HOUSE OF REPRESENTATIVES.

Timaru Herald, Volume XXXIX, Issue 2763, 1 August 1883, Page 2

HOUSE OF REPRESENTATIVES.

The Home met at 2.30 p.m. BILIS ASSEXTBD TO. , The Parliamentary Witnesses, and New Zealand Univorsity Bills were assented to by tho Q-overuor by Message. BBELIKS TO QUESTIONS. Replying to Sir Dodson, the Hou. Mr Johnston said the iron-work for tho Clarence river bridge had been ordered from England, and was now arriving. The plans and specifications were prepared and tenders for the erection would at once bo called for. Eeplying to Mr McMillan, tho Hon. Mr Rolleston said the Government would bo prepared to givo assistance to other bodies besides the one Canterbury Company, for the introduction of diamond drills into tho colony. When the Springfield Company had done with the drill, liberal arrangements for its use would bo mado with olhor bodies. Eoplying to Mr Bracken, tho Hon. Mr Dick said that blankets and flannels used m hospitals were provided by the local Committees, but those used m Gaols and Lunatic Asylum 9 were for the most part manufactured m the colony, unless the prices asked for these articles vrero out of nil proportion to those charged on tho Homo manufactures. Tho telegraph forms wore printed m London, as no colonial printer could do them at the samo price. Replying to Mr Macandrew, the Hon. Mr Johnston said the erection of the steam crane for lifting boilers at Pert Chalmers. could not bo proceeded with until a good solid foundation had been provided for, and before this could bo douo certain amendments m the Dock Trust were required.

Replying to Mr Tole, the Hon. Mr Dick said Government had no site to offer the Auckland University College, but it was understood steps would be taken for malting improvement* m the present building. Replying to Mr Hutchison, tlie Hon. Mr Dick sni'l it had been ascertained that tho confinement for ten or twelve days of persona suspected of lunacy m a building other than nn Asylum would be injurious instead of beneficial m eaees of suspected lunacy. Replying to Mr Postlethwaite, the Hon. Mr Johnston said that until certain returns bearing on the subject had been got, he was not prepared to say what the Government would do m the matter of fencing where the railway abutted on sections sold to deferred payment settlers. Replying to Captain McKenzie, the Hon. Mr Johnston said the Government was disposed to make the same concessions m the railway carriage of linseed as were given to grain, but as regards the carriage of grassseed they saw no reason for changing the tariff. Replying to Mr Morris, the Hon. Mr Dick said that m the other Colonies it had been decided to quarantine imported dogs for six months, m view of the case of hydrophobia m Xew South Walc3, and the same course would be followed m Kew Zealand. KIT BIIX9. The following Bills were introduced and read a first time : — Waimate High School (Mr Stewnrd), Wanganui Bridge (Hon. Mr Johnston). COHMITTHH OF BUFPIT. The House then went into Committee of Supply. Tho Hon. Major Atkinson moved that the period of two months mentioned m the Public Revenues Act be extended for a further period of one month, so as to provide Supplies up to the end of August. The motion was agreed to. PBOPEKTY TAX Dili. The Hon. Major Atkinson moved the second reading of the Property Tax Bill. He said he proposed to give Mr Montgomery and Sir George Grey an opportunity of bringing forward their motions as to substituting a land tax. Ho would therefore content himself with merely moving the second reading of the Bill. Mr Montgomery said the first question that would be asked bj the country was, why was tins Bill necessary when they proposed additional taxation ? The question arose was this tax a fair one m its incidence. He did not think it was, and it would not be required if land improved by railways and other public works was directly taxed to meet charges caused by the money borrowed for the construction of such works. The present property tax wa9 one upon the industry of the country. When a few persons subscribed capital to establish a company to start an industry, they were at once taxed, with the additional aggravation that m many case 9 they were taxed before they were m a position to make any returns to the investors. It was also a tax upon persons who improved their land, and even their insurances were taxed "through the insurance companies. The whole of the money invested by merchants and traders was also taxed from the moment it was invested. The property tax was unjust to industry and to companies. He would now deal with the hind tax. There was no possibility of doing away with one tax without substituting another. The large landholders were not worse than the most of tho people who would probably like to be large land holders. Money invested m land should have the same consideration as money invested m any other way. Land had increased, and would continue to increase m value with the increase of population. The returns from land were not immediate, but they came by-and-bye. It was a condition of tho title given by the State to land that it should be improved, and if not improved, it was for the State to say how it could get at it by taxation. He ha-1 no hesitation m saying that such a tax should be imposed as would make the owners improve land that was held simply for standing m the way of the general progress and improvement. That was tho general view of the question. Then they came to consider the value