THE FINANCIAL STATEMENT.

Press, Volume LXI, Issue 11944, 13 July 1904, Page 7

THE FINANCIAL STATEMENT.

{8T TEMCIUrH.) WELLINGTON, July IJJ. In Committee of Supply to-night, Uμ Colonial Treasurer, tlie Bight Hoa> R, J. Seddon, delivered his Financial Statement, as follows: — 3lr inUar.—Tfeer* is etw a wish oo th» part of honourable members to have the Financial Statement cc «arfy ac possible, and the desire is commendable vriien it ii incited iritii the view of obtaining information cc to the finaocee and general progress made during the year, aad not for ps*ty purposes. Believing that it would l>e pl«usi»g to all, I bave, by omduoualy opplying every spare moment to tho task, been enabled to bring > dovrn I hie SUiAeinent within fourteen days of the opening of Parliament, and forty-three days earlier than last session. It should, however, not be forgotten tliat over tiiree weeks vvro> intent last session in debating the Addrwsinlkply. It lias fallen to the lot of f<*\r men to l>e contiraioufly at- tl*» head of a GovernJ nie.nt the longth of t.iine it has pleased tho Parliament and people to maintain mc isi ; that position, and it is a privilege and i • pleasure for mc to deliver th<> niutti ! Budget since I have bewi Colonial I Tivasutvr, fuid in tho same to iiifwin ineiiir bL-rs aisd my Mlow-iolieugikv* of the resuite of tin , . piKst. y«';tv's financial aiwJ of tho .Nuh<;in!i; 1 progress our giund country is making in every aspect. Tlie of Kuipiiv-iiiiiking must be by Uw formation and up of the .Empire's clcjxyidciKißti, iuid iis those dcpendenoKv fliiuiisl) and hktcuw, co will the Empire's solidity and gtvatness continue to b* maintained amd expanded. It ha* bu'ii my honoured privikge to be the Prime Minister of our important and lovely colony for the past eleven J years, and I have not been a passive sjjecj tator of tite> building up of our Empire j during that period. Indeed, I may cay j without •gotiera that, ao far as my abilities go and opportunities afforded, I have missed no opportunity of keeping our interesting, unique, and bounteously endowed islands and their resources before our Kindred in the ouited Kingdom and tho other self-governing colonies and nations, ns a distinctly valuable integral part of the British possessions, and I think we can confidently congratulate ourselves uponbeiug one of the strong links binding the Empire together. THE SURPLUS. , The "dry ac dust" figures forming the summary of the transactions of the past yeax have already been given to honourable mtmbere, end to the public through the medium of the "Gazette," and thence through tho columns of tlie Press of the colony, but at the risk of wearying you it is my duty to announce the 1 oft-rtiter- , ated statement that we found on closing cur book* for 1903-4 that we had a very large surplus. This time tlie flguree reache.l over three-quarters of a million. I therefore decided to have a further gum of £125,000 transferred to the Publio Works Fund, making a total contribution for the year to that fund of £350,000, mid enabling us notwithstanding to 6hut down with the handsome balance in the Consoli-; dated Fund of £649,740. The country; must be congratulated upon such a result, which is more than double the balance at tlie clow; of the preceding year. PUBLIO WORKS EXPENDITURE. In my lust Budget, I strongly advised that we should "keep the Public Works expenditure within reuaoimhlo umits, praotise tlie strictest eootuwny, prove ourselves eelf-contained, and etek as; little money; outeide the colony as possible. So fa. as could reasonably be douo, tt» counie ' indicated lias been followed.' There iuw been a gradual seduction ihi the Public Works exipundßuire, and a further reduction is proposed. In tho y&.r 1892, when ' I wne Minister far Public VPlorka, tike total expenditure was £391,612. ;Last year tine . total expenditure was £I,£J2D,3W. The expenditure on railway coturtruction (including additions to open !«*«) alone tras £828,703, or more tluui double ■Uμ. total for the year 1892, whilst our expenditure on iroads last year (£361,044) ; was greater than tie total expenditure on publio ■works for the year 1890-91, -which wu £335,151. With ihe back-blocks tm- .'. roaded, the nwin trunk lines of railway incomplete, and the neoessity for develop- ' ing our mineral wealth, industries, and general resources, it will be impossible to .bring our Public Works expenditure down to wliat, it was Uiirteen yxars ago. There sliould, however, bo a neduction whenever possible, and to that end members etaouild lend thenwn-lv«!, and not continue a course many have namely, rail at the inoiwweof public debte in one breath, and in the liext freely and BcatJiingly denounce the Governnwait for - - nob providing euflSdent mohieH for roads, bridges, aik! public buildings in tlieir dietriebs. The nullenimn of a Colonial Treasures will arrive when imtnbora prove their patriotimn and ooneisiency by refraining from demanding a krge publb expenditure, and allow the completion of railways, the construction of roads, tits erection of post oiSces and buildmge to extend over a, knuger period, and oa fan as possible have the coat of public uorke defrayed out of the surplus £rom the Consolidation Fund. LAST YEAR'S BALANCE. I propose tsritlkrut furtJier deky to make a few explanatory roaiaxka upon Uie figuree jn-oducanp; the balance I have mentioned a> closing Hie transactions of last year, and hope to place the same before membere in «uch a, oomcise, lucid,. ami «mple way! that all may grasp nnd nndcwtftind. REOEIPTS 1903-4. Tii«e revenue for tli«e yeaa , ext«eded «evea minions, being considerably in excess of any previous record. The actual amooat was £7,021,385, or £634,776 more than the preoedhig year, and £553,385 over the ' estimate. Eeoeipte outride of revenue were £108,730, ancluding £60,600 ac the proceeds of Sinking Fund debentures. The increases of tlie several heads of revenue over the sums received tl» preceding year estubfebod two new records, namely, in that of the railway revenue, which for the first time exceeded two millions, and in the stamp revenue, which reached over one million. The prlnoiipal increases were dn the Custom* £265,682. . the stamps £100,345, land and income tax £59,617, and railways £185,442. AH the other heads of revenue exceeded the previous year's receipt*, except in Iho ca«e of the territorial revenue, -which fell off to thf> amount of £4435. Comparing the actual with the estimated revenue, increases took .place under M heads. The Oustonw wae exceeded bj £20L325, rail-ways by £167,902, etoaxpa by £96,284, land tax aad income tea: by £46.362. tewitoriftl by £7842, and ell other bende by £33,578 (learing out ek&Ynigu and penne). Of the misoellaneoue T«oeiptie oufarid* *3m» revenue propw, £47,741 -wan recovered in oomieetion wji-b ©xpenditere -whioh ted been charged in the aocoonts of the pwyear ej»m<»t the costs of t» fiotiwi' Africa contingent*. EXI*E3TI>rrTJBB 1903-4. The expenditure lor the year under permanent charge* and vott* reached £6.434,281, or £220,863 in exc«* of Uiel previous year, but £156,703 leet than the tetimated requirenjent*. Amoagtt the pernumeat charge*, intereet aod *iw»f fund item* ca xacrMM of £571,004

(£57.000 over the previous year), arising I from the rvyment of interert on new loans ( isMitd. . ! Ti'kuig the increased expenditure of \aM j year under tlw annual appropriations us compared with eimilar expenditure made during the preceding year 11902-3), Departnienie such ac the Foetal atfd Telegraph, Education, Working Railways, and the Department of Landa aod Survey, showconsiderable increase*, totalling altogether £187.945. Ar tta country becomes more dnwly wettled, the requirement* of the colonists in the way of providing conveni<!K.ta inuit he attended to and met, and this mean* incrt-arcd expenditure for tbo l> paitnu'nt of tha Postmaster-General and the Working Railways. It must. Lowever, bu remembered that tlw railways contributed additional revenue of over £■185,000, ugainfct on increased expenditure of £D78,0C0. Again, as our population in-uv-a&m, m> must utir expenditure increase l« keep puce with tho requirement* of free education and aSMtftanct) toward elevating the in v Hue tun) status of our ri-iing generation, and £20,000 extra had to be provided for this. The effort* of my Govern nn-nt in tho direction of placing the people upon tlw Crown lands, and by cutting up large estate for closer settlement, necessitates largely increased expenditure upon surveys, and, in consequence, the- ctet of the Lands and .Survey D.parUuer.t exceeded tluit of tin- previous year by some £51,000, but I fiol satisfied that members and the country g> ii rally will not complain of tlw mcreastd fxpendiiuns devoted to such a useful and reniuiwrutiv*' purpose. Lessened expenditure to r. plate it has, taken place in tlw Uf.pimiiK-nt.s of the Colonial Secretary, old ago pensions, tlw Minister of Justice, rind the Minister of Dcifence. Details of ] tlw savings and exctm on votes will l>e found in tho appropriation account, which has already been placed before you. TRAXSFBR TO PUBLIC WORKS. During tlw year 1502-3 we transferred the mm of £200.000 ac a contribution to tlw Public Works Fund. This year, finding I had such a hnndsome surplus, I was very plumed to he able to pay over no lew thai £350,000 to the Public Works Fund to supplement its ways nnd means. RESULTS 19054. It now only remains to summarise the fiAincial results of the p.iet year's working so far as tho Consolidated Revenue Account is concerned. The revenue for the y«.\ir including outside receipts amounted to £7,130,116 10s 4d, and the expenditure-, including tho contribution to the Public Works Fund, to £6,784,281 5s 7d. This left a surplus of £345,835 4» 9d, to which wo add the balance brought forward to commence the year with amounting to £303,5C5 V?i\ 6d. Adding these last named Miins tog-it):-.:, we read) the total of £649,740" 17s 3d, representing the balance to carry fonva.nl for tlw current year's j oprations. lam satisfied that hon. members and the country are pleased with tlw result. PUBLIC WORKS FUND. Tho receipts into the Pubbc Works Fund during the past year have been ac follows:—On loan account-£1,323,950under tho Acts of 1902 and 1903, and £465,000 to provide for a like amount of debentures which became duo in April. 1903. A further sum of £150,000 of debentures were created in respect of tlw Midland Railway Petitions Settlement Accounts 1902-3, and these securities were handed* over to the receiver of the Midland railway bondholders in London. Some miscellaneous receipts amounting to £1664 6s Id were aJso credited, nnd £350,000 was received from the Consolidated Fund. The expenditure ammAted to £1,620,377 133. In addition to this amount the maturing debentures amounting to £465,000 •were paid olf, and payment of £150,000 was made to tlw Midland railway bondholders in accordance with the directions of tlw legislature embodied in tlie Midland Railway Petitions Settlement Act Amendment Act of last session. Tho total amount charged against the fund was accordingly £2,235,377 13s. Tlk> receipts exceeded tlie expenditure by £55,736 13a Id, to which was added tlw cash nnd advances, amounting to £338,565 14s Id held in hand at the commencement of tlie year, and thus producing a balance of £393,802 7s 2d on tlw 31st March last towarda the ways and means of the fund for the current year. I may further mention that uf'the half million left of the loan authorised last session up to the 31st March last, the Treasury has sold £83,950, leaving a sum of £416,050, which I ha-vo little doubt -will be gradually sold to investors during the' current year. I say "gradually," aa I have no desire to disturb the local money market, which might happen were I'to ask for subscriptions to o, definite emitted loan. Taking, therefore, tlw available balance of ways and means for tho current year at £809,852, and afc least a similar contribution from the Consolidated Fund to that made last year (£350,000), I have an assured finance to enable us to carry on our public works with a prudent end at the sun© time a. satisfactory expenditure. The tables which accompany my budget give very clear and precise particulars of the operations which have taken pttice during the past year in the various "separate" accounts, and I do not therefore intend to make comment upon, all of them. LAND FOR SETTLEMENTS ACT. Recommendations to purchase twenty-five estates were made by the Board of Land Purchase Commissioners, and transactions were completed embracing ten propertiescontaining 97,139 acres, and the purchase money ran into large figures, totalling £468,615. The expenses charged to the account amounted to £39,564, and interest on money borrowed was recouped to tlw Consolidated Fund to the extent of £115,088. Tlie total charges during the yenr amounted to £623,263 10s sd. To meet Uieso charges,' sales of debentures were made to tho value of £511,350, and from rents we received £150,406 18s sd. Tlw interest derived from investments of moneys belonging to tlw account yielded £13.608 lls 3d. and other small receipts £486 19-» 9d, besides which we brought forward a balance of cash advances ;wid investments amounting to £366,074 19s 9d. Deducting tho expenditure of £623268 10s 5d tlw tvecount leaws off on the 31st March with a credit balance of £418,658* 18s 9d. Tim earth hunger is still unappeased, and I have arranged the purchase of several large estates, tl»o .settlement of which will übaorb. fairly large muiiis, to be provided for during the current year. I shall have tome remarks to make "about closer settlement later on.

