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THE

FINANCIAL STATEMENTS

COLONIAL TREASURERS

NEW SOUTH WALES,

FROM THE INTRODUCTION OF RESPONSIBLE GOVERNMENT ON THE 24TH

NOVEMBER, 1855, TO THE CLOSE OF THE PARLIAMENTARY SESSION OF

1880-81, ON THE GTH APRIL, 1881 ;

TOGETHER WITH

AN APPENDIX BY THE EDITOR,

JAMES THOMSON,

CHIEF INSPECTOR AND CONSULTING ACCOUNTANT TO THE TREASURY,

CONTAINING MEMORANDA EXPLANATORY OF THE FINANCIAL SYSTEM OF NEW SOUTH WALES, AND
OF THE RISE, PROGRESS, AND PRESENT CONDITION OF ITS PUBLIC REVENUE.

SYDNEY : THOMAS RICHARDS, GOVERNMENT PRINTER.

1881.

M3
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PREFACE.

SOME years ago it was considered desirable that all the Financial Statements made since
the inauguration of Responsible Government should be collated and printed for future
reference, and for distribution amongst the Public Libraries, Schools of Arts, and other
literary institutions of the Colony. The task of editing these Statements was entrusted
to me on account, I presume, of the experience which I had acquired, during a long course
of years, of the financial affairs of the Colony, and the practical knowledge which I
possessed of its public accounts generally. Until recently no authorized copy of any of
the Financial Statements was in existence, so that in the discharge of the duty imposed
upon me I had to carefully revise the reports that were given of them in the Sydney
Morning Herald, which, it is only fair to say, I found in the main extremely accurate, so
far at least as it was in my power, from having heard many of them delivered, to judge.
In revising these Statements I had of course to compare the figures given in the Herald's
reports with the published printed documents, a labour which necessarily involved much
trouble and occupied a very considerable amount of time. I therefore feel confident that
this edition of the Financial Statements will be found thoroughly reliable in this particular.

The new Constitution was proclaimed in the Government Gazette on the 24th
November, 1855 ; but although it came into operation on that date, no new Government
was actually chosen under it until the 6th June, 1856, when the first Ministry was formed,
under the leadership of Mr. Stuart Alexander Donaldson. Mr. Thomas Holt, the Colonial
Treasurer of that Administration, made no Financial Statement, because it ceased to exist
on the 25th August following. The Cowper Ministry came into power on the 26th August,
but the Colonial Treasurer, Mr. Robert Campbell, had no opportunity of making a Financial
Statement during the period it lasted, which was only to the 2nd October of the same year.
It was not therefore until the formation of the third Ministry, by Mr. Henry Watson
Parker, that the first Financial Statement under Responsible Government was made by
Mr. Stuart Alexander Donaldson, on the 6th November, 1856.

With the exception of the Treasurers in the first two Administrations, and of Mr.
Marshall Burdekin, Treasurer for a short time in the Cowper Ministry of 1865-66, and
of Mr. William Alexander Long, the Treasurer in the Robertson Ministry of 1877, the
varioiis Treasurers of all the Administrations (of which there have been nineteen) since
the introduction of Responsible Government, made either one or more Financial Statements
during the periods they respectively held office.

With the approval of the present Colonial Treasurer, the Honorable James Watson,
I have placed as an Appendix to the Financial Statements a memorandum explanatory of
the financial system of New South Wales and an account of the rise, progress, and present
condition of its public revenue, as it is considered they may be found useful to those who
take an interest in the financial affairs of the Colony. The former paper was prepared by
me in 1879 and the latter in 1876. Both were for the information of the Imperial
Government, who had it in contemplation at the time to publish some kind of official
work on the defences, financial resources, and general condition of the several Australian
Colonies. I am not however aware whether such a work has yet been published.

; The Treasury, New South Wales, JAMES THOMSON.

1st May, 1881.

TABLE OF CONTENTS.

Page.

Index to Financial Statements , v

Alphabetical Index to Treasurers, with a reference to their respective Statements vi

Governors of New South Wales vii

Parliaments , viii

Ministries . ix

Presidents Legislative Council xvii

Speakers Legislative Assembly xvii

Financial Statements ... 1

Appendix

Memorandum explanatory of the Financial System of New South Wales (written in May,

1879) 465

An account of the rise, progress, and present condition of the revenue of New South

Wales (written in 1876) 473

Addendum . . 506

FINANCIAL STATEMENTS.

INDEX TO FINANCIAL STATEMENTS.

When made.

Ministry.

Ihjr.

Month.

Year.

No.

Name.

Stuart Alexander Donaldson..

November

1856

Parker

Stuart Alexander Donaldson..

