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THE BUDGET.

. ~. __' ( Ocntmuttl from Mpp!emehi.J~__ . -.. RAILWAYS. '■'" : '' : <"^ -.The remarkable increase in the traffic returns of our railways du=irg the year is a very' pleasing feature in.!e<.d, the luoreas'B in revenue on tho previuuy tar being £io4,fc6o. The expenditure increased to the extent, of £33;Q77, the excess of revenue over' expenditure fcr the year b;ing £510,392, or £7J,783 'mefe than last year, notwithstanding the fact that the train services were largely added to in Auckland, Taranaki, Southland, and elsewhere, besides additional workmen's trains between Christchutch and Isiingtoa. The cost of these additional tifcin services has been ci'culated at £11,405. Additions and improvements to the lines and structures, "together with additions to rolling stock, have, cost £92,621. During the year the increase in the-traffic. ha 3 teen-very general, and the receipts per train mile .have increased from 7s ltd last year to 7s 6£d-the gross return is £3 3s 103 per cent, on the capitalist (£15.577,392) as against £2 .16a per cent 'tost - v £ ar -' Tne traffic expenditure for 189596' was' 17 52 per cent, of 'the.revenue, as against 16.153 [•per cent, this year. There has Taeena slight repduotion in the cost of locomotives r)er. train mile", andean increase in the cost of maintaining the permaneht "way and rolling stock, and 101,992 more train miles have been run-this year, The increased cost oh account' of the maintenance of cars and waggons-Us accaunted for by the amount .of .'-new' work done and changed to working expenses. Higher piicea had to be! paid for steel rails, and more money had to be spent ohthe lines and structure?,, with a view to bringing about a' greater state of cftTitncy, : The tocomptiyp charges have been increased,- owing to the additional tonnage hauled, the additional miles rup, and to the replacement of light 1 comotives by eoginea of.heavier type, and to increased capital value. The travelling putlic will appreciate the improved lighting of the passenger cars on. the Huruni-Bloff section, and I am pleased to inform imembers that arrangements have been made for introducing tho Pint-ch light system on all the other principal lines in the colony. The revenue for the currentjtar is estimated at £1,275,000, and the expenditure at £BIO.OOO. Notwithstanding the disastrous floods which-occurred in.< the Hawkc's Lay district and in other parts of, the colony, necessitating an increased expenditure for the current year, the Minister for Railways has seen his way, on further consideration, to reduce by the sum of £IO,OCO the estimate (£820.000) which he made in the Railway Statement lately laid on the taWe of the House. If the settlement of the country is to progress, if the industries are to be assisted, and the den: and* of travellers and producers are to be done justice to, a huge sum must be provided for additional locomotives and rolling stock, also for improvements and addi tions to the lines and structures, whioh in some ef the larger centres are insufficient fur requirements. To enable more locomotives and rolling stock to be built in the railway workshops,, the shop machinery mu>t be added to, and iu some case 3 replaced by morb modern appliances. In some d.stricts provi.-ion i 3 urgently' required for interlocking signals and point', also for fitting continuous brake gear on the t:aibsrunning over hf avily graded lines Where the line 3 are of such a nature and the volume of tr.ffio sufficiently large it will be economicaland wise to make provision for strengthening the lines and structure s' to permit of the passage of engines having greater tractive power and of the most modern type. Taking' into consideration the improved :esults shown by the railways,' and to provide for increased safety and efficiency, it is dsemed advisable, in the best interests of the colony, that £200,000 should be raised for these purposes. RAILWAY CONSTRUCTION.

Satisfactory progress has been made in the matter of railway construction during the year. Forty-nine miles of railway have been completed since the 31it March, 1836. The Makarau tunnel, on the Holensville northwards line, which has been ia hand for ovtr seven years, has at length been completed and the railway through it opened for traffic ; Rnd the Makohine via.luct on the North Island Main Trunk Kailway, which was so long in contemplation, has now b en commenced, the excavation of the foundation for the piers being well : iu hand, the bulk of the csraent on tho ground, and., the iron and ateel work now arriving from Englai.d. Other very important railway works are in hand and progressing as rapidly as the means at our disposal will allow. The line between Eketahuna and Woodville will ba completed in a thort tima. This done, a vigorous policy in respect to completing the North Wand Trunk, the Otago Central, and other railways is worthy of consideration. LIGHT RAILWAYS.

When visiting during thoreooss to take i-art in the Conference of Australasian Premiers 1 had an opportunity of ob:aining the fullest information in respect to the light railway beeween Zeehan and Mount Dundas. This line, which passed over some exceedingly rough country, had been constructed at the phenomenally low rate of about £2,000 -p;r. mile, including rails, sleepers, and rolling stock. J.to very-favorably impressed with the possibi'itjes of csnstructiuj light lines in our colony, but in respect to present authoiised lines without breaking the f.auge, at present the cost averages over £7,000 per mile. By uting lighter rails, fewer sleepers, and reducing the cuttings, earthworks, and decreasing the number of station buildings there wou'cl bo a considerable reduction, and the moneyß available would ba sufficient for double the distance, and desired connections coull be completed in half the time. Bail ways of the character I have referred to can bo conducted for very little more than it would cost to make a good metalled road in some parts ot the colony. But in no part where railways are required does the nature of the country warrant the breaking, of the gauge and the attendant disadvantages. As Treasurer I am, however, oaly concerned from a financial standpoint, and it is not necessary for me to go further into the question here/ a 3. fuller particulars of our proposals will bo given by.my, clleague in Lh I'ublic Works Statemen 1 , and these will, in due course of events, hi submitled to the Railway Committee. MIDLAND RAILWAY.