LOANS TO LOCAL BODIKS ACCOUNTS.

Up to tho 31st March last the total amount of debentures created and issued and carried into this account im £2,227,100, and the total disbur«:ments have been:—To local bodies £1,777,550; to the Lands and Survey Department toAvarde opening up blocks of land for settlement £358,666, and to the Public Works Fuud £89,800 in exchange for debenture? under the Roads and Bridges Construction Act, 1832, and sedtion 8 of the Local Bodies Loans Amendment Act, 1903. The lowrat* of interest of 3J per cent, per annum ■was abolished, and the rates mentioned in section 59 of the Local Bodies Loans Act, 1901, were increased by one half per cent, in each case with the same currencies, so that the , lowest rate at which loans axe*nowobtainable is at £4 per cent, per annum, having a currency of forty-one years. Of the total amount of debts inscribed to the Ist. of February last the following figures will indicuto the proportion of the various rates at which the loans were made.:— Low us at 4J per cent, rate £1.005,880; loans at 4 per cent, rate, £92,067; loans at 3"| per cent, rate, £800,205; total £1,857,152. The balance at credit of the Loans to Local Bodies Account on ' the 31st March. 1903, was £21,957 14» 10d. Debentures for £205,000 were created and issued daring the past tear, and refunds on unexpended balance of grants amounting to £665 3e Id were received. Payments on account of loans were made during the year to local bodies £195,652, and towards opening up blocks of land for settlement £25,753, leaving at the end of last year a balance of £13,418 to the credit of the

recount. I am grateful to be enabled to report that the payment* of the half yearly inrtalmtut* of intvrwt or the inxcribovl 'debts of the various local authorities eo'ntinuo to be fully and punctually paid. As ith« transactions within this account have 1k» n both large and jiuuktou", but more ! especially on account of the present strin- > pency of the money market, it. has. been expedient to curtail tire expenditure under the various accounts through which loan* to local authorities can be obtained. In consequence of this application* for loans amounting to £26,400 were refuwd up to tlw 31st March last, and *>inoe tint date there hnve Ixxn several more applications which have bad to be declined. Doubtless this -will cause disappointment to the applicant local bodies, but until'the money market is easier it is best to conserve our resources n> as to be able to meet the requirements of tlw most necessitous local authorities who are endeavouring to provide roads in the back blocks, and thus assist our struggling pioneer settlers. * HALF MILLION LOAN OF 1903. Tlw London market was unfavourable to colonial borrowing except at prohibitive rates, and it was useless to think of placing a loan in mat market. I had, therefore, to endeavour to raise the money required in tlie colony and Australia. A 4 per cent, rate was fixed upon with on ■alternative currency of five or twenty years at the option of the Government, and on the 25th November, 1903, we invited tenders from Australia as well as this colony for a l<Kin of £500.000 under authority of The Aid to Public Works and Laud Settlement Act, ISO 3. Tenders wttv to close on the 23rd December, 1903, and the conditions of jcynvent were a deposit of 5 pen cent, on application, 45 per cent, on tlw 4th January and 50 per cent, on the Ist February, 1904. Interest commenced to run from the 4th January, 1904. Fiftytwo tenders were received representing applicants amounting to £702,350, and were of the following classes:—Seven of £100. twelve of £200, one of £260, three of £300, two of £400, eleven of £SCO, one of £600, one of £800, three of £1000, one of £1200, one of £1700, one of £2000, one of £7500, two of £2500, one of £50,000, two of £100,000, one of £175,000, and one of £200,000. The minimum price of issue was £100 per cent, a-nd in only one tender was a small premium offered. It will be seen from tlie above clarification that out of the fifty-two tenders, forty-five -were for .sums ranging between £100 and £7500, and seven for amounts of £25,000 and over. This I think proves that the bona. fide investor and thrifty colonists were anxious to avail themselves of this opportunity of obtaining a remunerative investment. The depVwita of the successful tenders amounted to £23,555 Is. Payment of the first instalment produced £39,435 19s and of tlw second £59,899 0a 3d, while the first and second instalments paid at the same time amounted to £377,050 10s lid. A rebate at the rate of 11s 3d per cent, per annum was paid to tlw extent of £125 14s upon instalments paid in advance. Seven tenders were r-eoeived from investors in the Australian. States. Tlw expenses connected with' the issue of this loan of £500,000 amounted to only £2118 &$, or under 1.2 per cunt. THE PUBLIC DEBT. . The gross debt to the 31st March, 1903, was £55,899,019, and tLe net ■ debt £53,585,780. On the 31st March, 1904, the grosa and net debts respectively were £57,622,215 ami £55,064,328, or am increase of tlw gross debt by £1,623,196, and of the net debt by £1,478,548. This increase of our public debt is undoubtedly large, but I venture to assert that upon an intelligent analysis of the purposes for which these loan moneys were obtained, honourable members will not be inclined to find fault witih myself and colleagues. I propose to classify the loans, ac I have dome before, into two classes, namely, reproductive (that is interest bearing), and non-reproductive (that is not immediately interest bearing). Under the first , we? misled £923,070, including £150,000 for payment to Uio Midland Kailway bondholders, and under the second class we obtained £758,026, or a total together of £1,681,096. On the other hand, wo redeemed £55,900 of Consolidated Loan Act, 1867, bonds at the annual drawing, and £2000 of debentures created from the Government Accident Insurance Department were written off as being no longer , required. I have no desire to advocate. or even defend a large borrowing jk>]icy, but I must be pardoned if I look back with pride to the immense amount of good which has been done to our hard-working and of tea struggling settlers by our judicious borrowing, wliicl* has enabled large areas of land to be purchased at a fair price, and to be cut up for close settlement. Where once the lonely shepherd was looking after his widely scattered flock, tlkere are now hundreds of emiling homesteads and thousands of willing and prosperous settlers. Who tfhall say tluit euch money waa not prudently raised to be prudently epent? As I liave said, however, I am not going to advocate a large borrowing policy. -Quite the reverse. I am going to warn hon. members that although in some directions the London money market is in an easier condition than when I lasti had the Jionour to deliver my Budget Statement, I am quite observant enough to appreciate the fact that the purse-strings are, so far as colonial loans are concerned, still tightly drawn, and -will only relax when we prove ourselves self-contained and reduce our borrowing. It will, therefore, be nec-eesary for the Government to proceed only with ite most urgent public works, and to endeavour to make our available ways and means last as long as we can. In this direction I do hope hon. membera on both sides of the House will assist mc. Comment is often made upon the large dimensions of our public debt compared with our population. I do not think a proper consideration of the subject has been given it by individuals who ought to know better. Our political opponents are quick to seize tlw public debt table as a vehicle for attack upon the Government finance. A proper consideration of the subject ia, therefore, I think, of sufficient importance to delay you a few minutes whilo I endeavour 'to place before you a few figures and results which may surprise you, and cause- hon. members on both sid«i to agree wTth mc that, when properly explained, the volume of our debt, is not so very large, after all for a young, progressive country. In the first place, it must be remembered that in tlw early days of the colony's hisory, we were unfortunately often at war with the Maori population, "and, to provide for tihe sinews of war, several millions had to be raised. This imposed a burden of d-ebt to be deplored, but which could not Iμ helped. In 1870 a progressive cr public works policy was inaugurated which has n>sult;d in the advancement,of the colony by leaps and bounds. Of course, in carrying out such a policy, mistakes have been made in the past, and it is possible may be made in future, but I challenge any hon. member to deny that the progressive policy has not effected much enduring good to our people. To cony out the policy of making railways from one centre to another and of opening up arterial roads and building bridges over rivers, which were otherwise often death-traps, necessitated frequent appeals to> the money market, with the result of largo additions to our public debt. Well, you cannot make bricks without straw, and it was, and is, likewise impossible to build railway tracks and 'make roads without money. It is, however, to the increase of our debt by reason of the making of our reads thai. I desire to draw your attention. In the oWer countries, such work ix done by capitalists, who find the money, and the public debt is not increased one penny. Again, of late years our public debt has been swollen by the purchase of large estates for close settlements, by tlw borrowing of capital to tend out to settlers, who have been able to obtain loans from the Government on very niiffh more advantageous terms than they were able to do at the time from outside lenders, by the borrowing for the purpose of making loans to th? local authorities"!!t exceedingly low rates of interest., ra as to enable them to make roadi and buM bridge*, and our settlers

