THE FINANCIAL STATEMENT.

Otago Daily Times, Issue 12739, 12 August 1903, Page 2

THE FINANCIAL STATEMENT.

REVENUE STILL BUOYANT.

An Exhaustive Review.

[By Telegraph,]

WELLINGTON, August 11. .The Sight Hon. R. J. . Seddon, P. 0., LL.D., Colonial Treasurer, made the following. Financial Statement in Committee of ■Supply this evening:— I. Mr Millar,—l bring beforo tho committee , the Budget for the year with confide-nco, • .believing thnt.hon. members.will accept the assurance that, consistently with meeting; tho requirements of the , colony, strict economy baa been obseived, In proof of ■this, the Vital increase on tho annual appropriations is only £31,000, and -this in the fays of now departments, increasing' population, greatei conveniences, and oxtensive development.. I ostiinato a considerable increase of revenue, and believe that after providing for all charges there will be a substantial balance to the good. :Th(i financial ponition of the colony is sound and satisfactory. There is a buoyancy in:tho rcveiiuo from the Customs and railways—barometers that never fail to faithfully mark the prosperity and wellbcin; of the-people. Prudent administration is essential; and ivo must not, merely because we hwo■ an increasing revenue, deem V , proper on that account to increase our expenditure. Qnite the reverse: as the surest .protoction against adversity is to practise economy during prosperity. Every year since the Liberal pprt-y came into'offioo the' Government, by their pmdent administration in maintaining a- strong fnauco , and .increasing and insuring the spending powers of the people, have been able (o announce- a surplus on tho year's transactions. 'This year is no exception to. the rule, and.-Oβ members ore already awaro from tho public accounts, which are before them, we closed tho past year with si credit balance of £303,905; and for the current year Inter on in the Budgot shows a substantial surplus, which I am positive. will bo realised, if not, exceeded. Hon. mem- , bers must, like myself, feel disappointed at the price of our stock on the London market, and considering our ability not only-to mee.t our engagements, but after doing so to devote annually to development purposes large sums of money, tiie situation is the more inexplicable, Tho cause of the low price of colonial stocks is far aflold from Now Zealand, and , tin* reasons, therefore, are fully dealt with later_ on. The-'best way to improve our position is to keop tho public works expenditure within reasonable limits, practise the _ striotot economy, prove ourselves self-contained, and • seek as little money outside the colony as possible. The collntoral and other advantages of raising the money in the colony . and keeping the principal and interest •■ within ourselves are strikingly apparent, and the lesson for the moment will prove of lasting good. It is much bottei- that tho time for tho completion of.foine of our railways should be extended, the erection of. publio works bo postponed, and conveniences stand over than /to receive £91 15s net for every £100 debenture. I will avoid as-for a<? possible wearying members with a mass of figures, but will: ask them to refer to [he tables which accom-: pany this Statement, confining myself to the | most important details only in this, my j sevonth, Budget. As heretofore, I havo dealt ; with tho finartoos ot our colony in a prac- j tical and lucid way, so as to be easily understood and grasped by all. Subjects cognate to finance, and having a direct influence m ; maintaining tho present and promoting, the.: future prosperitjv.-.iire.shortly and EuceuicHy ; referred to. " ' . : RECEIPTS DURING THE YEAR 1902-3. With regard to the -receipts of the past year, it was estimated that tho revenue pioper would produce £6,026,000. Tho actual iigurca, however,, reached £6,386,609, or £360,609 in oxcoss of the estimate. Of this amount of excess Customs has yielded £115,613, railways £107,551, and etamps £80,939. Oflior items of revenue show in-; croasbs totalling £62,014, while only in two ! items—land tax and beer duty—the receipts i fell short, of the -estimate by £5538. The \ Customs revenuo was estimated at £2,222,000 —being nearly £19,000 in excess of the pre- ■ vioiw year'r, rovenuo. The actual receipts were £2,335,613. Railways produced £1,982,551, while the receipts from stamps amounted to £978,939. The receipts under the head of land tax fell, abort of the estimate .by £3938. The amount actually received from , increased valuation was £1000 more than was expected, but the remission - of revenue, owing to tho reduction of the' mortgago tax, v,m £30,000 instead of £25,000, ' as anticipated. The income tax produced £15,681 more than, the estimate, the twoheads of revenue together exceeding expectations by £11,746. Territorial revenue, set i down as £230,000, produced , £252,277, or £22,277 moro than was expected. Comparing, actual receipts with'-tho preceding year, lion.' members will find that the revenue .of the year just closed is bettor by the sum of £333,539, inado up as follows:— I Customs £131,527, railways £113,062, stamps ' £70,268, land and income tax £4513, beerj duty £167, registration and other fees £7389, j mnrino £1512, and territorial £2559. the only falling off being a small sum of £557 in miscellaneous revenue. In addition to 'the rcceiptu abovementinned,' £57,500 enroo lo credit in respect of the proceed* of debentures issued against sinking fund accretions and a recovery of £3326 on' account of expenditure of previous years was received, making tho receipts for the year from all , sources £6,44-7,445. EXPENDITURE DUPING THE YEAR 1902-3. Tho expenditure of the year out of the ordinary rovenuo ' account amounted to £6,214,019. The charges authorised by tjia | permanent appropriations snow, as comparstl

willi Iho Estimates, an oror-expendituro of £65,192. Of this sum hospitals and chad■table inetihi'tions are responsible- for £20,274, subsidies to local hodie.3 for £4049, "thirds-" and "fourths" for £5161, and'endowments for £2056; while Iho payment of two years' | contribution in respect of the Australian naval defence within tho year is answerable for £21,493. Coming Jo the departmental expenditure, the amount shown as underspont is £78,323; but of'this amount rail- ! ways are credited with £54,689, being the balance unspoivt after tho excess of revenue as allowed by law was added to the n.n-pro : I priation, so that by eliminating the railways,! we 'havo a direct saving for the year of I £23,634 on'our departmental votes. It 19 '■ unnecessary for mi to. deal in" detail with I the different classes, as the table showing actual expenditure of each class as compared with the estimate will bo found attached , , hereto. RESULTS OF THE YEAR. ' Results of tho transactions within the ordinaiy revenue account for the year may he sot forth as under:— • Balance, 31st ... ... £270,458 Chit of which \vm transferred to j ■ public works ' .. 200,000

Leaving ...£ 70,469 Actual receipts for 1902-3 ..._ ... 6,214,019 Excess of revenue over expenditure 233,416 Surplus afc 31st Jlaroli, '1903 ... 303,005 PUBLIC DEBT. i

The gross public de-bt on tho 3ht March last was £55,799,010, showing a total inoresioo for tho year, of £2,932,572. Of this sum £1,750,000 was raised under tho Aid to Public Works and 1 Land Settlement Act of last sossion. Tho requirements of the Advanoes to Settlers Offico caused the

THE "GO-SLOW*. POLICY.

