FINANCIAL STATEMENT.

Press, Volume XL, Issue 5857, 21 June 1884, Page 3

FINANCIAL STATEMENT.

[PBJBSS association thlbgbam._ WELLINGTON, June 20. The following is the Financial Statement delivered this afternoon by the Colo- ■ nial Treasurer.the Hon. Major Atkinson:— Mr Hamlin, —The task which I have before mc this evening is comparatively a light one, as I have only to submit for the consideration of the Committee the financial results of last year and ask for the grant of a sufficient supply to carry on the public service until a new Parliament can meet for the despatch of business, which I hope it will do within two months ■ from the present time I desire at the outset fo assure hon. members that the financial difficulties with which we have to cope during the current year are by no means of so serious a nature as some seem disposed to think. lam satisfied that there is nothing in the difficulties of our financial ' position to make us doubt our ability to < meet and overcome them without placing any undue burdens upon the taxpayers of the colony. It has been my pleasing duty ' for the last two years to announce a satisfactory surplus at the end of each financial period, but I regret to say that the serious depression under which New Zealand, in co_mon with a large part of the civilised world, has been suffering for some time past, has caused a considerable falling off in some items of our revenue, and has .thus transformed into a deficiency tho small estimated surplus of £8295, with which I hoped to have ended the year. OBDINABT BEY-NUB ACCOUNT 1883 84. In the statement I had the honor to make to the Committee last year I estimated the total expenditure for the financial year ending the 31st March, 1884, at £3,661,496; of this amount £1,645,694 was required for interest and sinking fund, and for the civil list and other charges under permanent Acts, and £2.015.802 for the services for which annual provision is made by Parliament. The sums voted on the supplementary estimates have increased the amount of the annual appropriation to £2,040,360. This sum, therefore, with the estimated charges under permanent Acts, amounting, as I have just stated, to £1,645,694, 5 gave £3,686,054 as the total appropria- j tions for the year. The total actual expenditure on this account during the year proved to be £3,681,320, being £4734 less than the estimated amount. The payments under permanent Acts were £506 in excess of the estimate, and those under the votes of the year were £5241 within the amount authorised. These are the net results. Hon. members will find on looking into the appropriation account already laid before Parliament that in some cases the votes were exceeded, and that in others the amounts authorised were not all expended. Eliminating the imprest advances outstanding at the close of the year, which ths law requires the Treasurer to include in the appropriation account, but which do not form part of the final expenditure of the year, the payments in excess of the votes of Parliament amounted to : £27,562, of which, however, should be added £7266 for services unprovided for, making the total unauthorised ; expenditure £35,123 chargeable against the £100,000 provided for this purpose by the Public Bevenues Act, on the other hand tbe unexpended balances of votes amounted to £40,369. As information relating to the so-called unauthorised expenditure and unexpended balances has already been laid before Parliament, it is unnecessary for mc to refer : to them further. During the year 1882-S3 the total expenditure out of the ordinary revenue amounted to £3,638.334 as against £3,651,320 expended last year. The expenditure of 1533 S4 being therefore greater than that of ISS2-83 by about £43,000. It will be seen from the table which will' be found sppc-nded to the statement when published, that the classes of ' expenditure mainly accountable for th_is j increase are education £12,200, and rail- J ways £53,700, but- a saving of £39,200 was '

effected in the Constabulary and Defence services. The liabilities of this account on the 31st March, 1834, were estimated at -5166,757, being -29,773 less than the amount outstanding on the 31st March, 1883. Particulars of these liabilities have already been laid before Parliament for the purpose of enabling hon members to compare the liabilities outstanding at the close of the last fin-n-i-1 yea; with the liabilities of the three previous years. The ] present mode of treating liabilities having now been four years in existence, I have had a table prepared which will accompany this statement when published. The ordinary revenue of the year 1883-84— that is the revenue exclusive of the receipts from land sales—was estimated in the Financial Statement of 1883 at £3,573,800. The subsequent increase, however, in the property tax of one farthing in the pound brought up the estimate to .