to get their produce to market. For euch and qther reproductive purposes our public debt Ikm bet-n, of course, considerably increased of lav* years, bat are -honourable members prepared to assert that our public (iibt t-hould not have been inere»wd m this way? Certainly they are not prepared to go that length.- Indeed, I am told all round that I do not purchase enough large estates, as the earth hunger is ttill so great. I am happy to «ay there are a large number of peopk, especially young colonists, who are eagtr to get upon the land. Local authorities are also complaining that roads and bridges urgently needed cannot be given to th* struggling settler*, because we do not lend them the money they require. The unthmKng may talk glibly of the burden of the pußfic debt, but I am of opinion there is no burden, and I feel quite sure there would be a great public outcry, and well deserved, if we were to absolutely close down our borrowing, with tho result that so many urgent works would be left undone. To obtain a more adequate idea of what the publio debt amounts to I have had a table prepared, wherein I show the debt per head of population year by year since 1892, eliminating the reproductive loans, euch as the capital account of the railway lines open for traffic, money borrowed for the Advances to Settlers Office, and for loans to local bodies. I also take out the money obtained to purchaee estates for clcstr settlement and other loans of a reproductive nature. It is most satisfactory to Ifind that what I may term the "normal" debt per head has decreased nearly Hi per cent, since 1893, namely, from £36 9i 7d to £32 7s 9d. Surely this is a matter for congratulation. In another column I show the debt per head upon the moneys borrowed for these reproductive purposes. I will now read the table and the results speak for themselves: — Statement of the yearly debt per head of population since 1892: — ■** m no to 0j S c. i J* c 5 C' *i 10 (* to fO t« (9 10 is 13 |3 hO f* wS Gross public debt gSSsSKSasBiSg ,, ' exclusive of repro'ftV^hpYp' ,I **'** ductivo loans. BSfSBBS2gS2£2Bg Indebtedness per ,_.,-. head population, •JoeiuMounSfctsoe" exclusive of reproductive loans. "{?£>(■? -MM-tosatow'eneßcoVMS Balance of public 2\BtfSfcKJs§pSgßji3», debt, reproductive 2S2shS2£&S*ggg loam. S?S2£S2gBB!S«BBB Indebtednew per MM*o*-SoS:s<oft-) hhead ' reproductive M loans. TRANSFERS TO PUBLIO WORKS FUND. For the past thirteen years, transfers of moneys from tlw Consolidated £und to assist tho resources of the Public Works Funds have been regularly made in amounts ranging from £30,C00 to £500,000. These contributiona make a grand total "of £3,755,000, a very handsome cum, which has enabled my collea,gue to undertake and complete many public works of importance which, uticler other circumstances, it might have been found necessary to hold over. Tlie importance of these contributions is ecareely understood, and is consequently liable 4o be underrated. I am confident that this extra amount of money collected from the people liae inflicted no hardship, while the saving of interest upon the use of tho money reaches astonishing proportions. Supposing we had borrowed in the London markets an amount equivalent to the swim transferred to the Public Works Fund, totalling, as Thave stated, £3,755,000, n.nd were payhsg interest on the loans at the ratea current at the time, our interest charges would have been increased by the very large sum of £119,800 annually. This ram has been saved in our expenditure, and at the name time many miles of railways and roads have been constructed, and other important works carried out by means of these contributions. Statement showing the money transferred yearly from the Consolidated Fund to the Publio Works Fund, and the amount of interest saved by such transfers: — Rate Year Amount, per cent. Saving. £ £ 1891-93 30,000 •1893-91 250000 1891-93 230.000 SJ 23,550 1893-S8 150.000 189G-97 150,000 1897-93 300,000 1898-99 423.000 1899-00 450,000 1900-01 500.000 iaai-02 500,000 1902-03 200,000 3 60.230 1903-04 330,000 3 14,000 Total 3,753,000 — 119,800 OLD AGE PENSIONS. As a result of tlw introduction, of tlie new system of investigating, refeered to by mc 'last year, which has been, made to apply to nil pensioners already on the ibooks, in addition to new claimants , , there ■lias been a decided drop in the number of new pensions granted, as well as a marked decrease in the total number of pensioners on the rolls, and consequently in tho expenditure under the Act. The new grants total 1063. as against 1386 in tho previous year. The number of pensions cancelled during the year was 690, which with 928 deaths reduced the total number of pensions to 11,926, or a decrease of 555. The actual amount mid dn pensions wad £203,164, or £6976 lesa than last year. Deducting recoveries paid to the credit of the Act, totalling £2320, the net expenditure for the year was £200,844, representing a saving of close upon £10,000. The coat of administration waa £3655, as against £3805 in the previous year. It is estimated that a sum equal to that provided last year, namely, £215,000, will be .sufficient to meet all claims this year. A, sum exceeding £10,000 was paid during tihe year to various hospitals and charitable homts in the colon J* for the mainteiuuuco of pensioners who prefer to reside in these institutions. In the various homes visited, tha pensioners were found to be well cared •for, and had no grievances. By reason of- the careful inquiries now made by. stipendiary magistrates, deputy magistrates, and others concerned in the ministration of the old age pensions scheme, I am satisfied that the present system resmlts in greater care being exercised iv tlw .gra-nting of pensions, and lias reduced fraud to a inindmuin. It may interest hon..members to liave some comparison with the old age pension echenie introduced into New South Wales in 1901, which I am enabled to make by penual of the initiffT report on tlie working of their Act. On the let Api*, 1902, the latest date on which" the figures can be compared, the number European pensions in New Zealand ''was 11,721, or 41 per cent, of the population eligible by age and residence, whereas in Sew South Wales the number was 120,135, or 48 per cent, of tha'population , 'similarly eligible. The present percentage in New Zealand on the same basis is only 34 per cent. In other words, where New South Wales pays pensions to 485 in every 1000 eligible by age and residence, New Zealand pays 351. I find that a-year's expenditure in New South Wales exceeds £500,000, whereas th" maximum amount paid in any one year in New Zealand was £210,000, and where according to the estimates for the year ISOo-4 it coste New South Wales £21.000 to administer its Act, in New Zealand the cost of working last year was £3655. The percentage of the cost of administration to the total expenditure is 4 per cent in New South Wales, as against 1.800 per cent, in New Zealand. Last year I made mention of the fact that an Old Age Pensions Bill had been introduced into the House of Commons, and a report has now been received of the deliberations of a select committee set up by that Assembly to enquire into the question. The evidence contains abundant reference to the working of the New Zealand Act, and the committee's report -is not unfavourable to the introduction of the scheme. More precise details of the working of the Old Age Peniiom Department appear

in the Registrar's report, as already laid ou the table. FRIENDLY SOCIETIES. Returns hare been received for 1902 from thirty-iivo central bodies and 462 lodges, courts, tente, etc., of the affiliated typeThe number of members at the end of 1902 was 45,407. The total value of the assets of the societies was £846,315, equivalent to £19 9s lid per member. Of isolated friendly societies returns were received from thirteen, with a membership of 5071, and assets valued at £4265. Thirteen Working Men's Clubs also sent in returns, of which the membership is given as 6531, and the assets' ac £58,611. Of specially authorised eocieties, such ac dispensaries, money clubs, banks, etc., the membership is given as 6264, and the value of the assets as £50,757, equivalent to £8 2s Id per member. If all the societies and branches of the Registrar had made the iequired returns, it Is believed the totel value of their assets would be.close on one. million. LAND TAX AND INCOME TAX. The receipts under the head of land tax exceeded the estimate in the Budget by £35,000, and those of the preceding year by £38,000. Of this latter sum, nearly £14,000 is due to the new scale of graduated tax in the. Act of last session, and the balance to it carried valuations. The income tax has again produced a substantial above expectations, and the results of the year bear testimony to the steady flow of business profits in the colony generally. ' VALUATION" OF LAND DEPARTMENT. The operations of this Department during the past year have brought the revision ofthe land of the colony to a point which enables mc to say that during this year little or none will be left unrevi&ed. So great have been the increases in value, and co numerous the changes in many parts of the North Island, that a large number of districts have been twice revised since the passing of the Act of 1900, and it is possible that in several districts a third revision will require to be made during the

present year.

' GOVERNMENT ADVANCES TO SETTLERS.

Owing to the unfavourable conditions prevailing for raising money, the operations of the Department have been somewhat restricted during the past year. Since February last, the office has not entertained applications for larger sums than £500. The balances at credit on March 31st last, in the hands of the Public Trustee, -were:—For Sinking Fund account, £168,500; for the Assurance Fund account, £91,400. I have had at table prepared showing the estimated saving of interest to our worthy settlere by, being able to obtain loans from the Advances to Settlers Office instead of having to opply to lending institutions and individuals, to wltom they would have had to pay a very much higher rate of interest on their mortgages. The ninount (-aved is estimated at very nearly lialf a mimon of money, which saving 'lias undoubtedly been employed in the improvement of properties or tho acquiring of stock, thus becoming of 'great good to the settlers themselves, and consequently of benefit to the whole community. Table showing the of mortgage interest to eat tiers which have obtained loans from the Government Advances to Settlers Office: — 8O CO O cO CO QD CP ■I * " ' en v* w *" — 03 ™v 55 tione. a^D S 82 w Interest at 5 per cent., 38K5?Jβ -jSe the department'srate. • OOOiOOtnuOi? ta ts to to h »-» t-* J5 B>p8SSjnß Interest at 7J percent., which wo<uld have ..**.K*.&BS-»& c - ruled i{ the dßpart . luent was not in exooojoqocto' cc " ©jo e>« *._io o< -j bSh!ssssi£s Saving to SoSwooiets-j" ecttleri. Sow, assuming that £493,500 represented the saving to mortgagors who have borrowed from the Advances to Settlers (Mice during the last nine years, I tihink it would not be unfair to assume, that all mortgagors in tlve colony who have renewed their mortgages with other lending institutions w private lenders, Jiave benefited to a similar degree. The ruling rates of interest nine years ago ran from 6 to 7 per cent., while until very lately they ran from 4j to 6 per cent. It is found that there ara in the colony mortgages to the extent of about £40,000,000. Assuming that the Government Advances to Settlers Office has passed through its accounts mortgages representing £4,000,000, 'this would have been about a tenth of the total sum represented by the mortgages current during the period in which the Advances To .Settlers Office has twen in existence, and the saving in interest to all mortgagors during that period would therefore appear to be a sum approaching £5,000,000. In arriving at this estimate, however, it must be borne in. mind that years ago large loans oould doubtless be negotiated at 5 per cent. I ehouki tlie:eforo say, if the cum mentioned were reduced, on this account to £3,500,000, the estimate would be fair and reasonable. This saving exceeds the whole amount borrowed under the Advances to Settkrs scheme.

STAMPS.

The results of the revenue for the past year disclose the fact that the SUwnp Department is'third on the list of revenue producing Departmenta. The rapid and continued growth of the business and inCteaei in the revenue of late years have been almost -phenomenal, and are further factors in proving the continued prosperity of tl*e colony. As I have already mentioned, for the first time on record -the stamp revenue lias exceeded one million pounds at the close of the lasi 'financial year. Tlie receipt© in excess of those of the previous year amounted to £100,345, there being an increase under every head except that of native lands duty, which has of necessity diminished. The number of impressed stamps made during the year amounted to 8,767,367, o» againet 7,649,826 for the previous year, showing the enormous increase of 1,117,641 for one year. The value of adhesive stamps issued in the year 1896-7 was £641,264, and in the year 1903-4 £960,242, showing an increase in seven years of £318,978, nearly 50 per cent. These figures do not include the beer duty stamps, which for 1896-7 were£72,27l, and for 19034 £102,650, an increase of £30,379. The number of stamps issued of the denomination of id, Id, and 2d, in the year 1900 {ti»t is the year prior to the introduction of the universal penny post) was 60,257,760, while for kit year the total was 69,782,358, an increase of 9,524,598. The expenditure of the Department is lees now than it was twenty years ago. The appropriation for the year 1884-5 was £30,571, while that for the last year was only £28,000. PUBLIC HEALTH DEPARTMENT. The wisdom of the passing of the Public Health Act, 1900, hae again been illustrated. It lias given us a property organised Department, capable of dealing not only with our internal sanitation, but

an effective instrument by which the colony can he> safeguarded against disease froin~ov*r-*>eo. When we bear in mind the cost of dealing with emallpox, and the commercial disorganisation which the prei-Mico of this diz>iVjf occasioned in a neighbouring colony, you will haw no hesitation in agreeing thah the comparatively small sum spent in combatting acd stamping out the recent outbreak m. Cltristchurch, is at once a justification for and a measure of tho efficiency of the recently established Department of Public Health. Within a ffl!* days of the notification of the first case of smallpox in the colony, the whole thing was well in hand, and as a result of the vigorous measures taken the disease was effectually limited to its point (4 appearance. Again, with regard to that greatest scourge of modern times, consumption, the war against /it is being carried on consistently and successfully. Great additions have been made to the sanatorium at'"Cambridge, and already marked benefit has resulted in many casee from the treatment in the ©pen air. The example set by the Government is being followed by private individuals, and by_ come of the friendly societies. Through the legislation of last year powers were given to the. various Hospital Boards throughout the colony to erect suitable open-air annexes for the treatment of this disease, and many Boards, have already taken advantage of this privilege. A disease which yearly in Great Britain alone claims more victims than did the Boer war, is one which we in common with the greater world outside, must strenuously fight. Competent critics have declared that nowhere, not even in America, has a finer weapon been forged wherewith to meet the enemy than that situated on the crest of Maungakawa hills. For this work in preventive measures I think we may safely take not a little credit to ourselves, and the cost of this Department, details of which are given in the (Estimates, is a mere cypher as compared with the direct monetary saving, and with so much sickness, death, and sorrow obviated.

EDUCATION.