raising of £450,000 (including £200,000 obtained on short-dated debenture* and einee paid oS). and for the acquisition of land for olose'se't&mont wo raised a. further sum of £338,700. ..Grants to Jocal , authorities ! required £278,000 undor "Tho Local Bodies' Loans Act, 1901," »ml for tho purpose of purchasing and managing ooal milvcs £52,000 had to bo borrowed' under "The State ; Coal Mince Act, 1901"; £4232 of New Zealand Consols wero inscribed, and £57,500 debentures for accretion* of sinking funds were created under "The Consolidated Stock Act, 18E4." Tho conversion operations for the year wero very few, the incroas; to the debt by conversion Ireing £12,240. On tho other hand, a small parcel'of debentures (£10,100) under "The Land for Settlements .Act, 1897," failing duo on Ist April, 1902, was paid off. Of the increase , , at least the following items may bo sot down ns of a directly reproductive character:—For the purchase of land for settlement*, £338,700; advances to-settlors, £450,000;" loans ■to local bodies, £278,000; New .Zealand consols deposits, £4232; purchasing and developing -State «oal mines, £52,000; — totals During tho year '£250,000 of- debentures under "The Land for Settlements Act, 1897," fell due, and were renewed by tft« prpceoda of a sale of a liko amount at a sniall premium al>ove par. On the 31st March, 1902, the net debt was (shown at £51,837,631', and on the 31et March, 1903, the net debt was sot 'down' in the publio debt tablo as £53,585,780. J desiro to explain that, in addition' to the customaiy deduction made for sinking fund] accrued, I have this year included tho accrued sinking fund of the Government Advances to Settlers Act, an item ■ heretofore not shown in tho table. I have also further reduced-the gross debt by_ taking off the amount of Government securities, in which Now Zealand consols deposits are invested, ns -both - amounts appear in tho table of publio debt.' For the same reason I have taken oft £500,000, held by the Publio Trustee in trust, for' tho payment at 'maturity of, stock inscribed, for the purchase of the" preferred shares of the Bank of New Zealand, represented, by debentures of n, liko amoiint issued under "The Aid to Publio Works and Land Settlement Act, 1899." ' ' PUBLIO .WOEKS FUND. Turning-now to the Publio Works Fund (the partioulare of which will be found in Table I), lion, members will find that £187,334 came to credit in respect of_tbo .loan of the previous year. We also received £750,000, being the. proceeds of debentures issued in the colony under ' .Tho Aid to Publio Works and Land for Settlement Act, 1902," besides instalments' to the amount of £260,000 on account of the million loan : recently raised in London. To those add £200,000 transferred from the revenue, together with a. small receipt of £1616, which, with tho balance brought forward to begin the. year with of £464,059, made a- total 1 available . ways and means of £1,552,009. I Out of. these moneys £1,426,264 was spent ! on railways, roads, and other public works, ! and £88,180 lor cba-rgos and expenses «f j raising loans, leaving a balance'to _be carried forward to this year of £338,565. If will be seen 1 from this that tho amount received in respect of the new-loan has, for- ; tunately, not been trenched on, and is avail- ■ able for , this year's expenditure. The. expenditure on railways, roads, and especially publip buildings, must, bo curtailed, notwithstanding that our ability to ,nieot interest charge? is much better -than in years gene by, when,much larger sums were fen , - r< wed. In the curtailment a discrimination for. such works as the -North Island Trunk railway should be made, and in rcapect to other railways, ■ roads, and other works thn decreased 'expenditure- hluwiUl bo spread ■ evenly throughout iho colony. I LAND FOR SETTLEMENTS ACCOUNT. I The account had a balance of to start tho year with, Debentures amounting- to £338,700 wero created and sold in the colony, £109,820 was received from rents and lcito fees, £10,335 from interest on investment .account, and £&tb from miscellaneous receipts. On Ih? other hand £353,462 was expended in the purchase of estates, and £15,521 in roading, survey, and other expenses," and £93,598 wife recouped to the Consolidated Fund in respect of interest paid on debentures issued.- A parcel of £260,100 debentures fell due on Ist April, 1903,. and £10,000 was. paid off from cash in hand, and the balance (£250,000) was redeemed from the proceeds of a like amount of new debentures created and sold for ! £250,625. The'balance'carried forward to this ye-ar' was £366,075. CHEVIOT. ESTATE ACCOUNT. The rents arid other receipts amounted to £14,609, which, added to tho balance of j £16,861 from 'laat year,, makes a total of £31,470, of which £9037 was expended in ( payment' of interest and other charges, leavI ing a balance of £22,433 at tho close of tho year. - .'' ' ■ . ■ . ' CONVERSION ACCOUNT. Tho transactions of this account during the past-year havo.not.been very numerous. 1 £230,040 of 3 per cent, stock has' been in- . scribed, of which £229,000 was' -sold, and the proceeds used to r&leom £52,000 5 per cent. 1867. debentures and to pay off tlie balance of £165,000 obtained on tho security of short-dated dobanturee under " Tho Aid to Publio Works and Land Settlement Act, 1899." A small parcel ol 6 per cent, debon-

,nri)3 under tlio Canterbury loan of 1862 camo iu for .conversion, and £1040 stock was issued vin «xflliango. Detailed particulars will l)i> found in. the taUo appended.

LOANS TO LOCAL BODIES ACCOUNT. The balance at the -credit of. tho loans to local bodies account on Iho 31st Match, 1902, was £2770.- Debantuvcs for £278,000 ; were created and issued during the past I year, and refunds, of unspent, balances, of grants, amounting to £1836, wore received, Payments on account of Joins were mado during the- year to local bodies of £234,870, ! and towards opening up blocks of land for settlement £18,578, leaving at' the end of Inst year a balance of £29,158 to the', credit i of Hie account. Up to the 3kt o[ March last the total' 1 amount of debentures created and issued i and carried into this account wits £2,022,100, : and the total disbursement toward opening ' up b'ooks of land rev seitrtlemmt £352.913, and to iUip Public Works Fund £59,f00, in exchange for debentures' under " The Roads • and. Bridges Construction- Act, 1882." It will 'to .recognised Hurf-.tho transections dn connection with.this account'have been considerably inoreasdd, the total of payments' mado to local nuiliorife oh swount of loam during tho -pssfc-ytai , boinij the 1-irgest since the passing, of ■tho (xovornnnMi't Loans, to Local Bodies .Act. in 18F-6. App'icrfJoivs for loans for tho construction of abattoirs under "The SlauditCTinp; and Imspootion

Act, 1900," and. for drainage and wiitaiy works under "Tho Publio Health Act, 1900," are constantly being" received. Thie is no doubt attributable to the feet that tilio locial authorities aro compelled'under these acts to borrow for the purposes nbovo

mentioned. '• Tho grants, although proving of (treat benefit in respect iof public health, tend very materially to swell the amount. It becomes necessary for ithe Treasury to borrow in order to provide tho loans anbiorissd by these note. Of '.'the total increased dobt of loci! bodice, amounting to

£16,691,606, the following- figures will indioato 'to what extent local authorities have availed themselves of the reduced rates of interest:—At 3J per cent., £964,361; at 4 per cent., £30,430; at 4J per cent., £674,639. Seeing that iho rate of interest is now higher than when "the act -was jsas3ed fixing the rato at 3J per cent., it may become necessary to raise the- interest chargeable. I am pleased to be able to report that tho payments of 'interest by tho various local bodies on- tho inscribed debts continue to ba fairly and punotually made. CONSOLS ACCOUNT. Tho deposits reeoived during the year were the smallest since the account was opened, , tilie amount being only £4131. The reason for this is no doubt due to iho fact, as stated in last year's Budget, tot a.better rat© of "interest Jβ obtained by purchasing other Government scourities. T.he total amount now inscribed is. £472,500, whioh has boon invested , in. Government and other securities, yiolding a rate of interest to the colony equal to about 3J jicr ccut. per annum. . THE GOVERNMENT INSURANCE DEPARTMENT, During the 20 years ended on 31st Dβ.oember, 1902, it-he 'Government Insurance Department has .made grepjt progress. Tho new policies issued during the period were 66,375,' repreeentinjf o aum assured of £14,561,581. Tho business in force at the end-of the 20 years increased from £5,176,217 at the beginning, to £9,896,572, representing a net increase of £4,720,355. The inoomb from premiums during tho 20 years amouwtod to £4,841,651, while- that from infcrost amounted to £1,895,565. The amount naid to policy-holders or their representatives during tho 20 years was £3,054,773. The amount added to tho funds was £2,677,925; while .tho total accumulated funds at the end of Hie 20 years was £3,3£2,817. The following table shows the position at- tho end of the respective 10-year periods-1892 .and 1002:Niunber of Sum 1832-1892. . Policies. Assured. New business com- ■ . / pieted 33,358 £7,776,713 Business in force at end of period 30,316 8,030,220 1892-1932, New business com'p'eto'd 32,117 . 6,784,60S Business iii force at end ■ of period 42,-100 9,896,572 InterMt. Premiums. 1882-1892 £ 708,001 • £2,0G8,26i ' 1892-1902 .. ■.., .. 1,287,561 2,773,387 ' Paid to Added Policyholdeis, to Funds. 1682-1892 .. .'■ £1,023,250 £1,275,409 1833-1902 .. .. 2,031,523 1,402,519 In connection with the abovo table, it ohould bo borno in mind that during.the decade ended 31st December, 1902, tho amount paid lo policy-holders or their representatives Iras very groatly - increased owing to the larger, number of insurances maturing , and increased deaths anil surrenders occasioned by tho larger number of policies in force.