I regret to fay that the rosition in respect to this most important public work remiins practically unaltered. The construction of the line ij proceeding slowly, and the expenditure is kept w-thin the appropriations. The company have met the c'a'ras made upon them. '1 he aotual amount of cash recovered on aocount of const! uction works carried out by the Government is £24,265 lis 6d. In addition to this thore was a profit on the working of the opened portion* of ths line to the amount of £7,38 > 3s 4d, which Ins also been used towards defraying the est of construction works, making tho total amount received £31,64313 a lOd. Proposals similar to those whioh were submitted to the Publio Accounts Committ-e In the session of 1896 have been reoeived. They are of mch a nature as'to prevent them from entertained. Mr A. Youn?, .the Reoeiver ot t.e Midland Kailway, had several interviews with : 'me,"j[n Lcndon'. In conversation wi-h him I maintained the position taken up when the matter "was before the Arbitrators - namely, that as the ground work was the contract itself, th. debentureholders cou'd not be placed in a better position than the princ'pal, the company. I, however, pointed out that, such being the case, one of two things must happen—namely, those, iuterested_ must cither submit proposals for the completion of the contract or throw themselves by petition upon the generosity of the people of New Zealand. Mr Young maintained »that, under the speoial Act passed in 1824, the railway and all the assets of the company remain legally charged to the debenture holders, and that, mch being the oase, their security could not be taken away even by the Government of New Zealand, although default was made in repaying tbe moneys expended on the construction of the line. From what I could gather, he was referring to an old contention- namely, that as a section was finished the dtbcnture-holders c.ul.d „taket. it, and that" default- "' in completing" the contract by the com; any would in no way affect the debentuie-holders. Ab we have been advised, this argument cannot be maintained, and, in my opinion, it is simply absurd for the debenture-! olders to imagine that they can ob*ol n n from tne c °l un y a repayment of the £BOO,OOO odd that they have invested in 'he construction and equipme t of the railway. The contention of the debenture-holders, that they could enter legal proceedings in Great Britain, has proved fallacious, for their own solicitors admic that proceedings must be taken m the colony. A proposal was mooted to me at Home by one having a good knowledge of the position that if the colony were prepared to give a guarantee of 3 per cent, for a period of, say, ten years tlwre was a possibility of raising the million required to complete the line between Jacksons and Springfield, and to finish it to a point to be agreed upon at the Reef con end, and also at tho Nelson end. This meant that if tho net amount received on the working of the line did not give 3 per cent., the difference between that obtained and 3 per cent, should be found by the colony. In the absence of any definite pr > posals from the company or the debentureholders for the construction of the whole of the railway, or even that portion between Springfield and Jaoktons, I think for the present there U nothing to be done but to proceed with the construction of the work, rendering periodical claims for the amount expended in construction. If in the meantime

the debeStafre-holdetß lite to tafie Btepa under section 124 of the Railways Construction and £)!,?. proposal for the'construction of those portions of the line on a guarantee auoh as hereinbefoi e mentioned, then in such.case I should advise fall and fair consideration being given thereto, f «Mg inability on: thevpart of the debenturehQldera- ■to make ;any''■; proposals, their - obvious duty.i-h<.,to throw * themselves on. the generosity Tof the colony at an early date, otherwise another year will be hwt and nothing done towards putting an end to the present unsatisfactory gtate o£-affairs, for it i 3 almost-cer-tain that afcno; distant : date default in meeting the claims on cons'fc'ruotiOn account wiil undoubtedly take place. ■

L4NDFto OPERATIONS. _; Since, the Actavoame into operation in 1884 86,106 aores have been leased, and the annual > rental is £22,293, paid by 770 farmers, of whom abont hajf are already resident, This gives 4.83 per cent." 'is* interest obtained on the investment' These results do not include, the transactions of the Cheviot B»tat"e purchase, which'was really the beginning of the Successful operations of the ;land. for - at-present pays-5;2. per. cent. During 1896-97 thirteen' 'estates coataiiji'ng 39,151 acres, divided" irito"362 farms,.'were opened for selection. Qnly • 637- Since 3Ut Mar<;Mast'.five other'estates have been opened' forselcctibn, and with'trifliDg exceptions these, were promptly applied -• for and disposed: of. The ogly failure, is .'aivWharenui, a hamlet near Christchurch, purchased at a high price, and intended for workmen's ,homes>, but which failed to»4r«ot;those-for whose benefltit'w'asdomed. ; The'Board-constjttitedtindelr ~the Laid fof getttements ;Act-dealt'-with 148. Of these, .thirty-one'- were/ rectmmendediof. r pur--chase,.and seventeen owners acospted theoffersmade, representing 51,535 acres, of the value of £251.571. Th,e/actual purchases completed durjust the year were fifteen estates, containing 61,333.acre5. 3he cost tlieioof waß £300,159. The' total Negotiations/completed up to the 31st March,, 1§97, Binca' the commencement of the represented by thirty-eight estates, cont»ining 1 .'t18,553 aores,- the purchase monev biing£s£o,s4lj An agreement is being-made purchase, a further/ 'area of 19V912 acresinseVeri .e3ta>esi.;;at .a the/total: purchase money'~actualiv paid and" liabilities incurred amount to £624,125. Besides this, of course there aira the expenses of ad-ministration,-enryey, and tho construction of roads./some" of whioh have-yet-to be paid. The compulsojy powers of .'the;. Act have been exer-o-sed;up:to the present time in only one casethat of the Ardgowan; but steps are now being taken to refer to the. Oompen ation Court-a proposal to purchase the Woburn Estate, containing 27,000 acres,"the owner being resident in Great Britain,. It is a very tedious process to put.-the law into motion under the powers given by the Actsof 1894 and 1895. ' ■"

_ Theßoard, in cbnjviMtion, with .the Commissioners appointed under the .Land Act, have arranged an exchange of 29,889 acres of freehold laLtl Tor 54,500 acres Crown lands in the Marlbifoughdistrict in order to consolidate properties -which had been acquired en freehold in scattered area*; atd in this way 67,000 aores of land suitable.-for- farms and email-grazing runs have, been'made available for disposal. St'll further exchanges are necessary for consolidating Crownlands and the-freehold lands.

: Effortshavebeen male to ensure land suitable for workmen's homes :inth9 neighborhood of Auckland, Wellington, "Christchurch, and Dunedin, but so far, ..with little result, the owners of-suitable land either refusing to sell o: asking prices which were,ih the opinion of the Land Purchase Board, higher than tenants could pay a rental of 5 per cent upon. The operation of the present statutes ceases on the 31st March, 1899, but in view of the negotiitions with the owners of large estates which are now under offer it iyill be necjsary either to amend the Act or tp stop these negotiations. The Act of. 'at session had the effect ot reducing speculative applications for T these valuable lands, and careful investigation! : hy the land boards of the applicants' means an 1 experience have seoured settlers of a suitable class. ' . DEPARTMENT OF LABOR.