Much solid progjreas has been accomplished in regard to education during the past year. The passing of the Secondary Schools Act, the National Scliolarships Act, and the issue of the carefully revised syllabus of instruction in public schools, mark an important era In the educational history of our colony. The large majority of the secondary schools have complied with tlie Government's scheme for free secondary education. The governing bodies of come secondary Institutions, however, have declined to mate the necessary provision for free places as required under the Act, and Parliament will be asked to deal with this phase of the situation. Only by compliance with the conditions laid down can full advantage be taken, of the money derived from public educational endowments. A liberal vote will be ashed for this y<-uv in respect to school buildings, technical education, and the payment of scholarship f««. The total amount spent on school •buildings laet year was £116,614. It is the Government's desire to meet, as far a» possible, the requirements of education in the backblocks and newly settled districto. In numv cases unavoidable delay in dealing with such appHcafione often occurs, owing to ilie necessity for inquiry and investigation, but Parliament will be asked to provide a. liberal vote for these HDeciiil cases. During the reoess an additional amount of £5000 was authorised in coniiwction with ths erection of the Victoria College buildines, thus maldnig a total grant of £25,000 towards this purpose. After considerable delay plans of the buildings have been approved, and a tender accepted. The requirements of an intelligent democracy entail a liberal expenditure in respect of 'Aβ educational system, and members will not begrudge tihe amounts allocated for this very necessary

purpose. DEPARTMENT OF LABOIiR.

The prosperous condition of the colony has lightened one.branch of the Department's work, namely, the superintendence of " unemployed " transport. Tli« number of men applying for work was comparatively f#v. and the difficulty of meeting the applications easier than formerly. Notwithstanding the steady and continued influx of workers from Australia, labour was sometimes scarce and costly in the country districts, wliile tlie skilled trades in town received unusually high rates of remuneration. The duties of inspectors of awards have 'been heavy, and occupy much time and attention. In the'year 1903 the cases brought before the Ourfc numbered 120, and there are still about 150 waiting hearing. Few of these eases are industrial disputes, but are mainly for breaches of awards, thus showing , how necessary the appointment of inspectors of awards was in the interest of tlie operative classes. Tlie expenses incurred by the Department in bringing these cases are reimbursed to a. very large extent by tihe Court. Factories increased in number beyond the annual average, 758 new factories employing 4598 workers being added to those enumerated in the last report. Over £2000 Ikis been collected in factory" (ten. a sum in iteeJf sufficient to meet the cost of administration. Aisartiions nre sometimes made that tlie wages of workers have unduly increased of late years. Answering these I would point to the large expansion of business which has Trackers place, and the increased values of property in the colony. In Wellington city alone the capital values have risen from £5.865,778 in 1891 to £10,935,689 in 1903, while £300,000 of this increase has been added in the last five years. The rating value of the four chief towner in New Zealand is now £27,972,747. These facie taken together with the aidvanoce in tlie price of commodities, fully justify any advance in the wages «of. the workers caused by tho carefully considered awards of the Arbitration Court.

PUBLIC TRUST OFFICE.

This institution continues to make rapid progress. Notwithstanding the reduction in the senile of charges aud rates of commission made witliin the last two years, the surplus of income over expenditure is considerable. A comparison of the figures for the present year with those of five years ago proves its steady growth. On the 31it March, 1899, there "were in" the office 2491 estates of all kinds. On the 31st March last there were 3470. Tlie value of the estates at the respective periods were £2,110,316 and £3,152,882. T!ie number of wills deposited in the office by ner&ons who have appointed the Public Trustee their executor has increased in five years* from 700 to more than 2000. This is convincing evidence of tlie growing confidence of tlie public in the office. The large increase of business which must take place in the immediate future will necessitate an increase in the bead office staff and better accommodation. A new building will shortly be erected on a very suitable site which haa been secured in the city of Wellington. The cost of a. euitable , edifice can easily be provided for out c-f profits already earned by the institution without any expense to the State.

life; and accident insukaxce department.

The number of new life insurance policies issued by this department during the year was 3137, assuring £702,350, representing an increase of £22,947 on the previousyear. Tlie death claims during the year were favourable, being £4468 lees than in 1902. The total amount paid by the department since its incept ion in respect of death claims and matured endowments hae been £2,571,019, and the total sum now assured by the department is £10,060,262, or including bonuses £11,111,807. The department hae no foredostd properties on its hands at present, and the satisfactory nature of its securities may be gathered from the fact that £415 only was overdue at the end of the year oat of an income from interest of £152,353. The business in the accident branch has increased substantially. Premiums amounting to £24,381 were received, as againet £14,100 in 1902. The funds *how an increase of £248, and now stand at £1255, but it will be seen from Uta revenue account contained in the annual report of the department that, notwithstanding the great reduction that has

Wn effected in the ratio of.the expenses to the premiums, tJw premiums have b«n only sufficient in the aggregate to tmtt the claims and expenses, nnd leave a slight balance in favour of the office. The daim experience of the accident branch is being carefully watched and analysed, and in time it*will be possible to grade tlie rates so as to equally meet the nek ia each oc-

cupation.

STATE FIRE INSURANCE.

In respect to commencing the business of State fir* insurance, considerable difficulty has been encountered. Applications were called for tho position of general manager, and ultimately Mr J. W. Bnndley was appointed. Tliia gentleman was for over twenty-two years general manager of the Victoria Fire Insurance Company. Since his appointment he has been through the colony investigating and selecting for recommendation suitable district agents and «sub-agents. The private fire insurance companies doing business in tlie colony having decided tliat they would not accept reinsurance from the Government Fire Insurance Department, other arrangements have had to be made,. which has caused some delay. The general manager anticipates, however, to be able to commence operations not later than the 30th September next. It will be satisfactory to hon. members to know that the private fire insuranoe companies have since the Act was passed reduced their premiums, especially on properties in country districts. The total sum asked for the initial expenses is £6360, which is for the whole- of the financial year, but it is anticipated that not more than £4000 of this sum will be expended.

FARMING INDUSTRIES.

[ The year has been a successful one for all classes of farmers and stock owners, and general prosperity is apparent throughout the colony. The total value of the exports of the principal items of farm produce, although slightly less than the phenomenal amount for the year 1902-3, ie more than two and a half millions in exoess of the value for tlie year The export of wool is less in quantity, but owing to the improved prices ruling the value has increased by £598,242. Tallow shows a decrease in both quantity and value, and the number of sheepskins is considerably less, and although the total value shows an improvement, these decreases are all attributable to the changes made from sheep raising to dairying and to the reaction following, and to the abnormally large export of frozen mutton and lamb during the year 1902-3, which wna followed by a very heavy snowstorm in Canterbury and North Otago, by which many thousand sheep were lost. In view of the losses sustained by the enowstortn and. the extraordinary dxaiu then made upon the. flocks of the colony, the figures for the year now under review are highly satisfactory. The output of butter shows an advance of about 51,000ewt, the value being £147,725 in excere of last year. Moreover, the quantity of cheese was nearly 12,000cwt greater, and the value improved by £25,266. The continued progress of the dairy industry is extremely gratifying, but in view of the decided fail in the* price of both butter and cheese lately experienced, in the Home market, I desire to impress upon milk suppliers the desirableness of introducing the best blood into their herds, and of regularly testing the yield of each animal, in order that the amount of butter fait produced per cow may be gradually increased. It cannot be too strongly urged upon dairy farmers that a high grade herd will pay better when butter fat is worth 8d a pound than an ill-selected one when the price ie 10d. Owing largely to the renewed ability of Australia to supply its own requirement*, and the diminution of the demand from South Africa, the export of grain, shows a falling off, especially in oote. It was, cf course, expected that the break-up of the drought in Australia and the withdrawal of the bulk of the troops from SouUi Africa would largely affect iito demand for New Zealand cereals ia those countries. The export of grain may now; be considered to have resumed its normal level. The output of New Zealand hemp still continues to grow,. both in quantity and value, and there can be Qβ-doubt that the Government grading of this product lias enabled it. to reach and hold markets in which it could not have otherwise o&tained a footing. Commercial fruit-growing ie gradually becoming established, in the colony, and farther provision for the treatment of this product as much needed. _ Aα expert in canning and preserving fruit lias been selected in London, and will take up his duties at'en early date. It ie hoped ( that fruit growers will see the advantages of combining to export fresh, fruit,, and to erect preserving factories in all suitable localities!. If the industry h developed along these lines, fruit will soon take an important place amongst tEe colony's exports. With -wool, sheep, and lambs adtheir present prices, although reduced prices is obtained for our dairy produce in the Home markete, the outlook for NewZealand farmers and pastoraltets was never brighter than at present. CROWN LANDS AND SETTLEMENT. i No effort hae been spared by the Government to push on with- eurveys, and the throwing open for (settlement of the remaining Crown lands. Kealising that, speaking generally, the beet part of the public estates had already been alienated, apd that it was necessary to offer further inducements and encouragement to persons desirous of acquiring and occupying areas of land in the rougher and mori'.wiriote districts, the Bush en^fiwwhp!'Crown Lands Settlement Bflt was introduced and passed last session. This Act • has been brought into operation wherever appHcable to the large ana of Crown lands wiubh has hitherto been lying open for selection, and also to all new blocks which have been opened. It came into force too late, however, to afford an opportunity in the past year of judging of its influence upon but the reports of Commissioners of Crown Lande indicate that the concessions and benefits which are afforded by the Act are highly appreciated, and it is anticipated tliafc a considerable extension of settlement will be the result. No lees than 2,714,147 acres of Crown lands were thrown open for eeiteetion during the year. ..Whilst recogaising that a considerable portion of this area had been offered in previous years, there is no doubt tliat its reelastifioation and valuing has been of great benefit. Deducting the area, thrown open on the pastoral run system, the area, wliioh waa offered almost wliolly on settlement ; conditions amounted to over 9,000,000! aerc-s. The area disposed of and handed over for occupation and improvements was j 402,794 acrew, aivd including the lands for* settlements estates, there was a total addition to the Crown leaseholds of 512,357 acree. This will ensure the placing of a large number of additional persons upon the land, who will ere long be in; a position to add to the wealth of the community, and increase the volume of exports and revenue, and ba enabled to establish them-, selves and families in comfort, and no become independent of the Government or labour markete. A epecial feature of settlement in tine North Inland wae the recognition of the claims of the co-operative labourers engaged upon the railway and road works for an opportunity to establish themselves upon the land. The Superintendent of Village Settlements was despatched to interview the men and ascertain their requirements. All Crown lands suitable for the purpose were surveyed into allotments, and ballots were held, including all those who had expressed their desire to obtain sections, preference being given to married men, with the result that 148 men secured holdings aggregating 27,059 acres under the improved farm system.

LAND FOR CLOSE SETTLEMENT.