PUBLIC TRUST OFFICE. This institution lias outgrown the troubles of infancy and reached a vigorous manhood, liy comparing the figures of tho years 1882 and 1902 its rapid growth can seen at a glance. Tho powers ot tho Public Trustee liav-D from time to time been onlarged, with, much benefit to his clients, in dealing with the property of lunatios, winding up estates, Applying income or , -capital to tba maintenance or advanooment in life of infants, and in many other ways he has now much greater powers than private trustees.' Tho management of Native lands, especially under " The West Coast Settlement Reserves Act, 1892," jby tho offico has been, very successful. Tho increase in land values owing to the riso of the dairy industry has no doubt contributed to this, but the granting by a public officer of simple, inexpensive leases, with cecurity for improvements and a. tight to renewal, has been a great aid to the* settlement ot these lands. Tho total area of reserves vested in tho office undertho act is 186,489 aere3; 128,156 acres are leased, 18,052 acres are hold by Native owners under occupation licenses, whioli require them to fonce boundaries and' pay rent to other Natives who have interests in thelaud, etc. The sum. of £23,001 Is 6d was last year paid from rents to the. Native' owners, after doduuting- till expenses;- The office lias boon very fortunate- in its investments. Prior to 1891 about .-G4OOO- had been lost.. The amount is small when the number of loan transactions is considered, and k creditable .to Hie office Lending Bbard. Tho losses wore, of course, met. out of profit and. did not cost Die colony anything. There havo boon no losses during the last 12 ytfars. The office assurance reserve fund now amounts to £10,278 12s 4d, a sum probably suffieifl.nt to meet, any' loracs. Last year' a Eiibetantial reduotion was made in tho scale of charges, nnd us tho busiuies of the department grows '-will be reductions. Tho State guarantee as a security for the nets of tho Publio Trustee- should- gain for the office the confidence'of the mese timid posrassors of property. It is satisfactory to note that the wille deposited in the offico by which the Publjo Trustee is appointed executor have increased so largely that ths number Iras noarly doubled during the past three yoars, The accumulation profits now in (Ho offico, apart from the araurancn and reserve fund, amount to £30,954- 3s 7(1, no portion of such profits having boen paid to the consolidated fund sineo tho year 1828. When the- proper time arrive? the amount now in ■the re-servo fund could with advantage be expended in building a suitable oflioe in Wellimrton for this important and useful institution. CUSTOMS DUTIES. Tho buoyancy in tho revenue derived from Customs, notwithstanding the large reductions which were made during the session of 1900, will bo readily seen by tho following figure*:—Year 1899-1900, £2,107,566; year 1900-1903, £2,335.6*3;--incrense duving the threo years, 10.8 per cent. Had tho duties on tea, current.?, raisins, oand'ke, and- kerosene' remained unaltered revenue would have boon derived from .tho articles to the extent ol £15.645 more than was actually received in 1902-03, the total revenue for which year would havo been £2.492,102, equal to an auVijico of 18.2 per cent, on the revenue for 18991900. As compared with tho previous year there i 3 a- uniform increase, "in nearly all tho principal items, a slight decrease boiiig shown in tobacco and Australian wines, '<ho incrcfliio in goods liable to ad valorem duty, such as apparel, textile, boots, fancy goods, hardware, etc., amounts- to £74,579 (equal to 8.17 per cenU, and on goods charged by weight, suoh'as handles, fruits, fish, jams, leather, 1 p&r cent. _ Theso in-' creases are gvoater in spirits—namely,£12,743, or 57 per cont. 'Cigarette show a considerable- increase—namely, £9152, or 15.2 per cent. Toa remained at tbo same Iwol; and on sugar there is an increase of £8366, or. 4.5 per cent.. These increased represent an increased public exDOndituro on pc-rSonal ami household requirements--a-result which is in keeping with tho known general prosperity ' of the' colony. Tho following figures show tho revenue per head of population on cortain lines of goods for- the years 1901 and. 1902:— 2891. 1902. Spirits, per head ..£ll7 8 £1 18 11 Tobac:o, per head ..137 1 3 7J Cigars and cigarettes, - • • ■ per head 0 4 7 0 7 8} Wine, per head ..017 0 1 3.J Beer, per hend .... 0 0 U 0 0 8i Beer (New Zealand), per hcail 0 3 9! 0 3 2 SngnT, per head ~ 0 3 4J 0 4 3J Tea, per head .... 0 3 Oi 0 10 Coffce.and eocoa, .. 0 0 % 0 0 1J Currants and raisins .. 0 . 0 11 0 0 5| Tliq taxation through tho Customs pw head of population was 10 years ago £2 7s 10(1. It was in 1902 at) £2 13s 9Jd. From the above, table it will bo soon that spirits, tobacco, cigars, cigarettes, and beer account fov ;an increase of 4s- 8d per head. This may; bp termed voluntary taxation on luxuries. Tho incrcaso per head, therefore, in 10 years,, if no remission.! on tho ncoessariijs of life had been granted, would have been 7s Hid per head; but from tho above table it will lie seen that tho revenue per brad for tho noce-.waries. of life has been red' i by ucnriy 2;. ; I. '"■■) AND INCOME TAX. Tlie i in'ts 'under tho (head , cf land fax fell shot.- of iho ortimntc by £4000. -The income tax produced £16,000 more than the estimate, the two earns of revenue together exceeding expectations by £12,000. The receipts from the income tax for tho current year I nlaco nt £210,000—a- mm slightly under the actual revenue of last "year, and yet a substantial amount when compared with the £68,000, received 10 years ago when the tax was first imposed. ABSENTEE LAND TAX. : Tho colony lias (ho name ol imposing a graduated-absentee land tax without gain, for tho year 1902-3 this tax amounted to the munificent sum of £922 12s 2d. The Legislature, when deciding some years ago upon the imposition, intended it to b? something substantial, and rightly so. Tlioro ' absent from the colony do not contribute to the indirect taxation or otherwise help the revenue, and it is not nnreaeonablo to ask them lo bear a fairer sharo of the burdens of the State. Tho prosent method of levying the graduated tax is not fair in its incidence, and tho following explains clearly tho position:—Taxpayer A pay 3 a graduated tax on £9980: amount of tax at Is Bd, £5 <s;B pays tax on £10,010, at 2s 8d: amount of tax, £10 8n 7d; O pays tax on £W,727,' at 7s 8d: amount nf tax £18 16s: D pays tax on «n,173, at Bs'Bd; amount of tax, £20 93