The return* from th's department show that there has been a kteady advance made by the industrial classes dur'ng : the year. The applications for assistance by the unemployed have been less by 1,100 than during the previous year, while compared-with 1893 the number of applications show a" fal'ing off;: of-at least one-half. While thh fact shows thifc-there id more general em'ploj merit throughout tne colony for unskilled labor.rthe -departm ntal returns dealing with the ski ltd trades are of a very encouraging nsture. There is an iriorease of more than 4,500 persons working, in factories this year as o>rnuared with last year, and an increase of 7 000 on the number registered in 1895. The Indnstiial Conoiliatlon and Arbitration Act met with gen- ral acceptance, acd has been brought into'<)ontinual 'Use during the year, preventing- many ~ heartburnings - and mlsunderstandings that might .otherwise have led to strike's and industrial conflicts. I regret, however, to say that-1 he decisions of the Conciliation. Board i hiye-not been accepted so generally expected, four ca<es out of five being carried to the Arbitration Court. Under these circumstances if is ; worthy of" consideration whether : rhose : invoking the aid of the Act should not be given the power of choice between the Board and the Court. .■' If such a concession be granted it,will be necessary to have the law ainended..so as to -enable the Board (under certain conditions) as well as the Court to make its decision final and binding upon the appellants. .-;' ':\

•, ; THE GO i D MINING INDUSTRY. . /Although there waV somewhat of a falling off i'rtbe quantity.of go'd»xported duiing the year 1896-97, as compared with the returns for the previous ;ryear, yet ;there is good r.ason for hoping that the: anticipations expressed in last year's. Statement will ult'mately be realised generally; throughout the", gold adds of the Colony. .'Extensive dtvelopii.ent works have b&n, entered upon for the further opening up of ..ojims,- on the cdmplelipn of which, combined >tthithjjintroduction of improved machinery for crttsliingT the ore, and better appliances for faving the gold and silver, it is expected that the returns hitherto obtained will be considerably inorcased. • The greater attention, also", which has been directed to dredg'mg operaand the improvements in the dredges and machinery, will, I believe, tend to a large increase in the amount of gold to be obtained from biir rivers and streams. The Contract for the erection of a pumping plant it: the Lower. Thames,, to whion reference was aadeia the Statpinent of last year, has resulted in' pxtensive worics being entered upon, wbioh are being, proceeded wjtk in a satisfactory manner..-;: •....'. *

The importance of the use of cyanide of potassium; ih saving gold being of paramount Interest in this-colony, where there are vast quantities of ores which,.»o far a3 at present Snown, can be most successfully treated by that pjbpjtß, abplicatlon-of the holders of the .patsntrbjhts for New Zealand for permission to amend; the specification of the patent was opposed bjr4hß\Gflyerhment, but unsuccessfully. .Subsequently ari,agreemant;,subj>>ot to ratification' by Parliament,: for the poi chase of the patent has been arranged',- '-'". ATheneceiity of conserving water for mining purposes and irrigation generally has not been lost sijrht of, and reports 1 upon this subject have b'een;presehted tathe House by the Minister of Mines:' • - -.-: •■■::*> ■:*;:

The' expansion '.of. ilie areas taken up tor ■mining purposes on iujged, mounta'nous lands, generally covered with dense bush, whioh are known to be; ;auriferous, necessitated the continuance of "provision being made for the construction of roads,-tracks,, and bridges. Vote 3 wilf accordingly be submitted on the Estimates for th'fese.purposcsV ■■'.', r V --..; OLD AGE PENSIONS. Under, the Registration of People's Claims Act, .which was passed In 1896 for the purpose of "arriving at an estimate of the cost of establishing an old ag'e. ; pensioh' fund;" the colony was divided ?int'o ; 73 . old age pension .districts. W district a was appointed tto receive :and; investigateapplicationvand on corroboration of the material points to issue certificates; to pjaima'ntsy The" extended time prescribed for the delivery of claims expired on the 31st July last,' and up to that date 8,010 claims were, registered. Some of these were rejected, the greater parton the ground that the. c'ainiahts "were not. tixty-five "years" of age on the'dat? pf the coming into operation of the Act. . Most of these claimants have now reached the.prescribe4;age. : Tie total number of persons' in the ' colony "aged sixty-five years and. upwards, according to the 1896 census returns, was -• 20,756. It.may be reasonably inferred, therefore, that a large number of aged persons had -not'-resided' twenty years in the colony, and that there, »ere some who were eligible but. did : -not: Bend in claims. Assuming that the number of" eligible-'and; deserving persons .is 10.0C0,"and th*t each pensioner is to receive 10i a week, required would be£260,000 per-, annum-fa'burden, it will be contended, too large for the taxpayers "of the colony atjpresent:t6 bear, as will be seenjjfifora a paper to be.-laid, -upjjji the table, Injere is. a. general': consensus of opinion that the proposal to.-give a. pension of 10s a week, to all persons; irrespective of position, would involve too greitan expenditure. I have carefully considered "tho question of ways and means and whether we could initiate a schenae whioh, though it be not all one could desire, yet m-'gbt assist' our aged colonUts to spend their remainifig years ingreater comfort. As there.is a possibility of JParliament this session passing Jan old ajeT pension scheme, appro-

.priations f or the necessary pensions -will have to be voted„bat»as,tbo,ytar-is,far advanced, and some'-time *wiH : -elapse-'-before- tho necessary machinery, and safeguards can bo provided, it is hoped that a sum of £120,000 will be more than suifioieut to meet claims: ' B3ETROOT SUGAR.'.'..'.''

