268 Auckland Provincial Government Gazette.

It is a deeply interesting subject of enquiry to ascertain what remedy may be applied to such a state of things. It will, however, be found that great difficulties lie in the way of bettering the future prospects of the people of this Province. You will find, looking at the revenue and expenditure of the whole of New Zealand in a general manner, that the estimated revenue amounts to about £1,450,000 a year. I do not think that the interest on the various loans can be stated at less than £850,000 a year. This leaves between £500,000 and £600,000 as a margin to work upon for the purpose of carrying out reductions in the public expenditure. The whole of this sum in the estimates of the General Government, with the exception of about £45,000, is absorbed on objects to a great degree necessary for the peace and good order of the country, although from the extravagant manner in which this is done there is a great waste of means. The sum of £45,000 is treated as an available balance in the estimates which are laid before the public; but in the estimates which bring out this available balance of £45,000 very large sums of money are not included in the expenditure, which, under any proper system of finance, must have been borne as a charge against the general revenue: such as various payments to provinces, immigration charges, public buildings, balance of defence expenditure, furniture, museums, offices for departments, and other like charges. It is thus evident that the margin left to work on for the purpose of carrying out reductions in the public expenditure must be exceedingly small. Something may and ought to be instantly accomplished in this direction, for the present rate of expenditure admits of very great reductions; but when the total amount which could be saved is divided between the several provinces of New Zealand, the share received by each can but slightly reduce the burdens thrown upon the inhabitants of each province. It may be said that additional taxation must be imposed upon the people; but I apprehend that in truth the limits of profitable taxation in the direction in which it has hitherto been imposed have been almost, if not actually reached, and that it is very doubtful if further taxation in that direction would much increase the revenue, whilst it certainly would greatly diminish the comforts and progress of the inhabitants of this province. It may be replied that the income realised from the railroads, when completed, will do much towards paying the interest upon the debt; but I believe that the cost of maintenance and repairs will, at least for several years, be so large, compared with the possible traffic on such railroads, that but a very small margin of profit, if any, will be available for public purposes.

The plan that appears to hold out the greatest hope of a considerable increase in the revenue is to attempt, by largely reducing the present system of taxation, to lower the cost of clothing and of the prime necessaries of life. This would relieve the mass of the population from heavy burdens which now impede their industry and limit their comforts. Small farmers and the inhabitants of country districts would then be able to carry on their operations freed from some of the burdens by which they are now over-weighted. But even when this was done it would still be necessary to have recourse to a system of taxation by which the wealthy would be required to contribute to the necessities of the State to an extent which bore some proportion to the value of their property. I believe that in this way a larger revenue would be realised from the customs and the ordinary taxation than is obtained under the present heavy rates of duty, and that commerce and trade would revive and increase, whilst the amounts obtained from taxes, to which those realising large fortunes were forced to contribute, would form a valuable addition to the revenues of the country.

In considering any measures you desire to adopt for economising, as far as practicable, the expenditure of this province, you will do well to bear in mind the subject of the general finances of the colony, so as to harmonise your system of finance with that which in your belief the General Government can most advantageously adopt to relieve, if possible, the people of this Province from the expenditure now entailed upon them, and from which it is so desirable that they should, if possible, be in part set free.

The Province of Canterbury appears to have received 10,098 immigrants during the past year, including 1,120 nominated in the colony. The province of Otago has received 12,311 immigrants in the same period of time. Into the province of Auckland during the past year 4,890 immigrants have been introduced, including 804 nominated in the colony. I have not had any opportunity of myself acquiring a knowledge of the class of immigrants which have been introduced; but upon the whole I do not think that any just ground for complaint exists against the class of immigrants who have been brought into this province; but those acquainted with the large amount of immigration which has taken place into this Province in former years will feel that no very large addition has been made to our population during the past year, considering the great liability for interest upon loans expended in immigration purposes which has been entailed on the Province of Auckland.

The agricultural progress of the Province for the past year is in some respects very satisfactory. About 40,000 acres have been laid down in permanent artificial grass, making a total of about 250,000 acres so laid down. The returns in these respects speak highly for the industry of the settlers in many of our outlying districts, especially of those in Marsden, Rodney, Eden, Franklin, Waikato, and the East Coast.

I hesitated for some time to accept the administration of the Goldfields, because I had no funds at my disposal to execute many necessary works there; and I found that the Colonial Secretary was giving orders for the expenditure of considerable sums on the fields, which I believed, from what I heard, were supplied from the Treasury of the General Government. I was, therefore, unwilling to inflict even an apparent injury upon the population on the Goldfields by depriving them of an expenditure which was in some respects advantageous to them. At length I felt convinced that the expenditure which was taking place, and with which, in some points, I did not altogether concur in, was really a charge upon Provincial funds, executed under the orders of an authority in no way responsible or amenable to yourselves, or the Provincial authorities. I then thought it my duty to accept the administration of the Goldfields, so as to bring the expenditure incurred there under your direct control. You will find that my suppositions were right; that all the expenditure incurred on the Goldfields is to be made a Provincial charge, and will be deducted from the small sums this Province is to receive from the General Government, whilst the amount expended in a