lid; E pays tax on £187,839, at'l4s 8d: amount of tax, £1369 13e 2d; F pays tax on £197,329, at 15i Sd , : amount of tax, £1541 12s Bd. Tho above avo actual casee, and thia being so it is intended to ask Parliament to amend' the law so that the increase in the ecalo of graduation shall bear more evenly, and in doing so care will be exercised' to see there is no decreaso in the revenue from this 6ource. . . I AQUATION OF LAND DEPARTMENT. During the pa3t year tho valuations of foiir largo cities and several smaller boroughs havo • been revised. The capital' vnluo of these ]ii» : beon increased by £6,250,000, and unimproved value by £4,01)0,000.' Owing to the system of rating on 'unimproved values having been adopted in Wellington and Christchurch and some of the other boroughs much keener interest has been taken in tho proceedings of the Assessment Courts than heretofore. In the country districts the results of the operations will, it is expected, when the' figures' are mnde up nft-ev thaAssessment Courts are over, slum a considerable increase of values, an well as equalising those whicli were previously uneven.' During the coming sumnior it is in-tended to roviee as many as possible of the districts which have not yet been valued under the act of 1900. GOVERNMENT ADVANCES TO ' SETTLERS .OFFICE. Tho business of this office continues on much the- same lines as in previous years. Tho amount at credit in, the Public Trust Offlcu of the sinking fund account wa s, on the 31st March last, £125.867 7s 10d, and of tho-assurance fund account £67,Mi-163 Bd. Tho success of this office, is a subject matter for'sincere congratulation. : -DEPARTMENT OF.LABOUR. The wages of male workers in New Zealand have rison considerably during the last 20 years, and tho wages of women workers during the last five years. lii manufactories tho average male worker (including youths) received about £6 10s per annum more than in 1892,-and the woman worker (including girto) 'about £2 15s per annum more than in 1885. This gives 'the largo sum of £1,118,325 : aa being gained by the male factory. workers in '-tho-last 10 years above the amount they would have reoeived had the wago rate remained on' the sonlo of that of 10 years ago, and it leaves the amount gained by women and girls out of notice. Tho' Labour Department has not at preisont tho moans to collect etatistics showing Hie wages of poreons working outside factories. Carpenters, plumbors, engineers, paintora, carters, Bailors, > miners, agricultural and pastoral labpurew are all outside the present range of accurate \va<jo returns, Speaking generally, however, there has been a considerable rise in wages. Thus j/iasono, who in 1892 received from alioii't 10s a day, , now get from 10s to 13s. Plasterers, who received about Bs, now get from 10s to 133. Farm labourers, formerly 15s per wcok, get from 15s to-255. Ploughmen, who were-' at 20s, get from'2os to 255. Married couples (servants), formerly at:from £50 to £70, now get from £60 to £80. This will give eomo. iden as to the. general cm in value of the earnings of Mio working classes, although at tho same time it may ba noticed that commodities (especially mout) liave risen in price. The-actual gain in wages is hy no moans tlio only improvement visible in the condition of tho industrial olaeses. By itienns of awards, agreement, etc., in many trades the houra of labour have bsen consideiy.bly. shortened, and holidays allowed for. .'Overtime also (which has not been computed in tho advances abovn spoken of) lias been fixed, ond is paid for beyond the ordinary rates of wages. The improved sanitation in workshops, ensuring-, better , health to the iri : mates, also, adds t6_ the earning capacity,, therefore, speaking generally, the life of the worker has been sensibly briglitoned during' , the-passage , of fho last 10 years. PUBLIC HEALTH. [' In view of tho appearance'of smallpox in Tasmania, elaborate and careful supervision. of all .passengers, from tho Australian Commonwealth has again been instituted, in addition to a measuro of quarantine ngainst. yesseJs coming direct from Tasmania. This inspection, I am pleased to say, is being conducted, free of cost to tho State. By an arrangement ente-fed into by .the shippersand the Health Department the expense attendant upon this extra work is being defrayed by the shipping companies. The. colony '• os to be congratulated upon the fact that although isolated cases o*f plague have occurred the disease has not been permitted to' snrond. The' occurrence, of two eases of smallpox upon a ship .within' our.' own' waters noint3 to the necessity of a more stringent enforcement of tho law with regard to vaccination, as well as tho expenditure of a considerable sum upon our sanitary defences. -;■ .".'... ~..:. .. HOSPITALS AND CHARITABLE ■ AID. " '• ' . • The colony last year granted by way of subsides £100,271- to hospitals arid, charitable institutions, and yet had no say what-' ever in respect to expenditure. Ij, is'true wo have an Inspector-general, but his power of control is nil. Tho position is almost farcical. Member!" review and criticiso the expenditure of those dopartmemts directly controlled , 'b-y the State, but iii this, which' to all. intents and purposes is a department' of State, neither Houso nor Government has any voice in administration and cost, arid, although providing' by far the largest sharo of money, tho local bodies, who find, next to-the Government, the largest shareof tho money, have a little say in the nianngoment, seeing they nominate members to ohnritnble aid boards niul haspi--tsl .trustees. A change is necessary, and tho moneys required should be annually voted. The Government should havo a responsibility. The inspector-general and other inspectors should, whero they sco administration defective. and pationte not medically or otherwise properly treated, or where persons are refused , admission' or improperly admiteil and retained,- or whoro w.aste or oxtravaganco obtains, and where, in tho ca-So of charitable aid, the expenditure is excessive, should have power to ca.'.l upon the board or hospital trustees to exact reforms and improvements; and, should this not ba done, the- Government should be empowered to stop further payments to boards and hospital "trustees until effect was given to the recommendations of tho inspectors. : Tho law. in this respect and in respect, to the .constitution of boards and trustees.requires amendment, and rc-prosen-tution of the Government and tho local bodies should Ivo on tho basis of moneys contributed, or tho controlling bodies should |-bo wholly elected by persons in tho districts who are on .thu doctoral roll. ' HOSPITALS FOU THE MENTALLY ■AFFLICTED. Tho question of increasing the accommodation for those, whoso mental condition warrants their detention was brought beforo the Houso sometime ago. My worthy ootkague -the Minister in ohargo of hospitnis having on that occasion, with my51'lf, fully stated tho intentions of tho Government in iraocct to this important mutter, there is nothing further to add, beyond' stating' that ample provision would bo'made to fully meet the pressing requirements of tho ease. Tho question of one- or more hospitals for first treatment, on' tho lines of the Bethlehem Hospital, deeerves our earnest attention. As soon as the necessary accommodation is provided tho 'classification of the inmates is another essential. The commitment to mir hospitals of persons should be jealously guarded. . Information has readied mo to the effect that patients aro sent to tlio hospitals for the insane who should, for ft time at least, bo sent to ho ordinary. hospitals. There aro also, it is alleged, hundreds of persona in our hospitals for mental diseases • suffering only from senile decay. During tho last five, yeari no'loss than £89,000 was-'spent in erecting buildings and furnishing the same. Last year tho salaries and allowances and cost of 'maintenance, etc., amounted to £74 799. This year you will be- asked to provide £75,895 out of the Consolidated ffiind for the snme nurposo, and, in addition, a- large, sum for buildings, etc., out of the Public V.'orks Fund.

FARMS JTOR SOCIAL OUTCASTS.

Year by year, members are fully aware, large sums of money arc spent, in the maintenance of persons in our gaols who (ire really not criminals in, Ilie full acceptance of the term. They are simply derelicts of society. Drink, evil companions, oM age, physical incapability, lack of mental strengHi io resist temptation to do.wrong all conduos to a,' breaking of the law. They must live, and when not in /gaol they grey upon sooiety. The time lies' arrived when tho colony should have, as in Gorrtrany and other couiitrios, farms to which these outcasts could ho committed. If.theso farms were on bush land fthoy could clear tho bush, stump and grub, and cultivate food for themselves, and , tho surplus could be utilised to supply "other State institutions. They would thus bo self-supporting, and an eyesore would ba removed from our midst which is now over visible- and don-no credit to our boasted higher civilisation. To send these poisons to gaol is a mistake. They arc: not really criminals. Some have tho laiiit, it is true; but may not this have arisen ,fwm the first contact in the gaol? There are men and women who are \inable to look after themselves, but, given a home, work, .and food, they Would , be quite happy and contented.' The initial cost i-ould bo tlio only one, and it is worth incurring if only to prevent the unduo swelling of tho criminal records oE our colony, with tho attendant undeserved rcflocvion, oc she peopk. .

THE TOUEIST (DEPARTMENT.

Tho Tourist Department has completed its second year of life, and' has completely justified its existence. Never in the records of the colony liae such a Jarga number oJ ' tourists reached our shores as during tin past year. The advertising ■ now being carried on, in addition to attracting tourists, is also designed to attract settlors of ('he best, kind. The Te ■ Aroha Hot Springs, heretofore administered by a Domain Board, arc now brought under control of ■this department. An accommodation house' hae been, opened at Waikaremoana, and other accommodation houses havo been pro- . vided. The revenue received from resorts under the control of. the department f6r ths year was £8401, .a* against £5491 for tte previous y«ar—an Jtiorcaso of £2910, But • as the department is not yet directly revenue- s producing these figures, do nob ! in any way gauge its value to the colony; POST OFFICE SAVINGS ■ BAKE. Tho progress of tho Post Office Siyjnga Bank and tho large accumulation of deposits may be accepted as evidence of the continued prosperity and thrift of the wageearners of the colony, who Tepresent about 96 .pei cent, of the depositors. Although moro particularly referred to in the aiinual . report of the Post and Telegraph Deparf'raent, it may hero'be mentioned that the excess of deposits ovor withdrawals in 1902 was £360,847-an increase «qual to 5.34- pe: cent, over the excess in 1692. During" the. decennial period' 1892-1902 tho number of ■ depositors increased by 102 per cent., the* number of deposits by 120 per cent., the . amount at credit of depositors by over 140 ' per cent., the amount deposited by 170 per cent., and the average amount at credit of ' each depositor increased from £25 9s to £30 5s 3d, or 19 per cent. ■ The total amount; H the credit of depositors qn. tho 31sh December, .last was £6,883,787, compared with £6,350,013 at the end of-the previous .. calendar year. . , .. . • ' ■ . OLD-AGE PENSIONS.

The amount estimated as required for old-age psnsions was £215,000 last year, whilo tho aum actually paid was £209,156 5s sd; It is estimated that £215,000, wi|l bo sufficient to mee.t all claims this year. When I introduced , the bill T stated , that a time would arrive when a maximum would be reached, and for some time there would not bo a very largo' increase. From the present outlook, tho amount requited will , not vary much. During the past year ill was found necessary. to introduce, a- new. method of examining applicants for pen- \ sions, which is of a more searching, chaii ■' actor than the-one in vogue* in previour years. -The system is workinpf smoothly, and doing all , that'woe expected of it in' preventing persons sot entitled to pension! from receiving them.-- While upon this subject permit me to say that it should always be borno, in mind that, where there is a large sum of nublio money to be had by application tho greatest care : must ba (jiveh to all claims, otherwise .pelaons not entitled thereto may obtain pensions, In the last Statement mention was made of the fact that the two largest States of the Copimonwcalth'had, by inaugurating old-age pensions schemes, followed , New i Zealand's human© action in 1898. It is'gratifying now to record, tho fact that a similar uieceiiro had been introduced into the House of Commons. ■ . •• •

WORKING RAILWAYS.