Tliirteen estate* were acquired by the Government, comprising an area of 140,356 acres and representing a capital value of £661,340 and an annual rental of £33,067. These were handed over to tho Lands and Survey Department to be dealt with, and prompt steps were taken to survey and prepare the lands for settlement.. The greatest interest woe manifested by the public and there was keen, competition with the result that almost the whole of

the sections were at once alloted to 4 superior class "of settler*, who have in »■ great majority of cases proven their fcotut tides by entering into, poWMmion ol «nd undertaking the improvement and utilisation oftheir holdings. . '. ■'■■'■-< ,' '. ■ '■■';' It -will be interesting to review the rei. suits of the policy inaugurated by tho Government under The Land for Settle-' awaits Act, 1892. The acquisition of the estates for the purpose of providing agricultural and pastoral holdings ana «uo> small areas for.the settlement of artisan*, mechanics, labourers, and other workers engaged in the industries of the country, has been satisfactorily pursued ever since tho oommencemesit of the j>olicy. Ther* <u» now recorded upon the: registers of the . Lands Departments 129 estates,-compris-ing an aggregate area, of 615,581 acres. Of tins area 576,045 acres have been sub- ": divided into 2729 holdings, clasai- j ficd and valued at £3,030,462, and ore producing an annual rental of' j £151,423. The receipts during tlie past \ financial. year amounted to £150,883. Two | thousand and seventy-six houses have been i erected upon tho properties, whilst 8255 .-. persons are residents thereon,. and the > value of improvements effected is'£6oß,6ll. I The total receipts, almost wholly on ac- f count of rentals paid into the Treuurr ':' since the inception of the system, amownta to £564,621. The accounts at .the 31it March last showed a.profit .for the yew of; £49,398 available for the purchase «f lur- ; ; ther estates. Reports .prove tliat the'ten- 5 ante satisfactorily maintain the lands in : their iholdings,*"and the improvements';: thereof, and that there is no undue d>; terioratio% through an excessive cropping.. V or neglect. The returns show that in almost every instance the lands tor.C settlement '[ tenants haw ettabliahed'wb-|<: etentiel and comfortable homes, and are£/.. working tJieir holdings with induttry •odj'j , and with great profit to eelvee and advantage to the State. It' MM I satisfactory that the policy has been atj.|,* tended with mioh undoubted success, •»*.s: that it now has the approval of ta»ny'wh.*"|Y contended! that attention should be giv«JJs'i in tlie firs* instance to the settlement of ordinary Crown lands, overlooking fact that close settlement is of.the V&M most importance to tho colony, and th»& the acquiring of estatee for" occupeAio||| meets the needs of the special class of l»jj£| son's who are deserving of tlie' beet co%>| sideration of the Government. rc'J ' FORESTS AND' PLANTATIONS, ff The interest manifested in recent ye*£fi| in the conservation and utilisation of- ti»| indigenous forests has in no way abat*&| Tliere can be no question - that. the pn>| servation of Hie forest* of. the "colony fm one of the greatest importance, and affects the. well-being and prosperity ijiLthe community.' The Government kM given earnest attention? to this 'questMj during the past year, and has caused {«r« ther investigations, inspections, and ! fm , praisemente to bo made of the thnberia various localities. Though' rt has not bMI possible to ocenplele • tlw provisional fai' speetions alluded to, it.has. been eabtr; tamed that, excluding the Taupo dittrteb , the I approximate quantity of . mittiig timber now , growirig'. uponi Ciwte lands ia about '20,000,000,000 njm > - iScinl feet, which experts consider e|iitl to fifty-five years' supply «* tb/ pt«»Mit, ■ rate of consumption/ It is estimated stfufc if the milling timber upon native and fwe i hold lands be fully otiK*ed, oiir t*|W c* e * meats wall be satisfied for the next eepMftjr " years. Closer investigation' has dispabed : that the quantity of kauri timber nhwlning for utSlisation will only l*st ibout twelve years at the present «nn«»l : The knowledge that the timber' wftjHei have been so largely reduced led WHhe consideration of the question of the ti*bcr. regulation, and «teps have .been t«kt)k to safeguard tire whole of tlie remaininflaill- . ing timber, and to deal with appUetion* for the right to erect sawmills end cat out :, the same only after full inquiry,' so nk , ■ to eneure that there shall be *s littl* wisU as poceible. Every enoounigement would be given to private owners of foreit* containing milling timber to preserre tb* . same, co that all tlie resources of the country in this respect shall be used? for the -v common good and be av»ilabl* »nd be used as far as possible on broad *pd o»M----prelieneive lines, bo $» to'mainUin tb» timber supplies* of Kew Zeohind' Witil planting operations, now ia ppoffMi snd contemplated, result in adaitioss being mode to tlie indigenous timber>»tippl»», . and in time to wholly replace thektter, M it, would be disMtroes if the cofenywM ' dependent upon America, Europe>,oc Aw- ;: tralia for the bulk of our futtu»: requirenents in timber. Planting cannot' be don* : I without a conddewbte outJay.V The. Government have consequently enWgtd -the./-:: operations by employing saditkiaT prison ■ labour, with'» view to expenses and affording healthful ;»nd profitablo work for the best claw of; pri»oo»ni, thus condoomg to their moral' snd physicsl improvement. We shall, howem, fcave to incur much greater exp«nee ii," providing for the futar* requir«j«at« of thi wtoefr but all will agree that nothjig is B»r« necessary or urgent, and we met givsdu*'; attention to' itan hnportant ji»tter. Ai c< showing what hie already beetj'done I eey •, quote «ie following figure*:-&Durinf im ; ! ': past twelve months 6,644,0w trees hive; V been grown in iHS imrseriee if th« Lfcndt and Siirver Department, toaUng »-tot*l to date of 1,829,300 treee; ;--a.;tbe*t" : tbeP»V'?j have been planted out 2,461,0P0 trees on tn x are* of 1040 aoree," whilst tlf total planted | out to date is 5,M9,000; ttijfce.oa: ii.tjrttl ? : are* of 2489 acre*. Th« nftnber of now In the nureeri«e it 1933,000. expenditure on the above wire fortheytftT wok £18,196, and the totaifveltte of stock ; £42,901. During the corrdUt fiiunci»l yiur • it ie proposed to plant fiifiilriUioa■■tUMt.; W« hive the neoesury. mdhiauj, know- 7 ledge, and skill for the ut*TtAking, .«Bd it ;: only remains to carry on'Jhe operitloni tc ajarger extent thaß4ith(po.- r, -'i.-0v;-. , 'f^-'^f MAORI LANDS Native townships and Oto- ',; ranga have been placed-li the market by the Maniototo Puwharefn Council, and ;'j have been successfully ;li»pc4ed of. AnQv. tlier township at Waioitu, between Roto- .« rua and Teupo, will beMioed ia the BMr- rV;: |: ket on tlie 28th Julyi end inapt of yet JS another township ut /ftaiiiarunui, on the ■; North Island main tnpc railway line at the head of the Wangalui river, and of therf?! Ohotu and Paetawa- fclock*, containing j -J about 67,000 acres atif 3400 acwe re»p«c» M tivdy, ate just. abo* completed,- Both : i| these blocks will be jjarad on the market ,| in August next, Ohotqfor olose «ettlement .;<. and Paetawa in grarig runs- ,Meanwhi!* .j tracks are being madj through tl»e Ohota 01 block to tins different actionsfor the accommodation of »tttlere wio may «*carfe \Vhen thete lands aw dispowd of a. nn'm- ;'| her of other blocks n the WangahUi trict, now in tIW 1 Jnde.' of the Council/, will b>e put undor Jfer to the puHks Ott7jfi' terms almofct similarlb the perpetaal leaea "\f\<s under tlto Lands Jet. .The difficult!**;-ti arkingout of tliie *nt of funds ..forpw*'; :"si; liminary ar4 other Aceswy incidental «x:.i;'| pensc®, and prejadfceii agaiiwt. the. departttre, which hare. Iterofofons. besot' tim Ji| opening up of ]and>py Maori Councils, *iv :i|| gradually disappeanig. wluch: ';, has resulted so fad an 4 wliwh;is aotki-'; U pated with rospecifto Ohotu and PaetaJa' Hook* wiQ, it '»,y| hoped, be an. objjet lesson, -which wi| bring tlie Act in» fdl swing in other district* where Saftri land* are : lyinf. waste and unproictive. The being constitutcJ m seW-supporling bodi?», but without funds!to start witJb., .tlie..;d&'>j«J| ficultiee of the pokion will be ,«f oaren*. If the policy wlikl the Act lays down to get a fair trii, itwJH be neceeearf:s3 for I'cirliament to* grant come financjiiil assistant to place the ; yari«»;k|| Councj|s in full wfking order. Any ■ttcaj!fj if gravy, will be to the of Bia»H kotts to such Councils orfy.'"j show I sufficient «gi» of competency '';*JW*SM euc«fis», to be wkuwl on tlie lands dealtl irttb, and b be. repaid in p«iodic«||| instajmente out $:-, '?*venue./Before: campr>*CTOyive et*fc«& °l can i>? fully inaigirated a cental ,*todh^ ttkitia at all Ma<&i«a4» wi ? be and;*hm this jufonnaboo;»_ ava*ko>!e,«|^ to opuwng np every aoenot; *W«4Jsa| the Maori for their «*&** •»*

y" port, to legislate in tin* direction of eiml> piifj'iittf l, '"' prowdurv by whioh Uie mr--1 j)liis Maori lands iuv to be placed undf-r {in , control of ily. , C<>uiicUc. At pMWint tin- ilifficultk , * in tin* way are Hiimwt iiir ' (iiiicraW* , , not tlw least of tlictii luing tlio p lV jU ( ]ict-x ari?iius out of the suspicions of viliicli tlw Maori mind is <.v<r j«teo^:H ,- <l i' l many by th<- ar!i«»n i.f }.'uri>i>':i:i fri-ml." and TJ;-- spin. ~' ~'r Tv A.-t—t-ii-'t ;•« ttv up in iiw(Jiiv^Tiiiix'Tit. ihr.'iiu'ii !]i,- i lii Miii'ln.-' Mi""' l ! ' i:: * ! -- , "iiivli :ir.> lyi;,|; i<ll -- ,I'llllii'>•<■'>' "• t'linl. :iml i( «o Iliv <■) lie tli'. , 'intv <•' l';ii - li.iiii' , rit i<> i;.v-- rvtrj , (id!J) MININ'i!. \)l J i• itiil 11 ili.ie ln-< Iv-•■ ri no pli.nivriu-n.'il de , elnpmeiii in j»o!rt mmmi: «mcv my !>..-! (it.itfiu- lit, t.lii- rt-turns < ■••itimte to «!i'>\\ eji iticp'ii.*-, ;iu<l in thai slat< UK'tit ilmt ill- ex'xtrt fur 1&03 wiraUl t'xco"d £2,000,000 nj.s'ixMili-cl. tlie t ctu;il ♦ xp«Tf fur tii« rear having been a. viilu.- of '11 k> for the fivo months fii'l.d 31.«-t M.iv I' l -" , nli ,l "' ii-ii incifii«; j of 2-1430/, lalueit "■' £10,053 a* compared «itli t!ie f, jX'riciil of 1P.0.5. STATK COAL MIXKS. 'lII.' (1, vili)])nitfit work at the T'oinl. KJitiLcili iniiii , . (It.'ytin.utli, ati'l tin- S»(ldnnvillc niilK*. \Vtslj)(iii, is rapidly approauh,ll r i-iiiiiplt-tion. At l'oint F'lizalMrtii the yiZ\ a«tuis have Im>ii tappi-<l hv two tunj,..h of a Iriiffth of 660 f<rt aii<l 750 fe»t j.HiKvlivt'l''. arid a amount of plant ins b<<-ii iiiftalkd. '1 h<? railway, which |iyi< Imeti utnltT <(instruction by th*.- Public W'urkM l)tp;irtni< nt, for tho convoy a ihx- of ilu< to«l from the miv? to the jwrt nt (iitTiiioutli, i« now X) far <.-ompl<t<<l as «,i «'i:ab!t? the shipment of coal to Ix- starred. A f'- w weeks more should iko this work Hnikhed off and taken owr by the ■ IJcjiartnuini of Working Railways. The ' coal w ndmitUilly of first-claKs quality. i. Such practical ttsts as liave been liiado '■' prove thi.x, but aa the trade in this coal \ wxs just been inaugui'ated there has been ' iwj time to ascertain the practical results ' obtained by Mio Railway Department and others to whom it has "been supplied. In order that a thorough test of its auitable- ' wye for admiralty purposes may b<. , made, the Government had supplkd 200 tons, free of cost, to 11.M.5. Psyche at Wellington. The lernilt of this trial will be awaited with interest. Tho totad quantity of cwil railed from the Krddonville mitw> - and disposed of to date if 16,201 tona, of which 8866 tons were supplied to the • Roveroment railways, and 6608 tons for itewnere' bunkers, the balance Ijeing di»ptwed of to various consumer*. The general development and' equipment of the iitatie coal mines haw proceeded very well, and tliero is every reason to aniticipate eatisfactory results.

I ' MIDLAND RAILWAY.