£3,658,800. The actual amount of ordinary revenue received and brought to account by the Treasury during the year was .£3,493,659, being thus £165,141 under the estimated amount. The usual comparative return of the estimated actual receipts will be laid before hon. members. It will be seen that the main branches of revenue in which the estimated receipts have not been realised are Customs and railways. In the Customs the amount received was -2123,313 short of the estimated amount, which was £1,520,000. In the railways the amount estimated to be received was -21,020,000, but the amount brought to account proved to be -.963,109, being thus j.s6,Bßlunder the estimate. I have already stated to the Committee that the total expenditure of the ordinary revenue of the consolidated fund during the year 1883-84 was £3,681,320, and that the revenue amounted to £3,493,659. To the latter sum I add, however, the balance at the credit of the account at the beginning of the year, £35,549, making the total receipts £3,529,208. Hen. members will thus see that the positions of the consolidated fund for the financial year ending the 31st March last resulted in a deficit of £152,112. I may perhaps here be permitted, Mr Hamlin, to point out the great difficulty of making an accurate estimate of revenue. Experience teaches us that a very slight alteration in the price of either wool or grain very materially affects our income, in some years when our staple products Bell at a good price we suddenly find an overflowing treasury. On the other hand, when prices are lower we find oarselves face to face with that unpleasant fact for a Treasurer, a deficit. In so small a country as this is we Bhall always be subject to sudden rises or falls within certain limits in our revenue, and we must from time to time expect to have to face a deficit, unless we are prepared in our annual budgets to leave a much wider margin of surplus than seems to mc hardly "possible or necessary; for a large surplus, in my experience, generally means pressing demands for greater expenditure. It also means that more money has been taken out of the pockets of the taxpayers than was necessary for the service of the year, and this I have j always endeavored to avoid doing, holding, as I do, the belief that no Government is justified in collecting more money than is sufficient to carry out the services voted by Parliament. LAND FUND ACCOUNT, 1883-84. The amount to be expended during the | year out of the money derived from tales of land was estimated at £238,162, of which £36,600 was for payments under votes for the services of the year. The actual expenditure,was £238,662, or £500 more than the estimated amount. The expenditure under permanent Acts, £34,843, and under the votes of the year, £203,819. The moneys handed over to local bodies for expenditure on road making, 'from moneys derived from lands sold on deferred payments was £23,353. There was also paid to local bodies during the year £45,446 for rates under the Crown and Native Lands Bating Act, 1882, making a total of £68,804 handed over to local bodies to be expended by them. The expenditure in respect of the Crown lands survey and other departments amounted to £158,373, being £3190 within the amount aforesaid. The (amount transferable under section 4 of the Beads and Bridges Construction Act, 1883, to the main roads account in the public works fund on account of the transactions of the year 1882-83 was found to be £75,203, but no transfer was made during the year 1883-84, the necessity for doing so not having arisen. The liabilities outstanding on 31st March, 1884, on this account amounted to £33,577, exclusive of the sum of £75,203 transferable to the main roads account. In respect to the transactions of the year 1882-83, the esti- | mated revenue during the year from sales !of land was £275,600; the actual receipts proved to be £232,545, being £43,055 under the estimated amount. The revenue derived from the cash sales was £163,758, and from sales on deferred payments £68,787. To the revenue I add the balance with which we began the year, £86,564, making tho total receipts £319,109. Deducting from this amount the expenditure, amounting to £233,662, which includes the sum of £68,804 paid to local bodieß, we get a balance at the close of the year of £36,447, subject to the charge of £75,203, transferable to the main roads account. THB PUBLIC DEBT. On the 31st March, 1884, the gross public debt of the colony amounted to £32,367,710, and the accrued sinking funds to £2,792,808. The net public debt was therefore £29,574,903; of this sum, how. ever, there.renmned unexpended £877,912. In the Financial Statement which I made in 1883, I informed the Committee that when the amount represented by Imperial guarantee on other debentures, amounting to £733,300, temporarily taken up out of the monies at tbe