is the author. Then, Sir, as to the style of argument which may be used in advocating such a scheme. The writer says, "We have a moral right to use"-what do you think?— every prejudice, every tendency of the popular or legislative mind to assist us in the work." The writer is the Colonial Treasurer. And, Sir, he has put into practice his theory. He has used every prejudice of the popular mind and has through it appealed to the dwellers in cities to impose this system on the country districts. I hope honourable gentlemen who represent country districts will take these two paragraphs home, and tell their constituents what they show and what are the means by which the present Premier wants to impose this land-nationalisation upon the country districts. Now, with regard to the exodus of capital, I must pass over that subject, as I am trespassing too long upon the time of the House. One word in regard to the public debt: I have already said there is one great blot on this Financial Statement; I think the statement about the debt is even a darker spot. It has been the custom with respect to the public debt, in a statement of the financial position of the colony, to mention the net debt of the colony shown in the previous year's statement, and the net debt at the expiration of the year just passed -the net debt for the two years: this gives, of course, the amount of the increase or decrease that has taken place. The Treasurer did this last year, but this year he only gives us the amount for one year. And why? To enable him to go on and say this: "a net reduction of the public debt of £117,000." Now I must go back to the Financial Statement of last year to find out whether this is correct or not. The net debt last year was £37,359,000; the net debt this year is £37,677,000, leaving, instead of a reduction, an absolute increase in the debt of £318,000, which more complete accounts have since increased to £334,000. Yet the Colonial Treasurer, in telling the people of New Zealand what the state of their finances is, does not hesitate to say that there has been a reduction of £117,000. I need not characterize such а statement parliamentary decorum will not allow me to do so-as it deserves. And the Minister of Education comes to his colleague's assistance with-what? a little joke about a chestnut horse. Sir, a jest is no argument. If the Minister could find nothing better to do than talk about chestnut horses he had better have left the matter alone. Now, Sir, a few words upon the land- and income-tax. The Treasurer states that the assessment just completed is the best that has been made. How does he know that? It is surely very early to say that. The honourable gentleman may say, as has been said, that there have not been so many appeals to Boards of Reviewers as in previous years. What would be said by honourable gentlemen on the other side of the House if we on this side had given such a reason? They would at once have said it was because the land had been undervalued, and therefore there were no appeals. With regard to this land-tax, the

Statement does not furnish us with the information which the Treasurer is bound to submit before we can be properly called upon to express any opinion on his proposals. There never was so large a financial policy propounded in so bare a statement. Information has had to be dragged out of the Government. I do not know why, whether it is from want of administrative experience, but absolutely everything in the way of information has had to be dragged out of the Government. I will mention two or three items. We have not the value of the taxable land, nor the value of improvements, nor the amount of the exemptions, nor the amount of the mortgages that are to be taxed, nor the amount of debentures that are to be double-taxed; we have not the value of the land liable to the several rates of graduated tax which we were promised last year; we have not the incomes of companies, nor the incomes from business, nor the incomes from emoluments, with the estimated produce of taxation; none of these are in the Financial Statement, nor actually even the rate of taxation which the Treasurer proposes to put on. All had to be dragged from him. We had to drag from him his intentions as to the tax on debentures; and as to the tax on improvements, we have not been able to drag that from him. With regard to the relative amount of taxation on capital invested in improvements and in personal property, the farmer is placed at a great disadvantage compared with what he was under the property-tax. Is it all an accident that this information is kept back? I do not think so. I cannot think so. The Treasurer has, I think, been anxious to find out, as the common saying goes, how, in the course of this debate, the cat would jump-not the Opposition cat, he knows that pretty well already, but he wants to find out how it will jump among his own supporters. Well, he has got some information from this debate which I think will, at any rate, induce him to drop his insurance scheme. He has been anxious, probably, to learn, not the opinions of the whole of his party-not of the section of his party who are ready to follow him through thick and thin; but of another section, the more moderate, sober, and experienced men, whom he cannot rely upon following him through thick and thin. To those gentlemen I hope I may be allowed to say that a very great responsibility rests upon them at present. They hold the balance of power, and are able to keep the Government within reasonable and moderate limits, and New Zealand looks to them to impose upon the Treasurer and his colleagues moderation in their policy. He will not listen to us, but he must listen to them. Of course the new system of taxation must have a fair trial. It is only by actual experience that the people of this colony will find out the real effects of this taxation. Some people will pay less under it, but many will find inequalities and hardships which will be just cause for complaint. Some instances have already cropped up. A gentleman was before the Committee on Industries the other day, representing a large and important industry,—the woollen-mills at

Kaiapoi,—and he stated that the result of the | change in the taxation the Government were about to impose on that company-which is a most useful one, and which has employed a large number of persons for a long time, and is now employing six hundred, and whose profits have not averaged more than 7 per cent.-will be to double the amount of tax they now pay. Mr. BALLANCE.-They must make double the income.