August

1857

Parker

Richard Jones

November

1857

Cowper

Robert Campbell

April

1858

Cowper

Charles Cowper (acting for )
the Colonial Treasurer, Mr. >

December

1858

Cowper

Robert Campbell) )

Elias Carpenter Weekes . ...

October

1859

Cowper

Saul Samuel

December

1859

Forster

Elias Carpenter \Veekes

January

1861

Robertson. . .

October. . .

1861

Cowper

Klias Carpenter \Veekes

August

1862

Cowper

Thomas \Vare Smart

September

1863

Cowper

Geoffrey Eagar

December

1863

Martin

105

Thomas Ware Smart . . .

March

1865

Cowper

127

Saul Samuel

November ....

1865

Cowper

135

Charles Cowper (on the re- )
signation of the Treasurer, /

December

1865

Cowper

155

Mr. Saul Samuel) )

Geoffrey Eagar

March

1866

Martin

165

Geoffrey Eagar

September

1866

Martin

171

Geoffrey Eagar

September

1867

Martin

197

Saul Samuel

January

1869

Robertson

209

Saul Samuel

October

1869

Robertson

217

Saul Samuel

February

1870

Cowper

231

Saul Samuel

October

1870

Cowper

239

George \Villiam Lord

February

1871

Martin

261

George William Lord

December

1871

Martin

271

\Villiam Richman Piddington

June

1872

Parkes

279

Henry Parkes (acting Colo- )

November

1872

Parkes.

289

nial Treasurer) )

George Alfred Lloyd

October

1873

Parkes

297

George Alfred Lloyd

November

1874

Parkes

311

William Forster

April

1875

Robertson

325

John Robertson (acting for
the Colonial Treasurer, Mr.
William Forster)

December

1875

Robertson

341

Alexander Stuart

January

1877

Robertson

359

William Richman Piddingtou

May

1877

Parkes

381

Henry Emanuel Cohen

January

1878

Farnell

387

Henry Emanuel Cohen

November

1878

Farnell

403

James ^Vatson

February

1879

Parkes

419

James \Vatson

December

1879

Parkes

435

James \Vatson

June

1880

Parkes

459

James Watson . .

February

1881

Parkes

465

FINANCIAL STATEMENTS.

ALPHABETICAL INDEX TO TREASURERS, WITH A REFERENCE
TO THEIR RESPECTIVE STATEMENTS.

Name of Treasurer.

Number

of
Statements

made
by each.

Reference to Statements.

Campbell, Robert , 1

Cohen, Henry Emanuel 2

Cowper, Charles (Acting) 2

Donaldson, Stuart Alexander 2

Eagar, Geoffrey 4

Forster, William 1

Jones, Richard , 1

Lloyd, George Alfred 2

Lord, George William 2

Parkes, Henry (Acting) 1

Piddington, William Richman 2

Robertson, John (Acting) 1

Samuel, Saul g

Smart, Thomas Ware 2

Stuart, Alexander 1

Watson, James 4

Weekes, Elias Carpenter 4

39.

387, 403.

43, 155.

1,17.

105, 165, 171, 197.

325.

31.

297, 311.

261, 271.

289.

279, 381.

341.

61, 135, 209, 217, 231, 239.

97, 127.

359.

419, 435, 459, 465.

51, 65, 75, 85.

FINANCIAL STAETMENTS.

Vll

GOVERNORS.

SUCCESSION of Governors of New South Wales, and the Dates on which they assumed
and retired from the Government.

Names.

From

Captain A Phillip R N

26 January, 1788

10 December, 1792.

11 December, 1792

12 December, 1794.

Captain Paterson, New South Wales Corps (Lieutenant-
Governor).

Captain Hunter R N

13 December, 1794
7 September, 1795

1 September, 1 795.
27 September, 1800.

Captain P G King R N.

28 September, 1800

12 August, 1806.

Captain W Blih R X

13 August, 1806

26 January, 1808.

During Governor Bh'gh's suspension the Government
was successively administered by :

Lieutenant- Colonel G. Johnstone ( Allof theNewSouth }
Lieutenant-Colonel Foveaux < Wales Corps, after- >
Colonel \Villiam Paterson ( wards 102nd Regt. )

Major-General L. Macouarie

26 January, 1S08
1 January, 1810

28 December, 1809.
1 December, 1821.

Major-General Sir T. Brisbane, K. C. B

1 December, 1821

1 December, 1825.

Colonel Stewart, 3rd Regiment of Buffs (ActingGovernor)
Lieutenant-G eneral R. Darling

6 December, 1825
19 December, 1825

18 December, 1825.
21 October, 1831.

Colonel Lindsay, C B. (Acting Governor)

22 October, 1831

2 December 1831.

Major-General Sir Richard Bourke, K.C.B

3 December, 1831

5 December, 1837.

Lieutenant-Colonel K. Snodgrass (Acting Governor)
Sir George Gipps

6 December, 1837
24 February, 1838

23 February, 1838.
11 July, 1846.

Sir Maurice O'Connell .. .'...

