo each other. The federa te < the Empire, and the close to n °L alliance of the Empire with and » rl j!. p ea king American nation, Ibe PS'Wound of hope to many, of the world. J**? rS universal peace depends ASt f neacefulness of the leading «P° D nf the world. Notwithstand '"*? necessary qualifications that «, be made, the British Empire hrt been at peace with itself ** m n2yy««n; and this happy den"? ""s doubtless to be attributed SS^. t0 *JP.enonal f hai " Her IVTajesty Queen Victoria, "T the increasing reverence and JO IVction with which her people, of the Empire, have been ia ireeard her. During her reign Pi rf her subjects have never JSwed by the loss of territory SX conquest, or by sustaining Srom « European enemy; no Sis step in foreign politics has been her Government, nor has any r°li e mistake been made in Im- SfSisTation- If. we owe the £ a debt of gratitude 'for her fl eagerness in the work of public m jl \ni improvement, for the SabVexample which her life has Trmtv set for the tnorough compre ff£ o the true conditions of the Sonant between the Throne and People, let us try to acknowledge Edebr as Mr. Gladstone said on a Li occasion, ' by remembering her SSnen When S. Paul enjoined I prayers should be made for all #n and gave the commanding and hi place to prayer for kings and kat were in authority, the apostle aoki the language not only of religion, Jofthe most profound social justice d linman common sense.'f The Church House. —The offer fa of our Auckland people at the iufch'o/the Holy Sepulchre on the 'ty'Of the Queen's Jubilee, were dewtei to the Church House Fund in London, in answer to an appeal from His Grace the Archbishop of Canterbury. That London memorial i the jubilee will, I believe, prove a nloable means of cherishing the unity $ the Church of England with the Orarcbes of New Zealand and Mela lgia and of other Colonies and feions.- Melanesian Mission. —I have al nys considered it my duty, as well as ipleasure, to inform the Synod of the sogress of the work of the Church in leMelanesian Islands. Not only was at work begun by the first Bishop of a diocese; but it has been continued, iisdis;tiow being , carried on, by mis sdnaries whose zeal and self-denial set forth the spirit of the Gcspel, and stimu late/ energies of ourselves in our Hredresponsibilities. The condition if the Island Mission Stations gene if is considered encouraging, espe (ij 'the quiet progress and un tobed well-doing of many' of the &. stations. There are two facts ItalwiU mention, as indicating a great fell that is satisfactory. The first is ta-ii October of last year the Bishop traght it safe to take Mrs. Selwyn itettith him at Santa Cruz, the island a Ah, not long since, it was con ned unsafe for any white man to W;and the second is that —at Florida ttwiscannot be obtained fast enough, Meitapplications made to the Bishop fcrthem bythejnhabitants. There are Ween schools established there, at- Wttl%nearly 800 scholars, of whom can read the New Testa seat Our most recent report of the «op himself has come by H.M.S. mmend, the officers of which vessel »bimin good health not many weeks $>■• We may expect to see the Mission I m. our harbour again by the !»* of December. \ Cohmral.—ln 1885 I informed the W of my intention to make arrange- JjSlith the people of S. -Mary's, ggpj using their parish church JJC#edral of the Diocese, in ac- Wance, with a of the w«rf Synod on the subject. The jjwlarrangements' with the parish J.9fj» been made, and will be JWled-te you for your approval. 1 JJ W.the more pleasure in entering I ; es ? wangements with S. Mary's inasmuch as the parishioners J 2,7f d to build at first only so «a«their, new church as they ex- Wtobe able to pay for. 2y' s p ARis H .-The Synod will Eff, ; as -I do, with theincum ?^fe pleof *•-Paul's, in their which have been & -ythj; Jong delay that has lowing of the land, C n shmh site > to the p er - J2P 1 ' an d consequently by the 55? of the re - erecti °" ° f fe ; -? EpoRT -~- Mr Samiiel m we are greatly in- Wa * anditsn S of Ac General u *h w\ Av ™s ™ n y y ears » whole of the numerous %?r?t are in P erfect order and always found them.' am - intending to re- fj' icons t0 visit the Z ■ res P ectiv c archdea- to toJ L threo years, and to W«S' orthc information of the y>W mf *i ate Di the church btiild |» cyS, ottler , matters with which H,.7*«7 for Archdeacons to ©f ott Diocesan has been t^Sffu ftfiflpinted V*>J§^a4||i| S last • J™ahepß,feg|a|£gH. jnto

consideration by the Synod without delay. Our special thanks are due to the Committee for the careful manner in which they have executed the impor tant work that was entrusted to them.

The Primate.—The Synod will, I am sure, be sorry to hear that our venerable and greatly reverenced Primate has given notice of his purpose to resign the Primacy, and the charge of the Diocese of Christchurch. It is his in tention that his resignation should take effect at the end of 1888. His Lordship informs me that his ' deafness has in creased much of late,' and that he is ' incapacitated for taking the part that lie ought to take at Church Committee meetings, in which so much that con cerns the well-being of the Diocese must necessarily be carried on.' The Bishop was consecrated to the See of Christchurch on the formation of the Diocese in 1856, and was elected by the General Synod to the Primacy in 1869, on the resignation of Bishop Selwyn. His wise and fatherly adminis tration of the affairs of his Diocese, and his patient and impartial presiding at the General Synod, during six sessions, have been great blessings to the Church of New Zealand.

Standing Committee. —In con clusion, I return my cordial thanks to the members of the Standing Com mittee, for the help they have given me in many matters of importance to the Diocese, during the past year; and also to the Secretary, Mr W. S. Cochrane, who for eight years has discharged the multifarious duties of his office with an efficiency that has left nothing to be desired.

