THE FINANCIAL STATEMENT.

Otago Witness, Issue 2579, 19 August 1903, Page 29

THE FINANCIAL STATEMENT.

REVENUE STILL -BUOYANT.

THE "GO-SLOW" POLICY.

An Fxhaustive Review.

[Bt Telegraph.]

WELLINGTON, August 11,

The Right Hon. R. J. Secldon, P.C., LL.D., Colonial Treasurer, made the following Financial Statement in Committee of Supply this evening: —

Mr Millar, — I bring -before the committee the Budget for tbe year with confidence, believing that hon. members will accept the assurance that, consistently with meeting the requirements of the colony, strict economy has been observed. In proof of this, the total increase on the annual appropriations is only £31,000, and this in rhe face of new departments, increasing population, greater conveniences, and extensive development. I estimate a considerable increase of revenue, and believe that after providing for all charges there will be a substantial balance to the good.

Thr> financial position of the colony is sound and satisfactory. There is a buoyancy in the revenue from the Customs and railways — barometers that never fail to faithfully mark the prosperity and wellbeing of the people. Prudent administration is essential, and we must not, merely because we have an increasing revenue, deem it proper on that account to increase our expenditure. Quite the reverse: as the , surest protection against adversity is to < practise economy during prosperity. Every year since the Liberal party came into office the Government, by their prudent administration in maintaining a strong finance and increasing and insuring tho spending powers of the people, have been able to announce a surplus on the year's transactions. This year is no exception to the rule, and, a<3 members are already aware from the public accounts, which are beforethem, we closed the past year with a credit balance of £303,905 ; and for the current year later on in the Budget shows a substantial surplus, which I om positive will ba realised, if not exceeded. Hon. members must, like myself, feel disappointed at the price of our stock on the London market, and considering our ability not only to meet our engagements, but after doing so to devote annually to development purposes large sums of money, the situation is the more inexplicable. The causa of the low price of colonial stocks is far afield from New Zealand, and the reasons, therefore, are fully dealt with later on. The best way to improve our position is to keep the public works expenditure within reasonable limits, practise the strictest economy, prove ourselves self-contained, and seek as little money outside the colony as possible. The collateral 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 better that the time for the completion of some of our railways should be extended, the erection of public works be postponed, and conveniences stand over than to receive £91 15s net for every £100 debenture. I will. avoid aa far as possible wearying , mombers with a mass of figures, but will ; ask them to refer to the tables which accompany this Statement, confining myself to the most important details only in this, my seventh, Budget. Ac heretofore, I have dealt wit-h the finances of our colony in a practical and lucid way, so as to be easily understood and grasped by all. Subjects cognate to finance, and having a direct influence in maintaining the present and promoting the future prosperity, are shortly and puccinctly referred to. RECEIPTS DURING THE YEAR 1902-3.

With regard to the receipts of the past year, it was estimated that the revenue pioper would produce £6,026,000. The actual figures, however, reached £6,386,609, or £360,609 in excets of the estimate. Of this amount of excess Customs has yielded £115,643, railways £107,551, and stamps £80,939. Other items of revenue show incieases totalling £62,014, while only in two items — land tax and beer duty — the receipts fell ehort of the estimate by £5538. The Customs revenue was estimated at £2,220|000 —being nearly £19,000 in excess of the previous year's revenue. The actual receipts were £2,335,643. Railways produced £1,982,551, while the receipts from stamps amounted to £978,939. The receipts under the head of laud tax fell short 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 the reduction of the mortgage tax, was £30,000 instead of £25,000. as anticipated. The income tax produced £15,684 more than the estimate, the two heads of revenue together exceeding expectations by £11,746. Territorial revenue, set down as £230.000, produced £252,277, or £22,277 more than was expected.

Comparing actual receipts with the preceding year, hon. members will find that the revenue of the year just closed is better by the sum of £333,539, made up as follows: — Customs £134,527, railways £113,062, stamps £70,268, land and income tax £4513, beer duty £166, registration and other fees £7389, marine £1512, and territorial £2659. the only falling off being a small Gum of £557 in miscellaneous revenue. In addition to the receipts abovementioned, £57,500 came to credit in respect of the proceeds of debentures issued against sinking fund accretions and a recovery of £3326 on account of expenditure of previous years was received, making the receipts for the year from all sources £6,447,435. EXPENDITURE DURING THE YEAR

The expenditure of the year out of the ordinary revenue account amounted to £6,214,019. Tho charges authorised by tho permanent appropriations show, as compared with the Estimates, an over-expenditure of £65,192. Of this sum hosp'tals and charitable institutions are responsible for £20,274, subsidies to local bodies for £4049, " thirds " and "fourths" for £5161, and endowments for £2056; while the payment of two years' contribution in respect of the AustraLau .

naval defence within the year is answerable for £21,493. Coming to the departmental expenditure, the amount shown as underspent is £78,323 ; but of this amount railways are credited with £54,639, being the balance urispent after the excess of revenue as allowed by law was added to the appropriation, so that by eliminating the railways we have a direct saving for the year of £23,634 on our departmental votes. It is unnecessary for me to deal in detail with the different classes, as the table showing actual expenditure of each class as compared with the estamate will be found attached hereto. . RESULTS OF THE YEAR. Results of the transactions within the ordinary revenue acecmnt for the year may be set forth as under: — Balance, 31st March, 1902 £270,489 Out of which wa^ transferred to public works 200,000

£ 70.489

.ueaving ... .. „. Actual receipts for 1902-3 6,447,455 Actua] expenditure for 1902-3 ... 6,214,019 Excess of revenue over expenditure 233,416 Surplus at 31st March, 1903 -. 303.905

PUBLIC DEBT.

The gross public debt on the 31st March last was £55,899,019, showing a total increase for the year of £2,932,572. Of this -sum £1,750,000 was raised under the Aid to Public Works and Land Settlement Act of last session. The requirements of the Advances to Settlers Office caused the raising of £450,000 (including £200,000 obtained on short-dated debenture-3 and eince paid off), and for the acquisition of land, for close "settlement we raised a further sum of £338,700. Grants to local authorities required £278,000 under " The Local Bodies' Loans Act, 1901," and- for the purpose of purchasing and managing coal mines £52,000 had to be borrowed under " The State Coal Mines Act, 1901"; £4232 of New Zealand Concols were inscribed, and £57,500 debentures for accretions of sinking funds were created under "The Consolidated Stock Act, 1884."

Tho conversion operations for the yoar were very few, the increase to the debt by conversion being £12,240. On the other hand, a small parcel of debentures (£10,100) under " The Land for Settlements Act, 1897," failing due on Ist April, 1902, -was paid off. Of the increase, at least the following items may be set down as of a directly reproductive character: — For the purchase of land for settlements, £338,700; advances to settlers, £450,000 ; loans to local bodies, £278,000; New Zealand consols deposits, £4232; purchasing and developing State coal mines, £52,000; — total, £1.122,932.

During the year £250,000 of debentures under " The Land for Settlements Act, 1897," fell due, and were renewed by the. proceeds of a sale of a like amount at a small premium above par. On the 31st March, 1902, the net debt was shown at £51,837.631, and on the 31st March, 1903? the net debt was set down in the publio debt table as> £53,585,780. I desire to explain that, in addition to the customary deduction made for sinking funds accrued, I have this year included the accrued sinking fund of the Government Advances to Settlers Act, an item heretofore not shown in the table. I have also furthc-r reduced the gross debt by taking off the amount of Government securities, in which New Zealand consols deposits are invested, as both amounts appear in the table of publio debt. For th© same reason I have taken off £500,000, held by tho Public Trustee in trust, for the payment at maturity of stock insciibcd for the purchase of the preforred shares of the Bank of New Zealand, represented by debentures of a like amount issued under " The Aid to Public Works and Land Settlement Act, 1899."

PUBLIC WORKS FUND,

Turning now to the Publio Works Fund (the particulars of which will be found in Table I), hon. members will find that £187,334 camo to credit in respect of the loan of the previous year. We also received £750,000, being the proceeds of debentures issued iv the colony under The Aid to Public 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 «mall receipt of £1616, which, with tho balance brought forward to begin the year with of £454,059, made a total available ways and means of £1,853,009. Out of these moneys £1,426,264- was spent on railways, roads, and other public works, and £88,180 for charge's and expenses of raising loans, leaving a balance to be carried forward to this year of £338,565.

It will be seen from this that the amount received in respect of tho new loan has, fortunately, not been trenched on, and ie available for this year's expenditure. The expenditure on railways, roada, and especially public buildings, must be curtailed, notwithstanding that our ability to meet interest charges is much better than in years gene by, when much larger sums were borr< wed. In the curtailment a discrimination for such works as the North Island Trunk railway should be made, and in respect to other railways, roads, and other works tho decreased expenditure should be spread e\enly throughout tho colony. LAND FOR SETTLEMENTS ACCOUNT.

The account had a balance of £332,692 to start the year with. Debentures amounting to £338,700 were created and sold in the colony, £109,820 was received from lents and lease foes, £10,335 from interest on investment account, and £846 from miscellaneous receipts. On the other hand £353,462 was expended in the purchase of elates, and £15,521 in reading, survey, and other expenses, and £93,593 was recouped to the Consolidated Fund in resptct of intcmst paid on debentures issued. A parcel of £260,100 debentures fell due on Ist April.

1803, and £10,100 was paid off from casfi! 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 year was £366,075.

CHEVIOT ESTATE ACCOUNT.

The rents and other receipts amounted to £14,609, winch, added to the balance of £16,861 from teat year, makes a total of £31,470, of which £9037 was expended in payment of interest and other charges, leaving a balance of £22,433 at the close of tho year.

CONVERSION ACCOUNT.

The transactions of this account during the past year have not been very numerous. £230,040 of 3 per cant, stock has been inscribed, of which £229,000 was sold, and the proceeds used to redeem £52,000 5 per cent. 1867 debentures and to pay off the balance of £165.000 obtained on the security of short-dated debentures under "The Aid to Public Works and Land Settlement Act, 1859." A small parcel of 6 per cent, debentures under the Canterbury loan of 1862 came in for conversion, and 4)1040 stock waa issued an exchange. Detailed particular will be found in the table appended. LOANS TO LOCAL BODIES ACCOUNT.

The balance at the credit of the. loans to local bodies account on the 316t March," 1902, was £2770. Debentures for £278,000 tvcre created and iswucd during the past year, and refund; of unspent balances of grants, amounting to £1836, were received. Payment on account of loais were made during tho year to local bedies of £234,870, and towards opening up Kocks of laud for sottlement £18,578, leaving at the end of last year a balance of £29,150 to the credit 1 of the account.

Up to the 31ot of March last the" total amount of debentures created and issuert and carried into this account was £2,022,100, and the total Jisbur-.ements have been: — To local bodies, £1,581,898: lo Lands and Survey Department toward ipening up blocks of land foi settlement, £332,913; and to .fhe Public Works Fund £59,f00, in exchange for debentures under " The Roads and^ Bridges Construction Act, 1882." Is will be recognised tha-t the transactions in connection with this account have- hsen considerably increased, the total of payments made to local authorities on -account of loans during the pant year being the largest; since the passing of the Government Loans to Local Bodies Act- in 18E6. Applications for loans for the construction of abattoir? under "The Slaughtering and Inspection Act, 1900," 'and for drainage and sanitary works under "The Public Health Act, 1900," are constantly being received. This is no doubt attributable to the fact that the looal authorities are compelled under these aots to borrow for the purposes above mentioned. The grants, although proving of great benefit in respect >f public health, tend very materially to swell the amount. It becomes necessary for the Treasury to borrow iv order to provide the loans authorised by His»s© acta. Of the total increased debt of local bodies, amounting .to £1,669,480, the following figures will indicate to what extent local authorities have availed themselves of the reduced rates of interest:— At 4-£ per cent., £964,361; at 4per cent., £30,430; at 3£ per cent., £674-,689. Seeing that the rato of interest is nowhigher than when the act was passed fixing the rate at 3£ per cent., it may become necessary to raise the interest chargeable. I am pleased to he able to report that the payments of interest by the various looal bodies on the insoribed debts continue to bs fairly and punotually made.

CONSOLS ACCOUNT

The deposits received during the year were the smallest sines the account was opened, the amount being only £4232. Th© reason for this is no doubt due to the fact, as stated in last year's Budget, that a better raite of interest is obtained by purchasing other Government securities. The total amount now inscribed is £472,500, which' has been invested in Government find other securities, yielding a rate of interest to the colony equal to about 3| per cent, per annum.

THE GOVERNMENT INSURANCE DEPARTMENT.

During the 20 years ended on 31st December, 1902, the Government Insurance Department lias made great progress. The new policies issued during the period were 66,375, representing a sum assured of £14,561,531. The business in force at I'he end of tho 20 years increased from £5|176,217 at the beginning, to £9,896,572, representing a net imcreasc of £4,720,355. The income from premiums during the 20 years amoiratcd to £4,841,651, while that from interest amounted to £1,995,565. The amouafc paid to policy-holders or their representatives during the 20 yeara waa £3,054,773. Th© amount added to the funds was £2,677,928; while the total accumulated funds at the end of the 20 yeaiC w-as £3,382,817. The following table shows the position at the end of the respective 10-yeai 1 periods 1592 and 1902: —

In connection with the above table, it should be borne in mind that during the decade ended 31st December, 1902, the amount paid to policy-holders or their representatives has very greatly 'ncreaeed owing to the larger number of insurances maturing and increased deaths and surrenders occasioned by the larger number of policies in force.

PUBLIC TRUST OFFICE.

