27

A.—B

England and investment of the sinking fund (if any) of the loan so guaranteed : Provided that sr.ch contract or arrangement was not inconsistent with the purposes for which such loan was authorized to be raised. In the session of the General Assembly just past (1871) the Government introduced in the House of Eepresentatives a Bill intituled "The Payments to Provinces Bill, 1871" (a copy of which is herewith), the object of which was to alter the financial arrangements between the colony and the provinces, to reduce the amount of capitation allowance payable out of the consolidated revenue from £1 18s. per head to 15s. per head, and, in lieu of the £50,000 per annum payable, under the Act of last year, out of the consolidated revenue, to the provinces for the service of the Eoad Boards, to apply £100,000 out of the moneys authorized to be raised by loan under " The Immigration and Public Works Loan Act," and which are referred to in the Bill as "the Public Works Fund," to the provinces for distribution amongst the Eoad Boards, "to be expended by them in the construction of new roads, bridges, and culverts, and in the maintenance thereof, for one year, and the completion of such works commenced last year as were not finished." And there was added in the Bill as sent up to the Legislative Council from the House of Eepresentatives a clause which has given rise to the question now raised, upon which the opinion of . the Law Officers of the Crown in England is requested. The clause was as follows : — 28. Notwithstanding anything herein contained, it shall he lawful for the Minister of Public Works, if he think fit, on the application of the Superintendent of any province, to expend any sum not exceeding one-half of the money to be allotted to such province for the year ending the thirtieth of June, one thousand eight hundred and seventy-two, under section eleven of this Act, in payment of or in repayment to such province of the cost of permanent works in such province : Provided, however, that, except in the County of Westland, such works shall have been authoiized by any Act of the Superintendent and Provincial Council of the province now in force. The object of this clause, as it appeared to the Legislative Council, was, under colour of a repayment to the provinces of former outlay on public works, really to place in the Provincial Treasuries additional funds for provincial appropriation. The Legislative Council objected to this clause. Though ready to give effect to the financial arrangements of the Government so far as they properly could, they considered that to divert £50,000 of the money authorized to be raised by loan last year for new public works specifically defined by the Act, to other services of a wholly different kind—namely, to replace in the Provincial Treasuries moneys already expended—was objectionable in principle, and in manifest violation of the spirit and intention of the Act authorizing the loan to be raised. Accordingl}-, they expunged the clause, and the Bill in this amended form (and with some other unimportant amendments) was returned to the House of Eepresentatives. The House of Eepresentatives returned the Bill, with reasons for disagreeing from the amendments of the Legislative Council in clauses 14, 15, 28, and 29, as follows :— That the above clauses relate to the appropriation and management of money, and that the Legislative Council has not power to alter or expunge such clauses. The Legislative Council replied as follows :— At this late period of the session it would be impossible for the two branches of the Legislature to discuss with the requisite deliberation the important question of privilege raised b)' the House of Representatives. But the Council desires briefly to state its views of the question thus raised. The present Bill, so far, at least, as concerns the application of the Immigration and Public Works Loan, authorized

to be raised last year, is not, in their opinion, a Bill of Aid or Supply. It imposes no new burden on the people, nor alters any existing burden, nor is it a grant of money by way of Supply. Tie Colonial Parliament last year authorized a very large loan to be raised on the credit of the colony, to be expended strictly and exclusively on immigration, railways, and other public works and undertakings specified in the Act. It is proposed by the present Bill to divert a part of the money so to be raised to other objects of a cognate character, and to that extent the Legislative Council is prepared to concur in the proposed measure. But it is proposed, further, to authorize the Governor to pay over one-half of the amount so to be diverted to the provinces. Such an application of the Immigration and Public Works Loan authorized to be raised last year is not, in the opinion of the Council, right or consistent with the engagements upon the faith of which Parliament last year consented to raise the loan. The Legislative Council claims the right to exercise its own judgment upon that point. The concession of that right would so narrow as practically to destroy its proper functions as a legislative body in dealing with questions of a similar character, which come before them in a great variety of forms. For the foregoing reasons, the Legislative Council earnestly trusts that the House of Representatives will accept the Bill as amended by the Legislative Council. To this the House of Eepresentatives made a rejoinder as follows : — That it is beyond, the power of the Legislative Council to vary or alter the management or distribution of any money as prescribed by the House of Representatives ; that it is within the power of the House of Representatives by Act of one session to vary the appropriation or management of money prescribed by Act of a previous session. To which the Legislative Council replied by the following message : — This Council cannot assent to the reasons adduced by the House of Representatives for disagreeing to its amendments in the Payments to Provinces Bill, and maintains that the amendments to which the House of Representatives objects are strictly within the powers and privileges of the Council to ma,ke. The Council considers the clauses in the Bill, in their original and unamended shape, to be objectionable in principle, and in manifest violation of the spirit and intention of the Public Works Act of 1870. The Council recognizes, however, that the Bill is a portion of the general financial policy of the Government, and that its rejection at this stage might be attended with great public inconvenience. While, therefore, still maintaining its constitutional right to make the amendments in question, it consents to abstain from the exercise of this right, on the House of Representatives agreeing,— 1. To amend the Bill so as to restrict its operation to the present financial year. 2. To refer the point in dispute between the two Houses to the Law Officers of the Crown in England, upon a case to be prepared by Managers appointed by each House. Subject to these conditions, the Council will, on being made acquainted with the names of the Managers appointed by the House of Representatives to draw up the case for reference, cease to insist upon its amendments. Whereupon the House of Eepresentatives transmitted the following message : — The House of Representatives have considered the reasons adduced by the Legislative Council for refusing to concur in the reasons of the House of Representatives for objecting to the amendments of the Council in the Bill intituled " The Payments to Provinces Act, 1871." The House have concurred in the first proposition of the Legislative Council respecting the operation of the Bill, and have agreed to the following clause, to stand the last clause of the Bill : — " This Act shall continue in operation until the first day of July next, and no longer." On consideration of the second proposal of the Legislative Council, the House of Representatives have agreed to the following resolution : — " That this House will concur in the proposition of the Legislative Council that the opinion of the Law Officers of the Crown be obtained on the question whether, in accordance with the practice of the Imperial Parliament, the amendments made by the Council are within its functions, having regard to constitutional usage and to the powers conferied on the Council by ' The Privileges Act, 1805 ;' and that Mr. Speaker, Mr. Brandon, and the Hon. Mr. Fox bo appointed Managers to meet Managers on the part of the Legislative Council to prepare a case for the purpose. Such opinion to be taken with a view to assisting the Legislature in future action, but not to be binding on either House."