railways and other public works had given to land. It was a fact that these works had given property immense value, and m that view was it not reasonable to say that such property should bear a large proportion of the public taxation rendered necessary by such worki. The injustice of holding unimproved hinds was this : One man improved his land, and was taxed m proportion to the value of theea improvements, while perhaps his next neighbor left his hind wholly unimproved, and the latter became valuable m proportion to the amount expended by the other. With a knowledge of that fact before them, it was ridiculous to expect that men of means would come to the colony when improve* oents were taxed. Therefore, if they could catch the property that remained unimproved and allowed the improvements m the other to go free, it would, he contended, be a much fairer mode of taxation. It was only the expend!Lure directly calculated to beneSt the land that he would take the land tax for. For tha general expenses of Government an income tax should be imposed. He denied that tha finances of the country were m a sound conlition. They were on the brink of a financial disaster. He calculated that the landed estate jf the colony was charged to tho extent of at least £30,000,000. He computed that the colony paid no less than £3,5-17,000 m interest alone every year. After paying that sum he would i*k how much was left m the way of profits to the people. At the present moment tho state of things all over the colony was stagnation m trade. The fact was they were spending too much monoy on useless departments, and sending so much out of the colony as interest on their debts, that they could not look for anything else than a continuation of this stagnation. Time after time, they issued Imprest Bills to meet tho public expenditure, and these m time came to be added to tho permanent debt of the colony, so that instead of improving, matters were m a fair way of being aggravated. Last year the revenue had been £268,000 less than the expenditure, and now they required an additional tax to mako good tliis and other deficiencies, and to meet a deficit of £112,000 without Supplementary Estimates. If they went on as they were going he predicted that the tax next year would bo considerably increased. The present system of finance was utterly unsound. They had had to borrow money to pay interest on loans already, and they would have to do it again. If they were to meet the position of things as they should, they would have to reduce their expenditure. That was the only safe course they could follow. Mr Dargaville blamed the Treasurer for not giving a fuller explanation of the Bill. He irgued that there was no necessity for the Loan Bills being passed last year, but so nuch had tho present Government become )ound up with a certain financial institution, ho Bank of New Zealand, that it had to onsult the interests of that institution m (reference to those of the people of the _olony. But for its necessities the Government could have gone on without any loan being iloated last year. Tho same interest would have found it inexpedient for tho Government to have borrowed money locally, as had been suggested, as that cour»e would have circumscribed their operations. Had a quarter of a million been sought for m the colony it could have been got, but this would have diminished the revenues of the institution m question, and that would never have done. He commented on the item m the Financial Statement of £16,000 for exchange, which he also attributed to the Government being subservient to tho purposes of the Bank, aud to show what the Bank could do he referred to Mr WaterLouse's action, when Premier, on the amount af Government money deposited with tho Bant. The amount of £45,000 for interest had been lost during the last two and a-half pears. That was another example of the Trea* iurcr's finance with his friends tho banker?. Cn respect to the property tax, he said the loan companies, of which tho Government fvere such friends, enjoyed immunities and idvantages of a very superior order. . Tho &.ct gave special facilities to them, by only taxing their capital and accrued' profits. Under tho 15th section of the Act the large amount of capital lent on mortgage escaped the tax. A law like that was a disgrace to the framers of it. Major Atkinson called himself tho Treasurer of the colony but m reality he waa only an yaw v aw ;ountant to the financial ring m Aucfc» land, and its willing tool. He could

not stnnd a day unless lie hac that ring at his back. He rend from n pub lished prospectus the nnmo of the Premier, a a director to a new project, tho New Zealnne Mortgage Company, Limited, launched bi the Bunk. Tho time had arrived when thci should put down their foot and say " We wil be no longer governed by this financial ring.' That Company would only bo taxed to th< extent of their paid up capital, whereas thej could lend £2,000,000 -which would not bi taxed. That exemption he computed to bi equal to 12 per cent on their paid up capital and to that extent they would under thii Act bo benefited as against private person; who brought their capital to New Zealand foi investment. A private person sending hi; capital for investment m this colony had tc pay the tax on the full amount of his mort' gage. In that respect alono the tax was grossly unfair, and he charged the Govornment with the responsibility of that unfaii dealing. Under the tax, ho contended that a million