This institution has outgrown the troubles of infancy and reached a vigorous manhood. By comparing the figures of the years 1882 and 1902 its rapid growth can be seen at a glance. Tho powers of the Public Trustee have from time to time been enlarged, with much benefit to his clients, in dealing with the property of lunatics, winding up estate?, applying income or capital to the maintenance or advancement in life of infants, and in many other ways he has now much groater powers than private trustees. The management of Native lands, especially.

jttnder " The West Coast Settlement Reserves Act, 1892," by the office has been very successful. Tlie increase in land values owing

to the v risc of the dairy industry has no , doubt contributed to this, but the granting by a public officer of eimple, inexpensive leases, with security for improvements and • a tight to renewal, has been a great aid to *he settlement of these lands. The total area of reserves vested in the office under the act is 186,489 acre 3; 128,176 acres are leased, 18,952 acrea are held by Native Owners under occupation licenses, which'refluire them to fence boundaries and pay rent fo other Natives 'who have interests in the land, etc. The sum of £23,001 Is 6d was last year paid from rents to the Native owners, after deducting all expenses. The office has been very fortunate in its investments. Prior to 1891 about £4000 had been lost. The amount is small when the number of loan transactions is considered, and is creditable to the office Lending Board. The losses were, of course, met out of profit and did not cost the colony anything. There liave been no losses during the last 12 years. The office assurance reserve fund now

amounts to £10,279 12s 3d, a sum probably

ufficient to meet any losses. Last year a substantial- reduction was made in the scale of charges, and as the business of the department grows there will be reductions. Tho State guarantee as a security for the bets of the Public Trustee should gain for the offico the confidence of the most timid possessors of property. It is satisfactory to note that the wilta deposited in tlie office by .Which tlie Public Trustee is appointed executor have increased so largely that the-num-Tjer has nearly doubled during the past three years. The accumulation profits now in the offioej- apart from the a&nirancp and reserve fund, amount to £30,954 3s 7d, no portion of such profits having been paid to the consolidated fund since the year 1888. When the proper time arrives the amount now in the reserve fund could with advantage be

sxpended in building a suitable office in Wellington for tine important and useful institution.

CUSTOMS DUTIES.

The buoyancy in the revenue deiived from Customs, notwithstanding the large reductions which wore made during the session of 1900, will be readily seen by the following figures : —Year 1899-1900, £2,107,566; year 1900-1903, £2,335,643; — increase during the three years, 10.3 per cent. Had the duties on >tea, >urrant.s. xaisins, candles, and -kerosene remained tmaltered revenue would have been derived from the .articles to the extent of £156,459 snore than was actually received in 1902-03, the total revenue for which year would have been £2,492,102, equal to an advice of 18.2 per cent, on the revenue for 1899•I9OO. As .compared with the previous year ■there is _a uniform increase in nearly all tlie principal items, a slight decrease being &hown in tobacco and Australian wines. The increase in goods liable- to ad valorem duty, such as apparel, textile, boots, fancy jjoods, hardware, etc., amounts to £74.579 (equal to 17.8 per cent.), and on goods charged by weight,, such, as candles, fruits, fish, jams, leather, paper, etc., there is an increase of £26,491, equal to 9.1 per cent. These increases are greatei than that in spirits — namely, £12.743, or 2.7 per cent. Cigarettes show a considerable increase — namely, £9152, or 15.2 per cent. Tea remained at the same level ; and on sugar tliGre is. an increase A £8366, or 4.5 per cent. These increases represent an increased public expenditure on personal and household requirements — a result which is in keeping with the known general prosperity of the colony. Tho following figures show the revenue per /Jiead of population on certain lines of goods ' for the years 1901 and 1902 :—- 1891. 1902. Spirits, per head „ £1 17 3 £i is v Tobacco, per head ..137 l 3 7{ Cigars and cigarettes, per head 0 4 7 0 7 8J Wine, per head .. 0 L 7 n 1 3i Beer, per head .... 0 Oil 0 0 8\ Beer (Neyf Zealand), per head 0 2 9{ 0 3 2 Sugar, per head .. .. 0 3 i\ 0 A Z\ Tea. per head .... 0 3 Oi 0 10 Coffee and cocoa. .. 0 0 2\ 0 0 li Currants and raisins .. 0 0 11 0 0 5j The taxation through the Customs per he-ad of population wa« 10 years ago £2 7s lOd. Ifc was in 1902 at £2 13s 92d. Ficm the above table it will be seen that spirits, tobacco, cigars, cigarettes, and beer account for an increase of 4a oil per head. I his may be termed voluntary taxation on luxuries. Tlie increase per head, therefore. in 10 years, if no remissions on the neeesearies of life had been granted, would have been 7s 112 d per head ; but from th-a tbove table it will be seen that the revenue par he<id for the necessaries of life hai bs-on reduced by nearly 2s.

LAND AND INCOME TAX,

The receipts under the head of land tax fell short of the estimate by £4000. The income tax produced £16,000 more than tho estimate, the two eums of revenue together exceeding expectations by £12,000. The receipts from the income tax for the current year I place at £210 000— a «un slightly under tlie actual revenue rf last year, and

yet a substantial amount when compared with the .£63,001) received 10 years ago when the- tax was first imposed. i . ABSENTEE LAND TAX. The colony has the name of imposing a graduated absentee land tax without gain. J?or the year 1902-3 this tax amounted to the munificent sum of £922 12s 2d. The Legislature, when deciding 6ome years ago upon the imposition, intended it to be i-.ometliing substantial, and rightly so. Those absent from the colony do not contribute to the indirect taxation or otherwise Kelp the revenue, and it is not unreasonable to ask them to bear a fairer share of the burdens of the State. The present method of levying tha graduated tax is not fair in its incidence, and the following explains clearly the position : — Taxpayer A pays a graduated tax on £9980: amount of tax at Is Bd, £5 4a; B pays tax on £10,010, afc 2s 8d: amount of tax, £10 8s 7d ; C pays tax on £49,727, at 7s 8d : amount of tax,_£lßl 6s ; D pays tax on £50,173, at 8s 8d: amount of tax, £209 Is Id; E pays tax on £187,839, at 14s 8d: amount of tax. £1369 13s 2d ; F pays tax on £197.329, at 15a 8d: amount of tax, £1541 12s Bd. The above are actual cases, and this being so it is intended to ask Parliament to amend the law so that the increase in the 6cale of graduation shall bear more evenly, and in doing so care will be exerc'sed to see there is no decrease in the z^evenue from this 6ource.

VALUATION OF LAND DEPARTMENT.

During the past year the valuations of four large cities and several smaller boroughs have been revised. The capital value of these lias been increased by £6,250,000, and unimproved value by £4,000,000. Ouing to the system of latihg on unimproved values having been adopted an Wellington and Christchurch and some of the other boroughs much keener interest has boon taken in the proceedings of tho Assessment Courts than heretofore. In the country districts the results of the operations will, it is expected, when the figures are made up after the Assessment Courts are over, show a considerable increase of values, as well as equalising those which were pre\iously uneven. During the coming Hirflmer it is intended to revise as many as possible of the districts which have not yet been \ allied under the act of 1900. GOVERNMENT ADVANCES TO SETTLERS OFFICE. The business of this office continues on much the same lines as in previous years. The amount at credit in the Public Trust Office of the sinking fund account was, on ■tiie 51st March last, £125.867 7s lOd, and of tlto assurance fund account £67,911 16- Bd. The success of this office is a uiibject matter for sincere congratulation. DEPARTMENT OF LABOUR. ! The wages of male workers in New Zea- ' land have risen considerably during the- la-t ! 20 years, and the wages of women workers j during tlie last five years. In manufactories i the average male worker (including youths) received about £6 10s per annum more than iv 1892, and the woman worker (including girls) about £2 15s per annum mor.: than in 1895.. This gives the large sum of £1,118,325 «9 being gained by the male factory workers in the last 10 years above the amount they would have received had the wage rate remained on the scale of that of 10 years ago, and it leaves the amount pained by women and girls out of notice. The Labour Department has not at present the means to collect statistics showing the wages of persons working outside factories. Carpenters, plumbers, engineers, painters, carters, sailors, miners, agricultural and pastoral labourers are all outside the present range of accurate wage returns. Speaking* generally, however, there has been a confiiderable libe in wages. Thus masons, -who j in 1892 received from about 10s a day, now get from 10s to 14s. Plasterers, who m-rived about. Bs, now get from 10s to 14-i. Farm labourers, formerly 15s per week, get from 15s to 255. Ploughmen, who we;o at 20a, get from 20s to 255. Married couples (cervanH. formerly at from £50 *o £70, now gefc from £60 to £80. This will givo some idea a« to the general rise in value of tho earnings of the working elates, although at the same time it may be noticed that commodities (especially meat) have risen in price. The actual gain in wagpa is by no means the only improvement visible in the condition of the industrial classes. By means of i award?, agreements, etc., in many trades the hours of labour have been considerably | shortened, and holidays allowed for. Overtime also (which has not been computed in the advances above spoken of) has baen ' fixed, and ia paid for beyond the ordinary rates of wages. The improved sanitation in workshops, ensuring better health to the inrrates, also adds to tho earning capacity, therefore, speaking generally, the life of tha worker has been sensibly brightened during t the passage of the last 10 year*.

PUBLIC HEALTH.

In view of (he appearance of smallpox in Tasmania, elaborate and careful supervision of all pas-enger?. from the Australian Com-mor.-.-oahh has aea'n hc-ii instituted, in addition to a in'.:.uu-o of qi:«rantiue against

vessels coming direct from Tasmania. This inspection, 1 am pleased to say, is being conducted free of cost to the State. By an arrangement entered into by the shippers and the Health Department the expense attendant upon this extra work is being defrayed by the shipping companies. The colony is to be congratulated upon the fact that although isolated eases of plague have occurred the disease has not been permitted to spread. The occurrence of two cases of smallpox upon a ship within our own waters points to the necessity of a more stringent enforcement of the Jaw with, regard to vaccination, as well as the expenditure of a considerable sum upon our sanitary defences. HOSPITALS AND CHARITABLE AID. The colony last year granted by way of subsidies £100,274 to hospitals and charitable institutions, and yet had no -say whatever in respect to expenditure. It is true we have an Inspector-general, but his power of control is nil. The position is almost farcical. Members review and criticise the expenditure of those departments directly controlled by the Slate, but in this, which to all intents and purposes is a department of State, neither House nor Government has any voice in administration and rost, and, although providing by far the largest share of money, the local bodies, who find, next to t!*o Government, tho largest share of the moiiey, have a little say in the management, seeing they nominate members to charitable aid boards and hospital trustees. A change is necessary, and the moneys rectuired should ho annually voted. Tho Government should have a responsibility. The. Inspector-general and other inspector? should, where they see administration defective and patients not medically or otherwise properly treated, or where persons are refused admission or improperly admited and retained, or where waste or extravagance obtains, and vrhc-re, 1 in the case 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 be done, tho Government should be empowered to stop further payments to boards and hospital trustees until effect was given to the recommendations of the inspectors. The law in this respect and in respect to the constitution of boards and trustee* requires amendment, and representation of the Government and the local bodies should ho on the basis of money 3 contributed, or the controlling bodies should be wholly elected by persons in the disI tricts who are on the electoral roll.

HOSPITALS FOR THE MENTALLY AFFLICTED.

The question of increasing the accomrnodxtkm for those who-.e mental condition warrants their detention was brought before the House sometime ago. My worthy colleague the Minister in charge of hospitals having on that occasion, with myself, fully stated the intentions oF the Government "in respect to this important matter, there is nothing further to add, beI yond stating that ample provision would j be made to fully meet the pressing requirej ments -of the case. The question of one or more hospitals for first treatmtnt, on the line 3of the Bethlehem Hospital, deserves our earnest attention. As soon as the necessary accommodation is provided tho classification of the inmates is another essential. The commitment to our hospitals of persons should be jealously guarded. Information has reached me to the effect that patients are sent to the hospitals for the insane who should, for a time at least, be sent to he ordinary ho=nitals. There are also, it is alleged, hundreds of persons in our hospitals for mental diseases suffering only from senile decay. During the la.=t five years no lc«s than £86,000 was spent in erecting buildings and furnishing the same. La.=t year the salaries and allowances and cost of maiatensnee, etc., amounted to £74,799.' This year you will be asked to provide £75,895 out of the Consolidated Fund for the same purpose, and, in addition, a large sum for buildings, etc., out of the Public Works Fund. FARMS FOR SOCIAL OUTCASTS. Year by year, members are fully aware, large sums of money are spent in the maintenance of person? in our gaols who are really not criminals ii> the full acceptance of the term. They are simply derelicts of rocioty. Drink, evil companions, old age, phyoio.il incapability, lack of mental strength to resist tomptation to do wrong all conduce to a breaking of the law. They must live, and when not in gaol they prey upon society. The time has arrived when the colony should have, as in Germany and other countries, farms to which these out-cast-j could bo committed. If these farms were on bush land they could clear the bu.-h, stump and grub, and cultivate food for themselves, and the surplus could be utilised to supply other State institutions. They would thus be self-supporting, and an eyesore would be removed from our midst which is now ever visible and does no credit to our bcasted higher civilisation. To send these person*- to gaol is a mistake. They are not Teally criminals. Some have the taint, it is true; but -may not this have arisen from the firatf contact in the gaol? There are men and women who are unable to look after themselves, but. given a home, work, and food, they would be quite happy and contented. The initial cost would be I tho only one, and it is worth incurring if only to prevent the undue swelling of the criminal records of our colony, with the attendant undeserved reflection on the people. THE TOURIST DEPARTMENT. The Touribt Department has completed its .second year of life, and has completely justified its existence. Never in tho records of tho colony ha» such a large number of tourists reached our shores as during the past year. The advertising now being [ carried on, in addition to attracting tourists, ; is also designed to attract settlers of the best kind. The Te Aroha Hot Springs, heretofore administered by. a Domain Board, are now brought under control of this department. An accommodation house lie» been opened at Waikaremoana, and other accommodation houses r<avo been provided. Tlie revenue leceived from resorts under tho control of the department for the year was £8401, as against £5491 for ihe previous year — an increase of £2910. But as th« department is not yet directly revenueproducing the3e figures do not in any way gauge its value to the colony.