.The advantages-.that.would result from the successful growing of beetroot and the manufacture of sugar therefrom cannot be too highly estimated. Some years ago Sir-Julius Vcgel interested him elf in / this matter, bu:, although legislation fo'lowed, no practical good to the colony has resulted. Gc-ima&y is making strenuous efforts—by meanß of. bonuses," cheap" railway freights, etc.—to faster the manufacture,of beetroot sugar j and the caeerful way in which the German consumers of the Fatherland sub.-nij; to .the- high prices charged for Bugar for home consumption, and at the same time find the money, for tie pajraont of bonuses, clearly indicates that they appreciate the advantages to the nation as a whole resulting from the growing of sugar :bett.. In the States of America the beetroot sugar industry is assuming large proportions.; "When: in >"an Francisco I liad the pleasure of meeting Mr Clans Spreckels and others interested, in,the industry.—From them I obta ned reliable information as to the benefits resulting to the' Califojrnian State 3 from the growing of beetroot and the making of sugar from it. Localities which; p"rior.to the starting pf beet-growing, were in an impoverished condition,.and almost depopulated owing to the poor returns fromiheland* arenow in a most thriving-conditionr--Land' has gone up in value £r. per acre, the demand for labor i 3 good, increased roiding has been found ncce:sary.anda railway specially" for that part cf the State is now in course of coLstruotion.' Our neighbors in the colony cf Victor'.* have also passed, legislation affecting the : new. industry, and have offered inducements sufficient to warrant a.company in erecting a factory at Maffra v For some years" pa-ij experiments' have * been made in 'different parts of 'this colony with the ...view of tilling the soil for sugar beet growing, and the results have been very- satisfactory; -The land in the Wai<t»to, Hawke's Bay, Wairarapa; and Tar:naki districts in the North Is'and; and" Marlborough, Canterbury, and the. northern parls of Otajb are found to Joe speoially suitable. The percentage of saccharine matter obtained from" sugar beet grown in those parts equals, if it does not exceed; that obtained in Germany and France. That our settlers could undertake to supply at a satisfactory price the amount vf beet required I am assured. The main difficulty in the way is the finding of the working cipital necessary for the purchase and erection of machinery and plant.. This is estimated at a coat not lesj than a quarter'Of a million pounds sterling. In selecting-a site for the works it ; 'has been pointed out to maSthat'thres things are essential—viz;, a plentifursnpply. of c'.ear water, cheap motive power, and a place into which the refuse from the works could be drained without risks of claims-for da.nage3 from the holders of riparian rights. During last session a deputation' from Aucklatvt waited upon me'in respect to this matt-r, and Count D'Abbaiis, Consul for ' has frequently called the attention of thi Government to this important industry, arrt. ha.3 supplied valuable information respecting it. When in Paris recently Mr' Ernest Busker, the representative of Messrs E. "Wanguier and Sons,' of Lille, interviewed me in reference to this subject. To him, as to all others, I have given the reply that the Government could only give auch concessions as the existing-law provided. The present terms and conditions are not sufficiently _ favorable, however, to induce private enterprise to embark in the undertaking We, therefore, deem it advisable to ask Parliament to review the position. I am not forgetful of the eff ct tho successful introduction of the beetroot sugar industry will have upon th? finances and upon the island trade and tho refinery at Auckland as regards finance, but the collateral advantages of a large employment pf labor, the increased value of land, retaining the money in the colony, and of reducing the price to our own consumer? will, I hold, comperi ata for the loss of revenue. As to>ir trade with the Islands, there is no feeling of .reciprocity, and mt exports there are decreasing yearly. As to he : refining works assimilation would possibly ensu?, reriles advantages that would probably accrue by adding another and j-rofitable industry to the large number already, established. The great help it would be to our settlers, and the opening for increased, labor that would .hs afforded, embolden the Government to subnui that the time has arrived for the colony to grant other "concessions, such as extending atd increasing ths bonus to ensure the tatißfactonstarting of this important industry. I iutend, atany early date, to introduce a measure extending the present law by granting, with ptoper safeguards,, to any person or corporation producing sugar from beet an annual bonuj of £5.000 on not less than 1,000 ton 3 produced yearly for four years, and alto continuing for a further period of ten years the provision for differential duty in favor of the manufacturer. The B'H will also provide for leans not exceed* ing £20.0C0 to any person or corporation at tho rate of £ for £ on - the moneys expended'on land, buildings, and plant for itn manufacture. DAIRYING "AND FROZEN MEAT INDUSTRY.

The grading and storage of frozen meat, dairy, and < other products have proved most beneficial, and further extension in this and other directions would be for the good of all concerned. In Eome parte "of the colony the settlers are unable through lack of rneansto erect creameries and butter and cheese factories. We therefore propose thai power be gmntomakaadvancstothem byway of loan for, this purpose, sufficient security beiag taken to cover all oidinary : riakp. The amount' to be advanced will not exceed in any one year £IO,OOO. A statement sbowipfr-the advancas made vti 1 be laid:before 'Parliament within fourteen days ot the opening of the session. Further,. I have been informed tl.at there U eery reason to believe that the HiaraeaJDosk' Company, are prepared to' expend a sum of J840.000 in the erection of cool atoreß on condition that tbe shipping the distributors, and the Government find a Bum sufficient to covr-r interest and other charge?, estimated to amount to £B,OOO a year. The colony's share would be £2,665, which the Government will ask authority to expend. It is unnecessary for me to point.out.the advantages that would accrue from placing produce such as fruit, butter, cheese, and frozen meat in cooling stores immediat»ly on its arrival in London, and keeping it there untU required for distribution. - COMMERCE AND TRADE WITH THE ISLANDS

jhould not pass unnoticed, and in calling atton. tion thereto I do so in the most friendly spirit. An annexation treaty has been signed betwqen the American Secretary of- >tate and tho Hawaiian Government." Not long ago It was announced in the Press that the United States Wanted to withdraw from the triplicate control of Samoa; while previously it had been -reported that they lad'expressed-their Indifference as to whether Hawaii should fall into tho hands of any. other Power or not. What has caused the complete change of front and departure from the Munroe Doctrine on the part of. the United" States it is not. for me to discuss. How the change will affect New Zealand i«, however,"..worthy of consideration. 7 The islands lay right on the ocean track between New Zealand and San Francisco; therefore the prospect of trade between Canada and Australia, together with rebent developments in British Columbia, should not. be overlooked. The harbor at Honolulu is one of the best in thet Pacific, and is the only good coaling station between HoDgkcng. Sau Francisco, and Vancouver The securing of thpse islands by" America would have a detrimental effeot in respect to the Pacific cable. Moreover, a great foregn Power would ba brought much nearer New Zealand, and should necessity arise the islands could be used as a defensive or aggressive base to the peril of intercolonial shipping and commerce. Should the propo-ed annexation actually take place; it: goes without saying that the United States would strengthen htr squadron in the Pacifio, and the other nations interested in the islands would probably have to do likewise New, Zealand has do-ie a gocd deal to establish a trade in the Pacific, ard thU trade is practically in its infancy. With Annexation the new American tariff wiii obtain in the Hawaiian group, and our trade there_ must inevitably suffer. Ab a matter of f*ot it is well known that owing to the new American tariff practically abrogating the treaty between Hawaii and America, the annex-„ ation movement arose. It cannot declaimed* fora moment that American interests are paramount in the islands. There has been no purchase and no conquest; in fact, nothing | haß been done except that when the Queen of Hawaii was deposed America favored the oligarchy then established, and later on a convention declared "that the Hawaiian Islands should be controlled by the Unitol States and that no foreign Power should be permitted to interfere with them." The population of the islands as far as I can gather-consists of 47,000 Natives, 21,000 Japanese, 15,000 Chinese, 12,000 Portuguese, and some 5,003 Europeans and Americans' of a cosmopolitan character, of whom not one half are Americans From the Press it would seem that tha Anglican bishop asserts that the peopla do_ not favor .annexation. Japan has objected" to the annexation or has placed the position before other interested nations. If the Japanese wish that the islands Bhould remain as at present, her claim is a good one; but if the object is Japanese control then American annexation is preferable. There is,