of money on mortgage escaped taxation, and to that extent it was bad. Its tendency was to raise rents, as landlords were bound to get a certain percentage on their money. This increased tho cost of the necessaries of life, and m the same proportion it limited the scope for employment. The land tax would not press unduly on tho working farmer. It had been objected to tho land tax that it was unfair to those, who paid enhanced values for their properties, but the samo argument applied equally under the property tax. He felt that anything he could say would not affect tho result of this motion. Tho Bill -would be carried. The Government, no doubt, now could do as they liked, as they had done since 1876, •when the present Premier and his partner, Mr Russell, received £10,000 from tho Bank for their services m getting the Legislature to pas 3 a Loan Consolidation Act, which had greatly benefited that institution to the loss of the colony. It was a shame and a scandal that tho name of tho Premier of the colony should appear as a director m the prospectus he had referred to, especially when they would not let Sir Julius Yogel, as AgentGeneral, act as director of an agricultural company. He warned tho Government that the position m which they stood was not ss stablo an one as they imagined. It could not be -when its foundations were class legislation, financial terrorism, political corruption, and public wrong, oil tending to selfish aggrandisement. Mr Turnbull said the real question they had to consider -was whether it was necessary to impose additional taxation at all. Could they not meet all the exigencies of the colony by a reduction of expenditure ? He had no doubt but the motion would be carried, although at the earns time ho would vote against it. The debate was interrupted by the adjournment at 5.30 p.m. The House reisiembled at 7.30 p.m. The Hon. Major Atkinson, who had been called on to reply just before the House rose, said he had no desire to bring the dobate to a premature close. If hon. members wished to speak. (Cries of " No ! Goon.") Major Atkinson said as this was what the great financial debate had come to on the discussion of the great subject of taxation, it was almost an insult to the House to have the financial position of the colony discussed as Mr Montgomery had done. Unless he could do it better ho would have to be deposed from his position as a sectional leader of the Opposition. As regards Mr Dargaville's speech, it was one of those many speeches which should not havo been delivered. He ought to feel thoroughly ashamed for that speech, that was if there was to be any hope for him. He was not sure that Mr Dargaville was capablo of shame. He had signalled out the Premier and himself (Major Atkinson) as the Government membere who had been guilty of corruption. He had gone back to the Consolidated Loan Act of 1867 as the foundation of the corrupt system of which ho spoke. He (Major Atkinson) was charged with promoting that Bill. Mr Dargaville : No. Not with supporting it. The Premier I alluded to. The Hon. Major Atkinson continued to say the honorable member was already beginning to wriggle about and deny his own assertions. As a matter of fact he (Major Atkinson) had voted steadily against that measure all through. The Premier was not m either Houses of the Legislative when it ■was passed. He challenged Mr Dargavillo to call for a. Committee to inquire into the truth or falsehood of the charges he had made as to the Premier receiving a reward for the passing of that Act. He had nothing to do with it. If Mr Dargaville did not move for such a Committee he would move for it himself. So much then for Mr Dargaville's facts. The two clauses of tho Act of 1879, which he had quoted as showing corrupt favor to a loan company, upon which he staked his reputation, had been repealed. They were no longer law. Mr Dargaville, however, did not want to represent the real facts of tho case. What he wanted was to mako out a case against the Government. The Act m question was founded on the American Act, and there it was not considered politic to take outside capital. It was thought most desirable to encourage the influx of such capital. That was the real object m passing these clauses m the Act of 1879, and it was carefully considered before the clauses were passed. When it was found they were not necessary for this purpose they were repealed. The whole of the loan companies were now paid upon the whole of their debentures. On their capital last year they paid £14,000, and this year he would ask them to pay £21,000. Now where were Mr Darganlle's representations on which he Bad staked his reputation for common sense. The fact was he had none to begin with, consequently he had not lost it by tho statement he hadmade to-night. After such statements the House m future would bo caroful about believing the hon. member's facts and statements. His idea about doing without the loan of last year was a most astonishing statement. His theory on that subject was a financial problem he could not solve. To place the smaller loan on the local market would have been most injudicious, as it would have withdrawn money from the Post Office Savjng Bank at 4£ per cent m order to pay 5 per cent on it as debentures. Had Mr Dargaville had his way and no loan been floated, they would have had nothing to go on with on the Ist March and to meet their engagements. He (Mr Dargaville) next showed his grasp of the finance of the colony by