POST OFFICE SAVINGS BANK.

Tho progress of the Post Office Savings Bank and the- largo accumulation of doposito may be accepted as evidence of the continued prosperity and thrift of the wage©arners of tlie colony, vuo ispr.seut about

86 .per cent, of tk& clpposrtoro. Although more particularly referred to in ihe annual report of the Post and Telegraph Department, it may here be mentioned that the excess of deposits over withdrawals in 1902 was £360,847 — an increase equal to 5.34 per cent, over the excess in 1£92. During the decennial period 1892-1902 the 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" Dy 170 per cent., and the average amount afc credit of each depositor increased from £25 9s to £30 5s 3d, or 19 per cent. The total amount afc the credit of depositors on the 31st December Lost was £6,883,737, compared wifcK £6,350,013 at the end of the previous calendar year. OLD-AGE PENSIONS. _ The amount estimated as required for old-age pensions waa £215,000 last year, while the sum actually paid was £209,156 5s sd. It is estimated that £215.000 will be sufficient to meet all claims this year. When I introduced the bill I stated that a time would arrive when a maximum would be reached, and for some time there would net be a very large increase. From the present outlook, tho amount required will not vary much. During the past year it was found usceswiry to introduce a new method of examining applicants for pension,!, which is of a more searching character than the oue in vogue in previous years. The system is working smoothly, and doing all that was expected of it in preventing persons not entitled to pensions from receiving them. While upon thU subject permit me to say that it should alway v bo borne in mind that, where there is a large fum of public money ro be had by application the greatest care must be given to all claims, otherwise persons not entitled thereto may obtain pensions. In Ihe last Statement mention waa made of the fact that the two large-s-t- States of the Commonwealth had, by inaugurating old-ago pensions, scb-smes, followed New Zealand's humane- action in 1898. It i? gratifying now to record tlie fact that a similar measure h->d been introduced into the House of Commons. WORKING RAILWAYS. I am pleaded to be v able to place on record the fact that traffic on the railways during the past year has .'hown a very marked increase over that for any previous year. Business shows an increase of 219.251 passengers, 19,000 head of cattle, 6685 pigs, 1,056,473 cheep, and an increased tonnage of 201,217. The gross revenue, as given by the Railway Department, amounted to £1,974,038— an increase oi £99,452 over the previous year. As showing the increase in the numbei of passengers and sheep carried and the increase of revenue since the railways were handed over by the commissioners, ihe following comparative figures from March 31, 1895, to March 31, IGO3, are very interesting: — 3895. 1903. Increase. Passengers .. 3,905.578 7.575,300 3,669.812 Sheep .. .. 1,519,921 3,8521,333 2.301,412 Revenue .. £1,150,851 ,£1.974,038 £823,187 The railways gave employment to no les's than 8875 men, and last year paid £3 6s Id per c-out. on the capital cost, £19,081,735. The value of concessions in fares and freights made since the Government- resumed control of the railways- amounted on 31st March, 1803. to £588,000. The highly satisfactory condition of the railway business h a matter for sincere congratulation, as it is undoubtedly one of the safest -indications of the continued prosperity of tho country. I confidently anticipate that the satisfactory condition of the colony, which has be^n so marked during the past 10 years, will continue for a %-ory considerable nme to come. EDUCATION. The past year has been marked by a great advance iin the work of education in the colony, both in regard to tlie number of schooL and institutions and pupils and in regard to the extension of tha field of operations. The progress has bean more pronounced in respect of manual and technical education than in any other branch. T'lue - total number of recoerniscd clseses has increased from 425 for such wcrk at the end of 1901 to 911 at the end of 1902. Of the latter, 563 are classes for manual work in schools, 279 are technical classes, properly so called, for adults, and 64 are continuation classes. The total number of classes is new 1629. The work is being taken up in the smaller as well as in the larger centres, and to an increasing extent in the country di.'tfricts a3 well as in the towns. This entails a ; larger expenditure, not only for tho capitation payable under the Manual and Technical Instruction Act, but in the form of , grants for buildings and apparatus and other - concessions, as free railway passes. The " number of primary schools open has in- '■ creased from 1715 at the end of 1901 to 1754 at the end of 1902. It is especially evident i that owing to the spread of education and J the rapid growth of settlement the sum < voted la?t year for new school buildings , will not be sufficient to meet the needs for ] the curren.t yeaT, and it will consequently ] be necessary to take a more liberal vote for ' that purpose on the Public Works Esfci- ' ( mates. During the year a new departure had been made in the direction of provid- ' j ing free secondary and technical education j | for those boys and girls who qualify to profit ( by it. The steps already taken include the granting of free tuition in secondary ] schools and of free scholarships in technical a schools on certain conditions. The Go- , 1 vernment's scheme for free secoiidary educa- j tion has been accepted by 16 out of the 25 • secondary schools of the colony. A iew • of tho larger sohools and one or two of the j smaller liave not yet seen their way to fall t into line with the rest. Parliament will j be asked to meet the contingency, and ere J the year ends it is to be hoped all tho 0 secondary schools will throw open their £ doors to qualified pupils, and thus make the valuable endowments they possess of tho greatest pc-'-iblo benefit to the community at large. The same end is attained in • country places by tho establishment of district high schools, the numbc-r of which is nearly 60. as against the 15 in exis'tenco two years ago. It is not tlie intention of Government to j stop here, but to go on until the way is 1 open for any boy or girl of promise in 1 New Zealand to receive the highest educa- t tion which tlie colony has in its power to t give. With this cud in view, the Govern- i: ment has determined to provide house f allowance for one year for two pupils in i the Fifth Standard in each educational dis- p triet — 26 in all— who are specially gifted and i have received the highest number of marks, I but who are, from out'id© cause, unable c to continue their school course; and to s c«*ablish 24 "national it-holarships." the. t object of which will be to enable hoMc> - s c to go from primary schools to »econd-ary t

schools and thence to the university, full provieion being made for tha 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 largo amount of money spent in education it will be neeessa.y in the v near future to make more complete provision for tho thorough training of our teachers. The programme which I have sketched out may seem ambitious. It will certainly entail a larg-e increase of expenditure; but it must not be forgotten that in education democracy is the safest and freest, because in it al! have an equal chance ; aid it is, too, the highest form of democracy,' iv so much as its individual members best know how to us© their liberty intelligently. Therefore I do not I for a moment b&lieve that either the country ' or this committea will begrudge the large sums of money which are spent from year' to year in currying out the most important functions of the State. FARMING INDUSTRIES. There is a considerable increase in the quantity of wool exported, and t'hc prdoes lealised are an improvement on those for the previous year. Tallow and sheepskins also show satisfactory advances both in quantity and total value. The export of frozen meat exhibits a large increase in quantity, the figurce being 2,454,000cwt for , the year 1902-3, as against 1,871,000cwt for the year 1901-2. The total value of this export lias also grown from £2,232,000 in <• 1901-2 to £3,229,000 in 1902-3. The quantify and total value of the cheese sent out of tho colony shows a decrease, but this is ' far more than counterbalanced*, by tho great increase in both quantity and total value of . the bu-tter exported. At the beginning of the season the London prices of butter were equal to those of the previous year, but, unfortunately, as the season advanced a considerable fall in the prlce3 of all butters on the market was experienced. On fcha other hand, the price of our cheese lias continued very high. The area under grain, especially oats and wheat, was larger than last season, and, although crops ripened later than usual, the yield per acre waa the lcost abundant for years. As prioes of grain continue high, fanners have every reason to regard the harvest as a very satisfactory one. The quantity and total value of hemp exported showed satisfactory-growth, and - prices have remained at a high figure. The reeeut large development of (his industry is undoubtedly due in some measure to :he institution of the Government grading. The fruit and poultry industries are making rapid stridre, and tho time is not far distant when expoit? of these commodities will assume important dimensions. Good progress has been mado with the • preparation of experimental farms for the purpose for which they are intended, The cultivation of vines at Waerenga lias again given excellent rr'iults, and the vitieultural expert engaged by Government last year predicts a grpat future for th© wine industry in New Zealand. Pubic abattoirs have been established at several mor<> of the JaTger towns, and the improvement thereby effected in the meat supply is undoubted. The outbrotik of anthrax ha=! git-en grave cause for anxiety, and every effort is\r-ping made to stamp oufc this fell disease-. There can be no doubt; r whatever ns to the source of the trouble, which undoubted!? name wi'h some'bonedust from India. Tlie only safe prroau^'on ia for tliA (4nrermn"nfc to ovct "<sf-«vr»li«-{f work 1 ?. Th ; " has been authorised. An oxpert has W»-i appointed, and tho erection of the work* at th« Bluff and Auckland will soon be in hand. LAND FOR SETTLEMENTS. About 150 properties wore oftVred for sale to the Government under the -Land for Settlements Act, and 23 were acquired. Tlie .iz<zregatc area was 151.940 acre?, valued • at £569.927. The purchase monoy paid during the year for 70,865 acres was £353.452, aud tho total isitm paid to tho end of last year is £2.598,112, for 122 estates, , aggregating 539,374 acres. Owners' values w^'i'e generally higher than the Board of Land Purchase Commissioners considered it prudent to go. On tlie 115 estates reported upon there are 2335 selectors, who havealready built 1785 residences, and only three settlements show unsatisfactory progress. The accumulated arrears of unpaid rente 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 secured, aggregating 475,223 acres and 19 perches, upon which the Government havo settled 2335 tenants, who contribute rentals to the amount of £116,979 5a Bd. Notwithstanding the fomewhat 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 dcubtloss accountable^ for tho keen demand which still prevails a"mong th& 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 84,000 acres, which was acquired by purchase under special act, and constituted the great typo of a)J succeeding settlements. It ( wa3 acquired by the Crown in 1893, afc >■ a cost of £324,908 19s 7d. though the market value at the present time is considerably in excess of tho original cost to the colony. The number of selectors within the estate is 334. aud the annual rental receivable from them is £14,434 13s sd, which afc 5 per cent, represents a capital value of £288.693 8a sd. exclusive of £37.355 received on account of cash and other sales, which necessarily had to be effected at tho time of tho acquisition of the estate. Accordingto the census of March, 1901, the population of the settlement is 1026, as compared with the small number represented in 18S2 by the owner and his employees. FRUIT PRESERVING AND CANNING. The waste that goes on in this colony pear by year in that which bountiful Nature* bas given us in the shape of fruit is little less than scandalous, and for the colony io be importing dried and tinned fruits to :he value of thousands of pounds annually ,s a reflection upon someone. Wliero the raTilt lies it i a hard to Fay. Common sense lictates mo that it is of little use having totnolon'isti bore to encourage fruit-growing f the fruii when grown is not to be used. [n respect to the fruit industry, I am of opinion that a course should be adopted similar to that with dairy factories, and ;he State ehould a='ist the fruitgrowers by jptabli'liing factc»rie» at irivcn centres, and ay advancing on safe condition* tl.o moneys