12 July, 1846

2 August, 1846.

Sir Charles A. Fitz Roy

3 August, 1846

17 January, 1855.

Sir William Thomas Denison, K. C. B

20 January, [1855

22 January, 1861.

Lieutenant-Colonel John F. Kempt (Administrator)

The Right Honorable Sir John ( Administrator ...
Young, K.C.B., G.C.M.c. j Governor-in-Chief

23 January, 1861

22 March, 1861
16 May, 1861

21 March, 1861.

15 May, 1861.
24 December, 1867.

Sir Trevor Chute, K.C.B. (Administrator)

25 December, 1S67

7 January, 1868.

Right Honorable the Earl of Belmore (Privy Councillor]
Sir Alfred Stephen, Knt., C.B. (Administrator)

8 January, 1868
23 February, 1872

22 February, 1872.
2 June, 1 872.

Sir Hercules George Robert Robinson, G.C.M.t...
Governor-in-Chief.

Sir Alfred Stephen, K.('.M.<;., C.B. (Lieutenant-
Governor. )

The Right Honorabh- Sir Augustus William Frederick
Spencer Loftus. P.O., ' C i>

3 June, 1872
20 March, 1879
4 August, 1S79

19 March, 1879.
3 August, 1879.
(Still in office.)

Ylll

FINANCIAL STATEMENTS.

PARLIAMENTS. ,

RETURN showing the NUMBER or PARLIAMENTS since the establishment
RESPONSIBLE GOVERNMENT ; when opened for the DISPATCH OF BUSINESS
DISSOLUTION OF SAME ; also, the NUMBER OF SESSIONS in each Parliament.

FIRST PARLIAMENT.

Opened 22nd May, 1856 Dissolved, 19th

December, 1857.

SESSION 1. (1856-7.)
22nd May, 1856, to 18th March, 1857.

SESSION 2. (1857.)
llth August, 1857, to 18th December, 1857.

SECOND PARLIAMENT.

Opened, 23rd March, 1858 Dissolved, llth

April, 1859.

SESSION 1. (1858.)
23rd March, 1858, to 26th November, 1858.

SESSION 2. (1858-9.)
8th December, 1858, to 9th April, 1859.

THIRD PARLIAMENT.

Opened, 30th August, 1859 Dissolved, 10th

November, 1860.

SESSION 1. (1859-60.)

30th August, 1859, to 4th July, 1860.

SESSION 2. (I860.)
25th September, 1860, to 8th November, 1860.

FOURTH PARLIAMENT.

Opened 10th January, 1861 Dissolved, 10th

November, 1864.

SESSION 1. (1861.)
10th January, 1861, to llth May, 1861.

SESSION 2. (1861-2.)
3rd September, 1861, to 20th January, 1862.

SESSIONS. (1862.)
27th May, 1862, to 20th December, 1862.

SESSION 4. (1863-4.)
23rd June, 1863, to 22nd April, 1864.

SESSION 5. (1864.)
18th October, 1864, to 9th November, 1864.

FIFTH PARLIAMENT.

Opened, 24th January, 1 865 Dissolved, 1 5th

November, 1869.

SESSION 1. (1865.)
24th January, 1865, to 21st June, 1865.

Si:ssroN 2. (1865-6.)
24th October, 1865, to 7th April, 1866.

SESSIONS. (1866.)
24th July, 1866, to 22nd December, 1866.

SKSSIOV 4. (1867-8.)
2nd July, 1867, to 27th April, 1868.

SESSIONS. (1868-9.)
13th October, 1868, to 1st April, 1869.

SESSION 6. (1869.)
28th September, 1869, to 13th November, 1869.

SIXTH PARLIAMENT.

Opened, 27th January, 1870 Dissolved, 3rd

February, 1872.

SESSION 1. (1870.)
27th January, 1870, to 7th May, 1870.

SESSION 2. -(1870-1.)
llth August, 1870, to 22nd June, 1871.

SESSIONS. (1871-2.)
14th November, 1871, to 1st February, 1872.

SEVENTH PARLIAMENT.

Opened, 30th April, 1872 Dissolved, 28th

November, 1874.

SESSION 1. (1872.)
30th April, 1872, to 13th August, 1872.

SESSION 2. (1872-3.)
5th November, 1872, to 25th April, 1873.

SESSIONS. (1873-4.)
9th September, 1873, to 25th June, 1874.

SESSION 4. (1874.)
3rd November, 1874, to 26th November, 1874.

EIGHTH PARLIAMENT.