credit of the public works fund, and which was not therefore included in the public debt of the colony, had been raised, the net debt would amount to £28,508,581. During the past year £599,399 of the sum mentioned has been raised, leaving £124,000 unraised, which I accordingly deduct, and get £28,384,581. During the year there has also been raised the second £1,000,000 of the loan of £3,000,000 authorised in 1882, together with £250,000 authorised by the Colonial Inscribed Stock Loan Act, 1832. The debt has further been increased to the ' extent probably of £161,300, by the conversion to which I shall presently return, cf a large amount of Four-and-a-half and Five per Cent. 5-30 Debentures into Four per Cent. Inscribed Stock at the Bank of England. The reduction in the rate of interest in respect of this part of the debt has, however, caused a large annual saving. These increases of the public debt, amounting to £1,411,300. added to £-8,384,581, give a total of £29,795,831. From this sum, however, I deduct the sinking funds accrued during the year, estimated at £220,979, leaving £_9,574, - 903, which, as I have already stated; presents the net public debt of the colony on the 31st March, 1884. LOAN OP £1,000,000 BAISXD IN JANUARY, ISS4. Last year I had occasion to congratulate the Committee on the. unprecedented success which had attended the negotiation of the instalment of the loan of three millions authorised in 1882. That loan, as hon. members are aware, was offered to tbe public through the Bank of England in the form of a Four per Cent. Inscribed Stock at a minimum of £93 10s, the average price at which it was placed being £93 12s od. The second instalment of one' million was raised in January of this year. Sir P. G. Julyan and Sir F. D. Bell again acted as agents. The loan was offered to the public in the same form as on the former occasion, and at same minimum- £9S 10a. The tenders received at the Bank of England were 607 in number, amounting in the aggregate to £5.073,000, at prices varying from the minimum of £93 10s up to £100 16a 6d. The average price obtained was £100 6s 6d, being no less than £1 14s Id in advance of the price obtained for the first million. There is, therefore, still greater room for congratulation on the present occasion of this renewed expression of confidence in the resource?jof the colony, and at the prospect which the b_te of our credit affords of our beins' able, if we contrive to manage our affairs with prudence, to obtain the necessary loans for new public work 3 upon very favorable | terms. Papers relating to the registration lof the loan will, as usual, be laid before Parliament at an early date.

COLONIAL INSCSIMD STOCK. As I have already stated, the loan authorised by the Colonial Inscribed Stock Loan Act, 1882, was raised last year. It na? taken out by the Postmaster-General at par, as an investment on account of the Post-office Savings Bank, and it bears interest at the rate of five per cent, per annum. The proceeds were, in accordance with the Act, paid into the Public Workß fund. It was found, when preparations were being made for offering the stock .to the public, that the Act would require amendment in certain directions to render it workable, and it was proposed to offer the stock through the medium of the Postoffice. The whole of the loan has been temporarily taken up by the PostmasterGeneral until the Act can be amended, and a favorable opportunity arises for disposing of the stock to the public. CONV—USION OP DEBXNTUBJES. Last year, in adverting to the Treasury bills, amounting to £1,832,000, expended on the 31st December, 1.382, for debentures having a currency of three years, issued under the Treasury Bills Acts of 1879 and 1880, to be afterwards converted into Four Per Cent. Inscribed Stock, it is stated with reference to the proposed conversion that circumstances had not proved sufficiently favorable for a successful operation, but that the Government intended to inscribe the debentures as soon as a fitting opportunity offered. The desired opportunity presented itself last year, and under the wise and skilful management of Sir P. Julyan and Sir F. D. Bell, the stock agents under the Act of 1877, the operation has been carried to asuccessf ul issue. It was not, however, restricted to the conversion of the debentures for £1,832,000. Hon. "members who are familiar with the form and currency of debentures will recollect that a portion of them was issued with a currency of thirty years, redeemable at the pleasure of the Government in any year after the fifth year from the date of issue, on the Government giving six months' notice by advertisement of their intention to pay them off. The Government had long contemplated the conversion of these 5-30 debentures, amounting to £7,250,000. The five years from date of issue having expired, the Stock Agents were