, I am pleased to bo ablo to, place on record the fuct that traffic on the railways during the past year has;'shown.a. very, marked increase over that for'any previous year. Business shows an increase of 219,254passengers, 19,000 head of cattle, 6685 pigs,. 1,096,473 sheep, and an inoreased 'tonnage of 201,217. The gross revenue, as given , by: the Railway Department,'■• amounted to £1,974,038—an increase oi" £99,452 over .thu. previous year. As showing the increase in the number of passengers and sheep carried and the increase of revenue since the .rail-

way.? were handed over by the commissioners, the following comparative figures from March 31, 1895, to March 31, 1803, aro very interesting:— .■*■

1895. 1903. Increase. Passengers .. 3,905,578 7,575,390 3,069,812 Sheep .... 1,619,921 3,821,333 '2,301,412 Revenue .. £ 1,150,851 £1,974,033 £823,187 Tho railways gave .employment to no lee* than 8875 men, and last year paid £3 6s Id per cent, on the capital cost, £19,081,735. The value of concessions-'in fares and freights made- since tho Government resumed control of the railways amounted on 31sis March, 1903,10 £588,000, The highly:satisfactory condition of .the railway business 13 a matter for sincere congratulation, as it is undoubtedly one of tho safest indication? of tho ewitinued prosperity of the country.I confidently anticipate tlia-t the satisfactory condition of the colony, which has been so marked during tlio past 10 yeaw,, , will con.' timid for a very considsrablo time to come.

EDUCATION.. ;■; . The past year has ho«n marked! by a-great advance in the work of education in tho colony, both in regard: to number of ■ school? and institutions and pupils and m regard to tiho extension of the field of operations. . Tho progress has been mora pronounoed in resneoi of rtauual and •fSeohnical oduoation 'than" in any othw branch. 'lino ■ • total'number of recognised elassce lias increased for such work at tlie end of 1901 to 9H\at tho end of 1902. . 01" ike latter, 563 are elas;e3 for manual work in. schools,. ■. : 279 are technical-classes, properly so called, for adnlis, and 64- are continuation classes.' v The total number of classes is uov/- 1629. Tho work is being Inkoirup in the smaller as well as in tho larger centres, a_nd to an increasing extent, in the country districts ' as >y<jll as in the towns. This' entails a larger oxnenditure, not only for the capita- . tion paya'ble under the Manual and'Tech--nioal "Instruction Act,"but in tho form of grants for buildings aiid apparatus and other concessions, as free railway passes. The number of' primary schools open, has increased from 1716 at tUo end -of 1901 to 1754 . at the end of 1902.' Jt is especially evident . that owing to the spread l of education anct the rapid growth of settlement the eum voted last year for now school buildings will not bo sufficient to most the needs for tho current year, .and it will consequently be necessary to take, .i more liberal vote for ; that purpose on tho Public Works -Estimates." During the year a new departure had been mado iii iho direction of provid- - f > ing Ireo secondary and technical education for those boys and girls who qualify to profit by it. The. steps already taken include tho granting of free tuition » secondary schools and of free scholarships in technical ichooh on certain conditions. The Govornment'a schejue for fr*e eecondary education has been -accepted by 16 oijt of ili© 25 secondary schools of 'the colony. A few of ,tho larger schools'and one or.tjra of the smaller have not yet seen their way to fall into Una with, the rest. Parliament will be asked to meet tho contingency, and ere the year end 3 it h to be hoped all the seoondary-schools will'throw open , their, doors to qualified pupils, and iliua make tlio valuable endowments thoy possess .of the greatosb'possible"boneflt to the community at large. Tho.same ond is attained in country places by tho establishment ol district high schools, the number

I of ''whioh' is nearly 60, as against . the 15 rh , existence ' two years ago. It is not the intention of Government to etop here, but to go on until the way is ■-:' .open, for. any boy or girl of promise in . _ New Zealand to receive tho highest educa- ..■■'" itipn which the colony has in, its power to ,-give. With' this.end in view, the Govern- . anenthas determined to wovide house' allowance for one year for-.iwo pupils in thePifth Standard in each-educational dis- ' friet—26 in all—who are,specially gifted and 1 have, received the highest number of marks, are, N from outside causes, unable to continue their schooli , course; and to establish 24 "national scholarships," the object of which will be to enable holders to go from primary schools to secondary Bohools and thenoe io the university, full provision being made for the cost of tuition and for their maintenance. One.important need of the educational system cannot be overlooked—namely, that in order to obtain the , greatest possible value for the large amount of money spent in education it will be necessary in the. near future to wake . Biore complete jiroviaibn. for the thorough training of our ceachere. The programme •which I have sketohed out'may eeem ambi- • turns.", It will certainly entail a large increase of expenditure; but.it must not be forgotten; that in education democracy is the safest and freest, because in it alUiave am - equal chance; and it is, too, the highest . form of demooraey,in so much as its individual members best know.how to use their liberty intelligently.; Therefore I dp not for a moment believe that either the country or this..'committee. will begrudge the largo, eums.pf money which are spent from year to year in carrying out the most important functions of the State. ; ■■ ".-•• 'FARIfING INDUSTRIES. . There is a considerable increase in the -quantity of wool exported, and the prices realised are an improvement on those for the previous year, Tallow and: sheepskins also.ehow satisfactory advances both in quantity and total value: The export of frozen meat exhibits a large increase in quantity, the figuree being 2,451,000ewt for the year 1902-3, ■ as against 1,871,000cwt for the year 1901-2.: The total value oi this export ''has also grown from £2,232,000 in 1901-2 to £3,229,000 in 1902-3.- The quantity and total value of the oneese sent out-of the colony shows a decrease, but this is far more than counterbalanced by the great increase in both quantity snd total value of the butter' exported. At the beginning of the.eeason the London prices of butter were equal to those of. the previous year, but, ; unfortunately, us • the season advanced a considerable fall in the prices of all butters on. the market to. . experienced. On. the ..... other hand, the price of oui cheese lias coiitiirsed veiy high/- The area under grain,, especially oats and wheat, was larger than last 'season, and, although crops ripened Hater than usual, the yield per acre was the most abundant for years. As prices of grain continue high, farmers have every reason to regard the harvest as a very satisfactory ■ one. The quantity''and total value of hemp β-tportcd showed 'satisfactory growth, and prices have remained at a high figure. The .recent -large development of this industry is undoubtedly due in some measure to the institution of the Government ,- grading. The. fruit and poultry industries are making rapid strides, and the time' is not far distant when exports of these commodities will assume important dimensions. Good progress has been made frith the preparation of experimental farms for the purpose for .- which they are intended. The cultivation ■of vines,» Waerenga has again given, excellent' reaultsj and the vitieultural expert engaged by Government last year predicts a great future for the wine industry in Now Zealand. Pub'uo abattoirs have been established at several .more of the larger towns, and the improvement thereby effected in the meat* supply i3_ undoubted. The outbreak of anthrax has given grave cause for; anxiety, and every effort is being made, to stamp out this fell disease; lUere can be no doubt whatever as to the source of the trouble, which came with, tome bone'dust from; India. 1 The only safe precaution m Jβ for the Government ta erect sterilising work's.' This has been authorised. An expert has bet n appointed, and the erection of[-the works at tho Bluff and Auckland will.soon bo in hand. ' 'LAND FOR SETTLEMENTS. .'AJbout 150 properties were offered for sale':to the Government under the Land for Settlements Act, and 23 'were acquired. The aggregate area was 151,940 acres, valued 't £569,927. Tie purchase money paid during, the year f0r"70,866 acres was £353,452, itrid the total sum paid to the end of last year is £2,598,112, for 122 estates, aggregating, 539,274 acres. Owners' values were . generally, higher;than the Board of Land • Purchase. Commissioners considered it prudent to go. On the 115 estates reported upon there are 2335 solectors, who have a&eady built 1785 residences, and only three settlements show unsatisfactory progress. ■ The accumulated awears of unpaid rents are less than , 10 per cent, of the year's . actual collections. Since the inauguration of the policy by the Government of acquiring 'freehold estates for close settlement 116 properties have been eeouTed, aggfegating 475,223 acres and 19 perches, • upon , which the Government have settled 2335 tenants, who contribute rentals to the amount of £116,979 53 Bd. Notwithstanding the somewhat unseasonable weather which prevailed, very considerable progress has been made- throughout the , settlements, and in nearly every instance their position and future welfare are assured. The object lesson which these properties generally, afford of prosperity and happy . homes; is doubtless accountable for the keen demand which still prevails among the people : of the colony for an opportunity' of acquiring holdings in like manner. "Whilst dealing with this subject I desire to : call. attention' to Cheviot Estate, of ■ 8(,D00- acres, which was acjuired by. pur- ' chase under special act, and constituted the great" type, of all succeeding settlements. It was acquired by the Crown in 1893, at a cost of £324,90819s Bd, though the market value at the present time is considerably in excess of, the original cost to the colony. The number of selectors within the estate 1 is 334;' ; and the annual rental reeeivaMo from .'.them is £14,434 13s sd, which at 5 per cent, represents a capital value of £288,693.8s sd, exclusive of £37,355 received on account of cash and other sales, which (necessarily had to be effected at the time of the'acquisition of the estate. According to. the census of :March, 1901, the population of the settlement is 1026, as compared With the small number'represented ia 1893 by the owner and bis employees. • - . FRUIT PRESERVING AND ' ...; '.'" .: CANNING. The waste that goes on in this colony year by year in that vwhiotf bountiful Nature lias given us in the shape of fruit is little . JeES than scandalous,, and; for the colony to be importing dried and , tinned fruits to • the value of thousands of pounds annually is o reflection upon- someone. Where the 'fault lies .it is hard to say.' Common.sense dictates me that it is of little use having pomologiets here to encourage fruit-growing af .(he fruit when grown is not to be used.. . In'respeot to the fruit .industry, I am of opinion that a course should be adopted similar' to that '..with dairy.'. factories, and tho State'.ehould.iassist'.tEevfruitgrowers by establishing. factories' at. given 'centres, , and by advancing on safe conditions the moneys to erect-the buildingu-'and to obtain'-the necessary machinefyT'and'appliances. There should-be instructors in'thwart of preserving; drying, and tinning, -who should go round-the country and; instruct the fruitgrowers in the same way- as the dairy experts have-done in* {lie case of outlying dairy, fawns. At the'.Cork Exhibition I was surprised to see-what could be done in this direction, and'''tow with the , aid of machinery, obtainable'at a. small cost, eveiy farmer's wife could,preserve- and tin the fruit J: from her ;own'orchard../.The Agentgeneral'was instructed to engage the export , who;'wa3.| in •charge'; of -the'jfruit-preserving ■* exhibits, itt-this exhibition.: It was found, however, .that ;hi3:services .had :been previously secured'by the Agricultural Department of Ireland. I-anticipate, however, . having-experts here.before the new fruit eeason:stftrts. This will be adding somewhat to - our administration, expenses, but. the'direct and collateral' advantages -will much, more thanxoinpenpte therefor, I hope the day is riot far, distant when the present waste wai-ceoee,' and good profits be secured, to the fruitgrowera of our colony.