■ My colleague, the Minister for Public Works, mentioned in Ms Statement last year that a considerable amount of eurvey work had been done on tho Arthur's Pass lection of this line, at tho instance of Mr lingua, the consulting engineer, who was cnlkd in to advlso on the selection, of the beet route between Otira and the Bealey, od(1 that full information to enable Mr Bogue to prepare hi» final report on the matter had been sent to New York in October lost. For eomo months paeb the Government have been in almost daily expectation of receiving this report, but it ]in& not yet come.to band. By the lust » Ban Francisco mail, however, a letter was received stating.ttait although tho full text of the report was etH.l not quite ready, Mr Bogue had fully made up his mlrwl that the A 4 line would be tho beet one to * adopti' Thla is on© of the long tunmel lines suggested by the engineer* of the Public Worka Bepaxtment, and the remilt of tlw very exhaustive enquiry, therefore, is U>at the advice reoeiTed by the Goveranvent from its own engineering staff is ; fully confirmed. This ia very satkfacand shows that the confidence reposed by the Government and the country in tlie engbeere of the Public Works Dβi partment ia not misplaced. The eurveys, - elaborate and extensive as they have been, ~ have etiU been only of a. preliminary character, aiul now that we know which line is to b* adopted', the next step mil be to get it completely surveyed, and thia will bo done as soon am possible. Tlie ' TadmoTe-Springfleld ami Reefton-Inangahua section* of th* Midland Railway are proRr&xeimg on rapidly as the moneys ol- ' located thereon permit. Further propoende in reference to the Midland Railway 1 will he submitted in. the Public Worka Statement.

j%.. RAILWAY CONSTRUCTION.

The construction of the several railways In hand ccaitinaea to make eatisfactory progßee. On the North Inland Main '' Trunk railway a length of 38 miles lias been opened for public traffic during the ■ • last twelve months, and euch favourable progress is now being made with Hie work that tile northern and southern ends will shortly be getting into touch with one another. Of the total distance of 426 mile* between Auckland and Wellington, . ' no less than. 323 miles are now open for ' Tegular daily passenger and goode traffic, ; • and the trails are kid for 21 mites further, nnd the forautwn works are either completed or 'in progress for 27 milee beyond , that, making it total length finished or in progK*u» of 371 miles, which reduces the length of the untouched section to 55 miles, j • and thte length ia igetting shorter prac■r , ticaJly every day. The Otago Central raill) yay la also progressing satisfactorily, and T public gapde trafflo ie now being carried Oβ far BarOphir, whiTe the formation works ? arts in hand well on the way towards % 5 .Alexandra. The extension of the Blen<■s heinvWaipura railway ie progressing satisi \ factorily and expeditiously at the Wajpara, I S end, and ere long Hie line will be opened I ' . to Cheviot. For the present only operaW, % tiona have ceased at the Blenheim end, T' " nnd the line etope at Seddon. So soon, however, m the taking of come o£ the large estate* l»we been concluded, a furf ther section from Seddon southwards will p , be proceeded with. Other railway works 'have been in luind in different parts of the colony, and fair progress made with ,j th*m, full piurticulam of which will be I' given to the Public "Worke Statement. ' WATER POWER. ! '1 he subject of natural water power for ■ .-. the transmission of electrical energy ha» H"t n-wived considerable attention, and, coni; % n-slent with the general wish, on electncal nnd hydruiilic expert (Mr L. JI. HanI . i.iek, M.A.1.E.K.) was eniiuged to report 'j iij.on the uoUiiiy. .Hancock's visit to the colony occupied eighty-two days, d«r----i ' ing which he travelled 4100 miles, making minute enquiries nnd a personal inspection * oi ionic thirty suggested sources of powiM , , f. inclLding our principal Htreams and waterV falls. His report is now to hand, und ~, - ■»!)! shortly be in the hands of members. [' Ihe local bodies of tho colony and private J (.nmpiinies are directing their tittenti«n to \ the cheapening of motive power through J; ' the utilisation of tho water power ot pre'V «-nt running to waste. Motive power be- :* Jiig a leading factor in production, the \ « cheaper it can bo procured the more pros■k V er °us °"r * n^ust ;Hfl§. w '" become, and a A cheap power is "especially essential, t weinif that there ie keen competition with i couiiFries where electrical energy is largely £ , used in manufacture. The, following paraIs gr<iph from Mr Hancock's report is worthy I of a place in thifl statement: —"ln closing |1 1 would say that I have seldom soen so f promising a country. lam sure that you 1 will finil that next, to your railways the j| utilioatiun of your water powers by'means ,}. of the electric transmission of energy will l£ <lo more to advance your material interests j , and to mitigate the evila of our civilisation I than any other agency you can employ. !jt The world U looking to you for the soluA ■ tion of many of its difficulties. The in- :| Testigation you have had mc make is in I line with anewering their queries, and the § ttilitation of i-he. forces of nature is one % of the quickest means of reaching the solu•f tion." 'f EXPENDED BOUNDARIES OF THE § _ ' COLONY. Jj[ V. Matters in connection with tho Cook J- »nd other inuexed It-lnnda have prosrres.'Cil ;s[i dua'ing the year. The i-e----i§ ceipt» of the Cook Inlands Administration |i . . for tli* year 1903-4 were £5310 4s 3d, and ■I tie expenditure £4558 3s 9d. The eiports

amounted to £34,740. and the import* U> £31,886. In Niuo, which by "The Cook and Other Islands- (Jevcmnu-r.t Act Amendment Act, 1903." was plattd uadsr ii i*.'parale administration, the revenue for tliu iiiku;<:Lal yiw v..v £19hO lv Bd. and the expenditure £1244 11s 4d, while the export.- for IjO3 (iwclu-ive of r«»htp;nent3) iiiii.:imt<'d t<. £760 l 13-! 2d. mi<l :he imports k> ££0-01, <.f which iatt'.r jffli-unt i-6532 rrprcstnts liie vaJu.; uf £omh liv.v N'WZ.. li ] i .;.d. I'OST OITK'K SAVING HANK. 'I lie l'<*t Mfli.e Savin--. Uaiik :-.i!l c<.niiiiii. ■< t'i !<-:iui in ;i iiK-skftl tin ]'n.-pcvi/H- i■'ili-liln.n of thy wock.-r:- «f Tho ' uli.jiy. ih.- yf-.u- 1905 t-ii;- nuiuucr i'! il.^ ,, " ,^":*1 ' jiocoums jncrca-ii'd i>y 16.210. ijj iii j a<l liiL' totarl «.j>t-i) ;i-.counts up U> <.'"f3.o/j. or r/no in every 3.42 of population. Hit! baiiincf ut iivdit on 31>t I)<'uiiLbrr LMclivd the.-urn of £7,388,682, dUclwiifcj a net Lnmase during ;ho yvar of ovr-r hiiH v milium. Tne averauo iunouut at the credit uf each d«'po»it«r v. a.-t £30 6s sd. PACIFIC CABLE. Tiie working of tl:*» Pacli'. , Cable, ;w v<ll us tiie (.'iitsatlian land lines and tht* Atlantic Cabh* wrvke. luis bn'n Kitisrfaotiny. New Zpilaurl's prr>poil.ii.n. <if th" ilelk it fiir the current vmr wan e.',tim:itvd at £10,058. It .-hoiikl". however. Ixi ro-coll<-ctpd that, bwmli'H <nd:nary itein-i of expenditure usually charged ;ig£iijLst ctible wi>rkii>i; e.\peiw<*H, a Unniiuible annuity payment of i 77,5-15 per year i» made, which not only provides for interest, but a sinking fund iin well, which will, in fifty years, repny the whole. «f £2,000.000 nutik in tho cilile. In addition, £25,000 h <Xt tusido every year an a r<»arvo fuud for the purpose of relaying: the original cable, if necessary, in forty years. ThefSiony has good n'a.»on to l>o Kitisfied with its inwMmvnt. Tho advent of tho I'aciiic cable lias brought about a reduction of rates and an improved oversea cable service, and a saving to tho users of the cablo of over £50,000 a year. Tho long-deferred confer-<-nco of delegates representing the Pacific Oiiblo partners to consider the Commonwealth agreement with the Eastern Extension Telegram Company and other important matters affecting the Pacific coble will, it is hoped, take place tluM month. Sir Snndford Fleming, formerly' engineer-in-chief of Canadian railways, who has taken a B|>ecial inteav-st in the inauguration of tho Pacific cable, will represent our Government at tho Conference. DEFENCE. Tlie conditions prevailing, especially in the Far tEant, will naturally excite enquiry as to tho harbour defences and defence forties generally of our colony. Tlie volunteers now number over 19,000. They are better armed nnd equipped than (they have ever been in the history of New Zealand. A further supply of small arms has been ordered, «nd ammunition and munitions of war are ,muclv greater Lhan have hitherto prevailed. Under this head we are in a better position than we liavo been before. Tho amount asked for (£45,000) is principally for the payment of small arms, ammunition for large and heavy guns, and equipment genm-fly. It must not be forgotten that, in addition to rifle corps, there are some 10,000 cadeta in our colony. The coftt of maintenance is comparatively wnall as (compared with the importance of their military training. Under the heading Permanent Militia and Volunteers, the appropriations lost year were £140,364. The appropriations asked for this year amount to £131,610. Under the heading, however, of stores and magazines and miscellaneous services, the appropriations of last year were £28,140. This year, under tlie «ime heading, no less a sum than £55,360 is asskwl for, tlie increase being caused by tlie purchase of small arms, ammunition, and cordite. Tli<?re are practically eleven million rounds of email arms ammunition available. tt is now recognised that the training of officers and noncommissioned officers Lj essential if the corps arc to be efficient, and tlieir efficiency depends upon the knowledge possessed by the officers end non-commissioned officers. Manuals for tho instruction of rifle corps and mounted infantry have been made and distributed. For infantry single rank hae been adopted, and tlve drill assimilated to that of the mounted branch. Various alterations respecting our harbour defences are under way, and the equipment of our heavy guns has been increased. DEBENTURES DUE. On the Ist of April last a pared of debentures amounting to £760,000 fell due, and on the Ist May following another parcel amounting to £527,950 also matured. Of these sums £647,100 was payable in London and £630,850 in the colony and Australia. At the time when it became necessary for us to s*<o that proper provision for theY renewal or redemption was made, investment rates in the colony and it; Australia were high, and as regards London, investors could do bo well in shorttime 6<?curitks, tliat it coon became apparent that we must be prepared to pay off a good deal of the paper maturing. I am the more pleased, therefore, to be able to toll you that, notwithstanding a very stringent money market in London and with high interest rates ruling throughout Australasia, our renewal terms were sufficiently attractive to induce a considerable number of holders to re-invest on terms mutually advantageous. For renewals wo offered in the colony a further term of five years at the same rate of interest, namely, 4 per oent. In London the term was made four yearn Tlie renewal debentures contained a clause enabling tlie holders to convert their security into £106 of 3 per cent, inscribed etock for every £100 of debentures, at any time during the first two years. Brokerage to banks and brokers won also allowed. Aβ a result of these offers I am pleated to say that in this colony, and in Australia, parcels amounting to £153,100 were sent in for renewal on April Ist, and £263,500 on March Ist. In London the renewals were £112,400 on April Ist, and £6100 on March let. Debentures which came in for redemption on tlie respective due dates were provided for by the issue, of 4 pt-r cent, debentures of four years' currency. I think the colony nuisti bo congratulated upon the very satisfactory result of our renewal operations when we come to consider the state of the moiß'y markets in all parts of the world. Now Zealand Clovernmw.t stock still communis the best prices amongst Uμ Australasian group, but tlve Ag<-'nt-Oeniernl informs mc that very little biwiitfts is dono in this group at all, an investors tight s.hv of Australian Govern Midlife wturities, owing to the f»ct back the States sustained from misrepiveeniation and the continued droughts of late years. Our sympathies are. with our neighbours, aixl it is to l>e regretted that because New Zealand is m> often eonpidcred a portion of Australia, our stock if) thereby depreciated, our credit injured, and our pockets suffer. ' AGRICULTURAL SETTLERS. In accordance with what I placed before you in my Budget lost session, I informed you that very few settlers of the agricultural class in England found their way to this colony. The lower rates of faros to other countries and frt-e grants of lands caused the etrvani of immigration to flow to Canada- and America. We Live been abla to induco tiie Shaw, Saviil, the New Zealand Shipping, and the Fede.nl CVenpaniea to bring out passengers at considerably rvduced rates. Eαen intended eettler lias to be approved by the AgentGeneral, and must be possessed of at least' £25 on landing in the colony. The passenger rates are as follows: —Full rate, second clasa, £38, payment by passenger £27, bonus paid by the Government £4, oompanv's reduction £7. Third clius, £19, £10, £4. £5. In four-berth cabin, nil, nil. In two-berth cabin, £21, £12, £4, £5. NEW MARKETS. So far back as 1897, I liave drawn attention to tlie necessity for extending our trade in various directions. ' It must bo satisfactory to members to know that we Itave secured a. steamship service to three West Coast ports of the United Kingdom, with direct trad« to and from the colony. Is Is also a pleasure to mc to inform