to. erect Ihe buildings and to obtain the necessary machinery and appliances. There should be instructors in the art of preserving, drying, and tinning, who 3hould go round the> country and instruct the fruitgrowers in the game way as the dairy experts have done ,in the case of outlying dairy farms. At the Cork Exhibition I was surprised to see what could be done in this direction, and how with the aid of ' machinery, obtainable at a email coat, every ♦farmer's wife could preserve and tin the fruit from her own orchard. The Agentgeneral -was instructed to engage the expert who wa3 in charge of the fruit-preserving exhibits at thi3 exhibition. It was found, however, that his services had been previously secured by the Agricultural Department of Ireland. I anticipate, however, having experts here before the new fruit season starts. This will be adding somewhat to our administration expenses, but the -direct and collateral advantages will much more than compensate therefor. I hope the day is not far distant when the present waste will cease, and good profits be secured to the fruitgrowers of our colony. i FORESTS AND PLANTATIONS. i As announced in the last Financial Statement, the officers of the Lands and Forest Department have given special attention to the conservation of the indigenous forests of the colony and to the disposal of milling timber and other products. Additional • areas of forest lands have been selected by the Commissioners of Crown Lands in the various land districts, to be djriy reserved --as soon as necessary- Expjorafcions and surveys are sufficiently advanced during the year, and 18,C46 acres were gazetted, bringing up the total area set apart and gazetted to 2,570,113 acres. The gross revenue from the sale of timber and other nroducts amounted to £15,916 63 lOd, of which £12,0*5 12s was transferred to the territorial account. The sum now standing to the credit of the State forc-ats account is over £31,000. The total expenditure upon the State forests and also upon the nurseries and the various services rendered to other departments and local bodies amounted to £11,018. It is proposed to approve of a considerable increase in the expenditure for the current year to defray the cost of lands acquired for the extension of nurseries and planting operations, especially in the vicinity of Waiopu (in the~Rotorua district), one near Kamo (Whangarei district), one at Dumgree (Marlborough), one at Hanmer (Canterbury), and one at Tapanui (Otago), where areas are being feoiced 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 state that, not- i withstanding the decreased yield from some ! of the quartz mines referred to last year, the returns from this class of- mining for the past year 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 ISO 3 show an increase of 33,6470z, valued at £120,355, as compareoV-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 Thames Hauraki Goldfields (Limited) have been acquired, and the Government are now the owners of the property. Had 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 for all time abandoned. STATE COAL MINES. | The development of the Scddonville State coal mine and the mino at Coal Creek is rapidly approaching completion, and by end of the year it is anticipated that coal will be put on the market. The outlook is very cheering, and the quality of the coal exceedingly good, 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 be sold at , much less than the prices now ruling. A matter that requires consideration is the transit by steamers to the several markets, ( and unless private enterprise provides steamer freights at low rates the Government may be compelled to have their own steamers. The winding gear, ropes, machinery, etc., have been ordered from England, and a contract let in the colony for the manufacture of mine tubs. Pressing inquiries 'ire already made for coal from our mine. The large demands for the Royal Navy and otherwise made prevented the department from receiving offers from the private mineowners for the coal required, and tho development even to meet our State requirements will not be a day too soon. Information as to these works j will be found in tho report of the manager of the State coal mines, which will be presented to Parliament in due course. NATURAL POWER GENERATING ELECTRICITY. The conservation to th:; State of "the natural power in our rivers and watcrfa'ls . is a matter of grave importance, and-, I fear, •we have not done our duty hitherto in con- ' serving to tho people those rights which nature in her bounty has endowed us with. It is true that in tho year 1596 wo pasee.l an act under which local authorities could not grant the Tights of livers to corpora- , tious or private individuals without the consent of tho Governor-in-Oouncil. Beyond that Parliament has done nothing more. 1 Recently some of the local authorities applied to the Government for expert assis- j tance, and a preliminary repoit was obtained on the natural motive powers of the Waimakariri and Rakaia Rivers, tho Huka Falls, and other rivers. It was sub- j sequently decided, considering the iirmor- j tance of the matter, that experts should hz 1 asked to report on the question. Negotiations were accordingly entered into by the Agent-General with electrical ta\t\ hydraulic experts ou the Continent aud also in America. Tho terms, limitations, and time stipulated for by the experts on the Continent practically debarred their acceptance. I am happy to say that arrangements are almost completed for Mr Handeock, one of tho 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 installation at the Niagara Falls. A report

from him can therefore be eafely relied upon, and will be oT 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 colony. An officer "hae been told off to prepare details, so that when Mr Handcock arrives we shall be able to, place before him in concrete form valuable information respecting the volume and fall of the different rivers, 'firs will enable 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 natural me- . tivo powers, and lias destined this country jtobe a eelf-sustaining one. We have iron, ! copper, tin, timber, coal, wool, and every essential to the well-being of an industrial ■world. By utilising the natural motive power in our rivers and streams this may be developed- with enormous results for the good of the country. There is no other country more naturally adapted for industries than New Zealand. It rests with those administering its affairs to aid that which nature lias given us. MANUFACTURES. Turning now to what New Zealand has made for her own use—that is, goods in the manufacture of which several articles are employed in combination —as well as by the great primary industries, the census of 18£6 (the firit census at which the information was obfained) shows a total value of £7,436,649 of manufactures produced in the previous year, and that of 1901 a total amounting to £17,141,149 for the year 1900. It must not be losfc sight of thai the great j primary industries of m^at-freezing, buttermaking, 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 schedules following. A short table will give an ide% of the fast strides industries and manufactures have made during the kst 16 years Table showing the increases in the undermentioned industries fcr the years 1885 to 1900—

NEW ZEALAND INTERCOLONIAL FAIR. It is now some years since- the colony promoted a national exhibition. In several of the largo centres industrial exhibitions have been successfully held, and this is a good augcry for holding a fair and on a, Fcale unprecedented south of the line. Tlii^ is requisite if full justice is to be done to the settlement and development of the colony, its resources and manufactures, its commerce, its unique and beautiful scenery, and id? arts and products. Next year the St. Louis Exposition, to which we propose this colony shall send exhibits, takes place, and an exhibition is also to bo hold at Capetown, .and an industrial exhibition is to be hold a>t Wellington, and to hold on intercolonial fair in New Zealand in 1905-6 would be most opportune. It is hoped that by ihat time railway connection between Auckland and Wellington may be effected and that Chiistchurch may have complete connection by rail with Cheviot. The selection of a place in which the exhibition should be held has given the Government much concern, and finally we came to tho conclusion that Haglcy Park, Christchurch, is the most fitting placM*. There space is available. The lake and River Avon lend themselves to gondfcla, water chute, and switchback, and, with the flectrical installation of the city and tho electric city trams, the means of transit are provided. It its now nearly 20 years since the last colonial exhibition was held in the City of the Plains, and, under all circumstance, I refer the suggestion bprein contained to the favourable consideration of honourable members, feeling aspured they will not, from local considerations, object io that which will prove to be of immense bpnofit to our colony. The necessity for pivinc timely notieo and for obtaining shortly the opinion of the Hoi^se upon tho matter ari.-es from tlie 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 infcim them of the time fixed for holding a grand intercolonial New Zenland fair. THE PACIFIO CABLE. The completion of the Pacific cable on Inc. 31st October last was a matter of extreme satisfaction to the Government and people of the colony, "both on account of the consummation of this highly important undertaking, in which widely separated members of the Empire are partakers, and because the cable han been the direct means of largely reducing the cost of oversea tplegraphing. The lowering of the rates has

brought about a considerable increase in the volume of cable messages, but the failure of the Pacifio 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 canvas-sera ha.s resulted in the loss of business which otherwise would have been secured by the Pacific cable. This, however, is now being remedied. A disturbing feature, and one which has 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, under which the company secured advantages which militate against the State-owned cable, and will require considerable expenditure by the Pacific Cable Board to minimise. This matter is dealt with fully in a paper •which has been kid before Parliament. The shar.e of the loss to be made good by New Zealand on the working of the cable for the year will be between £9000 and £10,000, which is much in excess of anticipation. Unforeseen factors have no dcubt helped to swell the deficiency, but it is hoped that the energy now displayed by the board to conserve and increase its traffic will materially reduce the loss year by year. The reduction of ratos, it is estimated, means an- annual savins: of about £50,000 on New Zealand business to the users of the cables.

OCEAN MAIL SERVICES.

The 18 months' renewal of the San Francisco s&rvice expired in May. A temporary extension has been arranged with ihe> Oceanic Steamship Company until tho 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 the 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 a calling place for the Vancouver service. The Commonwealth Government of Australia and the Government of Canada have recently extended the prese-nt Vancouver contract foi' two years. Negotiations wore 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 &ome hope that we may yet get the Vancomer service /estored.

SOUTH AFRICAN TRADE.

I am exceedingly pleased to say that, although the first two or three steamers of the subsidised line did not take away much cargo, the development has been such that the contract made with the new New Zealand and the South African Steamship Company has been more than justified, the last three or four steamers having gone away orammed with cargo, and with decks full of live stock. The opening up of the South African market has relieved tho colony of immense quantities of frozen meat, and the taste of our fellow-colonials appears to be for a lighter sheep than is suitable for the London market. The large quantity of beof for which there was no demand in the Home market has found ready sale in Africa. Again, very largo quantities of smallgoods, for which no market whatever could be found elsewhere, are being taken at good prices. Butter is going forward in large and increasing quantities, while for poultry an unlimited demand exista at lop figures. Several shipments of frozen fish have been sent, with the result that larga orders are on the way. Our oats have found a splendid market this year in Africa. No less than 175,969 sacks have gone forward in the subsidised steamers up till the 14th of last month. Pork, cheese, preserved meats, potatoes, bran, pollard, oatmeal, grass seed, fruit pulp, leather, milk, and various other of our products have been taken in larger or smaller quantities, and the possibilities of trade in many of thc«e articles are very great. Tho vessel at present loading in these waters has on board i-ome 70 tons of ground pumice, which is be-ing taken as a trial shipment for insulation purposes. Another order has been placed for this article. The same ves=el 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 boate can cairy, no fewer •than 12,750 sheep, besides horses and cows, having left our shores up to date, while tho spaca is engaged in tho vessel at present loading for 4000 shoep and 80 cows. Passengers to tho number of 130 have availed themselves of the subsidis2d line. The nine steamers which have been .despatched have made no less than 47 calls ai ports at which to load, visiting African ports for discharge ,28 times. The expenditure of money in connection with tho running of the new line cf steamers means a considerable gain to the colony. The different Harbour Boards will benefit to the extent of about £7500 per annum, the boats are disbursing at tbs yearly rate of £7000 for labour, and £6000 for stores. Besides the African trade, the steamers under contract to tho Government have developed considerablp businers •with W&stern Australia. Several lines of live and frozen sheep havo been landed at Fremantle, and the export of produce generally to that seaport has boon stimulated. One satisfactory feature of the African trad© is that virtually all the money paid in exchange for our products has been transferred to the colony before tho gootla actually left our shores. It may be noted that the Essex, which sailed in June, carried away one of the largest cargoes, if not the very largest, which have left Nf>w Zealand, measuring between 11.000 and 12,000 tons, exclusive, of course, of live btock, tie total value being about £70,000. The steamers engaged in the service- have all been nu& ships, with abnormally large acoommoda- ' tion for frozen meat. Two of tho later oneo , and the next steamer, tho Suffolk, arc twin screw boat-, of over 7000 torm register, fitted with roomy, up-to-tlato passenger accommodation, and it is hoped that the- trade , will have so developed that these large, vessels will be justified in continuing in the j service. | A commercial agent for New Zealaiul is now permanently residing- in South Africa, with headquarters at Durban, where his J services arc avnilable for Mipplying commer- i cial information relative to trade between | New Zealand and South Africa. Tho values , of shipments to South African ports were as i follows: — Frozen cargo, £334.267; geiieial cargo, £78,340; live stork, £9922; and to Western Australia, £8533. Further particulars appear in the table? appended hereto.

IMMIGRATION AND INCREASED POPULATION.

The advantage of having an increased population no wellnichcr of our colony can deny. How this can be obtained without resorting to an assisted immigration, scheme

demands our immediate and best attention As the result of meeting Indian officers botli

here and during my return journey from London, and of correspondence which I opened up with retired officers with reference to settling here, a few pioneers have already arrived, and ar© settling in tho north, and I am sure if our climate and its

adaptability were better known in India

a much larger number would come. As these officers enjoy pensions and have moderate means, it is well to encourage this olass of settler. To further this, I am of opinion that communication should be opened up with the principal military Biations in India. Tho fullest information should be supplied, and I am satisfied there are many who would be only too glad to I make their homes in New Zealand for the reason that they have a difficulty in maintaining their station in England, whilst here they could live for much less and enjoy better health and more comfort. Our handbook is in great demand in military quarters. As regards settlers of the agricultural class from England, there are very few, comparatively speaking, that find their way to this colony. The cheap fares to Canada and America and other inducements held out to 'them cause the flow of immigration from the United Kingdom to those countries at the present time. Our Agent-general has done his best, but lie has only the one central office from which information can bo disseminated, and this docs not meet the .necessities of the case. The' cost o"f coming to London to make inquiries is too great, and as a consequence in most eases the only information obtainable is from the handbook. What is v eally wanted is to have agents in England, Ireland, and Scotland, farmers and pastoralists. who sue personally acquainted with our lands and land laws and the assistance given to settlers, and who could give detailed information that would attract intending immigrants of the farming class. These agents should bo New Zealanders who had returned and settled in the Mother Country. Their remuneration would be nominal. The honour of the position and the recognition by the colony which had done well for them would be held a sufficient reward. Again, something might b; done in the way of lessening the cost of passages. The shipping companies Jiave in the past met the Government, and, as honourable members are aware, settlers with a given amount of capital come here at reduced passage rate. More should be done' in this direction, for, after satisfying the earth hunger of our own people, there remains plenty of good lar.d for others who come to us with the requisite energy and means to properly cultivate it.

BANK OF NEW ZEALAND.