Opened, 27th January, 1875 Dissolved, 12th

October, 1877.

SESSION 1. ( 1875.)
27th January, 1875, to llth August, 1875.

SESSION 2. (1875-6.)
16th November, 1875, to 22nd August, 1876.

SESSION 3. (1876-7.)
12th December, 1876, to llth October, 1877.

NINTH PARLIAMENT.

Opened, 27th November, 1877.

SESSION 1. (1877-8.)
27th November, 1877, to 21st May, 1878.

SESSION 2. (1879-9.)
10th September, 1878, to 24th July, 1879.

SESSIONS. (1879-80.)
28th October, 1879, to 13th July, 1880.

TENTH PARLIAMENT.
Opened 15th December, 1880.

SESSION 1. (1880-1.)
15th December, 1880, to 6th April, 1881.

FINANCIAL STATEMENTS.

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.. Colonial Secretary
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/ Solicitor General

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FINANCIAL STATEMENTS.

Remarks.

, 1861.)
Premier to 9 January, 1861.

Representative of Government in Legislative Council.

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Premier from 10 January, 1861.

Appointed Solicitor General.

Representative of Government in Legislative Council.
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Representative of Government in Legislative Council
formerly Attorney General.

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Colonial Secretary
Colonial Treasurer
Secretary for Public Works . .
Attorney General

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. . . Secretary for Public Works . .

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Charles Cowper
Elias C. Weekes
William M. Arnold
John F. Hargrave

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William Forster
Geoffrey Eagar
Peter Faucett
John Bowie Wilson
Arthur T. Holroyd
John Hubert Plunkett 2 ...

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Charles Cowper 1
Thomas Ware Smart..

1 succeeded by
Saul Samuel

succeeded by
Marshall Burdekin
John Bayley Darvall . .

succeeded by
John Hubert Plunkett

John Fletcher Hargra\
John Robertson

succeeded by
William M. Arnold ..
succeeded by

John Robertson
William M. Arnold ..
succeeded by
Thomas Ware Smart . .
James A. Cunneeu

The Honorable James!
Q.C. 1

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FINANCIAL STATEMENTS.

Xlll

Remarks.

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Council, with a Seat in the Cabinet. Resigned
both offices, 1 August, 1870.
1870.

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Robert Owen .

XIV

STATEMENTS.

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Secretary for Publi
Solicitor General . .
Postmaster Genera

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Secretary for Mine
Secretary for Publi

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Minister of Justice
Instruction.

Solicitor General . .

Postmaster Genera

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le Honorable Sir Ji
Martin, Knt., Q.C. 1
hn Robertson
>orge William Lord
le Honorable John B

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nies Byrnes
illiam Charles Windeye
le Honorable Joseph Do

jnry Parkcs
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succeeded by
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FINANCIAL STATEMENTS.

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XVI

FINANCIAL STATEMENTS.

Remarks.

In receipt of a pension of 426 13s. 4d. per annum,
but not drawn during present tenure of office.

A Member of the Legislative Council ; appointed a
Member of the Executive Council, 1 April, 1878.

Representative of the Government in the Legislative Council.

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Resigned Appointed a Temporary Judge of the
Supreme Court.

Resigned Appointed Agent General for the Colony

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Offices separated.

Appointed Postmaster General.

Vice-President of the Executive Council ; Repre-
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Attorney General
Secretary for Mines
Postmaster General

appointed on the 14th January, 1878,

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Postmaster General

Secretary for Mines
Minister of Justice and Publi

Instruction.

Minister of Justice

Minister of Public Instructioi

Colonial Secretary
Colonial Treasurer
Attorney General

Attorney General
Secretary for Lands . . .
Secretary for Public W

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Francis Bathurst Suttor . . . )
Ezekiel Alexander Baker
Francis Bathurst Suttor ..

Francis Bathurst Suttor . . . )

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James Squire Farnell
Michael Fitzpatrick
Henry Emanuel Cohen . . .
Joseph Leary

John Sutherland
William John Foster
William Henry Suttor . .
John Fitzgerald Burns . .
NOTK. John Marks, M.L.C.

II"

FINANCIAL STATEMENTS.

xvn

SPEAKERS-LEGISLATIVE ASSEMBLY.

SUCCESSION of SPEAKERS of the LEGISLATIVE ASSEMBLY, and the dates on which
they were elected, re-elected, and ceased to hold office.

Name.

Date
when first elected

Dates when re-elected.

Date of expiration of office.

The Honorable Sir Daniel
Cooper.

22 May, 1856...

23 March, 1858; 31
August, 1859.

31 January, 1860 Re-
signed.

The Honorable Terence
Aubrey Murray.

SUanuary, 1860...

10 January, 1861

14 October, 1862 Ap-
pointed President of
the Legislative Council

The Honorable John Hay.