The Report of the Standing Committee will now be laid on the table; containing a summary of the proceedings of the Committee since the last Session of the Synod, and a list cf the business to be done—of which due notice has been received.

I pray that God's blessing may be with us during our meetings at this time, that in all our deliberations and proceedings, for the edifying of the Church, we may ' serve Him with a quiet mind.'* Amen.

* Collect for Twenty-first Sunday after Trinity.

CABLEGRAMS.

(£T EX-ECTBIC TELEGRAPH —COPYTUGHT.)

O'BRIEN SENT TO GAOL.

H E RESTS T S THE

AUTHORITIES.

ANOTHER M.P. SUMMONED.

[UEUTETI's TELEGRAM.]

London, October 31. The hearing of the appeal case of Mr Wm. O'Brien, M.P., waa brought to a conclusion this afternoon, the full Court confirming the sentence of three mouths' imprisonment passed upon him by the Mitchelstown Court.

Upon judgment being delivered, Mr O'Brien strongly resisted the attempts of the authorities to arrest him, and a scene of great uproar, with a great amount of scuffling, took place, within the Court-houso

The prisoner was ultimately taken into custody and at once removed to Cork Gaol.

[SrECTAL TO PUESS ASSOCIATION.]

Mr O'Brien tried to leave the Court pending the issue of the warrant of committal. Messrs O'Brien, Dillon, and Lane, M.P.'s, were roughly handled. The Recorder ordered Mr Dillon's removal for disrespect. Mr J. R. Cox, Nationalist member of Parliament for East Clare, has been summoned under the Crimes Act for attending a meeting which was pro claimed by the Government.

THE GERMAN EMPEROR'S HEALTH.

[reuter's telegram.]

Berlin , , October 31. The Emperor William is suffering from rheumatism in the spine, general lassi tude, and broken sleep.

SENT TO COVENTRY.

London, October 31. W. W. Neale, solicitor, of Coventry, who wag arrested in Melbourne on charges of embezzlement, has been committed for trial.

THE CASS CASE.

(SPECIAL TO PRES3 ASSOCIATION.)

LoxDON-, October 31

The Cass-Endicott case is proceeding. Cass, in her cross-examination, ad mitted careless behaviour before mar riage at Middleton.

(SPECIAL TO PRESS ASSOCIATION.)

BANK OF NEW ZEALAND.

Lonpok, October 31

The readiness with which colonists purchase Bank of New Zealand shares has caused a strong rally in favour ot the stock of that institution. J. be latest quotation is £16.

(SPECIAL TO TliS,m ASSOCIATION.)

A FLOURISHING COMPANY.

Lemper, October 31,

TheUuion Mortgage Agency Com- Dftnv of Australia has adapted the Lert, and declared a 10 W cent dividend, has been earned to the reserve? fund.

CASTAWAYS AT THE CROZETS.

London, Oet#e* 81. The British twep-ship Thai!*, whfck sails en WmbW 24th ' H § **!?* to Croats f«to wreeke4 f reo«H ¥e 6sel -

FINANCIAL STATEMENT.

RETRENCHMENT AMOUNTING

TO £300,000

THE GOVERNOR'S AND MINISTERIAL

SALARIES

PROPERTY TAX RAISED TO A PENNY

NON-POLITICAL RAILWAY BOARD.

A MILLION LOAN.

[by telegraph, —parliamentary

REPOBTEB.]

Wellington, Tuesday.

In the House of Representatives this even ing the Colonial Treasurer (Major Atkin. son) delivered the Financial Statement as follows :—

Mr Hanilin : I have on several similar occasions had the honour of addressing you and your predecessors in that chair, but I need hardly pay that on no previous occa sion have 1 felt a greater sense of responsi bility, and of the difficulties which lie before us. Yet I will acid that never previously have I felt more confident that, these diffi culties can and will bo overcome, since the colony, and I believe this Committee, re flecting as it does the mind of the colony, has determined that our difficulties shall be met and dealt with in the right spirit. It was in May last that the country began in earnest to recognise the fact that

A Serious Financial Problem had to be faced. Parliament was then told by the Hon. the Colonial Treasurer, Sir Julius Vogel, that every possible economy having been practised in tho proposed public expenditure, additional taxation to the extent of £250,000 per annum must be imposed. Parliament, however, though a3 fully resolved as the Government not to let the current expenditure exceed the current revenue, emphatically refused the proposed additional taxation, in the belief that further larse reductions were possible, and could be made in tho expenditure before imposing further burdens, so that these latter, if really needed, might, at all events, be reduced to a minimum. In consequence of this refusal an appeal was made to the electors, and they fully confirmed tho de cision of Mio last Parliament, and I am here to night to propose the first step to wards giving that decision effect. I take, therefore, as my starting point, this firm determination of the country for retrench ment —ft determination which, under the si ill continued depression of trade and tho low price of some of our main staples, no one can say in not reasonable. The (<o vernment, at all events, are araonw thoso who fully believe in tho reasonableness of this determination ; and they believe aiso that tho country is prepared for the neces sary self-sacrifices which it involves. To some extent, I hope, retrenchment may bo eil'ected by greater care in administration, but there is no doubt that, speaking gene rally, retrenchment means self-.sacriiico in some shape on the part of tho community at largo. Hon. members will, I trust, ex cuse me if I ask them to bear this very obvious but very important truth in mind, not only in looking at tho Government pro posals nn a whole, but when they come to deal with them in detail. Tho Deficit. It will not be necessary to refer ab any length to tho transactions of last year, as they hava boon dealt with by the lafe Colo nial Treasurer, in his Statement of May last; but I desire to call your attention to tho great difference there was in that year be tween the recurrent revenue and tho expen diture. The deficit, aa given by tho lato Colonial Treasurer for (he year 108G 87, was £92,293, but if we omit, from tho revenue two considerable items which will not recur this year—namely, the surplus of £37,859 with which tho year 1886-87 bogan, and the windfall of £104,739 of released sinking fund, wo s-hall find that what I have recurrent revonuo fell short of the expenditure by £234,901. Bearing this fact in mind, hon. members will bo better able to understondhow tho lato Government, after making all reductions in expenditure they thought possible and expedient, felt constrained to propose no less a sum than a. quarter of a million of taxation over that of tho year ending on the 31st March last. Tho Land Fund.