The balance sheet of the Bank of New Zealand and the statement submitted to the shareholders by the chairman of directors must bo satisfactory to honourable members, and especially to those who, with myself, had the grave responsibility of bringing tha colony to the rescue of the bank some year.s ago. What wo then stated, and is now demonstrated, wa» 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 wae not then anticipated that at tl\je close of the 10 years for" which the -guarantee was given the baiik would bo in a position to dispense with it Proposals will (shortly be submitted to the House providing for a further guarantee for a specified period, but for a less amount than that previously eiyci. At the time the colony gave its assistance the bank's condition would not warrant anything being paid to the State for the guarantee, and accordingly nothing was asked Things now, I am happy to ray, are different, sv-d it is only reasonable that some direct return should be received. It has been suggested that the guarantee should bo given on the same terms as" before. It has also been strongly argued that the bank should be converted into a State bank. The Government consider the wisest course would be to establish as between the bank and the colony a limited partnership, giving a limited partnership for a stated period, which would be to the advantage of both, and, giving effect to that, a proposition will be submitted in due course. The administration of the Assets Realisation Board has boon adversely criticised. That criticism, however, is made by those who arc not fully acquainted with the farts or with the statement and balance sheet submitted to the House, and from the statement to the- shareholders of the bank the charges levelled at the board are unwarranted. To have forced the- whole of the real estate on the market would have meant a heavy loss — certainly to the bank, and probably to the colony. To sell as opportunity arose and at tho best obtainable prices has proved to be the most prudent and businesslike course, and the value of real estate now in the- bands of the Assets Board as compared with its market and book value at the time the 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 showir 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 the«e estates were a number of shec-p run? 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 advantage, not being suitable for close settlement and tmall pastoral runs. They have remained in the hands of the board, and I am happy to say they have been worked at a considerable profit. These are in a better condition to-day than they were at the time they were handed over. It is only fair to the board to state that the whole of (,he real estate- in its hands l>as bo en offered to the Government, and has always been open to private purchaser.-. The price ? offered by the Government Land Purchase- Board, when the offers by the Goiornmriit have been refused, have in every case when the land was fold privately been considerably in excess of the Government's offer — in .some instances by more than £1 per acre. Take, for instance, the Rangimru Estate. Tho Government offered £25,950. It was sold privately at net £31,686, or £5736 more. Then, also, for the Carnanon Estate the Government offered £39,072. It was fo'.d privately for £47,226, or £8154 more. To have sold at the pi ices 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 sc*<;ioii an act was passed under which Parliament authorised tho mm of £150,000 being paid to the debentureholders and shareholders of tho Midland Railway Company. Tho manner of payment was to be by the creation of deben-

tures at par, bearing 3i per cent, interest. The proceeds of the sale of debentures was to be paid into the Public Works Fund, out of which payment would be made to debenture-holders and shareholders. Nothing has yet been done. It was no doubt anticipated thai the 3| per cent, debentures, being at the time considerably over par, the 3J per oeut. would easily realise par. On making inquiries it was found the debentures would not realise par. The debentureholders claimed that they Mere entitled to £150,000 in cash. A meeting was called and a strong protest made against the acceptance of payment in debentures. Subsequently another meeting was held, when the debenture-holders and shareholders agreed, under protest, to accept debentures. As the amount they were to receive was fixed at £150,000, as mentioned in the actbeing the sum which, at a meeting in London, I promised to recommend Parliament to provide for— l am constrained to advise that an amendment of the act should be made, and that stocks should be> sold 1 sufficient to realise £150,000. I am advised; that stock bearing the unusual rate of 3J per cent, interest would be an undesirable innovation, and in order to relieve irritation and remove all grounds for grievance I strongly recommend the course- indicated, so that there may be now and for all lim« a satisfactory settlement of this long-stand-^ ing dispute. ■ ' •

■3 jr NEW MARKETS.— EXPANSION OF

TRADE.

In my Financial Statement of 1897 I drew, attention to the necessity for extending., ■our trade eastwards and to the Pacifiaislands. The following passage is worth repeating:: — "I have drawn attention to tlie, matter ■for the purpose of comparison and, to show the keen, competition that exists in other colonies, tending to keep down rates of trade and freight, and giving greater facilities for communication. In the. report of the Victorian Government on the. despatch of the Secretary of State for the Colonies, detailed information is given in respect to subsidies to steamship lines, and I find that the payment to the German line of steamers is £200,000 a year, and to French lines £120,000. The P. and O.i and tlie Orient lines each rece-ivo £85,000, per annum for a weekly service to Australia, and £245,000 is aUo received by the P. and 0. Company for the Indian service." I also called attention to the action of the United States in proposing to annex the ' Hawaiian Islands. That annexation has taken place. I also called attention to the fact that the United States was then anxious to withdraw from the triple control of • Samoa. The Hawaiian Islands now form part of America, and Samoa belongs to the United States and to Germany. Tho coastwise laws of America prevent this colony doing any trade whatever. America is further encroaching upon our trade owing to an arrangement being made between the French Government and the Oceanic Steamship Company for a • steamship service from San Francisco to Tahiti, and from this centre goods are distributed to the various i«knds. The ■ coastwise laws would apply . to the Pfiilippines, and- there can be littla doubt, as things are. going, but that President Roosevelt's statement " that America would dominate the trade of the Pacifio • may, unless some change takes place-, be . much nearer than is anticipated. Hon. members are aware that we have a subsidised steamers' service to the Cook Islands and to Fiji. Further extension has , been deemed advisable, and, after conferring with the manager of the Union Steam Ship Company, he has intimated that liis company is pre-pared to ' give a eteam service . between tho colony and Noumea for £2400_i a year. As this service would be of neutral advantage to the French Government and the colony, correspondence has taken place, and the Government of Franco has been asked to contribute, and, if not prepared to contribute, then to grant concessions in the way of admitting the products of New Zealand on as favourable terms a* those conceded to other countries.

SUGGESTED EASTERN SERVICE,

I also, in my Budget of 1897, made tho following statement: — "In order to encourage and open up direct trade and passenger traffic with Queensland and the Netherland Indies, Straits Settlements. Burmah, and India, it would be worth while entering into ■negotiation.? with the New South Wales, Queensland, and Indian Governments to sco whether they would be prepared to join this colony in subsidising a good and fast monthly service with Wel-ling-to and Calcutta as terminal ports. A through service between New Zealand and ' Queensland would be p matter of great importance, there being many interchangeable products between this colony and tho tropical portion of Queensland, but owing to the combinations between the shipping com- . pa nice all Queensland cargo for New Zealand has to be transhipped at Sydney, and, necessarily, the through rates for passage . and freights are high and obstruct trad 3. The route I will propose from Brisbane ito . India would be, in the first instance, up the Queensland coast, calling at intermedia to ports as far as Thursday bland, thence to Butevia (Java), Singapore, Penaug, Rangoon, and Calcutta. In order to profitably carry out this service it would be necessary to negotiate with the Dutch authorities at Batavia to allow the steamer.^ to call and permit trade, and from wha-f 1 can learn I think this conce&sion would be granted, as it is already in the case of the Queensland royal mail service. A monthly line of largo up-to-date eteamors with a speed of not l<?iis than 14- knots, fair passenger accommodation, refrigerating machinery, and good cargo oarrying capacity wou'd be required." A brief glance at the population along the proposed route may be of interest. Ths population of the inlands of Java and Mildursi (50,554- square miles) was estimated in 189t at 25,067,4-71, or, adding that of adjaofnfc islands, 32,800,000, of which aboufe 60,260 were Europeans. Tlie great commor.cial centre of Singapore has a population of about 184,554 ; Penang has considerable trade, with a population of about 235,618; Rangoon (population, 180.324), the capital of Buimah (population, 7,605.560), and the centre of a large trading country, has 'an immense trade; while the final port, Calcutta (population, 861,764). fo/ms a good base to tap a small portion of the trade of British Lidia with its population of upwards of 220,000,000. There is a large intermediate trade oil along the proposed route. Our fresh tin mea.ts, dairy produce, horses, .fruits, grain, etc., would soon be appreciated in tho tropicrs, and ;n; n return woolpacks, cornsacks, tea, coffee, rice, rubber, tobacco, indigo, spices, and other tropical - products would be brought here at low freights, and a clirr c-t trade be induced. I have no hesitation in saying that New Zealand would be benefited, for there arc creat

possibilities by going- off tibie beaten track and entering commercial regions which, properly exploited, may result in openrng Fresh markets for our produce. I feel quite certain these suggestions are practicable, and every -attempt should bo made to carry them to a successful issue Since calling attention to this, time has proved the accuracy of' views then expressed and tlis necessity for some-thing being done. "Wo may iiaturally look forward in time to there being no increase in our export trade to South Africa and Australia, and for our increased products, which must inevitably follow increased settlement and development, it is to .the East and to the Mother Country we- must look as our surest Nid best markets.

PREFERENTIAL TRADE.

Members ate aware' that the question of preferential trade is exciting a great amount of attention. It woe discussed at the Colonial Conference in 1897. The revenue required by the various colonies under Freetrade as between Great Britain and her colonies is impossible, but preferential trade given to the Mother Country by the dominions over the seas would help her trade and industries and might lead to reciprocity later on. At the Conference of Premiers in 1897 the Premiers unanimously recommended the denunciation of treaties then existing which barred the way to preference being given by the colonies to the manufactures of the United Kingdom. Ihe treaties have been denounced with the generat concurrence of this colony. That is now five years ago, and, to ba consistent, the preferc-nce then indicated should now be consummated. South Africa has declared for and Canada has already given preference, and this colony, I anticipate, 'will not hesitate to do the same. Care must be taken not to injure our own local industries, but, by making a carefully-selected list of articles and imposing on them a substantial duty, when of foreign manufacture! preference may be given to the Home trade without injury to our own industries. The concessions proposed are on a broad basis, and without stipulating any direct return from the Mother Country, but leaving it to her to respond as she thinks fit. At the present time the United Kingdom is not in a position to approach the colonies, but for us on our part to give the preference- now proposed is an earnest of more to follow, to prove to our kindred there that we are acting unselfishly, and, as we honestly believe, in the best interests of the Empire. Should, however, the Mother Country respond it will then be necessary for tw to recast our scheme and give her something substantial. I do not anticipate that the preference proposed will cither increase or decrease our revenue materially. In regard to the way of doing it, I should prefer the lines adopted by Canada — namely, to raise the total and then give a rebate to the British; manufacturer. It will be seen that while imports from"" tho United Kingdom decreased 9 per -cent-, during the' first 10' years, and increased 43.7 per "cent, during the laat 10 years, the imports from America decreased 9.9 per cent., and increased 245.6 per cent, respectively for the cam© periods; but the most remarkable expansion is seen in the trade with foreign European countries,' the increase in which was 289.5 per cent, for tne first 10 years and 227.1 per cent, for the last 10 years. These entrusted ■with responsibility in the Mother Country, nnd eupported by others with whom Freetrade is a fetish, have agreed that full, impartial, and searching inquiry should be made. As to the results of that inquiry I have no "doubt whatever. It will stagger eTery wellwishcr of the Empire and will conclusively prove that industrially the United Kingdom has lo3t considerably, and is- losing ground rapidly a3 compared with that in many of the principal industriea there are only the manufecturers' profits, the raw material having been imported from Germany and America, especially seeing America and elsewhere. We in New Zealand deaire to enter into a closer relation with the Mother Country, and it is not gain, but patriotism, lovo of country, and love of kindred that impel us to offer assistance. We helped in the emergency in South Africa, and, taking the rapidly increasing volume of trad© and home industries of 'America and Germany, and the ever-increas-ing exports of the products of these countries to Britiah communities, as gauged by the increased imports to this colony, a? hereinbefore mentioned, are prepared to give generous help, for we feel tho danger to the Empire to be much greater than any reverse that could have happened in respect to the war in South Africa. Statesmanship and prudence are essential in this trying epoch within the Empire. Country, not party, should be the watchword. With this obtained, all will be well. Alien countries whose, fiscal barriers obstruct British trade may take exception. From a business standpoint they would -prefer present conditions. But in seeking closer trade relationship with our kindred in the Parent Land, are we* in our friendly desires to be repelled by our own countrymen? Time will detertiine.

IMPERIAL CONFERENCE.

Members aro now fully conversant with Jhe result of the recent conference held in London, when matters of a far-reaching md important character were considered Had dealt with. Summarised, they were as Follows: — (1) Conferences to be held every four years ; (2) views of the colonies to be obtained prior to entering on treaties that Effect such colonies; (3) a system for mutual protection of parties to be devised ; (4) in future agreements as to cable communiostr tions the right of purchase be reserved to Ihe Government or Governments concerned ; J5) facilities to be provided for admission to Jhe skilled professions in the new cokuicj \a South Africa ; (6) the protection and safeguarding of the coastwise trade of the Empire, also a revision of the shipping laws of the Empire, with a view to the promotion of Imperial trade; (7) revision of the mail service within the Empire, such steamers as may be suitable to be at the gETvice of hia Majesty's Government as cruisers in time of war; (8) preference to be given to colonial products in Imperial army md navy contracts ; _(9) the adoption of the metric system of weights and measurements rvithin the Empire; (10) cheap postage on newspapers and periodicals within the Empire; (11) increased number cf colonial commissions in the navy and the army : (12) Ihe adoption of preferential trade within the Empire. 1 liave, in another part of the Statement, dealt separately with the question of pr-e-fsrential" trade. A bill giving effect to the pstnc system of weights and measures has been paracd. A bill Riving effect to the f.u^tralian and New Zealard ratal acrcerert will shortly b°. placed before voj. an I *«n assure.l will bs approved,

Tho question of "the islands of the Pacific was intrcducad: by the Secretary of Stat?, and subsequently it was concluded that the roatteT was not one for the conference to deal with. The question of Imperial charges on colonial bonds was not proere'lcd with. 'The question of army and navy contracts was deait with, ana I am happy to state as a result the supplies as far as possible are beirg obtained from the colonies. Of the 12 subjects dealt with in the above resolutions six were submitted by this colony, pmongst them being that cf holding periodical oonferf.nc?i3, which, it has now been dsc'ded, shall take nlacs not later than every four years. This will \ezd ultimately to the establishment' of an Imperial Council, in which the ovt'OT. dominion of th<* Emprre will be represented, and at which they can bring to bear their local knowledge on maters of impor a^o to the Emnire. They will also be. able to advise in respect to conditions obtained and appirtnin^d subjects demanding th? atccntion of the Imperial and colonial Governments.

INTERCOLONIAL CONFERENCE.