empowered to convert them, and were only waiting for a favorable opportunity to do so. They determined, therefore, to combine in one large operation, the two classes of debentures amount—gin all to £9,oß2,ooo;not,however, by the compulsory calling in of the 5-30 debentures, but by giving to the holders the option of conversion on certain terms. Accordingly, in September, 1883, an announcement was made public through the Bank of England that up to the 30th November applications for conversion wculd be received in respect of the following debentures:—£6,ooo,ooo Four-and-a-Half per Cent. 5-80 debentures at £103 of stock for every £100 in debentures; £1,250,000 Five per Cent. 5 30 debentures at £103 10s of stock; and £1,832,000 Five per Cent, debentures at £100 stock. The result of this invitation was that -the following debentures were brought in and converted, namely—£3,os3,ooo Four-and-a-half per Cent. 5-30 debentures, £503,700 Five per Cent. 5-30 debentures, and £1,832,000 Five per Cent, debentures, making a total of £5,388,700 converted out of £9,082,000. Full accounts have not yet been received from the stock agents, but it is calculated that, after setting aside a sufficient sum by way of sinking fund to cover the increase of debt arising from the conversion, a sum of about £28,800 will be annually saved to the colony .by the reduction of the rate of interest, a result which I think the Committee will agree with mc, may fairly be characterised as highly satisfactory. I may inform the Committee that the whole of the debentures for £1,832,000 were held on behalf of the sinking funds of New Zealand loans, the Post office Savings Bank, the Government insurance department, the public works, and other funds, and that the right to place immediately £500,000 of the 4 per cent. Inscribed Stock on the London market was reserved when the propo—d conversion was announced, an undertaking having been given not to sell the balance before the third instalment of three mil* lions was raised. I may further state that the Government received from the AgentGeneral advice by cable of the sale of stock to that amount on favorable terms. PUBLIC WOEKS. For the year ending the 81st March last Parliament voted out of the public works fund £2,014,757, exclusive of the vote for land purchase, £77,000. The actual expenditure was £1,278,710, exclusive of the expenditure for land purchase amounting to £24,480, and also exclusive of the expenditure under the Boads and Bridges Construction Act, 1882, amounting to £106,398, for which, as hoc. members know, no vote is taken in the annual appropriation. The chief items of expenditure were railway, £661,846; roads, £222,243; public buildings, £164,375; immigration, £107,041, and other services, £123,202. A return of this expenditure will be found in a table annexed to this statement. The liabilities outstanding at the end of year, exclusive of those for land purchase, amounted to £997,443, which added to the sum expended, £1,278,710, gives a total of £2,276,153, as against £2,014,757 voted for the year. In speaking of the expenditure out of the public works fund, and the liabilities outstanding at the end of the year, I have excluded both the expenditure of liabilities in respect of land purchases, and j also those incurred under the Boads and Bridges Construction Act. The land purchase liabilities on the 31st March last, as shown by the return laid upon the table of the House according to law, amounted to £285,400, as against £309,299 shown at the conclusion of the previous year; but, as hon. members are aware, only £200,000 was set apart under the Three Million Loan Act, 1832, for the purchase of Native land; the House havinjj approved of the abandonment of such of the proposed purchases as tho Government did not think it desirable to proceed with. Of this £200,000 £56,400 has been spent up to the 31st March last, and it is estimated, by abandoning such purchases as I have referred to, the balance of £143,000 will be sufficient to cover the liabilities. Out of £350,203 standing to the credit of the fund available under the Boads and Bridges Construction Act, £106,398 has been expended. Of this £89,496 was on account of main roads and £16,902 on account of district roads. The liabilities outstanding on the main roads account are £160,433, and upon the district roads account £43,777. The balance of the public works fund remaining unexpended on the 31st March last, including the balance of £389,000 of the second instalment of the loan, amounted to £877,912. One effect of limiting the expenditure of the loan of 1882 to about one million a year was not, I think, foreseen when the Act was passed. For example, to exactly spend £1,000,000 per annum on public work, with only £1,000,000 per annum in cash available would, under any circumstances, be next door to an impossibility, and in tie case of