The Honorable William
Munnings Arnold.

14 October, 1862...
1 Nov., 1865...

24 January, 1865

27 January, 1870; 30
April, 1872 ; 27
January, 1875.

31 October, 1865 Re-
signed.
1 March, 1875 Deceased.

The Honorable Sir George
Wigram Allen, Knight.

23 March, 1875...

30 March, 1875; 27
November, 1877.

Still holds office.

PRESIDENTS-LEGISLATIVE COUNCIL.

SUCCESSION of PRESIDENTS of the LEGISLATIVE COUNCIL, showing the dates on
which they were appointed and ceased to hold office.

Name.

From

The Honorable Sir Alfred Stephen

20 May, 1856

28 January, 1857.

The Honorable John Hubert Plunkett, Q. C

29 January, 1857...

6 February, 1858.

The Honorable Sir William Westbrooke Burton, Knt. . . .
The Honorable William Charles Wentworth

9 February, 1858
24 June, 1861

10 May, 1861.
9 October, 1862.

The Honorable Terence Aubrey Murray )

afterwards
The Honorable Sir Terence Aubrey Murray, Knt )

The Honorable John Hay

14 October, 1862...

22 June, 1873.

afterwards
The Honorable Sir John Hay, K.C.M.G

8 July, 1873

Still holds office.

INDEX TO PORTRAITS,

FACING
I'AQB

THE HONORABLE STUART ALEXANDER DONALDSON (AFTERWARDS SIR STUART

ALEXANDER DONALDSON, KNT.) 1

THE HONORABLE RICHARD JONES 31

THE HONORABLE ROBERT CAMPBELL 39

THE HONORABLE CHARLES COWPER (AFTERWARDS SIR CHARLES COWPER,

K.C.M.G.) 43

THE HONORABLE ELIAS CARPENTER WEEKES 51

THE HONORABLE SAUL SAMUEL (NOW SAUL SAMUEL, ESQUIRE, C.M.G.) 61

THE HONORABLE THOMAS WARE SMART 97

THE HONORABLE GEOFFREY EAGAR 105

THE HONORABLE GEORGE WILLIAM LORD 261

THE HONORABLE WILLIAM RICHMAN PIDDINGTON 279

THE HONORABLE HENRY PARKES (NOW THE HONORABLE SIR HENRY PARKES,

K.C.M.G.) 289

297

THE HONORABLE JOHN ROBERTSON (NOW THE HONORABLE SIR JOHN

ROBERTSON, K.C.M.G.) 341

THE HONORABLE ALEXANDER STUART 359

THE HONORABLE HENRY EMANUEL COHEN 387

THE HONORABLE JAMES WATSON 419

THE HONOI\ABLE STUARJ ALEXANDER PONALDSON,

(AFTERWARDS SIE STUAKT ALEXANDER DONALDSON, KNT.)

,* V

U a**-

NEW SOUTH WALES,

THE FINANCIAL STATEMENT of the HONORABLE STUART ALEXANDER
DONALDSON, made 6th November, 1856.

[From the Sydney Mornintj Herald of 7th
November, 1856.]

LEGISLATIVE ASSEMBLY.

Friday, 6 November, 18-56.

FINANCIAL STATEMENT.

MR. DONALDSON said: Sir, I am
.sincerely glad that in taking the course
which I am now permitted to pursue, I am
not proceeding contrary to the ruling of,
or in any disrespect to, the honorable the
Speaker of this House. The honorable
Member who sits at the head of the
benches opposite, has spoken of the way
in which this important matter has been
introduced by the present Government, but
I can only tell him that so far as the
substantial part of the matter is concerned,
we have taken the constitutional course.
The financial affairs of the country must,
in any instance, be indicated by the
Governor himself, by message to this
House. The difference between the coxirse
adopted by the late Ministry and the
present is that the late Ministry sent down
a message from the Governor, in which
the whole matter of the Ways and Means
and the Supplies were included ; while
the present Ministry have adopted that
eonstitxitional plan recommended by the
Opposition, of separating these matters. I
hope the House will bear with me while I
now proceed to make that financial state-
ment of the affairs of the coxmtry which has
l>een so long promised ; and I also hope hon.
Members will bear with me if I am com-