It is desirable, before going further, that! ; should briefly refer to the position of the land fund account. It must be remembered that although the land fund | liars been kept in a separate account since 1879-80, and very wisely co, it is in law a : part of the consolidated fund, and, when a surplus, should be used in aid of the con solidated revenue, upon roads and bridge?, to give facilities for settlement; but any de ficiency of the land fund is properly a de ficiency of the consolidated fund, and should bo so treated. On the 31st March, 1887 the land fund was m debt so that if to the £92,293 we add, as we should, this £54,263, the deficit of the con solidated fund afc the close of the year, which had to be provided for, the land fund was £146,556, and as a matter of fact ifcis included in the deficiency bills out standing. I shall now proceed to state to the Committee what would be the probable deficit of the consolidated fund account at the close of the present year on the twofold supposition, firstly, that the expenditure continues at the rate prevailing when the present Government took oihee ; and secondly, that no additional taxation is im posed EJJpenditure for 1887-83 TheEstimatesforthecnrren.tfinancialyear, as laid before Parliament by the late Govern ment, having being considered in the light of the six months' actual expense, with the view, on the one hand, of showing the probable savings which under ordinary cir cumstances would have accrued on the votes at the end of the year; and, on Che other, of adding to the original Estimates the cost of additional service for which no provision had been made, but which so far as they did not relate to ser vices under permanent Acts would have had to be brought down and voted in the supple mentary estimates - it now appears the probable expenditure for the current year Kd amount to £4,118,395, as against th« total of £4,088,804 appearing vi , the.Esti mated of the late Government. It is hardly necessary that I should enter into any explanation of the differences between these two esti mates. There are savings and excesses ftTvarious directions, and hon. members will £ »- thorn set out with sufficient fulness in atbte^ot iwill beappended to this Stat e T may remark, however, that the so aU l y or Searing on the Estimates, or Itendta, a »ooml «■*»> of Parliament

Government, but which had not been acted upon when we took office.