' '.EORESTS AND PLANTATIONS. As announced in the last Financial State-

ttottt,;the officers of the Lands and Forest Department have given special, attention to :,tte'- conservation of the indigenous

forests of'the colony and to the disposal of milling timber and other produots. Additional areas 1 of forest lands havo been

selected by the Commissioners _of Crown Lands in the totious land districts, to be duly ' reserved, : w soon as riecess_ary. Explorations aid • surveys are sufficiently ad■nacii- during the'.year, 'end 18,016 acres were gazetted, bringing up the,total area i&t apart and gazetted to ■ 2,570.113 acres. The groes revenue from thersale of timber »nd otlier produota amounted to £15,916 6s 10d, o.',whJoH £12,045 12s was 'transferred to tho territorial account/The sum now jtsadiag, to tk credit of the State forests accounts over £31;0Q0.' The total: expenditureViipoD' th» State foreste. and also, upon the nurseries and "-the various services rendered to-other departments and local, bodies amounted to ; £ll,018.: It;is' ; proposed to tpprove of » eonadatable -uiprease' in the

defray' the cost of lands -'acquired'' for the extension of nurseries ond_ planting operations, especially in the vicinity of Waiopu (in the Rotorua district), one near Kamo (Whangarei district), one at Dumgree (Marlborough), one at Haiimer (Canterbury), and one at Tapahui (Otagd), where areas are being fenced in and prepared for planting with selected trees suitable for replacing in some measure the waning „ indigenous timber supplies of the colony. GOLD MINING. This industry is steadily increasing, and I am pleased to be able to stato that, notwithstanding the decreased yield .from some of the quartz mines referrod 'to last year, the returns from this class of mining for the past show a. considerable increase. The yields from alluvial mining:and gold dredging also continue to increase. The total , export of gold for- the year 1902 amounted to_ 507,8580z, valued at £1,951,426, being the highest .for any year .since 1873. The figures for the seven months of 1903 show an increase of 33,6470z, valued -at £120,355, as compared,with the corresponding period of 1902. It is therefore fair to assume that the twelve months' export will exceed £2,000,000—a position not. reached since 1871. The machinery and. pumping plant at the - Thames belonging to the Thamo3 Hauraki Goldfields (Limited). -have been acquired, and the Government are now the owners of the property. Hud this plant not been acquired by the Government as a whole, it would have been dispersed, and the object for which the extensive pumping machinery was erected would have been frustrated. This would in.all probability have resulted in the operations for. prospecting for gold at the lower, levels at the Thames being Jor all time abandoned; STATE COAL MINES. _ , The development of the SeddonviUo State coal mine and the mine at CoalCrcek is rapidly approaching-"completion, and bythe end of the year if-is. anticipated that coal will be 'put oh the market. The outlook is very cheering, and the,quality of tlie coal exceedingly good," i whilst, the quantity, especially at Coal Creek, far exceeds anticipations, and the easy and inexpensive method of working the same will enable, if thought desirable, the coal to. he sold at much less than tho prices now ruling. A matter that reduires ■ consideration i 3 the transit by steamers to the several niarkets, and unless .private enterprise provides eteamer freights at low. rates the Government -may be compelled to have their own steamers. The- - winding gear, ropes, maohmery, etc., havo been ordered from England, and-a contract.let in,the colony for the manufacture of mine tubs.' Pressing inquiries are already made for coal from our mine. The large demands for. the Royal Navy and otherwise made prevonted the department from receiving offers from the private minoownera for the coal required, and the development even to meet our State requirements, will not be a day too soon. • Information as to these works will be found in the report of tho manager of the State coal mines, which will be presented'to Parliament in due course. NATURAL POWER GENERATING ET-EOTRICITYi The conservation to' th 3 State of ,the natural power in our'rivers' and waterfalls is a matter of gravo importance, and, I-fear, we have riot done our duty hitherto in conserving to the people Ihose rights which nature in her bounty has endowed us : with. It is true that in the year 1696 wo passed an act under which local authorities could not grant the rights of rivers to corporations or private individuals without the consent of the Governor-in-.Council. Boyond that Parliament has done aiothing more. Recently some of the local authorities applied to the Government fo» expert assistance, and a preliminary report was obtained on the natural motive powers of the Waimakariri arid Rakaia .'• Rivers, the Huka Palls, and other rivers. , '-It \yas eubsequenfiy decided, considering the importance of the matter, that experts should bo asked to report op-the question.' Negotiations wero accordingly entered- into by tho Agent-General with electrical and , hydraulip experts on the Continent and 'also in! America. The terms, limitations; and time stipulated for by the experts on the Con ; tineut practically debarred their acceptance. I am happy to. say that arrangements ore almost-completed for Mr Handoock, one of the best American experts, to visit the colony. It was he who installed'the system -from West County to San Francisco, and more recently he has.been engaged on inBtallation at tho Niagara. Falls.. ,A report .from'him can therefore be (Safely relied upon, and will be of the best'advantage to the colony. In the meantime the SurveyorGeneral has obtained_' from the,, chief surveyors ■in each district, the : names, the powers, and approximate falls of the .various rivers throughout the olony., An officer has been told off to prepare details, so ihat when Mr Handcock arrives we ehall be able to place before Mm in concrete form valuable information respecting the volume and fall of the different rivers. This will enablo him to form a general opinion as' to the position. Finally, no one can deny the importance of 'this matter. Nature has been bountiful in respect to raw products and najlural motive powers,, and has destined this, country to be a- .self-sustaini&g one. We have iron, copper, tin, timber, coal, wool, and. evei-y essential to the '.well-being of an industrial .world. By utilising the .natural motive power in our rivere and streams this may ba developed with enormous results for the good of the country. There is no other country more naturally adapted for industries than Now , .; Zealand. Itreste with those administering its affairs to aid that which nature lias given us. • ' - ■. .- . MANDFACTDRES. '' "'■; Turning now to what Now Zealand has made for her own is, goods in the manufacture of which ee'veral articles are Qmployed in combination—as well as by the great primary industries, the census of 1886 (the ifiret. census at'which the information was obfained) showe a total, value of £7,436,649 of manufactures produced in tho previous year, and that of 1901 a total amounting to £17,141,149 for the year 1900. It must not be lost sight of. that tho great primary industries of creat-frewing, Iratemaking, flax and timber milling are included, and that their produce goes,to swell the exports already alluded to. A complete table showing the increase of our industries from 1885 to 1900 will be found in the aJiedulee following. A short table will give an idea of the' fast strides industries arid.manufactures have made during the last 16 years Table showing the increases in the'undermentioned industries for the years 1885 to 1900- . .'■ * ' Industry, 1885. 190(T. ■ Increase. ■ . :£ . '•* . £ Meat freezing and ■ . ~ . boiling down . works ... .613,573 .3,834,891 3,291,013 Tanning, follmongery, and wool scouring.. 634,015 1,888,107 1,258,192 Buttei and cheese factories . . 43,091. 1,535,150 1,492,05G Sawmills, and sash ; . i and door fac- • tones .. .. 1,177,713 1,258,1)89 90,970 Iron and brass " .; foimdrioa, ' ' ■ . boiler - making, . . . " . machinists, etc. ■' . ' (not including ..-■■■. •Goveroment ' • '. ■ workshops . 2fiß,9ig 931,171 655,252 Soap and candle works .. . 130,7-iS . 158,«9 27,901 Aerated water fac- , tories .. I. 94,093 151,811 67,713 Agricultural .implement' " fac- v tories ... .. 111,823 -138,094. £0,271 Brick, tile, and pottery works.. 91,797 122,230 .30.-IS3 Spouting and ridg-- ■ '. . . ' ingwork3 .. .25,178 112,691 87,313 • Tinware ■ factories 8,500 98,587 90,037. Furniture . and ' . . CRbinet-making. . JD2.375 211,024 78,619 Coachbuilding & . ..■..' painting works" 128,3iC 210,077 87,731 PlaxmiUs .. .. 20,059 '. 203,492 183,433 Biscuit factories 47,78*. 197,089 : 150,205 ChfJl - cutting ' ••■'.: work 3.. .. H. 440 . 169,313 114,873 'Bacon curing .. 68,709 159,504 100,705 Clothing, and hoot and shoe- fac- ' torie?. . ..514,505-858,280 313,774 Printing establish- ■ ments. (exclusive . of Government Printing office) ■ 273,886 • 701,285 ■ 430,399 Breweries and:. . . ■ ■• malt houses .. 421,097/ 659,298 238,101 Woollen mills .. 194,311 359,382 165,071 Gasworks- ...194,653.290,567 '95,914 NEW ZEALAND INTERCOLONIAL PAIR. . . -

