No. 3.

Daily Southern Cross, Volume XXII, Issue 2871, 8 October 1866, Page 5

No. 3.

Copy of a Letter from his Honor F. Whitakkr to the Hon. E. W. Stafford. Wellington, September 22, 1866. qi r> I have the honour to acknowledge the receipt of your letter of the 20th insfcxnt, informing me that it will be necessary to satisfy the General Assembly that the province of Auckland will be able to bear $he proposed, a.dditiona.l annual burden

of £20,030, the interest and siuking fund (j£|fci^*o^ ; posed loan of £250,000; and requesting meS-to^fur- ' nish you with detailed statements in refeience'to the several matters referred to in your letter. 1. The estimate that a loan of £250,000 is required to cover all the contemplated expenditure in reference to the confiscated lands, is based upon the data already furnished, to which must be added, of course, the cost of negotiating a loan of the character proposed, which cannot be taken at from less than £25,000 to £30,000, or even possibly more, leaving a very small margin for contingencies. 2. With reference to the fund out of which the annual charge entailed by the loan will have to be paid, I am not able to supply you with the details you require, as I have not the documents which it is necessary to refer to ; but I can state the present position of the finances of the provinoe with sufficient accuracy to enable the General Assembly to judge what there is to look to to cover the annual expenditure which would be entailed by the proposed loan. 3. Apart from the question of assets and liabilities resulting from the confiscated lands, it may be assumed, for all practical purposes, that the province of Auckland is free from any financial embarrassment or difficulty. The revenue of the current year will cover the expenditure entailed in existing loans and administrative expenses, but no more, and I have no doubt the result of the year 1867 will be the same ; but there will be no surplus revenue this year, nor can any be expected next year available to meet any extraordinary expenditure, either as interest and sinking fund, or for public works. I believe that an average ofe from £20,000 to £30,000 a year may be reckoned on as the proceeds of sales of confiscated lands for some years to come, and this should be wholly applied or set apart to the payment of interest and siuking fund on the special debts entailed on the province of Auckland by the war and management of coafiscated lands. It is reasonable to expect, under judicious administration of the lands and' of the affairs of the province in general, that the rate of progress hitherto attained may be maintained; *nd, if this were so, the extra charge entailed by the proposed loan, met for a time altogether by the sales of confiscated lands and eased for some time after from the same source, would be paid probably without difficulty out of ordiuary revenue, and not severely felt. It must not, however, be overlooked that there are elements of uncertainty in matters already referred to, which no foresight nor prudence can altogether remove, and, taken in conjunction with other subjects to which I will now refer, it is a question for serious consideration, whether it would not be wiser and more to the advantage of both the colony and the province of Auckland that the arrangement come to in reference to the confiscated land should be cancelled. The existing loan of £500,000, authorised to be raised by the province of Auckland in 1863, was disposed of to the Bank of New Zealand. A considerable portion of the debentures were, only recently, handed over to the bank under the arrangement made, and it i 3 understood that they are now in the market, and no doubt will be for some timo to come. The debentures of other provinces are also saleable with difficulty, and only at a large discount. Under these circumstances it is very questionable in my mind whether a new loan by the province of Auckland would be saleable at all in the present state of the money market, and, at all events, an almo»t ruinous discount would have to be submitted to, aud the result would entail much damage to the credit of all provincial loans, and even a serious depreciation in the value of the securities of the colony. Again, it is becoming clearer every day that the operations of the Native Lands Court are reducing the price of land in the province of Auckland, and it is difficult at present to foresee to what extent this may go. Already it is said that titles to 2,000,000 »cres of native land have been obtained, and mo3t of it may bought at a few shillings per acre. This will necessarily much in.erfere with the sales of confiscated land, and disturb tho o»lcula. tions made ; it suggests, moreovei, the question — Whether it would not be a wise course to bring these latter lands at once into the market at such a price as will ensure purchasers without delay. Having regard to all the foregoing considerations, I have come to the conclusion that the proper course for me to adopt is to ask to be relieved, from the arrangement under which the management of the confiscated land 3 has been handed over to the province of Auckland, and, consequently, from the liabilities thereby entailed, and thus avoid the absolute necessity which otherwise exists for raising money on provincial securities, which I cannot con« template without doubt and apprehension. No difficulty will exist in placing the General Government in evea a befcw- p <*»*•*<«» t&<*" toey would luive been m if the management of the confiscated lands had not been in the handsjof the provincial authorities for the last few months. The money raised on the security of the debentures for £100,000, lent by the colony to the province, has been expended, I undertake to say, prudently aud economically in discharging the liabilities undertaken under the resolutions of the House of Representatives in the last session. Not one shilling has been devoted to any other purpose than in paying what must have been otherwise paid by the General Government. A separate account has been kept at the bank, and separate books of expenditure, by a competent accountant. So far the whole may be trausferred without any delay or difficulty whatever. It is, however, obvious that the performance by the General Government of those duties now discharged by the provincial authorities would entail a large amount of trouble; and the work, I venture to say, would be less economically and less efficiently done. I say this because it must be plain that the presence of the provincial authorities at the scene of operations, and the means at their disposal, give them an advantage which the General Government does not possess and cannot create. There is no question that the colony has an important interest in this subject, and the province a still deeper one. I am therefore most anxious that the best possible arrangement should be made, and with that view I offer a suggestion which may at least receive consideration. I propose that the administration should still be carried on by the Provincial Government at its own expense ; aud in consideration of this, and to cover [the outlay of administration and survey, and of such works as may be essential to render the land saleable (and mujh of it at present is not so), that a certain proportion of the gross proceeds of the land sales be paid over to the Provincial Government, and the remainder retained by the General Government in liquidation of the money advanced by them. The advantages of this plan to the General Government will be that they will avoid the necessity of creating and carrying on new departments, of which they can neither efficiently conduct the management nor control the expense ; that the most will be made of the confiscated lands, and thereby the largest sum become available towards the liquidation of the charges upon them. On the other hand, the province will have an interest in keeping the expenditure within the narrowest limits, and the disposing of the confisoated lands at the best price and with the least delay ; and it will avoid the danger of becoming involved in financial embarrassment of a very serious character. Both Government? will derive the advantages which will result from an efficient administration of a territory capable of being made to contribute largely to the indirect revenues of the colony. In submitting these views I wish not to be understood as being desirous of evading any duty or responsibility which the province may be reasonably required to undertake ; on the contrary, whatever course may be adopted, the best possible assistance in bringing about a favourable issue will be cheerfully afforded by the provincial authorities : but I am anxious at the same time that no expectations should be raised, the failure of which may hereafter lead to disappointment by their non-fulfilment, and that the whole state of affairs should be considered and understood before any decision is come to. I have only to add that no public works of an expensive nature are proposed, but only such roads and bridges made as will enable the land to be occupied and thus ensure its sale. It is of course impossible for me at present to detail these, but the amount stated in the estimate will no doubt cover all expenditure required on this account. — I have, &c, Fkedebick Whitaker, Superintendent, province of Auckland. To the Hon. Colonial Secretary, Wellington.