however nothing to warrant the coursetaken and, underalt the circumstances, tlie acUon of • America at the present juncture is, if not unfriendly, at least very selfish. It would be, therefore, well if the I'owers interested asked for reconsideration, and it. would ba in the interest ef all concerned to miko the Hawaiian Islands the Switzerland of the I'acifij...' -,-.... FREIGHTS. :••>"■■'

As there has been, and is, a diversity of opinion respecting freight!-, ar>d as there is a question of vital interest to the colony, I will give hon. members, as briefly as possible, my views upon the subject. After making allowance for extra cost of coal, arid thonecessity for vessels-viaitiDg different, ports, we still pav higher rates than producers pay in Australia. Notwithstanding the hi°h rates charged, it has been urged that the shipping companies have not ;pj*id large dividends. • I would ask: How could they, for it is a well-known fact that the vessels were orgmally entirely unsuited for the trade in which they were engaged? probably to tedjnanagement and mistakes at the initiation, and.:the large expense of working owing to unsmtability of vessels, there,was a time when almost the whole of the capital invested was lost. As will be. seen by the value of the shares to-day, the dividends paid, and the reserves made, the position his been retrieved durin°the past .few years, but this has been done at- the "expense of the producers of the colony. ,The direct shipping companies are now*working on much better lines. The vessels have a much larger carrying capacity, with a much less consumption of coal,.and though the pissages may take a few days longer than formerly these vessels are iu a position to carry cargo at reduced rates,, while still giving larger profit. Further improvement is still being rralej and I have been informed that two new steamers have been ordered tff .be built having a large carrying:; capacity, with * mininum consumption of. coil, and with speed suffitient to do the voyage in about four days less thau at, present obtaks. What is wanted is-concentra-tion df cargoes and the giving of the whole of the freights to certain lines The companies, ..being thus assuedof full cargoes and quiok despitoh woUld'be eaaWd" to make further reductions, more) especially- ; i£ products were concentrated at {he several pdirits-Where cool chambers are erected.;. To "give some idea of the excessive freights charged a statement co npiled by the secretary of the Customs will be la'd upon the table of the "House. From this it will be seen that last year New Zealand producers paid £459,913 more than they, would have been called upon to pay if the rates here, had been similar to those current in Victoria. Tho Australian Governments make contracts with the shipping companies, cargoes are concentrated and given to particular firms", and producers receive the advantage of reduced freights. When attending the Fiuitirowers' r tn firence in Melbourne recently we found that the freights ruling in respect to the export of apples was about 4s 6d per An offer being . invited, one was received stipulating tor a given quantity per stmmer, a?d ~the freight would then be reduced 50 per cent. With a view to concentration, the colonies of Victoria, New South Wales, and • v "outh Australia were invited to combine. There ought also to be combination here. Farmers, agriculturists, meat freezing companies, pastoralists, and dairy producers Bhould have kept together. Bv such a combination fair rates would have been assured I hope it is not yet too late for tin to be done, and, if freights are not arranged. by. and through the Government-, at all events they ought to be arranged by and through the representatives of the several lines of producers. In conclusion, I am of. the opinion that whatever company gives us reasonable inward and outward freights with regular despatch at short intervals it would be to our advantage to stand by them. The destiny of the direct lines of shipping companies rest 3in their own hands. I don't fo-get that in the past th»y have rendered good Eervice to the colony, but they have during late years been well paid therefor. To be in a portion to fairly compete," our producers must have low freights, and it is oKr bounden duty to obtain this for them. OCEAN MAIL SERVICES.