It will bo within the' recollection of lion F P •

members that a conference o remiera took place at Hc-bprt in 1f97.l f 97. At the conclusion of that confei once there was a general understanding that the next conference; should take place in New Zealand. A great eonstifcuHonal change has tafcan place since then in the inauguration of Iho Australian Commonwealth. There pre many matters of gre-a't interest to the Commonwealth, snd ?.l«o of Australian inter-State importance, wtich cou'.d ba dealt w i-th should a. conference be held, especially tho questions of trade reciprocity and defence. Our business connection with South Africa is very large, and is growing. Tho leading public men of South Africa have had no opportunity of meeting those of this colony or Australia. Again, there is a possibility of in.te.r- trade with Canada. We are mow partners with that great Dominion in the Pacific cable. We were formerly, and with advantage to both concerned, respecting the Vancouver mail service. At the recent Colonial Conference held in London tho proposal was ma-die for c direct all-British service from Australia, New Zealand, Canada, and the United Kingdom, and, subject to an 18-knot boat F-ervice being established, the New Z-ealand Government undertook to submit %n Parliament the granting of a subsidy of £20.000 per annum. So far, nothing has been done beyond the extension of the present contract for a service between Australia amd Vancouver. It would ba an advantage io both Canada attd this colony if the Premier, or some other Canadian statesman, could attend the conference 'to be held in this oolony, there to meet fcht statesmen of Australia and New Zealand and to discuss with them matters of grave moment, not only to the overseas dominions, but to the Mother Country. I feel firmly convinced that such a conference would do an immense 'amount of good. Ifc would bring public men.in.to closer touch, tend to reciprocity of trade, and add to the stability of the Empire. Such a conference would not be complete unless the Imperial Government were represented, nnd an invitation should be extended to the Secretary of State for tihe Colonies to attend and preside. He has a thorough knowledge of South Africa-, and this would give him *he opportunity of making himself acquainted with Canada, Australia, and New Zealand. If he could not come himself, some othar member of the Imperial Government might take his place, and this would also be a good opportunity for the Imperial Government to permit Lord Roberts to visit the colonies, who could advise jn respect to defenco matters; and it would not be out of place for one of his Majesty's Lords of .the Admiralty to visit tho colonies and" the islands. and thus, from personal knowledge, be in a better wosion "to deal with th© question of naval defences. REDUCED PRICES OF tCONSOLS AND

OTHER STOCKS

In a recent issue of the National Re-view it will bo found that Sir Edjiar Vincent has compiled fables ehowing the price of consols and cf th.& securities of the moro important foreign nations in 1895 to 1893 and at the- present time. i"he figures show that consols have fallen 21 per cent., whereas tho largest fall in any foreign securities is lose than 5 per cent. French and Russian securities are at substantially the same pricee as at 1895 to 1898, while there has been a considerable rise- in Italian stock?. The attempt to attribute the fall in consols to the reduction in the rate of interest from -22 to 2j per cent, can hardly bo successful, in view of the fact that this reduction has been announced for 15 years, and certainly during* the past five ye?rs no serious investorß have regarded consols as other than a 2£ per cc-itt. security, with i per cent, bonus. Up to 1903 they have been bought and &old on a 2Jj per cent, basis by al' except the pure amateur. If the pre^iuit value of the i per cent, bonus had beea deducted from tho price of conisob in 1897 it would still have left tho price at 108, and the percentage of fall to the present figure would be 20 per cent. The table as under should not be lost on our colonial fellow-subjects : — Percentage Averaga of fill of Present from, avermean price, 30th age to prcprice. March. 1903. tent price.

.Since the period 1895 to 1893 c< loiu.i! have been placed ou the trustee*' \i^t, which under ordinary circumstance-. <-hould ha\p led to a rise- in their price, while it would also tend to lower consols. If we find that in spite of this change in tlie conditions the prices of colonial securities liu\p fallen about 10 per cent., as compared with a 20 per cent, fall in cou^o'^, we may tentatively draw the conclusion that the fall in colcmil stocks and in consols would have be on similar but for the new class of investors admitted to tho colonial market and diverted from consols. Sir Edgar Vincent thus interprets the figures: — '"The figures appear to me tc favour tho opinion tha» tho fall in consols is not due to any special cause affecting one particular stock, but is a re=ult of flooding the market with highc'zss British acountips to -uch an extent t'.-.T- the* cipicity fov absorption of rl-e British public ha-: been o\e-rtaxed. It is

hardly necessary to observe that large municipal issues are a contributing cause."

OUTt LATE LOAN TRANSACTIONS.

During last session authority was obtained from Parliament to raiso "d81.75u.C00 for public work* under "The Aid to Public Works and Land Settlement Act, 1902." A million of the- loan so authorised, together with a quarter of a million authorised by " Tho Government Advances to Settlers Extension Act, 1901,'' was planed upon the London money market in February last, the price of issue beirg fixed at £94 10s, or ICs more 'than lhs> loan of tho previous ye2r. The Government considered the- time a favourable one to float the loan, but unfortunately an unexpected slump in colonial stocks sot in immediately after our arrangements for Boating had been completed, and spoilt the market. This was caused chiefly by the virulent at f aek made by one of tho London daily papers on the- finances of several of the Australian States. The attack on Australia wa.3 unwarranted, and for us most unfortunate — all the moro unfortunate as its effects were not manifest till it was too late for us to do anything. To withdraw the loan would have involved* a blow to our credit far heavier than any effect of a smaller subscription. We were not urgently in want of money, and could have postponed the placing of the loai without disturbing our finance had we realised the turn the market would take. I do not regard the loan as by any means the failure which cur opponents have thought fit to call it. The truMi is, we have got a million and a-quarter at a price which, considering the- state of the market, is an c-xceedingly good one. No person with any expert knowledge expects to see an underwritten loan subscribed to by the public and the dealers anything like as easily as one issued at a time when underwriting is not necessary. In the absence of tho loan accounts, which have not yet been received in the colony, I am unable to state the precise net price realised, but as there is no reason to anticipate that the cost of raising will be any greater than that of the previous issue the not result of the two accounts should be- about £91 15s per cent.— a very satisfactory result indeed. The over-counter sales of 4 per cent, short-dated debentures in the colony have now become a very popular investment. Over a million has been taken up in this manner, and during the psst year £750.000 was issued authority "of " The Aid to PubHc Works and Land Settlement Act, 1902," and £338,700 to provide ways and means for the acquirement of estates under "The Land for Settlements Consolidation Act, 1900." As in the caso of similar sales made last year, purchasers had the option of having the principal made payable either in the colony, Australia, or London. In all 243 parcels were sold, ranging from £100 to £100,000. Of the debentures thus disposed of £546,500 was made payable in tho colony, £386,500 in Australia, and £155,700 in London. A3 this method of investment becomes better known a larger demand of this class of security may bo looked for.

REVIEW OF TWENTY YEARS: 18:2—1902.

It i=s not out of place for mo to pu,u before members tho financial position of the colony 20 years ago and our position to-day, and also to recapitulate in categorical form, the lines on which progress has gone.

Finance Receipts and Expenditure.

In 1882 the Teceipts were £3,E05,233 and the expenditure £3,616,896. In 1902 the receipts wore £6.152,839 and the expenditure £5,895,914. The public debt 20 years ago was £28,4-79,111, in 1902 it was £52,965,447. In 1882 the interest charges and sinking fund amounted to £1,500.989, in 1902 it amounted to £1,803.939. Having shown the increased expenditure and Tecaipte. the increased public debt, and interest required to be- pa : <l, I will proceed to &how that security now existing to the public creditor and the ability of the colony to meet its engagements are far superior to what they were 20 years ago. In 18c2 there was a deficit of £1,628.316, in 1902 we close the year with a surplus of £270.4f9. During the. ten years from ltJ92 to 1902 the total net surpluses amounted to £3,279,914, and of this amount £3.2"05,000 was transferred to Public Works Fund and expended on public works and for development purposes. On that sum no interest is payable whilst the public creditor has the security. A survey of the development and the improved position to our obligations as contrasted with that existing 20 years ago will show.

Population

The population, other than Maoris, numbered 517,707 in December, 1862, as against £07,929 persons in 1902; an increase of more" than 290,000 persons, or 56 per cent.. be : ng a yearly average of 2 2-5 per cent. Of this the natural increase amounted to 261,048 persons, an average of 12,431 per annum, showing that whatever limy be- said of tho birth-rate there ha 3 benn a satisfactory margin between that and the death-rate, which, in New Zealand, is admittedly low. The. increa-e by births over dearth's in 1882 wa3 15,30*, in 1?82 11.417, and in 1002 12,230. Besides 807,929 persons, the ponulations of the- rceently-aunexe:l islands (12 292 person?) and 43. 14-3 Maoris have to be added to make the full population of the colony on December 31 last, which amounted to £63,364.

Private Wealth

The private wealth was estimated by the probate method to have been £110,7E9,QC0 in tho year 1852. It rose t0^ £240,000,000 in ISO2 — or at the rate of 117 pr cent. In 1395, shortly after the financial criais in Atist:a)irf, the rate p&r head of population had fallen to £219 (two years pr<?Mously if was £232). The figures for th& last year under conniderdtion (1902) give an average of £297. The jrivaite wca'th consists of personal aid leal estate airountip.g to about £130.000.000, awl. accepting this, there remain* £110,000,000 of personal eiitat" Consi<leriuif the> nnmen-e growth in th° amount paid as income tux (uhich rose 93 p»r oont between thp your? F95-1E96 and 19&1-1902, Jihile population li.ripased at the lessor rate of 12 1-3 ;ier rent.), there aro ground for br>iieving 'ho persona] e-tate is r.ot beng given at an e\tra\asrantly lush fisur?. For ISB3 the sim was otnnated by tho ri;pn Property Tax Commissioner at over £50 000.000 sterling. The above result.. pcupl"d with other 3 shown further on, all tend to the conclusion that tho development cf wealth privately owned is very great. Manufacture?, Occupation of Lands, and

Live Stock.

Wlulo this has been going on a process of jircumulption in monP3 r -, on deposit in bot'i clashes of brink* us not noticeable, if <=avinfrs coing haud-in-hand with enterprise enn Ecarcely bo objectc-d to. The deoosits in the

banks of issue (average of four quarters) were very nearly doubled in the 20 years under notice. The amounts are £8,945,346 for 18S2, against £17.231,767 for 1902: but the amounts to the credit of the Savings Banks (Post Office- and private) show a iar higher rate of progress — viz., from £1,832,047 to £7,876,877, or ac the rate of 330 per cent. The depc-sitorj grew in number from 68,358 to 261.948, showing ~a distribution of the savings which must be :egarded as eminently satisfactory.

TRADE AND iIANUFACTURE.

The statement in respect to the great increase of private wealth during the last 20 years ie supported by the increase in respect to the external tiade and internal manufactures and by the general increase- of trade, {production, and shipping. The increase in tho principal manufactures fiom 1885 to 1900 amounts to nearly £10,000,000. During the first of tlie period ihe population increased by 20.2 per cent., and tho volume of import and export trade by 9.3 per cent. ; but during the second half the increase was — population 24.2 per cent., and volume of trade 51.6 per cent. Since 1892 the imoorts show an increase of 63.1 per cent., and Ihe exports 43.1 per cent. The unexampled increase of trade during the last 10 years is proved by the value of mine of the principal exports. Tiie frozen meat industry bagan in 1882, and in 1892 Ihe export value reached the large amount of £L 033.371. but in 1902 it had increased to £2,718.763. The export of butter rose from £42,020 in 1833 to £227,162 in 1892 and £1,205.802 in 1902. A very large increase in the value of gold exported iias taken place —in 1883, £892.445; in 1892, £951.963; and 1902, £1,951.426. Tlie very great increase of trade indicated by the foregoing facts has resulted in a corresponding expansion of the revenue derived from Customs duties. During the 10 years ending with 1892 the increase was 17 per cent., but that for tho'lo years ending with 1903 was 38.1 per cent., notwithstanding the remission of Customs duties in 1895 and 1900 on tea and dried fruits, rice, raw coffee, salt, sheep-dip, agricultural implements, fencing wire, kerosene, etc-.

INCREASF OF SHIPPING.

The total volume of shipping inwards and outwards and of foreign-going shipping has decreased as regards the number of vessels, being 1656 in 1883, 1375 in 1892. and 1219 in 1902; but the tonnage has increased enormously. Between 1883 and 1892 it had increased 32.8 per cent., and between 1892 and 1902 60.6 per cent. The total volume of coastwise shipping shows a similar result as to tannage, but the number of vessels also shows an increase, though not in tho same propertion as the tonnage. These figures point to the tendency, both in the foreign-going and coastwise trade, towards th& employment of vessels of larger carrying capacity. In 1883 there were 579 registered vessels, in 1892 491, and in 1902 549; but there was an increase of tonnage between 1883 and 1892 of 19.1 per cent., and between 1392 and 1902 of 46.1 per cent.

CROWN AND NATIVE LANDS AND CROWN TENANTS.

Twenty years ago the total Crown lands occupied and unoccupied amounted to 25,000,000 acres. This "area has been increased, by the purchase under the Land for Settlements Act, oE 483,384- acres, at a cost of £2,252,690, and of 4,185,745 acres of Native lands, at a further cc>st of £1,037,155, exclusive of hilltops, pumice, and other lands more or less sterile. Thero are now available for immediate settlement 2,957.504acres, or, including those for pastoral purposes, 4,290,463 acrc-s. In addition to Crown lands, there are 6ome 6,000,000 acres owned by the Natives, a great portion of which is suitable for settlement. The number of Crown tenants is 18,813, and tho annual lental amounts to £340,340.

The pi hate landowners in 1883 were 71,200, and the private- landowners in 1893 were 91,500, and >n 1903 the-y had increased to 115,700. The. capital value of the land in New Zealand in 1883 was £74,000,000 ; in 1886 it was £116,000,000; in 1889 it was £111,000,000; and in 1893 £122,000,000— showing a-n increase in 10 years of £48.000,000. In 1898 £139,000,000, in 1903 £165,000,000, or an increase in 10 years of £43,000,000, and an increase- in 20 years of £91,000,000. INCREASE IN LIVE STOCK.

