56

ment, provided for out of capitation allowances and charged on the consolidated revenue.

Unsecured liabilities ...
... £38,850

—These are all more or less urgent.

Estimated expenditure necessary for carrying on the different provincial departments for the financial year ending 31st March, 1872 ...
... £33,588

Making a total of requirements for the current year amounting to ...
... £72,438

To meet these imperative demands for the current year, the ordinary income available within the year cannot prudently be estimated at more than £34,256, which leaves a deficiency of £38,182.

Under such a state of circumstances as I have just placed before you, the choice obviously lies between two courses of action. The one consists in frankly acknowledging our inability to meet our engagements, receding at once from our position with its privileges and its duties, and calling upon those endowed with superior intelligence and resources to administer those affairs which we declare ourselves unable to manage. There undoubtedly exist many who think that this course should be summarily adopted; whose minds are oppressed with the incubus and expense of excessive government; who are puzzled with the intricacy of the governmental machinery, and yearn for simplicity, uniformity, and centralisation; who regard with ill-disguised satisfaction the pressure of pecuniary embarrassment on the province, and calculate with perhaps too facile an arithmetic the period at which your provincial institutions must succumb to circumstances.

Whilst it may at once be conceded that such opinions are conscientiously held by a great many, yet the present Provincial Government does not recommend the adoption of such a summary course. Quite apart from the great constitutional questions involved, it has been guided to this conclusion by the following, among other, reasons, viz.:—It has no desire to see this province become the subject of experiment: it fails to perceive any hope of relief, either in regard to present or future local burthens, from placing the provincial estate in liquidation; in case the administration were otherwise vested, it is unable satisfactorily to answer the question, asked ages ago, ‘Who shall shepherd the shepherds themselves?’ It is of opinion that the people of the province, through their elected officers, are better able to manage their own local business than others are for them; it thinks that even if any fundamental change were decided on, it should be gradually introduced and carefully adapted; moreover, it believes that, notwithstanding temporary embarrassments, the financial position of the province rests on a sound basis, and that its ultimate prospects are good.

If, however, the Provincial Government discards the idea of at once resigning your affairs into foreign hands, it is prepared to adopt the only other course which is open, viz, resolutely to face the difficulties. I may at the same time assure you that the spirit in which this attempt has been resolved on does not consist in any aspiration after high governmental functions; nor in a desire to bolster up any effete system, much less to obstruct the freedom of future action. The Provincial Government aims at establishing throughout every part of the province a self-supporting system of management, resting on the simple but sure ground of local self-reliance, decentralisation (which is a long word for local power) and the recognition of its equivalent ‘local responsibility’—the end and object being local progress. The steps by which the Provincial Government will endeavour to meet the existing difficulties are these—It will propose to make additional demands on the local sources of revenue for the maintenance of your main and district lines of road, and for the education of your children; it will make efforts to realise certain portions of the public estate which have been lately unproductive; and it will further propose to borrow money, upon specific security, in order to provide for the following services, viz.—

Uncovered liabilities ...
... £38,850

Arrears of survey ...
... £27,000

Roads, bridges, and sundry under-takings ...
... £30,000

Making a total amounting to ...
... £95,850

I may here anticipate some queries, to which replies may reasonably be demanded. With an estimated ordinary expenditure not exceeding the estimated ordinary income, would not the most prudent course be to continue for a time to conduct the affairs of the province modestly and sparingly, and without borrowing more money?

My explanation and reply is to this effect: I have specified three objects on which it is proposed to expend the borrowed money, viz. 1st. To provide means to discharge actual liabilities. I assume that this debt must be paid; I show that the annual revenue is wholly insufficient for the purpose; and I therefore conclude that the only alternative is to borrow the necessary amount. 2nd. For arrears of survey, is of the same character as the last; for it can only be regarded as a debt, although there are no ostensible creditors, and it may not be a debt of that description perhaps which can be sued for in a court of law. But it is nevertheless a service for which it is absolutely necessary to provide, in order that contracts with purchasers of land, who paid their money long years ago, may be completed. At the same time, I am bound in justice to the province to state, that this service is for arrears of work, which have their roots stretching out into a period antecedent to the introduction of the Constitution, dating back to the time when the Imperial Government and the New Zealand Company disputed each other’s surveys, and when extensive grants of land were given in compensation, leaving legacies of large arrears of complicated surveys; the expense for which the colony, I admit, ought to pay, but not a particular province, which had not even an existence at that date and which never afterwards derived any special benefit from the lands in question. 3rd. Roads, bridges, and other Provincial public works, constitute objects, the necessity of which some, I admit, may be disposed to call in question, if money has to be borrowed for the purpose. Yet there are many who, whilst entertaining this objection, would not hesitate to advocate railway extension in the colony under colonial auspices. But the construction of railways cannot be otherwise than unprofitable, if the lines are not fed by roads.

In seeking, therefore, to obtain the means wherewith to incur expenditure of this character, the province is really aiding the policy of the colony at large. I also observe that owing to the present bare condition of the main lines of road and the destruction of some important bridges and the injury done to others, if funds beyond those which can possibly accrue from ordinary revenue be not supplied for these services, serious damage to the trade of the province will be sustained and a proportionate loss to the revenue both of the colony and the province. Moreover, just when considerable additional demands are being made on the present, in the shape of local taxation, it would be most discouraging and inopportune to relieve the future from its fair proportion of burthens. On the above grounds, therefore, I am prepared to justify the proposals. It may, however, be asked whether the circumstances of the province really warrant our contracting a further debt?

In considering this question we must take into account the extent and value of the Pro-