pelled to trespass on their patience at some
length, which, from the severe cold I labour
under, will render my full exposition of
the subject a matter of some difficulty to
myself. In making this statement of the
financial affairs of the country, it will be
my desire, as far as possible, to exhibit not
only the debit but the credit side of the
account. To show distinctly our present
financial condition, how that condition was
brought about, its historical antecedents,
the policy which has led to it, and the
principles on which we propose to pro-
ceed in short, to exhibit, as fully as I
possibly can, the position of our financial
affairs, and to bring before the House, as
fully as possible, the steps the present
Ministry are prepared to take in regard to
them. It may not be uninteresting if I
commence my observations with a short
synopsis of the financial history of the
colony for some years bygone. You must
remember we are now entering on a new
sphere that our financial arrangements,
both of expenditure and income, are in
future to be regulated by ourselves alone.
That for the first time we are to run on
our own legs, and it may not therefore be
unapt that, in order to guide our policy for
the future, we should proceed to some
review of the past. I shall therefore turn
to a period of 20 years ago, and in a cycle
of 20 years, in a young country like this,
all must be well aware of the great changes
in the position of the community social,
moral, and political which must infallibly
take place. It will not l>e necessary for me
to detain the House with all the figures in

MR. DONALDSON.

[1856.]

detail to afford the House the information
which I now wish to supply. Fortunately,
we have an intelligent and well-regulated
Press the influence of which will, I doubt
not, enable the statements I am about to
make to be put fully before the public.
Well, Sir, I find that in the year 1836 the
revenue of the colony was .340,533, the
expenditure 287,376 ; in 1837, revenue
l-:!.13,785, expenditure 398,496; in 1838,
revenue 334,079, expenditure 463, 161 ;
in 1839, revenue 427,368, expenditure
567,966; in 1840, revenue 682,473,
expenditure 561,023 ; in 1841, revenue
497,302, expenditure 756,580 ; in 1842,
revenue 428,730, expenditure 503,913 ;
in 1843, revenue 350,891, expenditure
369,489; in 1844, revenue 386,617,
expenditure 345,583 ; in 1845, revenue
436,920, expenditure 314,368; in 1846,
revenue 346,481, expenditure 305,730 ;
in 1847, revenue 369,259, expenditure
413,073 ; in 1848, revenue 396,862,
expenditure 460,430 ; in 1849, revenue
575,692, expenditure 516,633; in 1850,
revenue 633,711, expenditure 567,165 ;
in 1851, revenue 486,698, expenditure
444,108 ; in 1852, revenue 682,137,
expenditure 600,322 ; in 1853, revenue
987,476, expenditure 682,621 ; in
1854,. revenue 1,239,147, expenditure
1,136,568; in 1855, revenue 1,660, 7 10,
expenditure 1,675,024 making a total
of revenue through the twenty years,
11,616,879, and of expenditure, of
11,369,540. If the House will take the
average of these returns, they will find
that the expenditure and revenue of the
country for the last twenty years has a
little exceeded 500,000 per anmim. It is
impossible for any man to read these
returns without being struck with the
enormous increase of the revenue and
expenditure, particxilarly when it is con-
sidered that since the separation of New
South Wales from the powerful and pro-
ductive province of Victoria, the then joint
revenues of the colony have been nearly
doubled. That must prove to any man,
theorize as he may, a progression in the
resources of the country most marvellous
a progression that would appear to be
absolutely chimerical, but which never-
theless is an absolute fact. In further ex-
plaining the present financial position of
the country, I shall allude to the exports
and imports, and in doing this I shall
not take so long a period, but commence
from the year 1839. In the year 1839

the imports of the whole colony, Port
Phillip included, amounted to 2,236,371,
and the exports to 948,776. A period
of seventeen years passed away, and what
do we find to have been the result of the
enterprise of the community 1 its eager
grasp at the advantages which the produc-
tive resources of these colonies held out
to them. Why, they found that the
increase in commercial enterprise had
changed them from a mere province to
almost the financial position of an empire.
In 1855 the imports to New South Wales-
were 4,668,525, while the exports were
2,884,130. The imports to Victoria,
which I cannot but regard as one with us,,
as a great constituent of this Australian,
colony, were 11,568,904 ; the exports
13,469,194, making a total of imports of
16,237,429,andofexportsof16,353,324.
These figures, I think, are sufficient to show
the rapidly increasing importance of our
commerce and of our social and political
growth, while under the political guardian-
ship of the empire to which we are proud
to belong. But we are now to start on a
new career ; for the first time we have
to run 011 our own legs, to guide our
own footsteps, through all the intricacies
of finance. I fear not for any retrograde-
movement of this country, and have such
faith in her resources that I believe that
the rate of progression in wealth,
power, and importance, under her own
Government, for the next twenty years, will
compare with the twenty years that are
just gone by. I believe that the same almost
miraculous amount of progression of the
year 1876 over the year 1856 will equal
that of the year 1856 over the year 183G.
With such hopes, with such prospects,,
with such aspirations as these, who, Sir,
can refrain from piide, mingled with awe,
in taking charge of this infant Hercules? -
and in no respect can this progression be
influenced more than by the successful
regulation of the finances of the country.
I have now gone over the details of the
revenue and expenditure, and of the ex-
ports and imports of the country for some
years past, and it may be interesting on
many accounts that I should now afford
the House some statement in detail of its
present indebtedness, and the causes from
which that indebtedness arose. It is
necessary that the different purposes for
which these loans were incurred should be
separately stated. I will now read the
return wliich I hold in my hand, showing

[1856.]