It is now some years since tte .colony.promoted a 'national-.exhibition. Si ewcral of the large centres industrial exhibitions have been successfully held, aad this is a good dugcry for holding a fair and on a Ecalo south of the line. Tlu's is requisite if full justice is. to be- done to the settlement and, development of the : colony, ■Hβ resources and raanufaohires, its commerce, ita unique and beautiful scenery, and its arts and products. Next year the St. Louis Exposition, to which we propose this colony-"shall send exhibits, takes pkjee, and an exhibition u> also to b».held at Capotomi, and an industrial exhibition is to be held _at Wellington, and to hold ah intercolonial fair in Now Zealand in 1805-6 would !» most oppoTtiine. It is'hoped that by that time railway;, conneotion between Auckland and Wellington. may 'be , effected, and: that Christoliurch may have complete connection by rail with ''Cheviot. : The-;'selection' of:"*

place in which the exhibition should be held has given the Government jriucii. concern, and finally we came to the. conclusion that Hagley Park, Christehurch, is the most fitting place. There space is available. The lake and River Avon lend themselves to gondola, water chute, and switchback, and, with the electrical installation of the city and the electrio city trams, the means of transit are provided. It is now nearly'2o years since the last colonial exhibition was held in the City of the Plains, and, under sill circumstances, I refer the suggestion herein contained to the favourable consideration of honourable members, feeling assured they will not, from local considerations, object to that which will prove to bo of immense benefit to our colony. The necessity for giving timely notice and for obtaining shortly tlie opinion of the House upon the matter arises from 'the fact that it will be necessary to communicate with the Imperial Government, the Governments of other countries (India, Canada,. South Africa), the - Commonwealth and State Governments of Australia, and inform them of the time fixed for holding a grand intercolonial New Zealand fair. THE PACIFIC CABLtt. The completion of the Pacific cable, on the 31st October last wiw a matter of extreme satisfaction to the Government and people of the colony, .Tioth oh, account of the con-« summation of this'highly important undertaking, in .which widely separated members of the Empire are partakere, and because the cable has been tho direct means of largely reducing the cost of oversea telegraphing. The lowering of the rates has brought about a considerable increase in the volume of' cable messages, 'but tho failure of the Pacific Cable Board at the outset to counteract the strong efforts made in the interests'of the rival cable to secure business .by the appointment of canvassers has resulted in the loss of business which otherwise voulil have been secured by the Pacifio cable. Tins, however, is now being remedied. A .disturbing feature, and one which nas given much concern'to the Government, is the determination of the Commonwealth Government to conclude an agreement for a long term with the Eastern Extension Telegraph Company, vujder which tho company secured advantages which militato against the State-owned cable, and will require considerable expenditure- by the Pacifio Cable Board to minimise. This matter is dealt with fully in a paper •which has been laid' before Parliament. The share of tho loss to bo made good by Now Zealand on the working of the cable for tho y«n- will bo between £9000 and £10,000, which is much in excess of anticipation. Unforeseen factors . have no doubt helped to'swell the deficiency, but it 19 hoped that the energy now displayed by the board to conserve and increase its traffic will materially reduce the loss year by yeijr. The reduction of rates, it is estimated, . means an annual saving; of about £50,000 on New Zealand business to the users'of the cables.

, OCEAN MAH. SERVICES. The 18 months' renewal of-the San Francisco service expired in May. A temporary extension has been arranged with the Oceanio Sfeamship Company until the House of Representatives has had an opportunity of considering , the question of the continuance of the service, proposals for which tho Government intends to submit to tho House at an early date. It haa not been practicable up to the present to arrange for the inclusion of a New Zealand port:as si calling place for the Vancouver service. The Commonwealth Government of Australia and the Government of Canada have recently extended tho present Vancouver oontraot .for two years. Negotiations were opened with'a view of getting this colony included, but the other parties would not concede the extra time it would take to call at New Zealand. It seems as though Queensland is not over-anxious to retain the connection, and there is some hope that we may yet get the Vancouver service restored. SOUTH AFRICAN TRADE. I ..am exceedingly pleased to eay that, although the first two or.three steamers of the subsidised line did not take away much cargo, the development iias been such that the contract made, with tho new New Zealand and the South African Steamship Company has been more than justified, the last three or four steamers having gone away crammed with cargo, and with decks full of live stook. The opening up oi the South African market has relieved the colony of immense quantities of frozen meat, and the taste of our fellow-colonials anpears to he for a lighter sheep than is suitable for tho London, market. The large quantity of beef for. which there was no demand in the Homo-market has found, ready sale in Africa. Again, very large quantities of smalhjoods, for whioh no market whatever could bo found elsewhere,'are being taken at good prices. Butter is going forward in large and increasing quantities, while.for poultry an unlimited demand exists at top figures. Several shipments of frozen fish have been sent, with the result that largo orders are on the way. Our oats have found a, splendid market this year in Africa. No less tha-n 175,969 sacks have gone forward in tho subsidised steamers up till the 14-th of last month. Pork, cheese, preserved meats, potatoes, bran, pollard, oatmoal, grass seed, fruit pulp, .leather, milk, and various other of our products have teon taken in larger or. smaller quantities, and the possibilities of trado in many of these articles \ara very great. Tho vessel at preeont loading in theso wates has on board some -70 tons of ground pumice, which is being taken as a trial shipment for insulation purposes. Another order has-been placed for this article. The same vessel has loaded from Auckland about 50,000 ft of kauri, in which a good trade is almost sure to result. Africa- is also taking as much live stock as the boats can carry, no fewer than 12,750 sheep, besides horses and cows, having left our shores up to date, while the space is engaged in iho vessel at present ■ loading for 4000 sheep and 80 cows. Paseengers to tho number oi 130 have availed themselves of the subsidised line. The nine steamers which have been despatched have made no kss_than 47 calls at ports at which to load, visiting Afrieah ports for discharge 28 times. Tlie expenditure of money in connection with the running of the new line of steamers means a considerable gain to tho colony. The different Harbour Boards will benefit to the txtent of about £7500 per annum, the boats are disbursing at the yearly rato of £7000 for labour, and £5000 for stores. Besides the African trade, the steamoH under contract to the Government have developed considerable business with Western Australia. • Several lines of live and frozen sheep have been landed atr Fremantle, and the export of ■ produoe generally to that 6eaport has been stimulated. One satisfactory feature of tho African trade is that virtually all'the money , pa-id in exchange for our products has been transferred to the colony before, the goods actually left our shores. It may be noted that tho Essex, tvhich sailed in June, carried away one of. the largest cargoes, if not the very largest, which have left New Zealand, measuring between 11,000 and 12,000 tons, exclusive, of course, of live stock, the total value being about £70,000. The steamers engaged in the service have all been fine ships, with abnormally large accommodation for frozen meat Two of the later ones and the next steamer, the Suffolk, aro twin screw boats of over 7000 tons register, fitted with roomy, up-to-date passenger accommodation, and it is hoped that the trade will havo so developed that these largo vossels will be justified in continuing in the service.