Sir J. HALL.-Double what they paid under the property-tax. This is a company whose shares are held not by wealthy people but largely by small holders. Therefore this double taxation will not fall upon the wealthy, but far the greater part of it will fall upon persons of small means. It is only by actual trial that the inequalities of the new system can be brought home to the people. We have already had it pointed out to us that it is most unfair in its provisions in regard to exemptions. If a man carries on a business by himself he has an exemption of £300, while if there are two or three partners in the same business they have only an exemption of £100 or £150 each as the case may be. The same obtains with regard to small shareholders in companies and to tenants of land in common. In regard to mortgages, a letter came to me the other day from Dunedin which shows the unfairness of this new system. The writer

says,

"I notice that you have been pleading the cause of those persons who derive an income of less than £300 a year from public companies. Will you allow me to bring under your notice the equally pressing claims of all those aged and infirm people whose sole support is derived from their savings invested in mortgages? These people, if their income exceed £120 a year, will have to pay tax upon every penny they possess, while their neighbours, who may be earning up to £300, and who are young and able, are not asked to pay anything at all. This seems to me a most unjust proceeding, and quite a satire upon the Premier's doctrine that the principle of the present Government is to put the burden on the shoulders of those best able to bear it.' You will certainly earn the gratitude of this class of whom I am one-if you will do what you can to have this matter amended."

Mr. J. MCKENZIE.-Will you lay that letter on the table?

Sir J. HALL. I have not the slightest objection.

An Hon. MEMBER.-Who signs it?

Sir J. HALL.-David Wilson; no doubt a Scotchman. The Church Property Trust in Canterbury is another case in point. What will be the position of this property? It consists largely of land and mortgages. The general estate will be subject to the graduated tax. The net income of that estate is just sufficient to pay an income of £50 a year to a number of poorly-paid clergy. The taxation upon that estate will now be very nearly doubled, and there will have to be a corresponding deduction from the £50 a year which is paid

Mr. BALLANCE.-Which the late Treasurer did not.

Sir J. HALL.-At any rate, he did not profess that he did not do so. That is the difference between the late Treasurer and the honourable gentleman. The Postmaster-General said that the Treasurer could not obtain the money. I say he can do it. He has only to produce a Treasury bill, and the Public Trust Office will have to take his bill and give him cash for it. Mr. BALLANCE.-The honourable gentleman winked at it.

Sir J. HALL.-The Treasurer proposes to raise money through the Trust Office-(1) by means of the deposits he has invited in competition with the banks; (2) by deposit of the debentures given in payment for Native lands; and (3) by forced loans from insurance companies; lastly, by bringing into the office all kinds of private property under a Bill which was to have come down to us from another place, but which will not now come down. A more extraordinary measure was never proposed to any assembly. It would have enabled any spendthrift prodigal, as soon as he attained the age of twenty-one years, if he was not then by the will to enter into immediate and full possession of anything given to him under it

it would have enabled him, subject to the sanction of the Court, to throw the whole property into the Public Trust Office, where it would have to be realised, and the cestui que trusts would receive only 5 per cent.

An Hon. MEMBER.-Get his share.

Sir J. HALL.--But what about those people whose interests would be sacrificed? There is no objection to his getting his share in a proper way.

for.

Mr. TAYLOR.-That is all the Bill provides

Sir J. HALL.-The honourable member has not read the Bill, or, if he has, he does not understand it. The last point on which I shall trouble the House in regard to finance is the so-called self-reliance policy. The Treasurer says, "We have marched for twenty years at a furious pace, too severe to last." The honourable gentleman should be an authority on that subject. He sat on the box-seat of the Treasury coach when the pace was more severe than at any other time in the history of New Zealand. But I do not complain of this statement. I am even glad to welcome the honourable gentleman in a new character; and I may say that here in New Zealand, as well as in a more celestial sphere, there will be more joy over one sinner that repenteth than