railways it is altogether impossible. The works may be roughly divided in three classes, viz. (1) formation and bridges, (2) material for permanent way, and (3) platelaying and stations; and each of these items absorb nearly a third of the total amount. If, therefore, the formation on most of the line be done during the first year, it would be necessary that the whole of the works in the country should be etopped during the second year in order to pay during that year for the rails and sleepers, and thus to provide for the laying I of the rails and the making of the stations | during the third year. If, however, the i ! work in the country be continued during the j second year, it is evident that the rate of j expenditure originally proposed must be j over-run, and this, in fact, has to some i extent occurred. The Government have, j therefore, whenever circumstances ap- j peared to justify such a course, ven-' tured to slightly exceed the authority . directly given by Parliament in ordering ; rails and rolling stock, so as to prevent the j work standing still longer than was absc- ' lutely necessary, and t*>ig action on the part of Government will explain to hon. members how it comes to p_s that the expsnditure and liabilities together exceed the vote by £261,396. I may inform the Committee that there is material to the value of about £300,000, consisting of roiling stock not set up and rails, either in

the hands of the Government on the sea, or being made to order of the —gentGeneral. I desire to call the attention oi the Committee to these facte, because I think no Government ehould exceed the vote of Parliament in committing the country to expenditure or liabilities without the attention of Parliament being speciaUy caUed to it. It wiU be for Parliament to determine if the action of the Government in thus exceeding the vote by liabilities for material for future use was justifiable. Had we not acted aa we have done, one of two —tings muat bave happened — either some £260,000 less must have been spent on works on the lines, thus rendering the depression still greater than at present, or rails and roiling stock to that amount must have remained unordered, to t_e great delay of the works generally in the future. In the PubUc Works Statement made in 1882 it was pointed out that a large expenditure would be required for work upon the opened lines, and it was proposed to allocate a large sum out of the balance of the Five MUlion Loan for '.this purpose. The sum available has, I regret to say, been found quite inadequate to meet the necessary expenditure. Relying upon that proposal as being sufficient to meet the requirements of the public service, no further direct provision was made in the schedule to the Three MUlion Loan Act for the necessary improvements on the open Unes, which the increasing traffic is perpetually demanding. Such, for instance, as increased rolling stock, further station accommodation, heavier rails, sidings, and water supply. It is true that a large portion of this expenditure might, under the Loan Act, 1882, be charged upon the Unes named in the schedule, bnt this mode of charging does not appear satisfactory to the Government, and no provision bas been made for a number of the open lines upon which a large expenditure has been found necessary—at any rate it is clearly a question which requires the special consideration of Parliament. Under the authority of the votes of ParUament liabilities have been incurred of expenditure made upon the open lines during the two years since the 31st March, 1882, to the extent of £830,000, of this £460,000 has been charged against the Five MiUion Loan, leaving £370,000, which is at present charged under section 4 of the Appropriation Act of Last year to the loan account, and for which further ways and means wiU have to be provided, or the amount will have to become a permanent charge against the loan. It will be necessary also to make some provision for further expenditure upon open lines, which cannot possibly be avoided. I fear that a sum of not less than £1,000,000 wiU be required to be expended annually upon the open lines, besides all charges for renewal, maintenance, and repairs,"which are, of course, chargedjagainst the receipts, if the railways are to keep pace with the increasing traffic. Under ordinary circumstances, Mr Hamlin, it would now be my duty to submit for the consideration of the Committee the proposed expenditure of the ordinary revenue for the current year, and then to aßk tbe attention of hon. members to the estimated revenue with which it was intended to meet such expenditure. But, as matters stand in this House, I have only to ask the Committee to grant sufficient suppUes to carry on the public service until the meeting of the new ParUament, and to make temporary provision for the deficit of last year, and such further provisions