The Otago Witness, WITH WHICH IS INCORPORATED THE SOUTHERN MERCURY. THURSDAY, JULY 10,1890. THE WEEK.

Otago Witness, Issue 1901, 10 July 1890, Page 23

The Otago Witness, WITH WHICH IS INCORPORATED THE SOUTHERN MERCURY. THURSDAY, JULY 10, 1890. THE WEEK.

" Nunqu»m allad nitair, »Hud ««plonti» dlxit."— Juvenal. " Good nataro and good seme mast over join." -Pofb.

Next time the present Government has a surplus—that is to say if the AiYou present Government 'stays wko «. i on g enough at the Treasury

to have anything — it will probably go to considerable pains to conceal the fact. Nothing has ever excited the anger and disgust of the Opposition to anything like the extent achieved by the Ministerial annoucement of a surplus. To judge by the general tone of the speeches on the Opposition side of the House, if there is one blot more unsightly than another on the Government escutcheon it {is the record of this unhappy surplus; indeed, the logical outcome of more than one argument among the financial criticswould be that what the country has been pining for is a deficiency, and the achievement of its opposite is only to be grieved over as a lost opportunity. Even the Government seems to have been infected with the general gloom which the credit balance of the Treasury cast over the proceedings, insomuch that the Hon. Mr Richardson suggested that if hon. members would kindly take the trouble to arrange the figures another way (hopefully indicated beforehand by Mr Ballance) the objectionable thing would appear in a much less offensive form, expressible in four figures instead of six. The Hon. Mr Fergus, though not desirous of inharmoniously opposing the general desire to mitigate the disaster, evidently- thought that in this magnanimous concession his colleague had gone just a little too far; so when it came to his turn he suggested with some diffidence the acceptance of a five-figure numeral as representative of the truth. The suggestion, however, was stonily received by the obdurate Opposition, who insisted on purging the country of the stain of any surplus whatever, and were half-heartedly and somewhat vaguely supported therein by no less a person than Mr Bryce. Sir Harry Atkineon, who had committed the unhappy mistake of producing this davinota haereditas under the surprising impression that he was acting in the besfc interests of the colony, was not present ; and the apologetic attitude of his Ministers on the subject must be taken as indicating that some of them have grave doubts as to the policy of making both ends meet on the eve of a general election. As a natural consequence, the Opposition waxed more warm as the debate went on, until tbe latest speakers boldly left their predecessors (who had merely alleged that there was no surplus) far behind, and undertook to triumphantly prove that, on the contrary, there was a positive deficiency. True to 'their proverbial pliancy, the figures proved willing ; and the net result on the minds of the 40 or 50 members who know nothing at all about finance, as well as probably on a few hundred thousand of the outside public, was that it is impossible to say which is whiob, and it probably doesn't matter.