over ninety-nine prudent financiers who need no repentance. The honourable gentleman further says, "I have propounded in other places a policy of self-reliance, and shown the necessity of weaning this colony from a servile dependence on foreign dealers in money." And also, "For the first time we have determined on a policy of true self-reliance the only policy, I firmly believe, to make this a great country." Self-reliance is an excellent thing. I should be as delighted as the Treasurer if he could really carry out a policy of self-reliance in this matter. I have over and over again drawn attention to the effects of the drain upon this colony of no less than ten thousand sovereigns, or their equivalent,-in fact, more than that, which every day go out of New Zealand to pay the interest on our loans; and it would be worth a very great deal if we could relieve ourselves from such a drain. But can the Treasurer borrow what he requires in the colony? There may be small trust funds which trustees may be prepared to invest at 5 per cent. for a time. There are unprotected females, nervous about their investments, who may invest small sums with the Colonial Treasurer. There may be other persons who may make temporary investments at 5 per cent.: but that is all. The Treasurer will not get money in sums at all large enough to provide for our public works from sources of that kind. If he really attempts to provide for public works by borrowing money in the colony, what will happen? If he really gives such a rate of interest as will tempt sufficient money away from other local investments he will take money from the ordinary industries of the country. If that does not happen, what will be the alternative? My honourable friend the member for Wairarapa described exactly what will happen. The Treasurer will find agencies that will lend money at 5 per cent., or perhaps 41⁄2 per cent., but they will get it from England at a lower rate. The bulk of the interest will therefore go home to the Mother-country all the same. The honourable gentleman's only answer to this objection is as follows: "It may be said that the securities will find their way to England, or that the absorption of so much money would tend to make it dear in the colony." What is the answer given in the Statement? "These objections are not very formidable." He makes no reference whatever to the danger of interest going home to the Mother-country. He passes that over altogether. With regard to the scarcity of money and increased rates of interest he merely says, These objections are not very formidable." Sir, it would be most desirable if we could stop borrowing from the foreign money-lender; but a man cannot be a borrower and a lender at the same time. We can only emancipate ourselves from "servile dependence on foreign dealers in money" when there is a sufficient accumulation of surplus capital in this colony to supply very considerable sums for public works. We must pay off first what we owe, and then we may begin to lend. This accumulation is a slow process, and it certainly cannot be relied on at

VOL. LXXVI.-28.

the present time. The Treasurer's assertion that we are not going to borrow at all this year is entirely misleading. It is true that he may be shutting the front door of the Treasury to lenders, but he leaves the backdoor open. His is a system of back-door borrowing. He makes out that for this year we shall be able to get on without borrowing. But is that so? Is it correct to say that we can carry out a policy of self-reliance? Without the public-works estimates, of course, we cannot tell what sum is actually required for public works. We know that the Northern Trunk Railway is provided for. But with regard to other public works, after providing for liabilities outstanding on the 31st March last, the Treasurer will have £48,000 left. He proposes to add £200,000 from the Consolidated Fund. That gives him £248,000. Now, what were our last year's appropriations? They amounted to £558,000. Now, under these circumstances is it likely that the Treasurer will be able to provide without loan-money the sum which will be required for public works for this year? He cannot do so. In fact, of the funds at his disposal, a large part is the remnant of loans. I say, therefore, we are not really entering into a policy of self-reliance. Then, Sir, the Treasurer favoured us with an extract from the London Standard, which says,— 'Here is a colony wasting millions of loans because it could not pay its way without them. A colony in the true sense is not what we find, but a soil in the grasp of speculators; a people huddled into town, dependent upon public works for subsistence; municipalities joyfully dispensing other people's money; a land of banks, mortgage companies, and finance companies; a community whose very life is jobbed away on the Stock Exchange with no more thought than if it were so much hemp."

It was

Well, Sir, when was that picture drawn? Mr. W. P. REEVES.-Two years ago. Sir J. HALL.-Let us be precise. drawn in 1887. And who had been in office three years at that time? Who had reduced the colony to this sad position? The present Colonial Treasurer himself. By what species of infatuation the honourable gentleman could have been induced to put in his Financial Statement that absolutely condemnatory statement of his own previous political history I cannot possibly conceive. Further on the Treasurer says, "public works will have to be provided for out of consolidated revenue." This is not the case, because half of the provision which he makes is the remnant of a former loan. Then he goes on to say,

"I have noticed the policy of self-reliance on which we have entered, and it will be unnecessary, in conclusion, to do more than remind the Committee of the state of affairs from which we are trying to emerge, and of the opinions widely entertained of this colony but recently in the capital of the Empire."

He ought to have said, "With regard to the policy of self-reliance which I have talked about,' not" entered into." I have shown that this year he will have to supplement

taking up exactly the opposite position to that which he is really entitled to?