for PubUc Works as may be required untU the new Parliament shaU have decided how the expenditure upon open Unes is to be ultimately charged. I do not propose to ask the Committee to consider estimates of expenditure out of the consoUdated fund or of the pubUc works fund, but to obtain the necessary authority for expenditure by an amendment of the Public Revenues Act, which will extend the appropriations of last year, with such few additions ss may be necessary, until tbe end of August next. I shall ask the authority of Parliament to issue £150,000 deficiency bills to provide for the deficit in the ConsoUdated Fund to the 31st March last. These biUs wUI be in addition to the £400,000 at present authorised to be raised in temporary aid of the revenue. I may here say that I am of opinion, from the experience of last year, that £400,000 of deficit bills are barely sufficient to carry on the pubUc service without the risk of incurring serious difficulties. These difficulties arise chiefly from our having to pay at certain periods of the year large sums foi interest and sinking fund before the consolidated revenue has accumulated sufficiently to -meet the necessary payments. The revenue comes in irregularly from Customs and raUways, and especially from the property tax, which is coUectedonly once or twice a year. I propose, therefore, upon the present occasion, as the property tax cannot be collected within the current half-year, to ask for further power to issue deficiency bills to the extent of £50,000. With thia additional amount of ways and means, and if this House sees fit to grant authority to raise the extra £150,000 of deficiency bills te meet the deficit in last year's revenue, I think there will be no difficulty in making all necessary payments until the meeting of the new Parliament. With reference to the Public Works fund, I have stated that there was an unexpended balance of £877,912, but of this £202,484 was advances in the handa of officers, and, as hon. members who foUow the pubUc accounts know, advances outstanding, although included as balance in hand, are not really available for expenditure. These outstanding advances vary from time to time from £60,000 to £300,000. The expenditure during April and May has been rather heavy, amounting to £278,894, thua leaving the unexpended balance of tha fund on the Ist June last £678,229. But of thia amount £299,734 was advances. The expenditure for June, July and August will be less per month than the expenditure for the months oi AprU and May. The expenditure for April and May, though large, would have been gradually tapered off month by month until the floating of the next million of the three miUion loan, but owing to the large expenditure which has been found necessary during the last two years upon the open lines, and the action which the Government has taken in ordering rails, sleepers and rolling stock so as to expedite the works, it will be necessary to obtain some temporary aid for the PubUc Works fund until, as I have said, the new Parliament has determined how the expenditure upon the open Unes is to be charged, and until the raising of the third million of the three miUion loan. A table showing amongst other things the expenditure and liabilities of each vote authorised iv the schedule of the Loan Act of 1882, wiU be published with this Statement. Thia table wiU, I think, enable hon. members clearly to understand, the position ol the fund. I shall ask the House to permit the issue of deficiency biUs to the extent of £100,000. This wUI be sufficient until about the beginning of September. Since the three million loan was authorised the expenditure out of the public works fund has been for 1882 83, £897,037. Last yeai it was £1,409,583, making a total expenditure for the two years upon pubUc work* of £2,306,625. But this amount includes £154,127 advanced for purchase of rails foi tbe open lines, which wiU be repaid by the Working Raiiwayß Department as soon as J the rails arrive and are handed over. The net expenditure for the two years was : i therefore, £2,152,498, or an annual average j expenditure for the two years of £1,076,249, inclusive of £106,393 expended under the j Roads and Bridges Construction Act, ;so that the average expenditure a I little exceeds the one million a yeai which the Government estimated the ■ colony might safely spend, and this exI penditure would have been £260,000 less ■ than it wa3 had not the Government taken j upon themselves, as I have already pointed : out, to order sleepers, rails, asd rolling stock ;in anticipation of the requirements of the ) cutreat year. j THE BEP_E66ION. > And now, Mr HamUn, I would Uke to say a few words about the depression which prevails in the colony. In the first place, it does not arise to any appreciable extent either from defective laws or errors of administration on the part of the Government. It does not arise from the withdrawal of capital or from distrust of capitaUsts. There is no edgn of such dis-