Ordinary Revenue for the Year 1887-88. The revenue proper received for the six months ending on the 30th September last was £1,510,863. This was £16,844 less than was received during the same period of the financial year 1885-86. The Customs yielded £29,446 less, _ the railways £18,433 more than the previous year. To this must be added the proceeds of debentures amount ing to £258.184 issued last April under the Consolidated Stock Act, 1884, on account of the sinking fund to accrue during the financial year ISB7-88 ; bnt I do not add the proceeds of deficiency bills sold, because my object is to show what the probable deficit will be at the end of the year. The total receipts were, therefore, exclusive of the proceeds of deficiency bi115,£1,769,047. In estimating the revenue for the remainder of the financial year, I do so upon the assump tion that taxation, including the property tax, is not altered from last year. I may remind hon. members that no property tax has been collected, theannualbill not having yet been passed. With regard to the other itemsof revenue, I have ado pted the estimates of my predecessors, except as regards stamps and railways. The experience of the pasb six months leads to the probability that stamps will not reach the estimates by i:32,600, and railways by £50,000,. Taking these circumstances into consideration, I estimate that the revenue for the six months ending 31st March, 1888, will amount to £2,019,460, making a total of £3,783,507 for the year, as against £4,156,184, as esti mated by the late Colonial Treasurer, which included the proposed additional taxation. The Land Fimd. I have already informed the Committee that on the 31st of March last there was a balance of £54,263 at the debit of the land fund account. On the 31st of March, 1884, there was a balance of £80,447 at the credit of the land fund. The expenditure has, therefore, during the past three yeare ex ceeded the receipts by an average of £44,900 a year. Last year the expenditure exceeded the receipts by £33,879. It is expected that the receipts for the current year, estimated by the late Government at £108,890, will be realised, and a revision of the expenditure, estimated at £170,907, results in a probable decrease of £2,600. Thus the expenditure of the year would have exceeded the revenue by £59,417. I may say that this excess of expenditure is exclusive of the outlay amounting to £168,266, which has made from loan during last three years on opening up land before salo, and of liabili ties, £70,908, since incurred on the same account. It is also exclusive of £1,881 ex pended on village .settlements to the 31st of March last, with liabilities of £67,886, since incurred ; but this latter expenditure is to be capitalised, and interest obtained for ib in the shape of rent if possible. The money, however, has yet to bo provided, either from loan or consolidated fund, no provision having been made for it by Parliament. Kosults. The revised estimates of expenditure of the ordinary revenue account being, as I have stated, £4,118,395, and the revenue being £3,788,507, the expenditure will exceed the revenuo by £329,888 on the ordinary revenue account, and if we add the ex cessive expenditure of tho land fund, £59,417, we got a total of £389,305. The lat;e Government proposed to meet tho deficit thoy anticipated on the ordinary revenue account by additional taxation amounting to £250,000, and by a percent age reduction of £20,000 from salaries. With regard to the land fund, they proposed " that for a term of years, until the increas ing revenue will permit otherwise, tho de iiciency between tho land revonuo and the land expenditure should bo made up by charges* on tho land supplied by such local borrowing as may bo required." How tho present Government propose to deal with tho deficiency of the consolidated fund as a whole, and prevent its recurrence, I will shortly state ; but, first, J. must ask your attention to tho public debt, and to the public works fund account. Tho Public Debt. With tho view of showing the effect upon the public debt of tho operations during the last three years of the provisions of the New Zealand Consolidated Stock Act, 1877, and more especially the Consolidated Stock Act, 1834, 1 have had a table prepared to accompany this Statement. The gross pub lic debt at tho 31st March, 1884, as sot forth in that table, was £31,071,582, ex clusive of £398,000 for deficiency bills. At 31st March, 1087 it was £35,741,653, exclusive of deficiency bills for £279,100 then outstanding. Since that date further deficiency bills, to the amount of £715,900, have been issued, the total of those now outstanding being i' 995,000, in addition to tho debentures of £253,184 issued in April last for increases of sinking fund for the current year. The amount at 30th March, 1884, in the table to v/hich I have referred, diflbrs from the total j'iven by the late Colonial Treasurer in his Financial Statement of 17th September, .1884 It is unnecessary to mention the items con stituting tho difference, except in one par ticular, because the table prepared in 1884 was to ascertain the extent on an approxi mate statement. The exception to which I refer is the exclusion from the table of the amount of the bonds issued under the Con solidated Loan Act, 1867, "drawn,redeemed, and cancelled prior to 31st March, 1884." It is true that the scheme of that loan re quired that the annual charge for interest and sinking fund in respect of the total amount of debentures issued, should remain the same until the whole loan was repaid ; and that, after paying therefrom the in terest on the outstanding portion of the debt, the growing balance should be ap plied to annual drawing : but although in terest continues to be paid on the drawn bond to the trustees of the sinking fund, there is in fact no liability in respect of the principal of such bonds, which are ac tually cancelled from time to time, and sent out to the colony. The interest so paid is in reality a contribution of the sinking fund from the consolidated revenue, and goes to swell the amount available at each annual drawing of bonds. It is right, therefore, to include in the debt only the amount of principal for which the colony is liable. It will be observed from the table that during the three years ended the 31st March, 1887, bonds for £9,796,800 were converted under the two Acts to which I have referred to other securities, to the nominal value of £9,995,884. Prior to that date bonds for £5,390,300 had been converted, now represented by a debt of £5,499,571. The complete accounts of all these conversions, and the expenses of amending the same, have not yet been received, and until they are, an exact account of the saving effected can not be made. I now come to consider the effect of those provisions of the Consoli dated Stock Act, 1884, which empower the Colonial Treasurer to issue debentures in each financial year to an amount equal to the accretions of the sinking fund for the year. The total amount of these accretions for the three years 1884-87 was £742,728, of which the consolidated fund contributed £597,236, the balance of £145,492 being the product during the same period of investments made by trustees, partly in bonds of this colony, and partly in securities of other colonies. The amount contributed out of the consolidated fund represents in the case of each loan, except the consolidated loan of 1867, merely the 4 or 2 per cent, as the case may be on the amount of the outstanding debentures. In the case of the consolidated or " draw ing" loan of 1867, as ib is sometimes called, the amount contributed is 1 per cent, on the amount of the original debt of £7,285,100, together with 5 percent, on the amount of tho bonds drawn and cancelled, whioh increases year by year, and is now £1,982,100, inolufsiv© of the drawing in Mareb J aß,J > J & n5 deslrone <>hab the Oom inifefcee should appreciate the nmrkflol die

tinction in the accretions of the Sinking Fund between the amount which the colony contributes direct from revenue and the interest received by the trustees on their investments. I wish this distinction to be thoroughly understood, because I think considerable misapprehension exists with regard to the operation of the Act. When in his Financial Statement of 1884 the late Colonial Treasurer brought the position of the sinking fund under the notice of Parliament he did so with the object of propounding a scheme which would have the effect of relieving the consolidated fund of a heavy burden. He said, " I propose we i should nob be idiotic enough to ask the people to pay off a little fragment of our debt; no other colony does it." Now, it is claimed that the maintenance of the contributions of sinking fund direct from the revenue was an unnecessary tax upon the people, a tax which, in view of our con tinuing to borrow, should without breaking faith with the bondholders be removed. Whether or nob that is a right view to take I shall not now discuss, but the increases derived from past investments of these con tributions stand upon an entirely different footing. They constitute no burden upon the people, and to the extent, viz., £145,492, to which during the past three years ending 31st March last, the consolida tion has been aided by borrowing money equal in amount to the accumulations of in terest these years received by the trustees, we have, I venture to submit, exceeded the avowed purpose of simply making good to revenue the amount we have paid out of it. Reduction of Debt. I find it is not generally understood that such has really been the effect of the opera tion. I should, however, add that what has been dono has been with the provision of the Act of 1884, which gave power to the Colonial Treasurer to issue debentures for increases of the sinking fund from all sources, and that the result, as it was stated would be the case, has been that as regards loans outstanding on 31st March, 1884, the net public debt has . practically remained stationary. Public Works Fund Account. The account is now divided into three separate accounts, a separation necessitated by the legislation of the session of 1886, which has the effect of what has been termed "ear-marking" the North Island Main Trunk Railway loan, and the loan authorr ised in 1886 to the specific purposes set forth in the two Loan Acts.