member* that there In a probability of the Union Steamship Company providing a service boiwwu till* colony und Noumea. The amount mentioned is £2400 a roar. Tho suggested Ej.'ti-m ««vii* is still kept • strongly in view, ;md when tins time m ] opportune aonx-thing t hould be done so as to give <-qual iK>x>-ibiliti< v s to tho producer* . of NVw Zi-.i!and with thtir more favoured i neighbours in Australia. On , making fur-t'lt-r inquiries I am mor« than ever satisfied thai iilniii; the route from BrLsb.ine to J litduk up t|i«-"(Juvcn.-hind cu:iM. calling at ; Thursday I .-.land, lirar.a, SJigapor •■■, <tc. ;.> ('.>!( uMii. ii g< ik! nwrlift would be ; f.■ ur • 1 fin- (,ur tiiirud in<uts, li<ir>e?, fruit-, grains, t-tc, and in rttutn w«- should be ;;b!c to frt (Diii-acks, indiaiubber. ttpioca, •..ib.iccn. f|iii.«—. etc., and a practically new and •uit.i'.iJo tmde> would b<. , established. i\<-gui.iution? have lx'en opvnvd up with a , view of e?tubli--hin<r a tradt , Jtt-amer service I;-.live. 11 Candalla and this colony, and in accordance with appropriations a st«tim-r ruksidy undtr witi.-fuctory conditions as to efficiency, freights, etc.." of £10.OCX) p*r I nnnum was offered. This was not accept- ! f<l, a much larger num being a.«k«d aud declined, .md then* tho muttt-r stands. HOSPITALS AXD CHARITABLE AID. ! In my budjM last year I drew attention to the unsatisfactory |>i »j»it inn of the ; h'jspilals and charit'ibl*: institutions. We •ue granting subsidies annually of over £100.000. and have no control." check, or : say in tin , expenditure of >o a sum. The piwitiou of the Inspector-(i«Tneral i-t a.liiMjst farcical. He may inspect, import, I and point out what is required, but there) i is no power to c»ni{>el thy trustees to givo ! vifjet to his recommendations. Th« law 1 in respect to hospitals and charitable aid ■ ivquirca amendment, and the sooner Pariiaent undertakes reform in this respect tlie Utter it will be in the interest of the ratepayers and the patients in tht> institutions. HOSPITALS FOR THE MENTALLY AFFLICTED. I again desire to point out the necessity for accommodation being provided for those mentally afflicted requiring tirst treatment ou the "lines of the Bethlehem Hospital. I a.ho urge again and with all the force in mc the necessity for the classification of the inmates in our hospitals for insane. The result of the appointment of a. Royal Commission, whose Uuty it would be to classify and to report on the number of person* in the asylums who are simply suffering fioni senile decay would cause a. sensation. The enormous expenditure on building and maintaining our mental hospitals and the alarming increase of patients are matters demanding your most, serious attention. During the last live years £79,306 was spent in erecting buildings and furnishing the same; in. salaries, allowances, cost of maintenance £300,233 was expended. Thi.s year you will be- asked to provide £72,169 out of the Consolidated Fund, and to this muse be added a considerable expenditure out of the Public Works Fund. INEBRIATE HOMES. Members will naturally expect, considering the controversy that has recently taken place, that, sometning should be said concerning Inebriate homes. I will here biiefly state the position. The home at Waitati is on Government land, of some £00 acres in extent, the original cost, together with improvements being £2596 12s ild. The first year's' salaries and provisions amounted to £260 2s 7d, and the total expenditure for the first year was, therefore, £2856 16e 6d. During the year 1902-3 the total expenditure waa £6691 10s 2d, the receipt* being £446. For the next year, 1903-4, the expenditure was £5172 Is sd, and the receipts £1103 7s lid. From the foregoing it will be seen that up to the olat March, 1904, inebriate home experiment* have cost o> gross sum of £14,720 19s Id, whilst the total receipts amounted to £1549 7s lid. On the lyth May last there were seventeen men in the home, and seven women in the retreat. % The present number of patients' in the - home is twenty-six, and the total past and present patients nuniber in all 81. The weekly cost per patient, omitting any allowance for rental, is £2 8s 6d, a sum greatly in excess of the. average payments. Our first experiment has not, I regret to say, been, a success, chiefly owing to defective law. There is no power to compel patiemte to work or even take necessary exercise, and in respect to non-paying patients committed, there is no authority in law to meet what is required. If it ia decided to continue tlie Orakanui Home as an inebriate institution, the present taw will require to be amended m the direction of giving tlie Medical Superintendent an effective voice concerning tlie patients to be admitted to or discharged from tlie Home. Power, too, should be given for the provision of proper punishment in the event of any breach ot the regulations by any patient or person, and for the compelling of patients to do v certain amount of physical work, as prescribed by the Medical Superintendent It is quite clear to mc that we cannot havethe two olassee of patients in the one Home. The law should admit of Magistrates committing habitual drunkards of tho vagrant olasa to places like the Samaritan Home in Christohurch, or kindred reformatortee. There «ltoul<l tlwn be a Home where voluntary patients could be received, or otliers whose frkoids had them committed for curative treatment, lK>wer being given to tho Superintendent of these homes to enforce regulations to compel patients to do physical work, ajvd take exercise, and to submit to tmch curative , treatment ac may be proscribed. There is another alternative, viz., to transform tho Orakanui Home into an additional mental hospital for the treatment of those first, mentally afflicted. Later i on my colleague will submit definite proposals on this subject. FARMS FOR SOCIAL OUTCASTS. Wβ have, as in other countries, a large number of persons who are simply derelicts o! society, human wrecks, who, in order to live wlien not maintained in the gaols by tho colony, prey upon society. Land should be eet apart upon which these ; persona should bo placed. The value of ! tho work dono would be equal to the cost of their maintenance, whilst the collateral advantage,uf keeping them from the public gaze would more than compensate for the co,-t of the erection of the buildings and the land acquired. If allowed to go on as at present, a shocking example is ever prtsent before the rising generation, the criminal records of our colony are unduly iuevea.M.-<J and the social and moral condition of the colony is thereby prejudiced. NEW ZEALAND NATIONAL EXHIBITION. As pointed out U> imunhers la*t session, it is many yearn ago since a national exhibition was held in this colony. The time is ojuportuno, coming as it does immediately after the £t. Louis Exposition und prior to tho Empire Exhibition in t!io Mother Country. Timely notice is required to be given co that the manufacturers and producers of the Commonwealth, those of Canada, America, the Mother Country, Ciermany, and other manufacturing countries, may have an opportunity of exliibiting in our colony. I am still of opinion J that the most fitting place for the exhibition would be Hagley Park, Christclmrch, and I hope to ««o the matter taken up with vigour, thus ensuring success. I regret that tlw movement to have a local I exhibition at Wellington has fallen through. Last year, at tl» request of the Wellington committee, the Government postponed holding the national exhibition for a year, and tiiouch not yet approached with a view of extending "the time, I think it is ns well' to say here that it would be inadvisable to'postpone beyond next year the holdi-jjj of a national exhibition. It would be well that the Imperial (k>vemment and the Governments of other countries (India, Canada, South Africa, and the Commonweath of Australia) should be informed of our intention, to hold a national exhibition. Later on in tlie sesxion an opportunity will be afforded members of i coming to a conclusion upon this important matter. HIGH COMMISSIONER. Naturally the proposal to appoint a. High Commissioner for the colony to act as its representative in London has crea.ted comuK'nt favourable and otherwise. I am sorry to say that a construction ha» **xn placed upon the action of the Government