Sir J. HALL.-Will the honourable member read, in fairness, the part of the speech that precedes that which he has just read, as that is part of the same sentence that governs the sentence which he has just read?

Mr. SAUNDERS.-If you like, Sir; I have no objection at all. I read such small print with great difficulty at night, however.

Sir J. HALL.-Shall I read it for the honourable gentleman?

Mr. SAUNDERS.--Yes.

Sir J. HALL.-"A landowner having, say, £1,000 in the bank has to pay at the utmost 1s. in the pound on the income derived from it, probably much less. If, however, he spends this sum in improving his land, in giving work to those who want it, and increasing the produce of the colony, he is at once punished by the Government, and has his tax raised from 1s. or less to 1s. 8d.: probably he will pay double what he paid before. Need I suggest that this must be a great check to improvements?"

Mr. SAUNDERS.-That addition only makes the honourable gentleman's action a great deal worse, as it shows that he also wants to make his hearers believe that the graduated tax on improvements was abandoned at the suggestion of the Opposition, when he knows that it was really voluntarily surrendered by the Treasurer, at the suggestion not of his opponents, but of his closest friends; whilst it still shows that the honourable gentleman went on to speak as if he were speaking of a tax which some one else had put on, when he was really speaking of the tax he himself had put on. This Government have not put a single farthing of taxation on improvements; all they have done is to still leave on a very small fraction of what the honourable gentleman himself put upon all improvements in 1879. The honourable gentleman has told us to-night that the Financial Statement, as introduced by the Treasurer, was adapted for a very ill-educated audience. Now, for what kind of audience was his speech to-night or his speech at Leeston adapted? The leader of the Opposition, when he introduced this debate, told us exactly the same thing. His exact words were, "Ignorant people are prone to admire what they cannot understand." Well, Sir, I think I can understand a few plain figures, but I cannot understand such figures as I have heard for the last three weeks introduced from that side of the House. I will tell you what I can understand, and I think it is sufficient to do away with all the glamour which the honourable gentlemen are endeavouring to put on the past administration of the finances of this colony. I will give you just a few figures that, with all my ignorance, I do understand, and that there can be no contradiction of, as their absolute correctness cannot possibly be disputed. During the last ten years of the late Government's administration our national debt grew, on an average, at the rate of £1,017,349 each of the ten years, or £10,173,490 in the ten years between 1881 and 1891. Is that satisfactory finance?

to arouse the

Was the honourable gentleman right when he commenced his speech to-night by saying that we were never in such a dangerous position as we were in twelve years ago, when the honourable member who is now Treasurer was Treasurer? Does he not know as well as any man in this House that we are now twelve or. thirteen million pounds deeper in debt than we were then? And how can we be in a more satisfactory financial condition than we were in at that time? It is true that in 1880 there was an effort made on the part of some persons who were called "Skinflints' public to a sense of their danger. The honourable gentleman himself appointed a Commission to inquire into the state of the finances of the country at the time, and that Commission recommended a reduction in the annual expenditure of £500,000 a year; and if that recommendation had been carried out by his Government we should now be in a position to spend a million or two a year on public works from our own revenue, and at the same time have required neither property-tax nor landtax. But, because the recommendations were not carried out, and because the Administrations that have followed since then have gone on one after another increasing the national debt, we are now reduced to a far worse condition than we ever occupied before, inasmuch as our national debt is a much larger one in proportion to the population than it ever was before. Now, ignorant as I am, I admire the Statement brought forward by the Treasurer on this occasion. I admire his policy for this reason: that it has not increased the debt during the last year, and it does not propose to increase the debt during future years. If there is nothing else, that is something that ought to receive the congratulations of both sides of the House, and of the country. I have never since I have stood in this House spoken in approval of a Financial Statement this last twenty-three years; and, Sir, this is the first time I have ever been able to say I am pleased at the financial prospect before me, for I see it is not intended to go on annually increasing our debt as we have done in the past. Sir, I do not intend to go into small disputed figures, about which there may be a difference of opinion, nor to weary the House with details which members never follow; but I will set my opinion upon large undisputed figures, and give very few of them. I think that the Colonial Treasurer did well when he allowed the Opposition so much rope as he has done. If they have not hung themselves, they have certainly entangled themselves in such a mesh that I never saw men entangled in before. It is utterly absurd for men who have no books in their hands, who are not experts, who do not know anything about accounts, in fact, to come here and carp and cavil over small items in this Statement, as if that was the business they had undertaken-the great duty of the people's representatives-not to discuss the policy of the Government, but to inspect their arithmetic. There is but one man in this House who could tell whether these figures were