picking ont two sections of the Financial Statement— the liability for Post-offico deposits and the Bank charges for exchange, etc. These were the only points m it to which he took exception, and so it followed that tho Statement must have been a very satisfactory one if that was all there was to take exception to. If anyone could show them how they were to pay less Bank commission he would be most grateful. The whole subject of Bank arrangements was gone into some years »go, and on the recommendation of the Public Accounts Committeo notices were issued inviting tenders from the Banks. Only one tender wa3 sent m. Some of the other Banks were strong enough to open up the necessary branches throughout tho colony, but what these Banks wanted was to get the Government into the hands of the Associated Banks, but that would be most dangerous, and. he, for one, would never consent to such a thing. It would make the Banks the real Government of the colony. There was not the shadow of a warrant for the charge made about this banking business. Mr Dargaville had told his constituents that he was a free man, supporting neither the Ministry nor tho Opposition, and yet he told them now that the Government had been thoroughly corrupt from 1876. The speeches they had heard to-night were a fair representation of the policy which proposed to turn out the Government first and then talk about a policy afterwards. Great fault -was found with the Premier for becoming a director of a financial company. He claimed for himself and the other members of the Government the right to become directors of any sound legitimate con. cern. It was absurd to suppose that because t member took part m the government of thi colony, that he was to debar himself fron the ordinary rights of a citizen. As regardec Mr Montgomery, he was great m details, bu he always kept them m his pocket. Hi must, if he wanted to make an impression oi the colony, draw them out of his pocket if hi intended to occupy the position he aimed at They had been told that they paid ovei £3,000,000 of interest outside the colony

His own estimate was Hint they did not pay more than £2,500,000, nn<l Hint was quite enough. According to his showing their imports had exceeded their exports by a sum of £5,000,000. That was a financial effect he could not account for. He had been blamed for his estimate of customs this year because ho had also oppressed a hope that the imports would not bo so great. The fact was, howover, that stocks m the bonded warehouses wero much larger this year than usual, and the customs revenue would bo payable when the goods wero taken out. He admitted that there was commercial depression, but the reason was that the commercial men had imported £1,000,000 of goods more than they wero ablo to pay for. He deniod that the depression was participated m by the public. The fact was that the merchants were forcing their goods into the market, and the public gained the advantage. In past winters they had always had a cry about the " unemployed," but this winter they had had no such cry. The statement that the revenue last year was £168,000 less than the expenditure was easily explainable. The fact was they commenced the year with a surplus, and they employed it m this way : They reduced taxation by £80,000, and put the Constabulary on revenue instead of loan, and yet they had a surplus at the end of the year. It was not, therefore, true that the revenuo was under the expenditure. It was true to appearanco, but it was not true m fact. The statement that they were paying interest out of borrowed money was utterly ungrounded. Mr Montgomery : I will undertake to prove it. Major Atkinson said he would m due time call upon him to make good his promise. They had been asked, was direct taxation necessary P The answer was that the House and country decided it was. The fundamental principle of a property tax was that every man should be made to pay according to his means. The arguments used about taxing improvements told against Mr Montgomery. When once the money was invested m improvements, theso improvements were valued and taxed at a less amount than tho money used m making them would have been taxed had it laid m the Bonk. They were told that Mr Montgomery would put m land and income taxes. The latter m its very nature was an easy tax on the rich and heavy on the poor. The man of wealth was content with 10 per cent on his money, whereas the jmall man had to make 25 or 80 per cent to make a living. In that way the poor men would pay three times the amount their rich neighbors did. The industrious and thrifty who put their capital to good account and got a fair return would be taxed a great deal higher than tho lazy and indolent, whoso means and opportunities might bo quite as good as the other. He (Mr Montgomery) was only a recent convert to the land tax. A few years ago he Bpote against such a tax, as tho quotations from Hansard he would read Bho wed. Probably more than a third of tho landholders had acquired their property sinoe their lands were benefited by the public works. In that case they would be taxing, not the rich man who benefited by these works, but the man who actually paid for these benefits. As a matter of fact, wherever railways were made, land m greater or smaller areas was cut up into small holdings, and portions of the purchase money of these left as eecurity of the land. In that way this unearned increment had been converted into personal property, so that