MR. DONALDSON.

the debt of the Colony of New South
Wales, the year in which the different
loans were contracted, and the purposes
for which the money was raised :

Services.

Immigration

Years. Amounts. Totals.

C1851 69,600

| 1852 130,400

. { 1853 100,000

1854 60,000

[1855 53,000

413,000

!1853 50,000

1854 150,000

1855 534,400

1850 352,900

1,087,000

PnWii. f!8 Vic., Xo. 35 ... 1855 21,000

Work J ] 8 vic -> No - 35 - 1 1856 269 > 700

K ' (. 19 Vic., Nos. 38 and 40 } 1Hl ' 290,000

Sydney Waterworks

Sydney Sewerage

Total

(1854 10,000

...-< 1855 18,000

(1856 87,400

(1854 10,000

...-{ 1855 44,900

(1836 123,400

115,400

178,300
2,084,700

I must state in passing that these services
properly pay their share of the interest on
the debt contracted. I have said that I
think it will be the duty of every Finance
Minister to treat this debt under different
heads and view them from different points.
The debt incurred, for immigration for
instance, does not stand on the same foot-
ing as the debt incurred for the construc-
tion of railroads, and the debts for railways
and public works stand in a very different
position to those incurred for any other
purpose whatsoever. As I shall, however,
have to allude to this matter when a pro-
position which will probably be brought
before the House by the Government
shortly, for the raising of revenue, is under
consideration, I do no more than allude to
it to-day in a passing way, in order that
honorable gentlemen may be somewhat
prepared for its discussion. In connection
witli the tabular statement just read, I
will read another, also intensely interest-
ing, now that we are likely on the thres-
hold of making great outlays on public
works more especially those for internal
communication. I find from a statement I
have in my hand of expenditure for works
and buildings (exclusive of those provided
for by loan) from 1836 to 1855, that for
the last twenty years a very large portion
of the public works of this colony larger
perhaps than honorable Members who have
not paid much attention to the matter
have been accustomed to think has been
paid for out of the revenues of the colony

from year to year. I think this statement
is valuable. Our prospects are now grow-
ing clearer and clearer, and it is evident
that the cost of our public works of former
years, though large in amount, have been
trifling to what we must look for in future.
In the year 1836 the whole amount, as
will be seen from the tabular statement,
was only 8,621. One could almost smile
at the triviality of such a sum when we
consider that it is not nearly so much as
one month's interest of our present debt.

The following is the statement to which
I refer :

STATEMENT of Expenditure for Works and Buildings (ex-
clusive of those provided by loan), from 1836 to
1855 inclusive.
Year. Amount.

1836 8,621 7

1837 22,851 12 3

1838 63,937 18 1

1839 58,877 15 9

1840 49,703 2 11

1841 37,527 6 2

1842 33,195 19

1813 25,494 8 3

1814 22,262 8 8

1845 15,943 4 8

1846 17,070 1

1847 41,595 6 10

1848
1849
1850
1851
1852
1S53
1851
1855

32,013 18 1
25,992 11
16,163 15 7
14,117 8 10
17,823 6 5
44,596 1
101,878 14 8
82,314 14 1

Total 731,980 3 4

The progress of the colony did not appear
to attract the attention of the Govern-
ment until 1854, when it took a sudden
jump from 44,596 Is. Od. to 101,878
14s. 8d. ; and in 1855 to 82,314 14s. Id.
The total expenditure according to this
statement during the last twenty years has
therefore been nearly 732,000, without
one fai-thing for roads. This, I think, is
an interesting paper, especially as it has
a bearing on the prospects of the colony
in reference to public works for the time
to come. With these preliminary observa-
tions, I now feel called upon to state to
the House what is the actual financial
condition of this colony at the present
moment. I am sorry it should fall to
my lot but at the same time, as a public
man, I have no right to expect that my
path will be strewn with roses, or that
I am to enter upon my duties as Finance
Minister of this colony with nothing but

MB. IX)NALDSOK

[1856.]