No. 1 account is an account of the balance of the loans raised before 1886. The credit balance in this account was on the 31st of March last £491,245, subject to liabilities amounting to £335,774. On the 30th of September last there was a credit balanco of £247,292, subject to liabilities amounting to £280,495. Against this fund is charged all miscellaneous works, such as harbour defences, roads, bridges, school buildings, purchase of native lands, and telegraph expenditure. Hon. members will therefore see that without further borrowing neither can our liabilities be met, nor can necessary works of tho above de scription be undertaken if wo adhere to the wholesome restrictive principles of the Acts of 1886.

No. 2 account is the account of tho North Island Main Trunk Railway loan. The un expended balance on the 31st March, 1887, was £674,314, subject to liabilities amount ing to £187,987. On the 30th September last the unexpended balance was £615,258, with liabilities amounting to £137,474. There is therefore a sum of £477,784 still available in this account, subject, however, to the cost and charges of raising the whole loan in the market, which has yet to bo dono. No. 3 is an account of tho loan of 1886, being the amount authorised in 1886 to be raised for railway construction, £1,325,000, together with £242,800, representing certain district railway debentures sold on behalf of the post-office, in conjunction with that loan. The credit balance on the 31st March, 1887, was £1,012,034, consisting of amount in hand, £620,734, and balance of loan to be received, £391,300. The liabilities, exclu sive of tho proceeds of the £242,890 district debentures since paid over to the post office, wero £326,651. On the 30th Sep tember last the credit balance was £556,644, and the liabilities £304,004. There is, therefore, still available £252,640 in this account. The credit balances, however, of these three accounts jointly are, as I have shown, only in part represented by cash, and the power of spending depends upon our realising the securities held to their credit and floating the North Island Main Trunk Railway loan. The total cash available at 30th September last was £140,549, in addition,, to which we had £120,387 imprest advances in the hands of officers of the Government. The securities consisted of deficiency bills, £19,200, district railway and other deben tures, £139,058, and the North Island Main Trunk Railway loan, £1,000,000, the total credit balance of these three accounts being £1,419,194, against which there were lia bilities amounting to £720,973. Loans to Local Bodies. Up to the 30th September last we had borrowed £100,000 under the provisions of the Government Loans to Local Bodies Act, 1886, for the purpose of making , loans to local authorities. Of that amount £71,686 had been disbursed at that date, leaving a balance of £28,314 in hand, with liabilities amounting to £99,181, to meet which a further sum of about £100,000 will be re quired, consisting of balances of loans to local authorities which had elected to take their loans by instalments, £38,580, and £60,601 for loans previously granted in the first year of the Act, but awaiting the com pletion of the steps necessary to give the security required in connection with the administration of the Government Loans to Local Bodies Act, 1886. I may further inform the Committee that under sections 26 to 30 of that Act debentures for about £105,000, given by local authorities under the provisions of the Roads and Bridges Construction Act, 1882, have up to the 30th September last been converted in to liabilities under the former Act, which (section 31) pro vides for the payment into the public works fund of all moneys arising from such conversions. It is the intention of the Government to ask Parliament to appropriate a sum of £100,000 for the purposes of the Act for the current year. Under section 45 of the Act provision is to be made for the creation of a sin king fund for the redemption of the debentures, but as the transactions of the consolidated fund will end in a deficit at the close of this year, the Government do not intend to propose to Parliament" to appro priate a Bum for this purpose. Provision will, however, be made for it. The Maori Lands. Before proceeding to speak of the other proposals of the Government, with reference to equalising revenue and expenditure, and the proposals as to public works, I desire briefly to- call attention to the following subjects : Maori lands and the tai-iff. The apparently insoluble problem of dealing with native lands in a fair and equitable way in the interests of the Maoris and_ of the settlement of the country, has occupied probably more of the time of tho Govern ment and the Legislature of the colony than almost any other . question. I do not propose on , the present occasion to go at any length into the question. I shall only indicate the broad lines which the Government propose to follow in legislation upon this subject. In the opinion of the. Goverment there are large districts in the colony in which many Maoris are living where the same.laws can be applied with advantage to the natives and Europeans alike. We shall, therefore, in repealing—as wo propose to repeal—the Crown and Native Lands Rating Act—ask for authority to declare districts in which the law will apply equally to individuals of both races. The Maori,- on the one hand, will be liable to pay rates and taxes as bis WloTv-sttbJceb of the European race is; and

on the other, he will be permitted to deal with his land as freely as any European, after the Crown title has been obtained, except to this extent, that he will be com pelled to retain a sufficient amount of land for the maintenance of himself and family ; and of all those possessing large tracts of country, it will be required that the land shall be sold in blocks only of a moderate size. In all other districts of the colony which are not proclaimed, the Maoris will not be permitted to part with their lands to anyone but the Crown, except" under more stringent conditions. Before, however, pro posing final legislation on these subjects, we shall in the recess consult with the natives on the several points, but we intend at once to introduce a bill to remedy certain pressing evils. The Tariff. The revision of the tariff is a question which has occupied a good deal of attention throughout the colony, and is one undoubt edly requiring the early attention of the Legislature. Until this question is settled with some sort of permanency the trade of the colony will, in addition to its present unavoidable difficulties, continue to be.dis turbed and irritated by what can and ought to be avoided—the uncertainty from year to year—l might say, for a portion of the year, from month to month—as to what our tariff I is to be, and no one member, I am sure, will doubt that damaged trade means loss to the whole community. The Govern ment, during the short time at • their disposal, have had this matter under their careful consideration, and have come to the conclusion that the question should not be dealt with during the present session because it is impossible to deal with it com pletely. The Government are strongly of opinion that it should not be touched until it can be so dealt with as not to need further serious revision for a considerable time. We have within the past two years had two serious but unsuccessful attempts largely to alter the tariff, resulting in great derange ment of trade, with all the loss which that brings, and without the smallest compensat ing gain. The causes which led the House emphatically to reject those attempts still exist. The general commercial depression may fairly be considered at least, in its pre sent severity, abnormal and temporary. Moreover, we cannot atpresentlooksofarfor ward in our finance as to fix what we shall require from the Customs even for the near future, for on the one hand the changes the Government propose, and such further economies as they hope to make, will corres pondingly lessen the need for revenue. On the other hand, they recognise that it will be necessary to charge against revenue many works"which are now charged against loans, such as public buildings, school buildings, and.telegraph extension, so that with these uncertain elements at work, and looking at the fact that the time at our dis posal'is practically yery short, and that we have work now before us which, if satis factorily done, will certainly mark this as an epoch in our history, it seems to the Go vernment clearly right that no attempt should bo made to revise the tariff this session.