There has been a most substantial development in the flocks and herds, in face of the great requirements of the frozen meat trade. To give an idea of this, the number of carcases of frozen sheep exported in 1892 at (the different works waa returned as 1,316,758, of lambs 290,996, and beef 55.020 cwt; and in 1902, 2,058,622 sheep, 1,852,855 lambs, and 286,699cwt of bcof. The living sheep in New Zealand in 1832 numbered 12£ millions, against 20i millions in 1902. The cattle were 698,000 in tho earlier year, and close on to 1£ millions in the hitter. The horse-5 arenearly double what they were in 1882.

OCCUPIEp HOLDINGS. There were 27,352 of these, omitting holdings under one acre, in 1882, and in 1902 'tlie- number had risen to 65.034 holdings. Between 1882 and 1892 tlie increase was 15,416. and in the last decennium 22,266. Tlie land in sown grasses, under crop, or in fallow was returned in the latter part of the year 1902 at 13,357.700 acres, of which 4,558,346 acres were laid down in grasnes after ploughing, and ?i millions of acres '.urfaoe-sown. There were aleo 53,788 acres planted with forest trees. Ten years previously the total of land in crop and sown \mis only 9,713,745 acres, and in 1882 it stood at 5,651.255 acres. It cannot be asserted that the area in grain crop increased vastly between 1882 a«d 1892, or between 1892 and 1902; but greeiv and root crops gliow an acreage growing from 394,473 to 768,303 in the 20 years, and for land in sown grasses the increase- in very striking Taking surface-sown with land previously p'ouf?hed, the figures are:— In 1882, 4,322,562 acre-? ; 1902, 11.808.215 acres. For the feed.nc; «,f cattle a.ncl diee-p turnips arerequired, besides grasses, and here is found mi acreage of 235,679 for the year 1882 extending to 512,657 in 1902. REVENUE TWENTY YEARS.-1883-1903.

A marked feature of the progress of the oolony is the phenomenal iuc-rconC of revenue which has taken place, particularly in tho la°t decade. In 1832-83 the- revenue, from all souices totalled £3.742,556. Ten years later it reached £4,329,891; and for the- lust year (1902-3) we have reached no less a sum than £6.356,610— 0r £2,6U,054 moro than we re-cc'ivod 20 years ago. The

The K"ev.' Zealand Refrigerating Company ha<i declared a dividend at the rate of 8 per cent, for the year ending 30th June, and payable at tbo National Bank of New Zealand.

following will show the receipts under th« principal Leads for the years indicated: —■ ,

Direct Taxation and its Incidence. In 18S2 the property tax. was in ,force, but I find it dioicult to make, any comparison, inasmuch as the rites of the tax varied in. many years. I think, however, lam under tho mark when I fay that the value of the* taxable property in the colony has moroi than doubled. The value of free-hold lar.cH at the first valuation was £122,000,000, while the valuo on the 31st of March last was £165,000,000. The exemption of inlprovemcitfs, less the increase from the graduated tax, moans a loss of £20,000 a year, the mortgage tax £30,000, nnd ths resumed estates a further £20,000— 0r £70,000 altogether. If the same rates had prevailed last year as in lES2-93, and the same land 1 been taxable at present-day valuations, t'lie land tax revenue would have been £266,000 instead of £296,062. The icieome tax rates have remained unaltered sinoei the imposition of the tax. Vhe first year's collection amounted to aboub £63,000. This year "my estimate is £210,000. The actual receipts last year were £200,633. The receipts for oaoh year t>nd the number 1 of taxpayers are shown below: —Yea.r 1£9293: Amount, £63,080; number of taxpayers ' (approximately), 3400. 1E96-97: Amount, £105,000; number of taxpayers, 4200. ' 1900-1901: Amount, £174,000; number of' taxpayers, 5600. 1901-02: Amount, £179,000; number of taxpayers, 6500. 1902-03: Amount, £201,000; number of taxpaye-rs, 7500. 1903-04: (Estimate), £210,000; numbsr of taxpayers, £500. This" may l>e taken as an index of the progress the colony has made, and is making. I have little doubt that at the present rate tihoso of U3 who live- to the end of another eight years will see the income tax receipts reach £300,000 a year.

PUBLIC DEBT. Having thus cast a glance at the future o£ development in its various aspects, it remains to refer to the public indebtedness, and, with it, 100, tho degree of pressure on the people caused by the- burden of the annual charge in respect of the debt for interest and sinking fund. The net indebtedness of New Zealand in March, 1882, stood at . £27,315,593, or £54 Is lid per head of population, and had increased by March, 1902, to £51,837,631, or £65 12s Kd per head, an increase for the 20 years of £24,522,038. This twenty-four millions and a-half of money (which was not all raised outside the eclony), as is oliown above, only had the effect of raising the debt per head by £11 on account of the increase which has taken place in the population. The debt of the local bodies adds to tho liability. It inL/cf eased from £3,277,584, in 1882, to £7,839,695, in 1902, or a sum of four millions and a-half sterling. The burden of pubUo debt expressed "by the degree of its pressure upon the taxpayer is illustrated by comparing the .actual amounts paid out of the revenue of the Consolidated Fund for atnnual charge, which consists of interest and sinking fund, and tho proportion of the revenue which is absorbed by these charges. A comparison can be made for the years 1895 and 1902, which shows a movement entirely satisfactory in its direction. 1. Amount actually paid for charges of debt, year ending March, 1695, £1,716,889; year ending March, \Wl t £1,803,939. 2. Rate per head of mean population, 1£95, £2 10s 3d ; 1902, £2 6a 2d. 3. Percentage of revenue absorbed by public debt charges, 1895 33.96 per cent. ; 1902, 29.80 per cent. Tbe amounts showu above as interest and sinking fund do not comprise the wholo of 1 the interest and sinking fund paid by the Government in. respsct of moneys raised by the issue of loans. Thus, in reapsct of loans raised under the Land for Settlements Acts, the' Government Advances to Settlers Acts, and^far the purchase of the Cheviot Estate, the interest, although made a charge I upon the Consolidated Fund, is recovered from receipts levied from the leasing of the? lands, or, in case of moneys borrowed, fn>m instalments paid by the borrowers. The amount of interest charged and recovered during the year 1902 was £148 691. Suoh I interest docs not become a burden upon the taxpayer, and consequently is not included in the figure upon which the rate per head I of mean population is calculated.

DEVELOPMENT OF THE COLONY FROM 18E2 TO 1902.

(a) Imports and Exports.— The value of imports increased from £6,843,056 to £11,326,723, or a rate of 63.14 per cent. The value of New Zealand produce exported from £9,365,863 to £13,495,599, or 44.13 per cent. (b) Banking and Insurance —Deposits in banks of issue (average of four quarters) from £13,587,062 to £17,231,767, or 26.52 per cent. ; denosits in savings banks from £3,580,544 to £7,876,877, or 119.99 per crnt. (c) Transport and Comnnwiication. — Shipping (in international and intercolonial ■only) enter&d inwards from 675,223 tons_ to 1,0E9,"179 tons, or 61.31 par cent.; shipping entered outwards from 656,100 tons to 1,048,770 tons, or 59.85 per cent. Miles of railway (State) opened for traffic, from 13E6 miles to 2291 miles, or 27.47 per cent.' Railway receipt? from £1,181,522 to £1,974,033, or 67.08 per cent. Miles of telegraph lines open from SV79 to 7632, or 29.29 per cent. Telegraph revenue, including telephones, from £103,814 to £222,495, or 114.32 per cent. (d) Occupied Lands. — Number of holdings occupied, from 42,763 to 65,054, or 52.06 per efiiit. Land in cultivation, including sown graces, from 9,713,745 aer«3 to 13,357,700 acres, or 37.51 per cent. (c) Live Stock.— Horses, from 211,040 to 226,955, or 55.97 per cent. ; cattle, from 831,831 to 1,160,663, or 70.60 per cent.; =hcep, fro.-n 18,570,752 to 20,342,727, or 9.54 ncr cent. (0 Yield of income tax, freni £67,367 to £200.634, or 107.9 per cen,t., the rate of taxation being uniform. (g) European population, from 650,433 persons to £07,929 persons, or 24.21 per cent. SOME OF OTJR ASSETS, 1902. Railway?— Tho nrofits last year amounted 1 to £630,623, original co?t £19,031.725— w0u1d fetch in the open market at least £27,000,000, or equal to half tho public dfbt. Crown Lands.— L^t to Crown tenants last year. 16,^29 620 arr.-c : rents therefrom, £338,393 per annum ; present %a!ue3

based -on a 4 per cent, value on the rentals received, £3,459,975. Unoccupied Crown lands,* exclusive of mineral-bearing land, 585,513 acres, valued at £1 per acre ; auriferous, argentiferous, and coal-bearing land, £50,000,000.

Post Offices and Telegraph Lines. — Capital cost £1,312,498, la&t year's profits (inclusive of State services) £172,95+, which on a 4 per cent, basis fixes the value of the post and telegraphs at £4,323,850.

State public buildinga and land upon which thry are erected, Crown, local authorities, educational, church, and other land (with improvements), £25,053.84.0. Harbour defences and land occupied therefor, £30,700; lighthouses and land occupied therefor, and which are practically selfsupporting, £129,505. Land Values and Private Wealth.— Total .value of private lands in the colony is set down as on the 31st March, 1902. at £120,981.599, of which amount £70,524,604 is the unimproved value, and £50,456,995 represents the value of improvements, and during the past financial year these totals Lave increased considerably. The private wealth of the colony is £240,000,000.

The approximate value of the foregoing assets amount to £355,583,383. Our net publio debt amounts to "£53/585,780. We have, therefore, in the assets above enumerated, no less than £301,000,000, approximately, in excess of the amount that the colony owes. AID TO PUBLIC WORKS.

As previously stated herein, there was to the credit of the Public Works 'Fund on ; the 31st March last £323,000, of which £260,000, part of the million obtained under the million and a-quarter loan received laet year, remained intact. As circumsrances transpired, it was a good thing for_ the colony that our public works expenditure^ •was less than tho appropriations. This" arose from the fact that tho appropriations ■were passed late in the year, and during the summer months employment was very plentiful. A moderate rate of pubjic works expenditure has since been maintained, and we are now in a position to carry on public ■works for some months to come without further aid, other than the transfer of a portion of last year's surplus to the Public Works Fund. It will be Necessary, however, to take the requisite powers to pacs sufficient to carry on the public works after the 31st March next, and you will be asked to give the necessary power to raise one million fcr that purpose. I do not think, however, from present appearances, that although taking tho authority now there will be any necessity to raise the money till after the end of this year. I do not anticipate to require to go outside the colony to raise this sum, an it is in the be-st interest of the colony that we should refrain from going on the London market, and I do not expect there will be any necessity for so doing. There is oolTateial advantage in raising the money in the colony, even though we pay a higher rate of interest, For we pet the full amount of debentures issued, and the less interest we ihavo to send out of the colony the stronger is our financial position.

PUBLIC WORKS.

The expenditure >n our public works during the last 20 years, though considerable, was less than during the preceding 13 yearsj which carries us back to the initiation of the public works policy. During the 13 years ended March 31, 1883, the groes total public works expenditure amounted to £19,054,018, while during the 20 years between that date and March 31 last the amount was £13,890,811. Tho yearly average amount during tlie former period wa3 considerably larg&r bhan during the latter, 'Hie respective figures being £1.465,694 and £944,541. The expenditure on the different classes of works was as follows: — Railways, £8,970,074; roads, £4,364,423; development of goldfields, £203,288; telegraphs, £567,780; public buildings, £1,713,527; purchase of Native lands, £l,]fll,£00 ; miscellaneous, '£1,964,919;— t0ta1, £18,890,811.

The total length of Government railways opened fcr traffic- during the period u/nder review is 933 milos, in addition to which 19+ miles of private lin-es have been acquired Tha amount expended under th« head of " Native Land Purchase" has resulted in an addition to- the public estate of no less than 4,185,740 acre.s of land ESTIMATED EXPENDITURE FOR 1903-4.

The expenditure for the present ye«r is estimated a.t £6,255,857, representing an increase of £41,838 on tho expenditure of tho previous year. The permanent charge 3 are estimated to exceed" the actual payments of last year by the sum of £19,579; while departmental appropriation thews an increase of £31,2E6. Of tho permanent charges, interest on the nublic debt is answerable for the additional sum of £39,672, but this may be reasonably accounted for, provision havinsr to be made for interest on the receut million loam as well as on mon-eys borrowed for lending to local autarkies under special acts. If lion, members will refer t« table No. 7 which accompanies this Statement they will find that certain, classes under departmental appropriation show era increase of expenditure totalling £162,632, but when you take into consideration the growth of our population and the requirements of the people, it must be expected that our annual chargo will increase. I have, with a view to a better comparison between the different classes of departmental expenditure, caused the departments which hav-o been inaugurated during recent years to be shown under new classes in the Estimates, as their inclusion in the same class with executive departments tended to show an abnormal increase of expenditure, which was somewhat misleading to the uninitiated. The greater portion of the increase asked for under the annual appropriation is absorbed by no less than six departments— Department of Lidustries and Commerce and Tourist Department, Po9t and Telegraph, Education Department, Working Railways Department, Police Department, and Lands and Survey Department. Hon. members will admit Uiat fhese are departments which cannot ba allowed to suffer for want' of funds. Otter classes show a reduotion of expenditure to 'the extent of £131,396, and I am sure members will be pleased to find that this year there is a reduction in the Defence expenditure of no less a sum than £56.992; while ttfie Colonial Secretary's class shows a reduction of £65,825.

