Mr. J. MCKENZIE.-You are getting the land revenue.

Mr. RHODES. - We are not getting the land revenue. It is going for the construction of a railway which will particularly benefit the district of the Minister for Public Works and the district of the honourable member for Greymouth. There are very few miles of it done on the Canterbury side at all, and we shall get no benefit from the work on the West Coast until we get connected. We know that the Midland Railway Company have collared our land; but, as I did not vote for the Midland Railway, I am not responsible for that. I say there will be very great dissatisfaction in Canterbury at the large blocks of land being sold lately, and ultimately there will be dissatisfaction in respect of this. But, as I say, I am not responsible for it, and I say we are getting no benefit from it whatever. The main feature of the Government policy last sessionof course it has not come into operation yet -was the land- and income-tax. I opposed it in this House as much as I could. The main feature of it was the duplicate tax, and the second the graduated tax, and putting the burdens on the land and taking them off property. As far as the duplicate tax is concerned, the Premier last session refused to alter that. I say that deliberately. What happened was this: Night after night I pointed out to him-I did not interview him, but the Hon. Mr. Bowen and the late Mr. Macarthur told me they interviewed him; whether they did so or not I cannot vouch -at any rate, I pointed out night after night what the result would be if we were going to have duplicate taxation; and the Premier, thinking it would not matter what happened to the large companies, absolutely refused to alter it. Then we went to the country, and did our best to point out to the country what the exact position of affairs would be. Then the Ministry found that the country at once saw that, if the taxation was going to be put upon this money, the people who borrowed the money would ultimately have to pay it. At last the Ministry have decided not to impose this duplicate taxation. I say that was a very great blunder. It was pointed out to the Premier, but I cannot say who was responsible for this blunder. If there had not been this scare the rates of interest for money would not have gone up. Practically, the ordinary mortgagee pays no more than he did before. The loan companies, and private individuals who borrow money to lend on mortgage, are the only classes that pay more, and the latter class are only a small minority of the public. I do not know whether they will get any relief or not. Until the amended Bill comes down, it is really very difficult to discuss what is going to happen. Then, the other principle in the Bill was the graduated taxation. I opposed that; and I do so still. I can see no principle at all in imposing a graduated tax on land and not on other property. I opposed that, as I say, and I feel able to do so with a clear conscience,

on property would. I remember speaking on the third reading of that Bill last session, and saying that any unfair action in this respect would be found out by the public, and that when they found it out they would compel the Government to remedy it. The main feature is that the Government have given way on the duplicate taxation already; and the country settlers will ultimately cry out and compel the Government to amend the Bill so as to avoid the infliction of heavy taxation of land as compared with other property. We will suppose there are six or seven people who have a farm in common. They are tenants in common, and they work the farm together. There is one instance of that kind of thing that is very well known to me. I know of seven people who employ a good deal of labour, and each one of them has an individual interest in that property. They are taxed on the whole place. Individually they only own 450 acres, and there is no reason why they should pay this graduated tax. They are not large landowners, and they employ a great amount of labour; and why should they be classed with those who own large properties nobody can tell. Provisions of this sort are ultimately bound to be amended, no matter what Ministry may be in power in the meantime. The new system is very severe on heavily mortgaged properties. There are men who own large estates and have them mortgaged up to the full value. They pay a full graduated tax, and the mortgagee does not pay. This is very unfair. If taxation is a system of punishment, I say it is absolutely wrong. It would be much better to come down and legislate against certain individuals-owners who are a nuisance-directly, and smash them up, than to do it in the shape of punitive taxation. As to the difference between the rate of taxation paid by a person who has an interest in land, and other persons, I will take the extreme limit that it shows out worst in. If a man had £16,600 lent on real estate at 6 per cent., he would pay on that, at 1d. in the pound, £70 6s. 8d.; if the same man put £16,600 on deposit in a bank or with a trading company at 6 per cent., or in any other way invested it, he would only pay on £996 per annum, which, with the exemption of £300, would make him to pay £17 Os. 8d. a year. A man, therefore, with that amount, who lends it on mortgage on land, pays nearly four times as much as he would if he lent it in any other way, on any other property, or to a bank or trading company. Or, take the illustration with £10,000: the difference is between £39 11s. 6d., which is what he would pay if lent on mortgage on land, and only £7 10s. In this case the tax on the land is five times as heavy as on personal property. The public will not stand this in the long-run. Ultimately the country settlers will rise up against it. I feel certain of that. The exemption of £300 allowed to ordinary incomes is very much larger than the £3,000 exemption allowed on improvements on farms. Everybody supported that exemption; but I say it is not so great