to get at the men who were the actual gainers, they would have to go for personal property. Again, it was not the landholders alone who benefited by the expenditure of loan money. Woges rose at least fifty per cent, and contractors, storekeepers, and others all benefited by its expenditure. In that case they could not get hold of the person who actually benefited unless by a general tax capable of overtaking all classes of the community. Again, the question of unimproved lands was a moat difficult one to (Icnl with. If Q znnn ifrew crops or grew mutton, it was all of the nature of improvement. He regretted they had not bad a real instead of a sham debate on their finances. The motion for the second reading of the Property Tax Bill was then put, and the House divided — Ayes, 48 ; Noe», 32. The following is the division list : — AYES. Allwright Mcllwraith Atkinson McMillan Beetham Mitchelson Bryce Morris Buchanan, W. C. Munro Conolly Peacock Dick Pearson Dodson Petrie Driver Postlethwaite Fergus Kolleston Fitzgerald Shaw Fulton Shephard Green, M. W. Stevens Hamlin Sutter Hobbs Sutton Hursthouse Swanson Johnston, C. J. Tawhiao Johnston, W. W. Thomson, H. Kelly Tomoana Lee Trimble Leveatam Whitaker McKenzio, F. W. Whyte, J. B. Mason Wilson, J. G. McDonald Wright. NOES. Barron - Ivess Bathgate Joyce Bracken Macandrew Brown, J. C. McDonald, A. Cadman McKenzie, J. Daniel Montgomery Dargaville Moss Do Lautour Pilliet Duncan Seddon Fcldwick Sheehan Fish Shrimski Georgo Smith Grey TeWheore Harris Thomson, J. W. Holmes Tolo Hutchison Turnbull. On the question for tho committal of tho Bill, Sir G-. Grey denied that facilities had been given for debating the question fully. Not a single word fell from the Government side of the House until the Treasurer rose to reply. Mr Bracken pointed out that Mr Green had been made a convert to tho property tax, and quotod from a speech delivered m Dunedin, m which he said ho was m favor of a progressive land tax. Mr Jos. McDonald said he preferred a property tax to a land tax. Money was wanted to carry on the Government, and open up tho country, and none of them should grudge what was asked. Mr M. W. Green said the question on which he had voted was the introduction of a land tax as against the property tax. Mr Levestam said he had voted for the second reading of the Bill, as he contended that the present was not the proper time to raise the issue as to the substitution of a land tax. At tho next election tho question of a land tax would be raised, and that was the proper time. Mr Hursthouse and Mr Fergus pointed out that as the property tax was already a tax on the hind, it wa» not necessary for the supporters of the land tax to arguo m its favor, as if it was a new proposal. The Hon. Major Atkinson said the Bill was brought on expressly for to enable Mr Montgomery to discuss tho whole question, but he had not shown courage enough to move an amendment, and there was no reason why the Government should take up time arguing m favor of, the property tax. It was for tho Opposition to show that it was not a right tax. The attack had been an utter failure. When called on to reply he had afforded every opportunity for others to speak before he replied, but no one appeared inclined to do so. In that case he was not fairly chargeable with having burked discussion. Mr Dargaville said he would accept Major Atkiuaon's challenge and move for a Committee to enquire into the Loan Consolidation transactions of 1867. The Bill was then ordered to be committed on Thursday. BASrBXJPTOT Bill.. The Hon. Mr Conolly moved the recommittal of the Bankruptcy Bill for the purpose of reconsidering clauses 61 and 139. The House divided— Ayes 39, Noes 27. In Committee clause 61 was re-amended, so as to read as it was orieinolly printed m the Bill. b On clause 139 the Hon. Mr Conolly proposed the following addition: — "All costs, charges, allowances, and expenses properly incurred by or payable by the aasigneo m tho

execution of his office under tine Act shr.ll be puid m priority of any debts." The Committee divided — Ayes 34, Noes 2S. The following was also added to the rliuipe: — "All wages of any artisan, laborer or workman, whether skilled or unskilled, m the employ of tho bankrupt at piece-work at the date of tho order of adjudication, and not exceeding the amount earned at such piece-work m the throe months preceding such order." A further proviso was added to the effect that the bankrupt should not be entitled to recoive hii discharge until wages as provided by the foregoing lection were paid. The clause as amended was then read and carried, and the Bill was ordered to bo reported with amendments. BILLS OP EXCHANGE BILL. The Bills of Exchange Bill was further considered m Committee, when the following was added as a new clause : — " No bill, note or cheque, shall attach any liability to nny aboriginal native, unless it shall, if not written m Maori, have a Mnori translation endorsed thereon, and shall ulso show upon its face that the note or cheque was duly interpreted to such native at the time of making the acceptance thereof, at d that such native understood tho liability of payment imposed thereby." MARHIED ■JVOMBN'S PROPERTY BILL. In Committee on the Married Women's Property Bill, Mr Hutchison said that this was an important Bill, nnd it was unreasonable that they should be asked to go on with it at this late hour. He moved that progress be reported, which was agreed to. The H 'Uie adjourned at 12.5 a.m.