A commercial agent for New Zealand is, now permanently. residing in ,South Africa, with headquarters at Durban, where lne services are available for supplying commercial information relative to trade between ifew Zealand and South Africa. The values of shipments to South African pone were as followei-Frbzcn cargo;- £334,267;. general cargo mSW; live stock, £9922; ancHo W«itern Australia, £8533. Further partioulare appear ia the tables appended hereto. -TUMIGIUTION AND INCREASED ■ ... POPULATION. The advantage' o£. liaving an increaasd population noivellmster of. our colony cau deny. How t-tus-.<p'J>o obtained without iesor ; ting to an aesisted'Vmmigration sclierae demands our immediate and best attention. As the result of meeting Indian, officers both hero and during my retmtt journey from London, and of correspondence which 1 opened up with retired officers wtli refer-, enco to settling hero, a few pionoera have already arrived, 'and are settling in the north, and I am sure if flur climate and its adaptability were bettor known in India a much larger number-would come. As these officers enjoy pensions and have moderate means, it is vvell to encourage this olass of settler. To! further this, I am-of opinion that communication ehouM be opened up with the principal military stations in India. ITie. fullest information should be supplied, and ram. satisfied there are many who would be only- too glad to make their homes.in New Zeahvnil for tlio reason that they havei a difficulty.in maintaining their ef&tion in- England,, whilst hero they could live for much less and enjoy better health and.more comfort. Our luufoIwok is in great demand in military quarters. As regards settlers of, the [ agricultural cheA from England, thero arc' very few,' comparatively speaking, that find their way to this colony. The cheap.fares .to Canada and America and other inducement 1 ; heW out to them cause the flow of immigration from the United Kingdom, to those cquittriee at the present time. Our Ageut-gcnerat has (lone his best, but he has only the one central office' from which informajtion can be dis-, seminated, and this, does not-meet..the necessities of the ease. The cost , of coming to London to make inquiries is.too great, and as a. consequence in most cjses ,-the only information obtainable is from the Jisndbook. What is .really wonted is -to' ha.7o agents in England, Ireland, and Scotlano, farmers and pastoralists, who JXfi persdnally , acquainted with our lands and land laws and the assistance given to settlors, and who could, give dotailed informaksji that would attract intending immigrants tff the farming class. TJiese agents should bo New Zoalanders who.had returned and sotted in the Mother Counlrj'. Their remuneratitW would bo nominal. The'honour of the posi- , , tion and the recognition by the colony which had done well for them would be held a sufficient reward. Again, something might .bi! dono in the way of lessening the cost of passages. The shipping companies have in tho past met. the Government, aiid, as honourable members are aware, settlers a given amount: of capital come Jiere at reduced passage .rates. More should be dono in this direction, for, after satisfying the earth hunger of our own people, there remains plenty of good land!.for others wlio come to us with the requisite energy and means to-properly cultivate it. BANK OF NEW ZEALAND. Tho balance sheet of the. Bank of New. Zealand and the' statemet-t submitted to the ehareholders by tho chairman of directors must be satisfactory to.honourable members; and especially <to those who, with myself,. had the grave,reepoasibility of bringing ths colony to the rescue of tho bank some yea-re ago. What we then stated, and is now demonstrated, was that the colony would not be called upon to pay anything, and- that the bank would.in the course of time work out its own salvation. It wss not then anticipated that at the close of the 10 years for which the guaranteo was given the bank would bo in a position to.dispense with it. Proposals will ehortly be submitted to tho House providing for a further guarantee for a specified period, but for a less amount tlian that previously riven. At the time tho colony gavo its. instance the bank's condition'wouKl' not warrant anything being paid to tho State for the guarantee, and accordingly nothing was asked. Tilings now, I am _ happy to say, aro different, and it is only, reasonable that some direct return.should be received. It has been suggested that the guarantee should bo, given on the samo term's as before. It has also bean strongly argued that the bank should be converted into a State bank. The Government consider tho , wisest course would be to establish as 'between the bank and tho colony a limited partnership, giving' a limited partnership for a stated period, which would be 'to the advantage of both, and, giving effect fo that, a" proposition will be submitted in> due' course. The administration of the Assets Realisation Board has been adversely criticised,' That criticism, however, is mado by -those who are not fully acquainted with the facts or with the statement and balance sheet submitted to the House, and- from the statement to the shareholders of the bank tho charges levelled at the board are unwarranted; To have forced tho whole of the real estate on.tho market would have meant »' heavy lose—certainly: to tho bank, and. probably to the colony. To sell as opportunity arose aud at , tho best obtainable prices has proved ■ to bo the most prudent and businesslike/course, and the value of real estate now in the- hands of the,-Assets Board as compared with- its market and .book value at the time tho estates were handed over to tho board shows an increase of at least half a million sterling. During this time the management of the. estates has shown a considerable profit, which has been used to reduce the liability incurred by the colony on behalf of the bank. Again, it is not generally known that among- those estates were a, number I of sheep'runs and pastoral properties, entirely unfitted for close settlement, of such area and value that no private individuals, could purchase them. These would .not cut up to advantago, not being smtsble for close settlement and email, pastoral runs. They have remained. in the hands' of the board,- and I am happy to say they havo been worked at a considerable profit. These are in a better condition to-day than they were at the time thoy were handed over. It'is only fair to the board to state tfat the whole of the real estate dn its hands has been- offered to tho Government, and lira always been, open to private purchasers, The prices offered by tho Government Land Purchase Board, when tho offers by tho Government hive been refused, have in every case when the land "was sold privateJy been considerably in excess of the Government's offer—in some instances by more than £1 per acre. Tako, for instance, the Eangiuru Estate. The Government offered' £25,950. It was sold privately at net £31,686, or £5736. more. Then, also, for the Carnarvon Estate the Government offered £39,072. ' It-was sold privately for £47,226, or £8154 more. To have sold at the prices first, offered would'have been unfair to the shareholders of the bank, and would not have reduced the .liability of the colony.

. MIDLAND RAILWAY. Last ■ session au act was-passed under which Parliament aatliorisedj the sum of £150,000 being paid to the debenture, holders and shareholders -of the Midland Railway Qompany. The manner of payment was to be by the creation of debentures at par, bearing 3i per cent, interest. The prooeeds of the sale of debentures was to be paid into the Public. Works Fund, out of which payment would be made to dob&nture-holdora and shareholders.' Nothing h«s yet been done.' It van no doubt anticipated that the 3£ porcont. debentures, being at the time considerably over par, the 3i per oent.woirld easily realise par. On malting inquiries it was found the debentures would not realise par. The. dobentureholders claimed that tlioy were entitled -to £150,000 in cash. A meeting was,called and a strong ' protest made against the acceptauco of payment in< debentures. Subsequently, another meeting was iheld, when the debenture-holders and shareholdera agroed, under protest, to accept debentures. As tho amount they were, to receive, was fixed at' £150,000, as mentioned in the act— being tho sum which, at a meeting in London,-1 promised to recommend Parliament to provide for—l am constrained to advise that an amendment of tho aot should bo made, and that, stocks should be sold sufficient to realise £150,000.' I ato advised that stock bearing the unusual rate of 3i per cent, interest would be an undesirable' innovation, and in order to relievo irritation and remove all grounds for grievance I strongly recommend the courso indicated, so that.there may be now and.for all time a satisfactory settlement of this long-stand-ing dispute. ■.'■■'. ;, (Continued on inner .pages.)