In going through the Estimates members •■will find that substantial • increases have foeen given to the magistrates and to several lieads of departments and to experts. This 5s in kee-ping with increases granted to heads of the classified departments lfnder the exiting law. On comparing the salaries of tho heads of our railway service, Secre-

tary of Customs, the commissioner of insurance, the railway insurance, and other experts, with what is paid in other colonies and countries, and what is paid by corporations and private companies, it will b© found we have men with equal, if not superior, capacity, yet their salaries are very much below tliO3e paid for similar service outside. The- inevitable result follows, and the colony has lost, and will lose," its most capable public servants. It is false economy not to pay well-trained, brainy men, whose experience and technical knowledge over command good salaries. In submitting these increases we have not omitted to recognise that with the increased cost of living, and having given faithful fervioe, 'those receiving lower salaries in the unclassified departments are entitled to consideration. The increases to them we submit to your approval. I sincerely hope the time is not far distant when the whole cf the public service may be classified, and that superannuation or insurance may bo •Drovided for the school teachers and for the highest to the mo3t humble of our State servants.

ESTIMATED REVENUE, 1903-1904,

Turning now to our ways and means for the year, I liave, after careful ccreideration, set down our receipts from revenue proper as. £6,463,000. In addition, the revenue will be'aided by £60,600, being the proceeds of debentures issued in respect of tlie accretions of sinking fiuid for the current year, thus making a total available ways and moans receipt from «ull sources of £6,528,600, or £84,491 more than was received last year.

For the Customs revenue I have estimated to receive £2,400,000. Though the receipts of last year w«re very large, I <lo not see any ground for anticipating a retrograde movement, and, in view of the good prices for wool and dairy produce now obtainable, I anticipate the revenue will be better Uian that of the previous year by nearly £65,000. The railway revenue is expected to reach £2,000,000, or nearly £17,500 in excess of last year's receipts. From stamps an additional cum of £4061 is anticipated, while land tax is expected to realise £4000 more than the previous year. The estimate fcr income tax is set down as £210,000, or nearly £10,000 better than the preoeding year. Registration and other fees show a small increase, but there is an allowance made for a shrinkage in marine and miscellaneous of £4171. The beer duty will no doubt to some extent be affected by the extended area of No-license districts, and I have therefore discounted last year's receipts by the sum of £1400. The Minister of Lands anticipates a falling-off in the territorial revenue of over £12,000, and I have therefore set down the- revenue derived from that source as £240,000. or £12,278 less than the amount received last year. ESTIMATED REVENUE of the CONSOLIDATED FUND (Revenue Account), 1903-01, compared with the Actual Revenue of 190203: —

SUMMARISING the estimated receipt's and expenditure for tho year, the results may be set forth as follows: — Ei-timated revenue £6,528,600 Estimated expenditure ... 6,255,657 Excess of revenue . ... £ 272.743 To which we mu»t add tho balance (£303,905) brought forward from last year, making a credit balance of £576.643. This is ample to provide for .supplementary estimates, and alao for a handsome amount, as usual, to ■ be transferred to the Public Works Fund. CONCLUSION. I have placed before hon. members many important matters affecting tho colony. I have proved incontestably that, financially, our position is sound and strong. Figures given as to our public debts compared with our aM-.ct=, public and private, give £6 for every £1 we owe. Our population is fast increasing, and tho indebtedness per head is more likely to decrease than to increase. People in the United Kingdom fail to recogni«e th© fact that the railways hero are tho property of the State, and that if sold io-mcrrow would fetch nearly half the money we owe as public debt. They also fail to realise that occupied Crown lands, from which a rental of nearly half a million per annum is received are worth 50 millions. They are oblivious of the face that the unsold Crown lands are worth another 10 millions. The value of the auriferous and argentiferous lands of the colony it is almost impossible to estimate, but I shall bo we-ll within the mark by putting tho value of them down at 50 millions. Then, again, there are public buildings and pcv,t and telegraph assets—all State-owned. In addition to this, there is the private wealth of the colony, amounting to over £240,000,000, equal to £293 2s per head of our population. There are in the colony, approximately, 437,000 adults, who, gauged by their earning and spending values, are equal to £200 per head of realised invested wealth. On thi6 basis the colony has in its adult population a commercial value of £87,400",000. Land settlement and development generally are proceeding at a rapid rate. The output of gold has been more than it has been for the last 30 years; revenue is ever increasing, and tho principal sources from which it is obtained — namely, our railways and Customs —prove the colony to be ill a most prosperous condition. Tho remarkable increase in our exports, attributable to the spread of settlement and development and the industry of our colonists, the vast increase in manufactures, and increase in the number of employed, are factors which bear evidence that our industries are flourishing and employment is plentiful, with good wages obtaining. The education of our

I youths and their complete equipment for •life is a claim we cheerfully admit and provide for. The deserving aged are relieved from anxiety, and the pensions given ensure their requirements being fairly met. The construction of our railways and roads provide arterial communication, so that our products from the interior reach ports of shipment at a reasonable cost. The grading of dairy produce and oats gives confidence to purchasers, and the inspection of meat ha? proved a great boon to both producers and purchasers. The success attendant upon having secured markets in South Africa warrant* further effort; and the distribution •of oiv meat over a wider service in the Mother Countrvthan at present obtains, by opening emporiums in the various industrial centre:, is an experiment that wi!i cost little, yet still have tha most beneficial results to th© New Zealand producer. The Budget now submitted, I trust, may be taken as a chart whiah, if adhered to, will guide the jrood ship New Zealand safely into port. To announce that there is available from the Consolidated Fund over half a million sterling after providing for everything on the Estimates makes one feel light-hearted, and to have one million sterling on the 31st March last available for public works —thus obviating fhe necessity for going on- the- London market for a considerable time —is most satisfactory and cheery. I enjoin ecoaemy in respect to departmental expendiuire-, a moderate expenditure on public works, strenuous efforts to increase our population by attracting to our shores those who will le?een our responsibility, promote- settlement, and bask in that sunshine of ideal progress^, contentment, hanpiness. and prosperity we now enjoy. New Zealand jxistly merits bcintj termed " the Paradise of the Great British Empire," and, in the language of poet Bracken, " God's own country."

VIEWS OF SOME OPPOSITION MEMBERS.

(Tr.oi* Our Owx Coß>EsroNt>E::T.) WELLINGTON, August 11. The Financial Statement delivered tonight is, in the mattei of words, almost a record. It took Mr Seddon two hours and three-quarters to read it, and it contained between 25,000 and 26,000 wotg'i;. So far as I know, this has only been exceeded on one occasion, when Sir Julius Vogel delivered a statement of some 30,000 words. The interest, taken in this year's Budget was not so keen as usual, the House not being quite full, while there was also more room than usual available in the publio galleries. I had a chat with two prominent Opposition members after the delivery of Financial Statement to-night. Mr Masiey, on being asked for his opinion on the Budget, said:—"The Statement on this occasion contains a great deal )f unnecessary verbiage, or what is called " high falutin," and references to mattera which have nothing to do with finance, and ought not to be included in a Financial Statement, but properly bejong to the Year Book. It is quite evident from the figures quoted that the country generally is prosperous, but, nevertheless, the finances appear to be in a condition which must cause grave anxiety to the Treasurer owing, not only to the fact that it is almost impossible at present for colonial Governments to borrow in London, but also because pro-vieion will soon j have to be made for meeting some of the ehort-dated debentures which are at present afloat. I can quite understand the ceceseity for economy which the Premier preaches, but I don't approve of his proposal to commence with cutting down the Public Works Estimates, because I consider that public works are the most important of the many purposes for which wo use loan money, though I am afraid some- difficulty will be i experienced in raising the necessary fund*. There is very little new suggested, except, perhaps, the proposal to increase the graduated laud tax, but from the number of subjects dealt with it is safe to predict a very long debate. ' Mr James Allen said: " Financial Statements year by year are becoming something else than an exposition of our finances, and never was this more so than this year. The Statement is full of bills, blue booke, and bunkum, and when it docs touch finance, as it does now and then, it leaves an unpleasant taste. An increase in the public - debt last year of c}ose on £3,000,000, espe- | cially in view of a tightening money market, bhould make a population of some 860,000 , people pause and think. It is umvke at . ■short notice to criticise thfi proposals of the ! Budget, but I think it will be unfortunate I if anything i? done to injure the advantages < now obtainable under the Government Loans to Local Bodies Act, and I think the Premier's suggestions in this respect have no meaning. The main point of interest attaches to tho Public Works Fund and the nceeceity for supplementing this, and probably the Statement is a manifesto to the English and Dther monoy-lcndere. Th/J £1.000,000 loan under such circumstances as exibt at present, shows how dependent the. colony has become on borrowed aid, and I cannot believe in tho wisdom of raising euch sums at comparatively high rates of interrofc • in th" colonies. The argument that the j interest is paid in the colony is of no -value, more especially in view of the fact that the intcres-t on the 4 per cent, debenture* has !>oen made payable in Australia and Great Britain, and no doubt will be so in future."

The Rpgivtrar-general's roluni of \ital statistics for July shows that the numh~r of brths in the four chief cities of the colony, with their suburbs, was as follows: — Auckland, 126; Wellington, 144; Christchuroh, 104 ; Dunedin, 115. The. deaths during the same period, with the proportion per thousand of population, weie: Auckland, 46, 0.84; Wellington, 53. 101; Christchurch, 51, 1.03; Dunedin, 63, 1.15 The total birth? numbered 487—33 more- than in June ; and the deaths were 213 — a decrease of four on the previous month. Thirty-six of the deaths, or 16.90 per cent., were of children under five years of age, and 29 of these, were under one year. Measles caused two deaths during the month (both at Chiistchurch). scarlot fevcv one, influenza one, and mumps one. The mortality from constitutional diseases was considerably higher than in June, the number of deaths being 46, as again it 30. Phthisis caused 19 deaths, and cancer 14. It is proposed to call a .meeting at Tin 1 am to consider the advisability of holding a regatta there in the early summer.

.Numbei ot 1882-1892. Policies business completed during each period 33,958 Business.in force at end of- period 30,316 Sum Assured. £7,776,713 8,036,220 1892-1902. New business ' completed during each period 32,117 Business in force at end of period 42.40G Interest. LBS2-1892 .. ... .. £ 708,001 L 892-1902 1,287,564 Paid to Policyholdprs. ■SB2-1892 .. .. £1, 023,250 L 892-1903 .. .. 2,031,523 6,784,868 9,896,572 Premiums. £2,068,264 2,773,387 Added to Funds. £1,275,409 1,402,519

Industry. 1863. 1900. Increase. £ £ £ Meat freezing, preserving and boiling down .vorks 543,878 3,834,891 3,291,013 Tanning, f c 1 1mongering, and wool scouring. . 634,915 1,555,107 1 253,192 Butter and cheese factories . . . . 43,034 1,535,150 1,492,056 Sawmills, and sash and door factories .. .. 1,177,713 1,265,659 90,976 Iron and brass foundries, boiler - making, machinists, etc. (not including Government workshops) .. 366,010 324,171 555,252 Soap and candle works .. .. 130,745 158,649 27,904 A.crated water factories .. .. 94,098 151,811 57,713 Agricultural implement factories .. .. 111,823 133,094 26,271 Brick, tile, and pottery works.. 91,797 122,230 30,433 Spouting and ridging work 3 . . 25,478 112,691 87,213 Tinware factories 8,500 98,587 90,037 Furniture and cabinet-making 162,375' 241,024 78,649 Coachbuilding & minting works 128,346 216,077 87,731 Flaxmills .. .. 20,059 203,492 183,433 Biscuit factories 47,784 197.989 150,205 Chaff - cutting works .. .. 54,410 169,313 114,873 Bacon curing .. 58,799 159,564 100,765 dlothing, and boot and shoe factories .. .. 514,506 858,250 343,774 Printing establishments (exclusive of Government Printing office) 273,886 704,285 430,399 Breweries and malt houses .. 421,197 659,298 233,101 Woollen mills .. 194,311 359,382 165,071 Sas works .. 194.653 290,567 95,914

British consoie, l l'i ocr cent. Cunada, 3 p^r 00-ut. Cape, 4 per -ant. . . X.S.V., 3 per cent. Xew ZealaDd, 3 u<t cent. ludia, 3 per cent. 109J 103 USJ 10& V 902 10QJ 1031 662 Oil 9Pi 211 0.21 116 11.5 C 2 10.0

i»s;s-&3. IBS^-yd. iy\n-a. £€ . £ Customs .. .. 1.494,463 1.642,590 2,335,643. En: 'ways .. .. 954,741 1,174,099 1,962.551 Stamps .. .. 537,525 " 658,424 978,940 Taxes (property or land and income) .. . . 157,793 331,674 496,746 Territorial .. .. 410.578 303,675 252,278

Estimate Actual Difference. far for In- DeRevenue. 1903-04. 1902-03. crease, crease. Account. £ £ £ £ Dustoms .. 2,400,000 2,335,643 6i,357 — Railways . . 2,000,000 1,982,551 17,449 — Stamps .. 983,030 978,939 4,061 — Land tax.. 300,000 296,062 3,938 — [l-.come tax 210,000 200,684 9,316 — Beer duty 89,000 90,400 — 1,400 Kegistrat:on and other fees .. 84,000 83,881 119 — Marino .. 32,000 32,963 — 963 tf i s c c Ilaneous 130,000 133,203 — 3,203 rerritorial revenue 240,000 252,278 — 12.278 Totals .. 6,169,000 C,386,G03 89,240 17,549 Debentures for sinking fund increases 60,600 - 57,500 3,100 — Totals .. 6,528,600 6,4-14,109 102,340 — 17,849 Xet increases 84,491