the farmers do not get so great an exemption as | that on money lent on other securities. There is another thing, the system of taxation by regulation. I say this is constitutionally wrong. Personally I can speak freely, because I am personally opposed to the taxation of foreign shipping companies. We shall not get very much from it; and anyhow it is a mistake. But, if it is right to tax shipping companies, the public ought to know how they are to be taxed. It is for the House to decide how they are to be taxed, and not for the Government. It would be highly improper to allow the Government to arrange how the incomes of shipping companies and insurance companies should be assessed. I hope the Premier will put the regulations under which they are to be assessed on the table at an early date, and, if possible, embody them in the Bill. We see a system growing up of taxation by regulation. It is, perhaps, only a small matter; but, still, are we going to allow those honourable gentlemen on the Treasury benches to say how different individuals in the country are to be taxed? I shall, at any rate, on every occasion that arises raise my voice against taxation by regulation. I have a few words to say about the Public Trust Office. A few sessions ago I spoke very freely about the office, and I dare say that what I said has done some good. I should like to point out to the country this: The honourable gentlemen on the Ministerial benches seem to have no idea what rates of interest mean. They cannot have any. They are handing over a lot of different businesses to the Public Trust Office, and in almost every case a different rate of interest is charged. This is an extraordinary thing. First of all we have the Bill of last session. There they say a man who has £3,000 in the Public Trust Office may get up to 5 per cent. for it; for £20,000 he may get up to 4 per cent.; between £3,000 and £20,000 I do not know what is to be paid. Then, under the Testamentary Trusts Restriction Bill he is to get 5 per cent. If a man has a million pounds, for instance, in the Public Trust Office, under the Testamentary Trusts Bill the Government would have to pay 5 per cent. That would take, possibly, the whole profit of the office, and the other people would get nothing, for it only says that they may get or 5 per cent. But the Government are not compelled to pay that amount. Just to show how absurd this is, I will give an instance: Supposing a man has £200,000, no man, except a fool, would give it to the Public Trust Office. He would go to a solicitor and ask his advice how best to manage it. The solicitor would say, "Make So-and-so your executors, and instruct your children to compel them to hand it over to the Trust Office." By this means he would make 1 per cent. per annum extra, for if it were put straight into the Public Trust Office he would get only 4 per cent., whereas if it were done through the Testamentary Trusts Restriction Bill he would get 5 per cent.-a clear profit of £2,000 a year. The rates of interest are turned about in a most absurd manner. The honourable member for Mount Ida stated that it was re

per

ported that the Testamentary Trusts Restriction Bill is being brought in for some special estate. Well, when you see that the Government are going to be compelled to give 5 per cent. -more than could be got in any other way-it gives a certain amount of colour to such a report; it looks as if it were for something special. I do not know anything about it myself, but I hear the report that it was being introduced for some special purpose; and it looks as if there were something behind it. The Bill only deals with estates over £1,000. Here, then, we have one Bill stating that large estates are to get less interest, and in the next Bill they are to get the highest rate of interest. I think this is very funny. Then, we have the purchase of Native-land debentures. Under the Bill these would bear 43 per cent., but the Statement says that they are to be put into the Public Trust Office, and only to carry 4 per cent. Whether the Natives are to get cent. in the Public Trust Office, or are still to get 4, is a conundrum which I should like the Colonial Treasurer to decide. It appears they are to get 44 in the Bill, and according to the intimation in the Financial Statement they are only to get 4 per cent. Possibly the half per cent. is to go for expenses or something. Then, there is the insurance business. They are going to put a large amount into the Public Trustee's Office, and are only to receive 4 per cent. It means this: If all the colonies and the rest of the world are going to bag this insurance-money there will be very little left for the insurance companies to deal with. We should like to know whether the insurance money in the case of a large fire-a pretty heavy call-will be available. There is another thing about the finance of the Government. We see on the other side of the water that whenever there has been a run on the deposit banks there has been fearful havoc and distress. I am told that there is something like £2,600,000 in the Post Office Savings-Bank at the present moment. If this is not the sum, it is something very large, at any rate. I should recommend the Government to see that this money is available at a moment's notice. There might be very heavy calls in the case of any great failure here; and, if most of this is lent in New Zealand debentures, the question would be a very serious one. If we have any great fall here, and our funds go down, it would be a very serious thing for the colony. We are going in now for a big financial business, what with the Public Trust Office and the SavingsBank. We are taking up a very large financial business, and we are not making proper preparations so as to have money at command in case of a sudden collapse. In all seriousness I ask the Premier to pay attention to this matter, because all the other colonies have had large financial failures; and, although for the next few years I think we are going to be fairly prosperous, yet the wheel may go round, and ultimately we may be in difficulties. With the large financial undertakings the Government are proposing, handing everything over to the Public Trustee, the Savings-Bank, and other