Balancing Revenue and Expenditure

I have now, Mr Hainlin, to answer a very important question —a question in which this Committee and the country are at present most deeply interested—How is it possible without further taxation for the revenue and expenditure to be balanced ? I have already shown that the excess of expenditure during the current year over the receipts of the consolidated fund, in cluding the land fund, will probably amount to £389,305, on the supposition that the expenditure continues as at present, and that no additional revenue is obtained by taxation. It must be evident to anyone acquainted with the condition of the colony that something more is now needed to re -Btoreconfidence than mere trivial economies. Our chief difficulties have undoubtedly arisen in a great measure from a too lavish, expenditure, more especially of borrowed money. That must be stopped, and our first duty therefore is to apply the pruning knife with an unsparing hand. But that is only our first, not our only duty. There is another not less important. The Settlement of the Land. We must, indeed, take all possible means to prevent waste, both of our ordinary revenue and our money borrowed for public works, but we must also promote the settlement and occupation of the lands of the colony by rendering them attractive to persons willing and able to cultivate them and to develop their many and varied resources with their own skill and capital; and we must also, as far as practicable, encourage all our other in dustries by all reasonable means in our power, that is to say, we must encourage such industries by such means as in our judgment, upon a general and careful re view of a difficult and complicated subject, really in the long run increase the wealth and prosperity of the colony. In these ways we snail in due course raise an increased revenue without increase of taxation ; or, conversely, the same revenue with less taxation. The results no doubt concern the future, but a future not, I trust, by any. means far distant. There is no surer way of lifting the country out of its present difficulties than by the introduction of considerable numbers of persons pos sessed of sufficient means and knowledge to cultivate the land profitably, not only as ordinary farmers, but as fruit-growers and growers of plants suitable for manufac ture, or to supply other industries. Our efforts at retrenchment will be compara tively unavailing to restore prosperity unless we can obtain a considerable acces sion to our' population to employ labour. We think the time for this very favourable, and if the House should approve of the course we shall propose it. Upon this sub ject we hope to see, at no distant period, a considerable accession to our population of persons of the class above referred to. The time also apparently is favourable to the establishment of pensioner settlements. Much interest is being taken in this sub ject by leading men in the United Kingdom, and a good deal of thought and attention has been given to the details of a scheme by a gentleman in Auckland, who has de voted a large amount of time and energy to the matter. The Government are of opinion that every effort should be made to induce a considerable immigration of this class of persons to the colony. As an essential means towards accomplishing the above important objects—and, indeed, the settle ment of the country generally —the Govern ment propose to amend and simplify the land laws, and, as far as possible, make them uniform throughout the colony; to allow selectors full freedom of choice as to tenure, and above all, and as the dominant idea, to enable the bona fide settler to get possession of and title to, his land with the least possible delay and expense. It is, perhaps, desirable here to declare that the Government fully recognise the wisdom of the principle which has been acted on since 1879-80, namely, that the proceeds of the sale and disposal of our lands should be 1 treated, not as ordinary revenue, but as a special fund for opening up the country and promoting settlement. • The Mining Industry. l<? would not be appropriate to speak here at length of the mining industry, though of great importance. I may, however, point to two hopeful signs for the future. One is that the yield of gold from the qu&rtz mines appears to be steadily increasing, and the other is the large and steady and increased output from the coal mines. There can be no doubt that when the harbours on the West Coast are completed, the latter indus try will assume still larger proportions. The Government fully recognise the impor tance of developing the mineral wealth of the colony, and for that purpose of affording all facilities in their power for promoting legi timate enterprise, and they hope that by the spread of wider and more exact know