Of course, however, it does matter; and

| matters not only in ' New I q. c. i>. Zealand, but outside. It seems surprising that not one of the speakers appears to have resorted to the simple plan of first defining a Treasury surplus in dear terms, and then testing the audited returns to ascertain if anything corresponding to the definition really existed. What, then, is a national •• surplus ? " Clearly, it is not a superabundance of cash to the credit of the community, since we are said to owe altogether a trifle of 60 or 80 millions, and have at tbe present moment some hundreds of thousands of temporary Treasury Bills out— the latter class of paper money corresponding to what are called accommodation bills, or "kite-flying," in unofficial circles. Neither the six-figure surplus of Sir Harry Atkinson, nor the four figures of Mr Riohardson, nor the five-figure compromise of Mr Fergus would go far to mop up an ocean like this in a year's work, any more than would the no-figure surplus of the Opposition or the minus quantity of its later speakers. Nor is a surplus, as we have recently taken occasion to point out, an excess of the total receipts of the year over the total expenditure. That of course would be a surplus, and one of a very desirable kind, but it is not the only kind. The true definition of a surplus is to be found in the direct relation between the Estimates of the preceding year and the actual outcome of the figures. The Estimates of both revenue and expenditure are constructed on a certain plan, approved by the House, and must be passed by the House in detail before they are adopted. Once passed, they are committed to the Auditor and Controller-general, and no Minister or official can issue or negotiate a cheque on the public account until the auditor's passing 3tamp is on it. Now, if at the end of the year the Treasurer claims a surplus, the claim must be examined with direct reference to the Estimates submitted to and accepted bytlie House 12 months before, an,d it must be seen whether the accounts correspond in headings with the Estimates. If they do, and if no expenditure properly coming within the scope of those Estimates has been unfairly foistod on the loan fund, then the Treasurer may, and indeed must, designate any resulting credit balance as a surplus. The aim of the Estimates may be" assumed to be that expenditure and revenue as shown thereon should balance. If they do more, it is desirable that everybody should know that the finance has turned out better than the Estimates, and that the revenue has more than provided for the expenditure estimated & year before to be required from it ; or vice versa, as the case may be. The confusion shown by the debate to exist in so many members' minds about the meaning of ,a surplus is oaused by the essentially erroneous idea that the existence of a surplus is necessarily a proof that the Treasurer's, or' the House's, system, of finance is good. The idea is absurd. A surplus may be simply the result of excessive and unnecessary taxation, or, as in Sir Julius Vogel's time, of the vicious system of charging avowedly in tbe Estimates enormous amounts of annually recurring expenditure to loan — a system of which the modified relics still exist. But whatever the system of finance, whether good or bad, it is the system defined by the House at the beginning of the year as tlie system to be followed out for that year, and the House's independent officer, the Controller-general, is there to see it carried out. If on that system— whether good or bad does not matter — an excess of receipts over expenditure occurs, that excess is a surplus, and cannot be truthfully called anything else. If the Opposition critics bad acquired the knowledge that the surplus, while to a certain limited extent entitling a Government to credit as regards their administration, is as entirely consistent with a bad policy as with a good one, they would have been less ready to unnecessarily discredit the country and the financial world by denying for party reasons the existence of any surplus at all.

Select Committees of the House are very useful

in their way, and as often do Aiuntcur g00(ig 00( i wor ]j a 8 Da <j t but of tenest conatitntion. o f a u fo no thing that is enmongeri. t j tle( j to be caUed WQrk kind whatever. A select committee to inquire into a particular grievance of an individual or an association of individuals, or to investigate a charge against a Minister or a member of the House, or to clear up a special matter of figures, or to deal with any event of an unexpected and nonrecurrent kind which requires to be investigated in detail before Parliament can pronounce upon it and get rid of it — any such select committee is a useful time-saving machine, and if properly constituted may save a great deal of trouble and perplexity. We are not of course referring to the ordinary sessional committees which deal with petitions, printing, &c, as the usefulness of these standing sub-committees has long ago been firmly established, but to the committees of what the presbytery would call the^ro re nata kind. Such a committee has been moved for by the Hon. Mr Fergus "to inquire into and report upon the question of local government," and is to consist of Dr Hodgkinson, Mr T. Mackenzie, Mr Bruce, Mr Tanner, Mr R. Thomson, Mr La wry, Mr O'Conor, Mr Bryce, Mr Saunders, and the mover. We give the names in full because they rather tend to emphasise the absurdity of the whole thing than otherwise. Appointing a select committee to propound a system of local government is about as hopeful an enterprise as entrusting' the order of battle to the drummer- boy's mess, or the Commissionership of Customs to the gentleman who has just formally claimed to be the inventor of tbe primage duty — and, astounding to relate, has petitioned Parliament for a reward insiead of keeping his identity a profound secret. Of course nothing will come of the committee, and nothing was ever intended to come of it. What possible weight would any scheme of local government carry which merely represented the fads of Dr Hodgkinson, Mr T. Mackenzie, Mr Bruce, and the rest of them — or rather, of such of these as will even attend the committee meetings at all ? The committee is formally endowed with " power to call for persons and papers," and men will venture to predict that the only persons it .will ever call for will be the waiters from Bellamy's, andJJ the only papers those now

