B.—No. 2.

difficulty of making sudden reductions in large current expenditure. Before the end of the Session, we felt it necessary to admit that sufficient allowance had not been made for the difficulty of suddenly cutting down such an expenditure; and we asked the House either to submit to being called together before the usual time, or to increase the £150,000 by a vote of £50,000. The vote was given upon the understanding — which I admit was perfectly clear —that if the £200,000 should be found to be insufficient, the Government would not incur a larger expenditure, but would call the House together. Now, Sir, in addition to the £200,000, we have, as I have stated, acted upon the right conferred by Act of the Assembly to incur an expenditure of £40,000 under a special Order in Council. If lam asked whether, although it was perfectly legal for us to incur this extra expenditure, our doing so was not, in spirit, a breach of faith with the House, I reply that, as soon as the Government became aware that there was a probability, I might almost say possibility, of an excess in the expenditure for Defence purposes, arrangements were made for calling the House together, and the meeting took place at the earliest moment at which it was found the Assembly could bo convened. It is only right I should add to what I have just stated, and as something fairly to be set on the other side, that honorable Members now know, as far as we are able to estimate it, what has been the whole expenditure for the year, and what, with the reservation already made, will have to be paid for the year, including all liabilities. I ought not to omit to remind you that the Colony has not been called on to make any payment for the detention of the troops ; so that whatever amount it was supposed would be charged for that purpose has been saved. The items of Expenditure for Wanganui Bridge, and Advances to Patea: Settlers, are both really loans. Under the head of " Unauthorized," appears £8,130 advanced for necessary purposes to the Provincial Government of Southland; besides which there will be owing by that Province about £15,285 for payments made in excess of its share of the Provincial moiety of the revenue. The item for Roads in the North Island, I shall have occasion to speak of presently. I will now say merely, that the proposal which, before I conclude, I shall submit to you in reference to dealing with the question of constructing roads in the North Island, will include the amount of £25,000, charged to the current year, and which appears under the head of " Unapportioned." REVENUE OF THE PAST YEAR, AND COMPARISON WITH EXPENDITURE. I will now turn to the question of the Revenue of the past year; and we can ] proceed to compare the Revenue with the Expenditure, and ascertain how the £ account will stand at the end of the present year. I will state the actual as compared with the estimated Revenue —even what I call actual is to some extent estimated, for the last month of the year has not yet expired. But the amounts may be accepted as nearly correct: — Estimated. Actual £ s. d. £ s. d. Customs ... ... ... ... ... ... 816,000 0 0 ... 816,150 19 4 Bonded Warehouses ... ... ... ... ... 5,000 0 0 ... 4,722 11 8 Stamps ... ... ... ... ... ... 66,000 0 0 ... 65,008 1G 4 Tost Office ... ... ... ... ... ... 48,000 0 0 ... 47,433 1 6 Telegraph ... ... ... ... ... ... 25,000 0 0 ... 17,443 12 10 Miscellaneous ... ... ... ... .., ... 72,000 0 0 ... 83,714 0 8 Sinking Fnnd released ... ... ... ... ... 40,000 0 0 ... 31,061 0 0 Treasury Bills ... ... ... ... ... 150,000 0 0 ... 150,000 0 0 Total ... ... ... ... 1,222,000 0 0 ... 1,215,534 2 4 Sale of Steamers, &c. ... ... ... ... ... ... ... 9,000 0 0 Credits to Votes —exclusive of those already brought to account as Assets ... ... ... ... ... ... ... ... 11,581 10 7 Transfers ditto, ditto ... ... ... ... ... ... ... 12465 13 9 £1,248,581 6 8 It is not necessary for me to detain you by giving details of these amounts; you will find them elaborated in Statements E, G, and H. The revenue from Customs, Post Office, Bonded Warehouses, and Stamps, comes out very closely as estimated. 3

Recoverable items of Expenditure,

Revenue—Estimated and ActuaL

9

FINANCIAL STATEMENT.