As hon. members are aware the present San Francisco mail contract will expire shortly. At the present time we are paying lid per lb. for letters, and the total amouut paid by the colony to the contractors is about £7,600 per annum. The American Government grant a tubiidy equal to about £28.000 a year. This, however, is only c f a temporary character, and will expire on the 30th of June nest. Prom Auckland to San Francisco U the- shorter of the two Paoifio routes, the distance being something like 5,879 miltß. From Wellington to Vancouver via Fiji is 8,555 miles. Our present contract between ?an Francisoo and Auokland is twenty days. This can be easily shortened, as reoentlv two trips have been made in two days less than contract time. A 17-keot boat can do the distance in less than fifteen days. Take four days and a-half to five for the overland route to New York, and five days and a-half to six from New York to England, and our mails should be landed in London in twenty-five days. Kecently a contract was entered into between tho Canadian and British Governments' for a 21-knot boat service between Great Britain and Canada. To Vancouver from Halifax would be sk days, or about eleven and a-half fro-n The total annual subsidy payable are £154,500, of which the British Government is to pay £51,500, to be app'ied speoifica'ly to the establishment of a fast service between C.wada and England One condition on which the subsidy was promised was that it Bhculd be regarded as in aid of the accomplish, ment of -- the "-Pacific no less than the Atlantic section of the scheme. It was at the same time made clear that no additional subsidy, was to bo looked for from the Home Government towards the improvement of the Pacific service, the arrangement of which was to be left to the Governments of Canada and Australia. The present Vancouver contract with NevSouthTVales stipulates for a twenty-one daysTservioj between Vancouver and Sjdney. .■ The contract with the Canadian, Government was for ten years and has about seven years to tun, while the agreement with New South Wales expires in May, 18S9. The shortening of time, therefore, at one end would be of no U3e unless an increased speed wore obtained between Vancouver and Wellington. The recent developments in British Columbia and the prospects of doii:g trade with Carada render the project worthy of consideration. I regret to say that our trade with Samoa aud-the Hawaiian Islands is decreasing, and if the latter isanda are annexed by. America our trade under the new American tw™ which will then be in foroe there will be still further decreased. On the other hand, our trade with America in 1892 was £4OO OCO and in 1896 only £2OO 000.' America's trade wth us in 1892 was £200.000, and last year it had doubleJ, being £400,000 New Zealand was the first to establish tho 'Frisco service, and I think it is a great pity that wo should not have derlvedihe full benefit* from it by insist-' Ing on New Zealand being the terminal port. New South Wales contributes only £4,000 a year to theußervioe, 'and had we been called upon to contribute double that amount, and retained the service within ourselves, it would have, owing to collateral advantages, paid us todo it. I am further of opinion that in any future con-tract-we should stipulate for a.not less than 15-knot service, with steamerß of not less than 4,500 tonnage, and the TDBsimum rates both for goods and passengers should be' fixed. New Zealand, from its and owing to its rapidly increasing population and the extension of its produce, should at no distant date be the terminus of one or other of the mail lines of steamers whioh now make Aust alia their terminus.- Tho P. an! 6. Company are largely subsidised by the British and Australian Governments, as are also the Orient Company, but New Zealand derives little or no benefit from .these services, owing to the running of the intercolonial steamers not being timed to connect with either the outward or tho inward mails. The Union Company have recently effected an improvement by running h--1 tween Wellington and Sydney in a little ovor I four days. The establishment of a fast service j to connect with the P. and O. and' Orieifc steamers is not, however, contemplated by the Union Company unless an adequate subsidy is paid. Again, there is tho Messagenes Maritimes, which is heavily subsidised by the French Government for Noumea, the terminus of Ub lino. Becently the French Government granted a subiiiy to the Union Company for their servioe to Tahiti, and it seems almost a waste of money to send the Messageries' Bteamers to Noumea and then for them to return to Sydney. If a branch steamer were sent from Sydney to Noumea there would then be nothing to prevent the main boats making New Zealand the terminus. At the present time there are also the vessels belonging tolhe North German Lloyd's heavily subsidised by the German Government. These boats stay, in Sydney three weeks, and seeing that the distance from Sydney to Wellington is only 1.239 miles, and that the Bteamers have to return short freight, one is apt to wonder why the vessels of this company stop short at S vclnev. I have drawn attention to this matter for the purpose of comparison and toshowthe keen competition that exists in the other colonies, tending to keep the rates of freight, and giving greater facilities for communication. In the report of the Victorian Government on the despatch of the Secretary of State for the Colonies detailed information is given in respect to subsidies to steamship lines, and I find that no e «P a Z m?nt of tne German line of steamers is S?M9 a year ' and to ' tne French line £120,003. The K and O. and the Orient lines each receive £85,000 per annum for the weekly

service*?. Australia, and £2*5.00)', is -also received by the P. .'and O. Company,for the Indian Eemce., I.niiy i-lyr> :\;r.ti(in that the weekly mail service betweebiiustra!i» and Great Britain, performed by the P. and"o.-ftnd Orient Steam snip Companies h&B receStltCb'een renewed Ut n term of seven years front the Ist February next! ,^ h^ b P b y the cbntfacting, colonies is t'o.UOO per annum, aa.ftt present, but the time between Adelaide and London has been reacceleration of from three and a-half to fourdaj s on the present contract.running; It is my H^ P I 0 L afc ß ' Oa - ear!y « dat ? to b « D E before the House by a series of resolutions proposals in connection with ocean mail services:^. SUGGESTED EASTERN SERsl<ji . In. order to encourage and "cipen updirect/ trade and passenger t.afflc with Queensland, theNetherland Indie,, the .strr.it! /.SetUementv Burmah, and India it wondCbe worth while entering into negotiations with the New South? Wale 3, Queensland, ana Indian Governments to see whether they would be .prepared to. join this colony in subsidising a good, and- fast , monthly service, with" Wellington and' Calcutta as terminal ports. A - through Eervice between New Zealand and Queensland would be a matter of great importance,there-being many inter-' r changeable products between this colony and- 7 .the tropical portion of Queensland, "but, 1 s owing to the comb'nations between- theshipping, companies, all rQueenalandr cargo for New Zealand has to be transhipped at Sydney, and necessarily the through. rates for passage ; aud freight are high, and ; obstruct trade.. Toe - Mute I would- propose from Brisbane to India i wouldbe,.mthefirst instanop, up the ;Queenso' Una" ooast, calling at intermediate ports-as Thursday Island; th'nce to Batavia (Java). • Singapore, Penasg, Rangoon, and Calcutta. In order to profitably Scarry out this service it would be necessary to negotiate with the DftAch ■■•• authorities at ; Batavia to ; allow the steamwko- : call trade, and from iwhat I can, learn I think this concession would be granted ■- r Ji. 13 M^ ady -i u the «?e.of ihe Queensland . Royal Mail service. A,monthly line of largo up-to-date steamers, with, a speed of noUeV; than fourteen knots, fair: passenger acoommodation, . refrigerating machinery, and,~,goad «• cargo-carrying capacity would :be -required* As a_mail service it would establish rapid com- '■■■ mumoation between these coloniesLai&the East,aad the British and.the Inlian Governments ■; mght be induced to;«rant? assistance for military and strategical reasons. - ; At present a mail - service i 3 run fortnightly'between Singapore and Ualcutta on the route, suggested,.and this would-* no liouot.wdik inwithihe present proposal. Very few British steamers cross the region of the Dutch Indies, so tliat between Singapore, and ; : Australia there is, bo far'as our people "are concerned, a great gulf fixed, which the propose*'-' line; would help to bridge. There is a large intermediate trade all along the proposed route. Our freshandtinnedmeats.dairyproduoe, horses, • - temperate fruits, grain, etc., would soon be appreciated in the Tropics, and in return woolpacks, cornsacks, tea, coffee, rice, rubber, tobacco, indigo, spices, and other tropical products wov.'d be brought here at low freights, and direot trade be induced. - In support of this contention I would point out. that at present it pays the Union Steam Ship Company, in conjunction with the British India Steam Navigation Company, to send a large cargo ■ steamer down to New Zealand at irregular intervals (about once every two months) with heavy cargoes, but they are of little service as regards passenger traffic. The Indian tourißt, as a rule, Ims plenty of money to spend, and would thoroughly appreciate our climate, which is not so rigorous as that of England. The suggested service would .bring us" into direct touch With a large portion of a densely populated part of the globe, and be a valuable and progressive step on the part of the Indian and Australasian Governments. I have no hesitation inlaying that New Zealand would be benefited, for- there are great possibilities by going off the beaten track and entering commercial regions whioh, properly exploited, may result in opening up fresh markets for our produce. I feel quite sure these suggestions ■ are practicable, and every attempt should be made to cwry them to a successful issue. BUSINESS AGENTS FOR THE COLONY.