fashionably devoted to (he manufacture of cigarettes. The affairs of the Bank of New Zealand are i shaping themselves slowly but A surely — we might almost say Reiiue inevitably — in the direction Party. j n w hich thinking men in the financial world have looked for the outcome during the best part of three years. A company is being formed to take over the globo assets from the bank, leaving the latter free to work its valuable and profitable current business unhampered by an enormous accumulation of unsaleable securities. At first sight it may seem rather a one-sided arrangement, inasmuch as the bank retains all its good accounts, while the Assets Company gets, roughly speaking, only the bad ones The working out of the idea, however, is intended in reality to provide a fair margin of profit for both sides— otherwise we may be very sure the shrewd London capitalist would not be so ready to engage in the transaction. The Assets Company will become the possessor of tbe estates, mills, factories, and so on, which have fallen during the last few years into the hands of the bank by the default of the nominal owners, and will pay the bank an agreed valuation for them, either in cash or in some financial equivalent which, will, be readily convertible into cash. Of course the money the Assets Company will pay" the bank for these possessions will be an enormo us discount upon the advances formerly made by the bank in relation to them, and the shareholders of the bank will lose the difference. But the shareholders have long known that they must lose in the end ; and to get rid of the whole globo accounts in a bunch will be an incalculable benefit to them, even if it should turn out that something like Mr Buckley's valuation has to be accepted. Their bank will then be a bank in reality instead of a heterogeneous conglomeration of all the businesses under the sun ; and with an extensive and profitable business, such as they have always had in their legitimate banking books in the very worst of times, they will start again with sadly lightened 'pockets, but with every prospect of a regular and satisfactory dividend for tbe future on their diminished capital. On the other hand, the Assets Company, not being a bank, but a speculative enterprise, will be in the position of a capitalist who buys a suburban block, and proceeds, after lying out of his money long enough to survey it, form roads, and so on, to cut it up for disposal to the highest bidder. This is a plain, and we hope it will be a useful, sketch of tbe plan of operations of whicb a London cablegram has just given forth the first signal. As we have already said, it has long been awaited by financial experts as the only possible outoome of a position known to be strained beyond all endurance. , < Regarding the much discussed appointment of Judge Edwards to the The sixth Supreme Court Bench, the jndge. zea j o f the Opposition has considerably outrun not only its discretion but its obligations in the direotion of ordinary fairness. Supposing that anybody is to blame for Judge Edwards''appointment, clearly Judge Edwards is not. This much is at once apparent from the most elementary review of the facts of the case. A gentleman practising as a barrister in Wellington receives one day from the Government of the country the welcome offer of a seat on the judicial bench. What are his obligations in the matter? Simply to consider whether the appointment suits him or not, and to accept or decline it solely in accordance with his conclusion upon tfiat question. It cannot possibly be any business of his to inquire whether, as Mr Seddon puts it, " the circumstances of the colony and the administration of justioe warrant the colony going to the expense of appqinting a sixth judge." In fact, there would be something very like impertinence in replying to an offer of the kind that in the opinion of the person addressed the responsible Ministers of the counjtry were n,qt justified by the circumstances of the colony in making it. This bjejing so, and quite independently of the Tightness or wrongness ;of the Government appointing Mr Edwards or anyone else, it should have been clearly recognised by the Opposition from the outset that the appointment must be confirmed. If not valid, it must be validated. It is very unjust to Judge Edwards that a moment's doubt should be allowed to exist upon that point, and yet the Opposition attack was deliberately directed towards the cancellation of the appointment, instead of being delivered upon the Government for having made it. When we pass from this phase of the matter to the inquiry whether the Government was justified in appointing a sixth judge, and if so whether the selection of Mr Edwards was a wise one, we confess to being unable to find in the speeches of his assailants any justification, other than a merely party one, for the storm which has been raised. There could not possibly have been any political motive in the matter, for Mr Edwards is not and never was in any way connected wftf) pplitics, though he has once or twice, if we remember rightly, been' a candidate for a seat in the Legislature. It is not alleged in any responsible way that there was not work for a sixth judge, nor is there any serious statement to set against the declaration of the Government that the paths of justice were blocked to the people of a considerable area of the North Island for want of a judicial officer to do their work. As to Mr Edwards' personal claims, we believe they are adequate, though not conspicuous. We should ckss them as about equal to those of Mr Conolly, the last preceding appointment to the Bench, pnd distinctly inferior to those of Mr Denniston. If the Government succeed in showing that the appointment was required at all, we should say that no serious objection could attach to the choice they made ; but however this may turn out, we trust it will be unhesitatingly recognised that the country cannot play fast and loose with the Supreme Court Bench by turning Mr Edwards off it now. Constable John Achiter, of Auckland, died in the hospital there of fever. An old man named Hone Pitti, a Maori, is lost in the bush near Coromandel,