ledge of minerals and mineral processes and methods, by a more complete technical education, a good deal of waste may be avoided, and lodes and ores may be found and worked with profit which are either now passed by or are not thought payable. The Government will be willing to assist in the matter of technical education as far as they are able, and so far as they can do with real effect. Railway Management. The management of our railways from the first has never given satisfaction to the public. It would be a waste of time on our part to endeavour to explain the reason for the public dissatisfaction. The fact pro bably is sufficient for us that the public have long been greatly dissatisfied with what is called the mismanagement of our railways. I do not share in this dissatisfaction myself, so far as the managementgoes, believing as I do that our officers on the whole have been efficient, and that it is the inherent defects of the system, and not the management, which areat the bottom of thisdissatisfaction prevailing , . »The question of placing the railways under what is called a non-political Board of Management has been before the public for some year 3, and the introduction of that plan in Victoria has enabled us in New Zealand to watch the practical work ing of the system. It is now admitted, I believe, by all those qualified to judge in Victoria, that the system has proved a great success. The Board has now been at work for nearly four years, and I think it may bo fairly said that the scheme has passed far beyond the stage of experiment. Looking, therefore, to the dissatisfaction existing in New Zealand at our present system, and the satisfaction which the Board has given in Victoria, our colleague, the Minister for Public Works, will ask for leave to introduce an Act this session in Parliament to constitute a non-political Board of Management for the New Zealand railways. The Government believe they are fully justified in anticipating from this change a large increase in the net profits from the railways. Proposals to Cover the Deficiency. In the meantime we have to deal with the serious present deficiency in our revenue, which I have stated. Now it is obvious that without an increase in the number of taxpayers there are only three ways in which a deficiency of revenue can be met, or rather its continuance and re currence avoided. First, taxation may be imposed for the whole amount required; second, expenditure may be reduced to the whole extent necessary, if that be possible; third, reduction of expenditure may be made and additional taxation may be im posed which together shall make up the re quired sum. Reductions In Services. It is hardly necessary for me to say that it will be impracticable to cover the de ficiency of the current year by the reduc tion of expenditure. Seven months of the financial year have already passed, and it is impossible for the two or three months to come to obtain much, if any, effect from reductions. The proposals, however, which I shall submit will, I hope, prove to be of a sufficiently comprehensive character to satisfy the most thorough reformer. There is an impression in the public mind that suffi cient reductions can be made in the public expenditure by reductions in the numbers and salaries of Civil servants, but I need hardly point out to hon. members that it will be a] together impossible to effect the whole of the necessary savings in that direction alone. It will be necessary alsf> to curtail the conveniences and aids which are now being enjoyed by the public and the" local bodies. Reduction of the Governor's Salary. I will now state to the Committee what our proposed reductions in the services are. The first place we propose to begin with is the highest office in the colony, that of His Excellency the Governor. I need hirdly remind the Committee that- this reduction cannot take effect until the appointment of a new Governor. It has been said lhat the colony is likely to lose standing and/reditin England by I'educingthesalaryof tte Gover nor, but we have no fear, after careful con sideration of the subject, that ill fffects will follow this reduction. We have ao fear but that we shall still obtain the services of officers of the same high standirg as hereto fore ; and, as to our credit, we have the fullest confidence that the reductions and other economies we are proposing will, prove the existence of that first condition of com mercial confidence—a determination to pay our way. We propose, then, that the Go vernor's salary shall remain at £5,000, but that this shall include the cost of his staff and all allowances. This will be a total reduction of £2,500 from the amount at present paid. We think thai the sum I have named above should coVer the total cost of the Governor to the colony. In the next place I will deal with ibe legislative and executive branches of the Government, and the Committee will, I trust,, excuse me if I take the latter first. ( The Pay of Ministers. We propose then, with regard to the salaries of Ministers, that the Premier shall receive £1,000 instead of £1,F50j now paid, and that theotherMinisters&'iallreceive£Boo instead of £1,250, at present paid, and we propose to reduce the pumber of paid Ministers from 7 to 6, simultaneously with the reduction in the number of members of the House of Representatives, which I shall shortly mention. As to travelling allowances, it is obviously importantohat Ministers should travel so as to make tlemselves personally acquainted with the wsntsandcircumetances of theseveraldistricts Theallowance should be arranged so as merely to recoup necessary outlay, and we propose to allow £1 10s per day while actually travelling on the public service, and limit the total to be paid to the whole Ministry to £1,000" in any one financial year. The average amount paid to each Minister for the last three years has been £190. With regard to the ex penses of the official residences of Ministers, we think that large reductions can be made. We think the one known as the Tinakori Road North should be sold, as being too large and expensive. Of the others, we pro pose one should be retained as a residence for the Premier, the cost of maintenance of all but the house itself being defrayed by the occupant instead of from the public funds as heretofore. With regard to the other Ministers, looking to the difficulty upon short netice of finding suitable house accom modation, we think it desirable this should be provided for some of them at least, if it can be done with proper safeguards against exceeding reasonable limits of expense, and that those not obtaining a house should receive a house allowance of £200 per anuum. But upon this subject we will shortly make more specific proposals. Legislative Expenditure. 1 now come to the legislative expenditure. This is, undoubtedly, a question of some difficulty ; but, in our opinion, a consider able reduction in the legislative expendi ture ought to be made, and that if made it and the reduction of Ministers" salaries will tend more than any argument to ■ induce in the minds of the people of the colony, not only a conviction of our sincerity on this question of retrenchment, but also of the necessity for retrenchment generally. The Government will, invite the Legisla tive Council to express by resolution its opinion that the honorarium -paid to its members should not exceed £100, and we shall ask this House to reduce the honorarium paid to its own members £100, with an allowance of £50 in consideration of the additional expense necessarily curredby them. We think that no pay--,, ment should be made to the Chairman W Select Committees of either House, that all officers of Parliament whose salaries are provided not «f than the statutory pay at present proved, all extra- amounts individually voted being flbruck off, and the salaries of the .other