CAPITAL WITHDRAWN.

The Hon. Mr. SHRIMSKI moved, That the returns laid upon the table with reference to the withdrawal of capital by British and foreign companies be printed.

The Hon. Mr. JOHNSTON thought the wording of the order ought to be altered; for, as a fact, the return was quite different from that which was ordered by the Council. The return which was ordered, if he remembered rightly, was one that would show the amount of money which had been repaid during a certain period, and the amount of that money which had been reinvested within the country during the same period. He found that the return showed in one instance that a sum of £151,000 had been repaid within the period, and that that sum in reinvestment had grown to £356,000. In many other instances also it was quite incorrect. It was quite impossible that the return could be in accordance with the order of the Council. He suggested, therefore, that if it was to be printed the wording

should be altered.

The Hon. Sir P. A. BUCKLEY said that the portion of the information asked for which had been supplied was, as far as he was informed, quite correct, except that, as concerned the amounts which the Hon. Mr. Johnston had indicated, they were not, strictly speaking, reinvestments, but investments. He thought that the difficulty might be got over by altering the expression "reinvested" to "invested." That would meet the difficulty. With regard to the

The Hon. Mr. PHARAZYN asked how the return was described.

The Hon. Sir P. A BUCKLEY said the return which was ordered asked for the amount of money on mortgage which had been discharged, and, in some way or other, the amount which had been reinvested. The error in the return was a mere technicality, and, with the leave of the Council, he would accede to the suggestion for altering the wording.

The Hon. Mr. SHRIMSKI said that in writing out his original notice of motion he had made an error. What he meant to convey was this: that a return should be furnished of the amount of money released from mortgage, and the amount reinvested by other persons, showing the amount on mortgage that had been retired. He was obliged to the honourable gentleman for calling his attention to the point. course, as it stood, it would not carry out what he wished, which was to obtain an idea of how many thousands of pounds of investments had during the period specified been renewed. For his purposes the position was even better than the return showed.

Of

The Hon. Mr. McLEAN thought it better to allow the matter to stand over till the following day. He did not think this return would give much of the information that the honourable gentleman wanted. It would certainly give a certain amount of information, but little or none of the real information that was required. This was simply a return of moneys paid off and of the amount of fresh mortgages. He did not think it was the most reliable information. No one seemed to have been aware that it had come up. He had not known that it was upon the table of the Council. There were certainly moneys on the return which should never have appeared there.

The Hon. Mr. SHRIMSKI said, if the return was not in order he would give notice for a new one, in order that it might show what was the correct position of affairs; because he had moved for it in the public interests.

The Hon. Mr. OLIVER thought the course now proposed by the honourable gentleman was the best one.

The Hon. the SPEAKER asked if the honourable gentleman wished to withdraw his motion.

The Hon. Mr. SHRIMSKI said, not if the return were amended as the Hon. Mr. Johnston suggested: with that amendment he would be satisfied.

Return amended, and motion agreed to.

MAJOR KEPA TE RANGIHIWINUI. The Hon. Sir G. S. WHITMORE asked the permission of the Council to present a petition