unwarranted by the circumstance. There "are those who "will never sac the progress and altered conditions th.it surround them. They live wrapt up in the jwst, oblivious of th* pneent and the future. Wh«i the General Agent, for the i colony at Home, or the AgentXJeiieral, as be is now called, was first appointed, ' New Zealand had a population of 266.586. I Its revenue amounted to £1.542.116 while ; its trade amountod to £9,249,297. It had • at the same time eight provincial councils j or smaller states. Things have now change d. We have a population of 838.954, while our revenue amounts u> £7.021,586 and our trad..; u> £28,675.932. We have liad our fi-deratioa; the Provincial Counj cils have been abolished, aixl 1 tiiiuo is one central Government. j Canada halite High Commissioner with !*ubI mdinate GommLs-iohers in the United ! Kingdom ;;nd tkwwhciv. Tlie Commonwealth ! of Australia has its Act empowering tlu-'.ip-i pointment of a High Commissioner, which is xxjii to take place. The time has_ now arrived for New Zealand to bring itself into line with other countries. The Iμptjial Unvernimnt have their High CmninuMontr.--. Tlw latest wa.s to Cyprus. And if X«-w Zealand is to maintain it> prestige and give it* ro]u\-.-ent.iti\v a fair and fitting opportunity. the n;ime '■Au'ciit-fr-.-iie-ral" >'iould be changed to tint of "Hi n 'h (.'oininis-iuiier." We have our pioduoe i-uiiimk-.ioncr in South Africa, and tv merge the Ageiit-Onwul into a High Oonmiissioncr ii a wise and proper thing to do. The next question is the salary for such an office. The Government think that a salary of £2200 per annum would not be toft much and am of opinion that a change of otlice should bo made, ev«n if th» iulary now tKiid to the Agent-Gemiral (£1500) w.'re continued. A very large percentage of our colonists who visit England have litters of introduction to tno Agent-General. H<> is put to expense and has to entirtain. Whatever Hilary is fixed there should bo a sum granted for entertainment purposes, thus obviating tne colony's representative bearing the expense out of his own salary. There is no provision made in the Estimates, as the K;dary will be provided in the Bill that will be submitted to you later on. The amount will be about £2000 per annum. The next important point is as to who should be appointed. Adverse and undeserved comment has been made regarding myself. It has been openly stated I Mas creating tlie position with an ulterior object. It is with some diffidence 1 express the opinion that, health permitting, I can do greater good for this colony by remaining in New Zealand. Whoever is appointed should be a New Zealander well acquainted with the political, agricultural, and commercial affairs of tlie colony. To appoint merely a. figurehead and to make the position, ambassadorial would he a grave mistake, and the Government have no intention of m> doing. The appointment should not be for more than five yeare, discretionary power being given to the Governor for a leaser term, thus ever keeping the person appointed in close touch with tlwj oolony. I will cay nothing further upon this matter now. Further details will be given on the second reading of the Bill. fiSTLMATED EXPENDITURE FOR 1904-5. The estimated expenditure for the current financial year upon ail services of Government I haveeet down at £6,601,412, which is more than, the actual expenditure for the year ended 1903-4 to the extent of £167,131. The table (No. 7) which accompanies thia Budget, allows very clearly the increases or decreases over or under the expenditure mado last year. "Interest and sinking fund" show an increase of £45,000, caused by having to make provision for internet on new loans only partly charged feist year. "Permanent charges" sliow an. increaee of over £35,000, of'which tho extra, contribution of £26,600 for tho cost of the maintenance of the Australian naval squadron is principally responsible. I have eet down the provision for old age pensions at last year's estimate, £215,000, although we did not actually epend more than £200,845, but I have reason to believe that last year's expenditure will be exceeded. Tlie total of the appropriations for this year are in excess of the actual expenditure from, votes last year by the sum of £88,393, but if? we take out the services for poetnj and telegraphic, for education, and for working railways departments, in which the expenditure increases automatically with the requirements and prosperity of our people, it will be found that we have been able to reduce the excess by £64,101. Tlie Public Health Department, tho Department of Agriculture, the Printing Department, the Defence* Department, and tho Lands and Survey Department contribute reductions on last year's expenditure. Tlie requirements of "other Deportments are estimated nt very little in excess of last year's expenditure. My Government have u*ed the greatest care in the preparation of the estimates, which will be laid .before you, and have exercised the utmost economy, while avoiding too drastic a curtailment of provision for services, which might imperil the legitimate requirements of our colonists or impair tlie value of the services rendered. Our increased expenditure of late years has given occasion for many adverse remarks upon our administration. Of course I do not for one moment deny that the yearly Estimates become larger and larger, but, on the other hand, 'have not our receipts increased by leaps and bounds, and the colony's business proportionately grown and prospered? Our settlers and citizens require to be provided with all the up-to-date appliances of railways, telegraphs, and telephones, and postal facilities must be brought to their doors. The extension of these services necessitates a large yearly .outlay, quite apart from the capital cost. Again, as our population increases so is it essential that larger sums are required to be spent upon the education of the rising generation. Parliament also decided that we t'hould look after the health of the community, and always be at war with disease. Members must not forget that this colony has led the van in providing a pension for pur aged and deserving pioneer settlers, who unfortunately have bten unable to accumulate a comjß'tency for their declining yearn. Over £200,000 per annum is required for this service alone. Our contribution for naval defence, it must bo admitted, is a wise outlay.. With islands abounding in the most beautiful and varied scenery, semitropical and alpine intermixed, and with tJu-rmal wonders absolutely unique, we cannot be blamed if our Tourist Department endeavours to attract visitors to this favoured colony. Good work has been done by our Department of Agriculture. The examination of meat for human consumption and affording assistance and stamping out disease amongst our live produce is work of great importance, while the grading of our dairy produce and of our hemp secures a high standard of excellence, and as a result enlianced prices to producers. 1 should weary members if I were to enlarge further upon the many new services which my Government have inaugurated in the interests of and for the welfare of our people. It is our aim and desire to develop our magnificeut country, and to assist in making the people of ih'ia colony healthy and prosperous,- but it Ls idle to imagine that eiich important work as this can be done without increases expenditure. In_ the direction of development, let mc instance our State fortsts and our Stat* coal minea. To assist in our people's welfare do nofc our Advances to Settlers Office, our Labour Bureau, and our Accident Insurance Office materially afford them help? I have had a etatement prepared showing the annual estimated expenditure for this current year. In a second column I chow the amount for new services, and in a third column the net estimated expenditure which would represent the normal disbursements of our colony had the requtrementa of our colonists not been given effect to. In otlier words, out of the proposed exjjenditure of £6,892,397 nearly £800,000 has to be provided for new services, tho result of pur progress and prosperity. ESTIMATED REVENUE, 1904-5. The estimated revenue for 1904-5 mounts higher and higher, but I do not hear thai the collection of it presses unduly upon < our colcniste. Customs duties last year ;

ykldcd £2,601,325. This year it is estimated they will reach £2",61O,O00, or an imrtase of iwarly £9COO.- Our working railways produced £2,163,000, while for this* current period my colleague anticipates obtaining £2,180*000, a very handsome mult, cuiitddtTiiig tilt valuable conwhich have b«n fiwly givwv, *o iia to promote our-industries and to assist in bringing our product* as cheaply ns lK>M*ible to our markets. Last, year's stamps revenue exceeded, a million, and for tliia year it has been put. down at £1,095.000. I anticipate that " beer duty"' and " registration and other fees " will this year be tdightly exceeded. On the other hand, I have reduced our estimate »%htly | in the cat*) of laud tax, in consequence of i the purchase of some large estates by the Government, which, of oour.-e, etused to pay land tax. I have a bo reduced marine, miscellaneous, and territorial. Under the Jiist. •head of n-venue. seeing that those persons havfej the r?p*t to acquire the freehold of tlw; kind Inld by them under occupation liunses have exercised their rights wry freely, I do not think the ivvmue under the head of '■Territorial" will yield anything like that i 4 last. year. I haw. therefore, thought it \vi«e to keep to an .>timat<- of £230,000. Tlu- net iwtime- of in<-rea.<ii s over di-crea.'vs w £16,015, not a wry large amount, I ;;;hifit, but I prefer to be cautious. ;>nd will ke< p on the safe .-side. Inflated cstin;.itos of receipts itwite to increase expenditure and extravagance, whilst keeping tlw estimates at a. reasonably low rate promotes economy. Our estimated «.x[>eiiditure being £6.601,412, and our estimated revenue £7,098,000, the ex«<m of revenue over expenditure is £496,588. to which the amount brought forward is to be added, £649,740, producing an estimated balance of £1,146,328. "Wo should l>e able to assist the Public Works Fin*! wilh £650,000, leaving a ■lxibnce of £495,328. This balance (which is .some £80,000 loss than last year's er-ti-mate) -will amply sufficient to provide for f-uppletmntary expenditure and for subsequent a.«s:*tance to the ways and means of the Public Woris Fund." As I havo already stated, the balance of the credit of the public works fund on March 31st lupt was £393,800, in nditjon to which thers remained to be sold £416,050 of the moiety of the million loan which was authorised cession. This loan is being freely availed of by the bona fide investing public, and I am'pleaaed to MVi it taken advantage of by this class of investors. Up to the present time some 250 persons have placed their savings with us representing over £200,000 invested of the half million- which is offered for sale. The facilities we have offered for receiving investors' moneys at any Post Office Money Order olh'oo a.s well ns\ at the various branches of the Bank of New Zealand, and for sums of t,tO, £50, £100, and upwards have, I am quite sure, popularised the issue and have proved of considerable advantage to persons of thrifty ha'bita who detiro to make the most of their hard earned savings. To get back to the ways and means of the Public Works fund, the available balance of this fund including the balance of loan money to be raised was* £809,252, to which I anticipate adding a contribution from the Consolidated Fund of £350,000, which would rais? our ways and moons to £1,159,852 to provide for our current year's expenditure, but I must.point out that our requirements oannot stop when we reach the 31st March next. We must be financially strong enough to carry on a fully considered expenditure at least for three months longer or up to the 30th June next. Under these circumstances we shall require more money and to fix upon the smallest amount of further assistance to enable us to economically provide for the necessary expenditure on our public works has given my colleagues and myuolf the gravest couiiJderatioti. Last year authority was asked for to raise one million in aid of public works. This year we desire to raisw £750,000, wliioh will enable the construction ol public works to proceed at the existing rate of expenditure up to the end of September, 1905, by which time further expenditure can, if required, bo made by Parliament. CONCLUSION. The keynote of this Budget, given with no uncertain sound, is prudence u-nd economy in administration, reduced public works expenditure, and decreased borrowing, tlie aim ultimately being not) to go outside the colony for moneys at ail. The Budget shows clearly that there ie a decrease per head of population, in respect to loans that are not direotly reproductive, although theio is an increase per head in respect to monies raised for reproductive purposes, wliith are directly remunerative and interest paying. Tliis ;s satisfactory, for the gtiKiral taxpayer i» not called upor» to contribute any more to tlie Consolidated Fund. From what I have placed before members it has been incontestably proved tliat strong as our financial position was last year, it is much stronger to-day. Our assets over liaibilitiee ore as over £6 to £1 of our indebtedness. The population of the colony hoe, during the past year, increased by 24,576, and the increase of arrivals over departures amounts to 11,275. Thus the increase.-of debt per head of population has decreased while the power to pay has been increased. The settlement of the people on the Crown lands and on lands acquired under the Land for Settlement Act is proceeding rapidly, and as satisfactorily as the existing laws and conditions will permit. The revenue from Customs and railways is increasing, thus denoting continued prosperity, end an increased spending power of the people. In the year 1879, when I first entered Parliament, the exports were £5.743,126. and our total trade was £14,117,711. In the year 1891, wlien I first took Ministerial office, our exports were £9,566,397, and the total trade £16,070,246. Last year (1903) the exports were £15,010378, and the total trade £27,799,053. What the spread of settlement, the development of our resource*, increased population, improved opportunities given to the people, and prudent and enlightened administration have done are evidenced by the increased exports, trade, our flourishing industries, increased population, and the general happiness, contentment, and prosperity of the people. Members will notice a larger increased education vote. This I hope may he cheerfully accepted, and provided for. It means th« complete education of our youth, and his equipment for the battle of life. Primary, secondary, technical, and University education are imperative if our children are to compete and light the battle ! on level terms with others. La«t financial year gave the colony its record .surplus, and to be able to transfer this year £650,000 from the Consolidated Fund and to have sufficient wherewithal in' the Supplementary Estimates is an achievement th/it should gladden the heart of any Colonial Treasurer. At the same time ft in essential that the strictest economy should follow. This done, the time is not far distant when a remission of indirect taxation, railway, and other charges might be considered. Finally, our unique and lovely islands abound in varied and beautiful scenery, tropical and Alpine intermixed. Colonists and visitors may be in the tropical north one day, and the nest amongst the enow, or witnessing the appalling grandeur of tho finest geyser in the world. They may shoot tho stag on our mountains, or enjoy fishing unsurpassEd in tho world. They may pass their time on our beautiful lake.s | or go into tlie agricultural districts amongst the waving golden corn. They may t*e in our cities prosperous industries. Un- j employed want and poverty do not exist, j and beggars are unknown in our fair colony. I again repeat, we are a buttress of, and the paradise of, the great British Empire—in the words of our poet, Bracken, "God's own country." STANDISH AND PREECE t ♦ Adopt all the latest styles and processes in photography. The "sitting" a pleasure, not an ordeal. Ernest Preeo*, operator. High Btreet. 82 HOME, SWEET HOME. A good picture beautifies the home, and a good frame adds to the beauty of a picture. Inspection invited. The P. 0. 1 ,. Camera and Fine Art Stores (facing Clock Tower). 6311

THE AMERICAN PRESIDENCY. PLATFORM OF THE DEMOCRATS. United Pre?s Association—By Electrio Telegraph—Copyright. NEW YORK, July 10. The Democratic platform favours Monroeism, revision and gradual reduction of the tariff, reduction, of navy and army expenditure, avoidance of entangling alliances, impartial maintenance of tlie jast rights of labour and capital, £nd an open door in the Far East, and it opposes colonial exploitation. HOME AND FOREIGN. United Press Association—By Electric Telegraph—Copyright. THE MSLEY MEETING. LONDON, July 11. The Bisley meeting has begun. The newspapers regret that Australia hae allowed tho Kolaporo Cup to go by default, A TRAIN TELESCOPED. NEW YORK, July 11. A passenger train telescoped two, cars of nn excursion train with 800 Germans on board, near New Jersey, killing 17 and injuring many. » ENGLISH POLITICS. (Received July 12th, 10.21 p.m.) LONDON, July 12. On dausc two of the Licensing Bill tlie closure was applied and the clause waa carried. Mr Balfour promised to re-intro-duoe the Aiieas Bill early next year.