officers of the House being reasonably re duced. I may here take the ojf|qiftunity of informing the Committee cif some proposal* of the Government which, as involving ecp are of considerable political importance, namely that the Government intend this session to introduce a bill to reduce the number of members of the House of Reprte sentatives to 70, inclusive of the Maori ffi presentatives, though this change cannofc take effect until the end of the present Par liament, and next session they will submit a bill to the House altering the mode of election and other necessary reforms of the electoral laws. They will also during the present session invite the Legislative Coun cil t6 devise a plan by which their,number may be reduced to 35, one half the number of members proposed for the House, and. there after limit to that number. Retrenchment In the Civil Service. Now let us see what reductions are pos sible in the Civil service. The total number of persons in the pay of the colony, in cluding the Governor, Ministers, judges and others, but exclusive of forces and country postmasters, is 7,T63, ---and the amount they receive in salaries, pay and wages, is £1,004,273. Of these, 5,862 are receiving monthly wages, pay or salaries not exceeding £150 a-year, the total amount paid to this class being £638,519. The Government do not propose to make any substantial alteration in the *° these persons. It is that their numbers will be reducea, btrt afe present there has been no time to go intto this question. It follows, therefore, tb&t £365,754 paid to persons in receipt *of salaries over £150 a-year is the principal amount upon which it is possible to "make reductions at present. The reductions pro posed in the departments generally i do not purpose here to refer to in detail. £60,000 Saved Off Education. These will be dealt with in committee by the several Ministers in charge of the departments; but I will say, a few words upon our education system, in regard to which, while admitting tha/o it hasjtiven great satisfaction from ths purel|jj|j|uca ; tional point of view, specialists agflßhaV relatively to population find revenue,* the system is too costly. /They differ only as to the means by which reductions may be best effected. The proposals to be submitted by / the Government! will show where moderate savings may be made without weakening the system. Our • principal proposals yvill be to limit the capi tation grant to the statutory amount of £& 15s a head, which we think, under the cflp cumstances of the colony, is ample for necessary purposes, and not to pay capita tion upon any child under six years old; but we shall make provision so that no country school shall be closed in conse quence of this change. The saving on the education vote we estimate at about .£60,000 per annum. Summary of Reductions. I have had to consider carefully how to submit clearly to the House the reductions that ihe Government propose, and have thought it best, in view of the short time at the disposal of the Government, to tiring down a. schedule, in which will be shown, in one column, the total amount of each class of expenditure as proposed in the Esti mates introduced by the late Government ia May last, with Supplementary Estimates /or services either inadequately or not an all provided for; ; in the next column the reduced amount which the Govern ment propose for the current year, seven months of which have already passed, and two more of which will at least pass before lit will be possible for the reductions t$ take effect. The third column will show What is the amount of the reductions on the estimates for the twelve months which the Government already see their-way to make, and which will take effect m- proportion as our proposals have time to operate. Wβ IDropuse to take a vote, for each of the classes and sums mentioned in"the second column of the schedule under the head of annual appropriation, instead of follow ing the usual course of taking votes for the several services on each class. Hon. members will recognise that it will not possible for the present Government in so short term to bring down a revision of the Estimates of thelate Government showing; in detail the reductions we propose to make, and that there is no other course open in the circumstances than- to take a vote for each class of expenditure only. With re gard to the reduction of the sum of £16, COD which has, nofy been located to any class, but which willi when given effect to, be dis tributed overall of them in> such a manner as the Government may determine, a clause will be inserted in the Appropriation-Aeb which,willi limit the power of; expending* under the votesi to the total amount of the classesless thesum o£ £16,000, i o Compensation for Loss of Office. Before leaving this part of my subject, I wish to say that the Government, in making reductions! desire to use all possible con sideration for the persons directly so far as their duty, to the public will allow, more particularly as postal and telegraph officers and SflPe now en titled to pensions 'and allowlmees. The Government will do their utmost to make 5 the red v ctidns and other changes ■ press with;" as little hardship as possible, subject only ' to the necessities of the case as to their paramount duty to the public. Amount of Seductions. Our proposals, if assented to by Parlia ment, will reduce the total amount of the da partmentalappropriations out of the consoli dated fund for a full year by £251,500, The reductions comprised in this amount have been made'up on the probable expenditure, for the same services during the current financial year under estimates and engage ments of the late Government. I may ia passing inform the Committee that before making them all services of a non-recurreitt character, so far as they could readittjbe traced, were first eliminated from the Esti mates for - the current year, such as the -expense of a general election, and the same course was pursued with reference to paY ments under permanent Acts, such as tne allowance to members of the General As sembly attending a second Parliament. If in determining the amendments of these reductions' any non-recurrent items have been the omission will probably be adjusted by the occurrence of othfer items of a like character in the Estimates for the next financial year. We already see our way, then, to effect departmental reductions, to the extent of £251,500, and we believe we. cani make still further, and we hope, substantial by means ; of a more perfectly organised system, and amalgamation of offices compatible-with each* other. . Supporting the Hands of the ■ Government. It is. clear that sufficient time must* be given to any Government undertaking the; i reorganisation of the service, and full power must be given to that Government if the work is to be done successfully, but when the work we are now proposing to do has beep , done to the satisfaction of the House, if it is not to be again undone it will* be ; sary that far greater restriction should be placed upon the Government of the day than is the case; at ' Vigorous , retrenchment is effected by one Government in times of depression. They are replaced by another Government, and much of-:, the work they Mye dorki : it times-iare:"' a little more or if a , more v sanguine view of the prospects is taken, ia. J undone by their successors. I may give an ■■% $h(ftfc&nee, of what I mean; In the year 1880 1 W&r& w£r© 17 Inspectors of Police. y> Afteafi** tprefuiconsideration, it was detenninedti&fe 11 Inspectors could perform the, work, iad were made £&spectors satisfactorily work «p to 1884 at a cost'of £4,300, l^aymg,44s' " ■;" ' (CoritititKd on./tags & J

THE AUCKLAND EVEJHNG STAR, WEDNESDAY, NOVEMBER % 1887.

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