During my vi=it to the Mother Country and to Australu I was very much struck with the utter absenca of information respecting New Zsaland, its scenery, its resources, and product?, and the misapprehension in respect to its legislation and the ignorance of its affairs g iierally. We are annually subscribing large sums of money for the printing of books and leaflets and illustrations, and from*time to time attacks are made upon the finanoes and pro« ducts of the colony, and misleading information is given, whioh prevents tourists from visiting this wonder'aud of the. South. Not only pari Agente-Gcneral did their best for the colony, but the present Agent-General is doing work in the direction of advertising New Zealand} yet it is irapossiblo for him alone to grapple with the difficulties that sur. round the position. After careful inquiry. I have come to the conclusion that the time has arrived when this colony should have is tho large cities agents who would "work under and with the Agent-General in London. Their work would be to distribute papers, books, illustrations, and general information respecting New Zealand, and to further tho introduction of the colony's products into the districts assigned to them. They would also be able to give information tointendingimmigrants, particularly of the farming class, regarding the area of land open for settlement-, the price of land, together with its suitability for horticulture, viticulturp, stock-raising,' and dairying. Such agencies would, m my opinion, be the means of lnduo:ng people to como here instead of going to Canada, the United States, and Australia. These agents would also be able to give rel'able infoirrution to British capitalists regarding the colony.. The emoluments for suoh Eositions would not amount to much. Leading uviness men would be glad to have the agency, because it would be the moanß of giving them a status. I may sßy that in connection |with the postal service the colony has such an agent in San Fracoi.co who is doing excellent work for a very l.mited salary. The course suegested would, if adopted, bring us into close touch with such cities as Manchester, Glasgow, Liverpool, Bnmingham, Edinburgh, Dublin, and Cardiff. Later on it might be found necessary to extend the agency system to Melbourne, Sydney, Brisbane, Adelaide, and Perth in connection with the interchange of products.

EDUCATION. Under the present conditinsof education there is a serious defeot. Sufficient encourage, ment U not given in our existing institutions For the primary school pupils who are desirous and capable of enjoying the advantages of secondly and university education. A Bill will be sub. mltted to you to es'ab'Uh and endow a university, college, in the city of Wal. HogtoD, and the proposals therein con« tiiaed will afford a satisfactory solution of the difficulties existing Jn the districts which will be benefited by this central r-olicge. The scholcjihips propofed under the Bill will b§ sufficient: in number and value to enable a reasonable proportion of deserving sohool pupils to be alvanced from the primary and the secondary schools to - the University. Provl. sion will also be made on the Estimates for the erection of buildings, eto. The age at which our children leave the primary school andine*ge aWhich they are qualified to enter a university leaves at least an interval of three years, which t-bould be bridged, and whioh our present sesondiry school system, as now administered, doek not provide for. Owing to the spread of settlement in the North Island, and the necessity for increased school accommodation in districts in the South Island, where land has been acquired under the Land for Settle-: ment Act, and the increased number of schools required in the Native districts, It has been found necessary to mike provision for supplementing the amount hitherto granted for school buiHinss. The grants have usually been about £50,000 per annum, but this year I am of .opinion that our requirements will reach at least £75,000 I, therefore, propose to ask for authority to raise a further sum of £25,000 for the purrose of grants in aid of school buildings.

In order that our people mav maintain their position as manufacturers and agriculturists, and that the industrial classes may hi specially benefited and fitted to undertake scientific, mechanical, and mining pursuits, it is of national importance that technical education alisuld be placed upon a more satisfactory tooting. From the experience of the last two years we are able to discover wherein the Act of 1895 requires amending and enlarging. The House will be asked to pass a Bill , approving of greater : encouragement being I given to the technical schools throughout the colony, and providing for the establishment of new schools Continuation classes will bo recognised as part of the system, andthesecondarV schools will be encouraged to work under the iftmeAct. Tower will also be given for local authorities to assist in 1 he establishmect aid maintenance of technical Echool*, as is beinfedone&t the present time in England. It would not be fair, however, if I did not recognise how much valuable work has been done; and is being " done, under the present order of things at Wellington, Auckland, Wanganui, and Dunedin. These schools hive trainsd a very; large number ot pupils, whoso work has been tested by examinations held upon paperssupplied by theScienceand Art Department at South Kensington and the UtyGuiHs of the London Institute. In all, certificates showing 615 passes were obtained by candidates from these different schools in the year 1896. All the assistance in the power of and Art Department of South Kensington in this work is cheerfully afforded. Under the ptovi-iona ot the Manuai and Technical Instructioni : Ao«v 1895, itisesti'.'' mwed snaf the am»ge. attendance at closer''

numbered 2,690, but the amount of technical n.mot.on given in the colony is not confined to that given under the Act. Our schools of mines, the students of which numbered 229 ! n the year 1895. afford . a . most valu ble technical education for specific objectsThe Department of Agriculture is also aesiatinj J technical education by the instruction g veh sc the agricultural experimental atations, fruit farms, and dairy schools. The Canterbury Agricultural College had forty-three student* in 1896, and a school cf engineering and technical science—a department of Canterbury C'olloße has eighty-s>.ven. I trust, however, that thefurtherproposalstobasubrhittcd to the House this year will result in greater advances being made in this necessary branch, atd that it will take a more important placa in the whole of our education system. At all events, the Govern: ment feel that the principal drawback in the past which has operated detrimentally to the establishment of technical schools in the colony has been the absence of funds sufficient to provide and equip the necessary building*. The House will be invited to m ike provision for this purpose to the extent of £25,C00. THE PROGRE33 OF THE COLONY. The time has now arrived, after six years of the Liberal paity's administration, when we can fairly a-k whether "wide diffusion of wealth and industry among the peop e," ascompanied by "a buoyant revenue and a healthy Exchequer *' has been realised. The buoyancy of the revenue an 1 the healthiness of tiro Exchequer have been abend intly demonstrated. Bach year has shown a tubstantial surplus but perhaps the moit striking way of showing this is to compare the revenue f.ir the year before we took office, 1890-91, with the year iu!>t closed :