k, trust to be found anywhere, as far as I r- know. Capital can now be obtained is >f any amount and upon reasonable terms for I any undertaking which wiU give a fair c return fer the outlay incurred. Capital c has not, as a matter of fact, been driven .- from our shores either by our system, of g direct taxation or by the nature of our r land laws or by any other cause. Far more f capital has flowed into the colony during c the last three years than in any period of c our history. Nor does the depression arise s from the large amount of interest we have b to pay upon our public debt and private c borrowings. We can, I am satisfied, t pay with ease aU the interest we - have undertaken to pay, because the i employment of the borrowed capital a has enabled and is enabling us te - produce far more than the share our sleep--3 ing partners draw in the way of interest j s and this must be evident to anyone who a will look at the amount of our exports, 1 and remember that this is the surplus I after our population has supplied itself • with all the chief necessaries of life ; and _ especially when the enormous direct ad- . vantage to the producers which accrues 1 from our raUways is considered, as a saving f to the community of at least two mUlions 1 per annum. The present depression is - traceable ultimately to three causes. Fir st, r the habits of extravagance arising out of 8 the wonderful prosperity which, with only c sUght and temporary checks, we have en- , joyed for the last thirteen years—habits V which our real circumstances never justii fied us in indulging, if, indeed, any circum- - stances could be their justification. This r extravagance is now a response to tbe un> i becoming foUy, recognised as an evil, and . successfully combatted. Secondly, the i class of distributors and middlemen is far , too numerous. In proportion to our popu- . lation there are ne doubt too many mer- , chants, traders, and agents. Numbers of i these are trading upon capital bori rowed upon terms which make it impossible - for them to do business upon a sound i basis, and the consequence is they interi fere and ruin the legitimate business of f the responsible merchant and trader. It i is generaUy admitted by aU competent i authorities, in the year -4882 over importa- . tion of goods to value of at least one f miUion sterling had taken place, and I find I upon inquiry that the stocks in the wares' bouses were equal in value on December, I 1883, to those in December, 1882, so that b the reUef which was hoped for last year in r the reduction of stocks has failed us for s the present. Thirdly, the low prices which ) have obtained during the last year for 5 your chief articles, wool and grain. It is i said that wool and grain are never low in i price at the same time; and this is no s doubt true as a general rule. Unfortu- . nately this has not proved true during the > last year. The loss to our spending power i upon these two articles of export has been, r I estimate, not less than half a million i sterling. I myself beUeve that had wool , and grain been anything like average price > we should have had no deficit in our con- • soUdated revenue to provide for. These r causes sufficiently account for the want of > confidence in our immediate prospects, and • for the condition of trade in some districts , of our colony. Real circumstances . do not justify this lack of confil deuce, but there can be no doubt • that it is an important fact is the present i depression, and that we cannot hope for a > return of prosperity until confidence is i again restored. As I have on several oci casions pointed out, the action of Farliar ment and the Government have to a cerl tain extent intensified tha depression by j the determination which we arrived at two - years ago to limit to a moderate extent the ■ expenditure of borrowed money. As hon. r members wiU have seen from statements > which I have just made, Government have - not arbitrarily curtailed the expenditure r by a hard and fast Une, but have endeat vored to make the reduction as Uttle felt r as possible by increasing the expenditure - during the current year to the full extent - of the limits imposed by Parliament. How r the depression is to be speedUy overcome i is a question of great importance to aU of i us. L confess at pace that I see no royal ) road by which we can be reUeved from i present duUneßsr. The only remedies are i to Uve weU within our means, to increase a as largely as possible the number of pro--1 ducers by settlement orrlande of a class j of persons able and willing to cultivate • them, by encouraging the consumption t of local products and manufactures, l to beUeve in ourselves, and to reso- ■ lutely set our faces again&t the expenditure . of pnbUo moneys from revenue or loan b upon purposes unnecessary or unproductive, while at the same time we steadily - push in our public works. If we deter- - mine, as I believe we shall, to foUow such . a course as this then our prosperity is, I i venture to say, already assured. Had it i fallen to my lot, Sir, to have submitted a r complete budget for the Current year, my , proposals would not have necessitated my T asking Parliament for any increased taxab tion for the purpose of carrying on the > services of the year, as I saw my way to . make both ends meet, with a margin for 1 contingencies, by means of reductions t under proposals for the reform of the Civil f Service, which the Government have had i under consideration, by savings which > would have been effected under our hospital s and charitable aid proposals, and by the ;. savings upon other votes to which we 9 should have asked the sanction of the - House. 3 CONCLUSION. f In conclusion, Mr Hamlin, I would point r out that within six months after the Hall - Government took office, which it did in 1 October, 1879, the Government had to face - a deficit of one miUion sterling upon the T ordinary revenue. Thia, as I have often >• said, arose chiefly from the falling off in the 7 land revenue,'upon which we had been relyd ing. The Government at once set to work 1 to face the deficit. In the first place, it t excluded the land fund altogether as a • source from which the ordinary expendi- '• ture might be met, charging against it - only the cost of its administration and f the charges to which it was locaUy liable, r and setting apart the balance for local c works, and to the separate use it has been 7 applied ever since. The deficit of one - million for the period ending March, 1880, 0 had to be met by a permanent loan, and a the expenditure of the following year 9 balances with the revenue by means of tt very large reduction in expenditure and a 5 considerable increase in taxation. At that : * time, for some years preceding, and for two • years subsequently a large portion of the c charge for the Armed Constabulary was r borne upon loan. Our five miUion 5 per c cent, loan had been sold in December, B 1879, at £97i, with the option of convert--1 ing into a 4 per cent, loan at £120. In • other words, our 4 per cent, stock then L ~ sold for £81}. This sale was undoubtedly - at the time a most successful one, and eerf tainly represented our credit in its most '• favorable Ught. In 1881 there was a email '• deficit in the consoUdated fund. In 188-----f there was a suiplus of £203,000. The t opportunity was therefore taken in that t year of transferring the charge of £75,000 il then paid out of loan for Constabulary c to the consolidated fund, and taxes were c reduced to the extent of £110,000. d In 1883 there was a surplus of £35,000, not- ; r withstanding the large reductionof taxation '- which took place in 1882, and the fact that 8 the consolidated fund was charged for the 8 first time with the whole cost of the r Armed Constabulary, an additional charge c amounting to about £75,000. In 1884 we 3 have to face a deficit of £152,000. This 6 has arisen from the falling off in the rail- '» way receipts to the extent of £56,000, and c in the Customs duties of £123,000. Upon '» looking at the circumstances under which c the estimates of ISB2 were made, I cannot ''> say I beUeve either estimate was a j not what we might have reasonably v j expected. The deficit is to be ree | gretted, but it ia not certainly a " | matter about which we should feel any s'. anxiety. It can be provided for without ■_■ : burdening any class of the community, d ( Moreover, our credit never showed higher ' than it does in London at the present time. c j Our last £1,000,0004 per cent, loan realised (no less than £100 6a 6d per cent. We i have, sir, as far as my judgment goes, •> nothing in our present circumstances a to dishearten us; nothing, sir, but t what should nerve v.a to renew c our exertions with the certainty that s great prosperity will again reward our - efforts. Meanwhile periods of pressure c may be on the whole beneficial to the comf munity by the forcing the attention of the - colony to our affairs, public and private,

prudence in our speculations, and better organisation in our industries and our administration. Waste is more or less an incident of aU human work, which the greatest skill, sagacity, and prudence cannot whoUy terminate, and the tendency in times of excessive confidence is to neglect the attempt. It is generally admitted that but for this fact our large colonial enterprises of the last fourteen years would have been a more signal success. If the country and Legislature are capable of profiting by the uses of adversity our future progress as a people will more than compensate in its increased stabUity for whatever it may sacrifice in swiftness.