, „ 1893-1. 1898-7. Ordinary revenue ... £3,808,222 £4,452,815

It will be seen that between theso years the revenue has increjsed bv £641,623, a magnificent proof of the spending power of the people, and the more general diffusion of wealth in the colony. It will be contended that this iucreise has been largely caused by the operation of the new tariff, but I am in a posiii >n to assert that this is not the case. The total increase on items affected by the new tariff amounted to £8 ,OCO, while the reductions and concessions reached £67.000. leaving a net increase of only £15,000, which was represented by the increase on spirits alone. There are, however, other means cf testing the progress of the colony than that of increase of revenue. I have had prepared a series of tables, which will be found attached, showing the progress of the colony as regards its agricultural, mineral, and other products during the six years of the Ballance and Seddon Administrations. The figures show conclusively that the policy, which the Government have pursued of assisting our industries and opening up the lands of the colony, has proved benefir'al justified by events. Kqually they demonstrate that the labor legislation, although denounced ai calculated to hamper cur industries, has had no such effect. No clearer proof of this could be given than the gratifying inc-ease which has to bo recorded in the number of hands employed in the factories of the colony for the past year. The following are the number of operatives registered as employed in the factories of the colony:

Males. Females. Total. January, 1896 ... 23,807 8,580 32,387 January, 1897 ... 27,129 9,489 30,918

Such a development speaks well for the present position and future progress of the colony from an industrial point of view. deferring to the progress made in agricultural, and p33«ftral pursuit?, I finl that the wool exported has increased from 102,522,1851b in the year ended September, 1893, to 125,309.673 ib in the year ended September, 1893, whi!e the quantity purchased by local mills has also increased from ?,979,293!b in 1890 to 3.989,9341b in 1895, the total increase in production aggregating 26,793,129;b. Ncr his this increase been on account of the abnormal growth of large flocks. In 1890 there were 11309 flocks; in 1895 there were 17,703, representing an increase of 6,394, but of that number there is an increase of 4 366 in the flicks of under 500 sheep, proving that the progress which has been made ia rather Chat of the small farmers—who form the base of the pyramid—than of the large farm rs and rnnholders. The., number of fheep increased from 16,116 113 in 1890 to 19,138,4E3 in 18)5.. represmt'ng a total increase of over three millions in six years. Turning now to our second great Industry- frozen meat—ihe tables show that in 1890 the expart was 100.954,7561b, while in 1895 it was 123,576,514;b, an increase of 22,641,7881b. Equally satisfactory has been the progress of the dairying industry. In 1350' the combined butter and rherse exports were v*'ued at £207,687 ; in 1896 they were valued at £411,882. Thw proof of the development of the industry is most gratifying to the Government, and will donbtleß.? prove so to the colony. The dairying industry ia one cspecia'ly adapted to the small farmer, as it provides employment for his famify, and I attribute largely the progress of small settlement throughout the colony to the development of this industry. In 1890 there were 38,178 holdings over one acre in extent occupied and cultivated in the colony. In 1895 the number had increased to 46,676. Finally the total area of land, farm?, cultivated surface sown in gras3 or in gardenand orchard, was in 1890 8,039,765, in 1896 it wan showing an increase of 2,696,215. Such progress as I have sketohed was bo ind to show ikelf in the valuations ef the loci' bodies of the colony. I may fitly close this part of my Stattm nt by referring to the increase !n the value of the ratable property in the colony dur'nj the !a=st i\x years. In 1890, judging irom information in the returns furnished by Ihe local bedies for that year, the tot«l rating value for the whole colony was £103,116,564, excluding Crown and unoccupied J-'ative lands, also outlying lar-ds in c. ui>ties where the Act was not in force. In March, 1896, tie value had risen to £114,385,605, and, if the figures quoted be only approximately true there is still buffi-, i- nt evidence of consider-' able progress, inasmuch as the same returns _ Bhowed that the value of the property in the municipalities remained stationary during the period referred to. The inoreas; above must nece-sarily have been confined to the property belonging to rural districts. The mineral resources of the colony have shown e.}ual development and expansion during ihe past Bix years. The value of the gold exported in 1890 was £751.360, and in 1896 £1,041,428 showing an inorease of £290,068. Second, in value amongst the minerals of the colony comes ooal, which is inseparably connected with the development of all ouc indus. tries. The quantity raised in 1890 was 637,397 tons, in 1896 it was tons, showing an increase of 185,454 tons. Side by tide with this Urge inorease of the coal raised in the colony must be placed the fact that the import of coal has decreased, being in 1890 110,939 tons, and in 1896 101.756 tons—a diff ronce of 8,183 tons by way of reduction. CONCLUSION. The faots I have stated need little oomnun'fc j they speak for themselves. They show that s applying any and every test which is possible, the progress of the colony during the pasi six years has been decisive. Our revenue (exclusive of territorial) was increased by £644,623 ; the area of our lands, occupied and cultivated, has been greatly enlarged; the number of our farmers has multiplied; the expoit of our wool and meat has increased in volume; the output of our gold and coal mine* his substantially increased ; and the capital invested and the number of hinds employed in our factories and industries have largely expanded. Surely, in view of these incontrovertible facts, I am justified in c'airaing that the Ballance and Seddon Governments have succeeded in bringing about a marked impr vement in the condition of the people, and of placing the colony on a permanent footing of prosperity beyond that previously obtained. The first and foremost cause of this satisfactory condition is the enterprise and energy of our co'.onists, who have contributed a large degree to procure these splendid results But I have no hesitation in rointiDg out tbat this satisfactory state of thing 3 has taken place under a Liberal Administration whose advent to power was heralded 'by the most gloomy predictions on the pirt of those who differ from us, And to the future, I feel confident that, with strict economy, prudent expenditure on reproductive woiks, the continuance of the policy of settlement of our lands on wue and progrefsive lines, the development of our resources, assistance to and encouragement of our industries, aided by the judicious application of expert knowledge, the progress of the past six years will most certainly be continue! and our most sanguine anticipations be realised.

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THE BUDGET., Issue 10443, 12 October 1897

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THE BUDGET. Issue 10443, 12 October 1897

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