that calculated to felicitate me. I am
sony to begin my career as a public man
with a state of affairs certainly not agree-
able either to myself or to the country.
It is no use, however, to conceal from the
House the fact that in bygone years
I will not lay the blame on any individual
or on any body of individuals, owing to
the mode of Government, the propositions
made by the Executive Government, as it
were, added to the proposals of honorable
Members representing constituencies, and
owing to the weakness of the then Govern-
ment when they could not carry their
financial schemes although they were
bound by the necessities of the day to give
way to the pressure for money the ex-
penditure had exceeded the income until
it had left the colony in a bad state. I
am sony I differ totally with my honor-
able friend opposite if he will allow me
to use such an expression to one so hostile
as the late Finance Minister. I do not
know what attention he may have paid to
the particular department of which he was
the head, but he stated and statements
coming ex cathedra are considered to have
some weight that the debt was about
30,000. [Mr. Campbell: 40,000 or
50,000.] The honorable gentleman says
40,000 or 50,000 ; he has jumped up
some 50 per cent., but even now he falls
far short. I am afraid he had a pair of
diminishing spectacles on when he turned
his attention to the matter, if he could not
see that the debt was much larger in
amount. I have taken great pains to go
through this matter, assisted by a gentle-
man whose able head and ready hand were
at my disposal, and I am astonished to hear
the honorable gentleman opposite make
such a statement, whether he really had
charge of the department of which he was
ostensibly the head or not. The deficit at
the end of 1855, estimated in the most fair
and reasonable way, cannot fall short of
120,000, exclusive of the Supplementary
Estimates before the House. That would
be about a tnie statement, and I neither
wish to conceal that fact, nor the difficulty
with which I am encompassed. That
deficit I must explain, has not accrued
during the years 1 855-6 ; it is an accumu-
lated debt since 1854. I have drawn up
an accoxmt which, availing myself of the
Press, I shall possibly be able to give to
honorable members before it is laid upon
the table of the House formally. This
account of the estimated revenue and ex-

penditure shows how the deficit ai-ose. The
revenue is enormously deficient of what
was anticipated. I do not blame the late
Government for this. They propounded
a financial scheme objectionable to me as a
Member, and also, I believe, objectionable
to a majority of the House. I speak of
the Government which existed previously
to the inauguration of Responsible Govern-
ment. Whether they based their conclu-
sions on the financial scheme they with-
drew, or upon the result of the Ways and
Means, he of course, could not say. He was
sorry to say all the calculations made had
fallen far short of the truth. On the
debit side of the account their estimates
were larger than had been realized. I will
not detain the House now by going into
the discussion of a principle which the
experience of many years in the old
country has proved to be true. It is in
vain to increase the existing tariff in the
expectation of improving the revenue.
It is a principle, now acknowledged, that
if you have a tariff calculated to raise
a certain revenue, and were to put 10
per cent, more upon it, it by no means
follows that there would be 10 per cent,
increase upon the revenue. That idea has
been exploded long ago. It has been
scattered to the winds by practical results.
It is utterly erroneous. I think it nmst be
apparent to every one seeing the policy
of the late Government was to seek for
additional revenue by adding 50 per cent,
to some and 100 per cent, to other
articles that they were doomed to dis-
appointment. I do not blame the late
Government, for there never was an
opportunity afforded them or if there
Avas it was not pressed on them to look
beyond the moment in which they lived,
or a little farther than their own country.
They passed easily along like gentlemen in
a spring vehicle in another region ; it was
necessary to look for revenue, and they
looked to the Custom-house to the easier
collected indirect taxation, overlooking the
fact that the supplementing of the impost
did not insure an equal increase in the
revenue. But we are now bound to see
that your burdens are laid on with a due
regard to principle in every sense of the
word, and with a due regard to equality
and fairness, so that the burden may
be placed on the shoulders of those who
ought to bear them. The fiscal scheme of
the late Council was bad, and there were
other circumstances which pressed upon

[1856.]

MR. DONALDSON.

the country. A reaction took place after
the over-stimulated trade of 1853 and
1854 a reaction which it did not require
a prophet to foretell. The Custom-house
revenue, consequently, fell short at the
beginning of 1856. The late Government
were also exposed to another difficulty.
Some lion, gentlemen who represented con-
stituencies pressed the Government for a
large expenditure, which was granted with
the expectation of support. I take no
credit to myself for anything I have done
as a public man ; but I must state this as
a matter of fact. I was not in the ranks
of those who pressed the Gov eminent for
a large expenditure while I refused to sup-
plement their revenue. I felt it my duty
to withhold from the Executive Govern-
ment any extravagant expenditure, for fear
of an improper expenditure being ex-
pected afterwards. I think if honor-
able gentlemen will do me justice, they
will acknowledge that I did not press
upon the late Government large exj>eiidi-
ture for this and that purpose. I do not
seek to lay the blame on any honorable
gentlemen. It was the result of the state
of a Government, not strong enough in
itself, and obliged to bow down to those
who had power to put a pressure upon it
they were not able to withstand. Whilst
I am on this subject I will take the oppor-
tunity of remarking, and I hope honorable
Members will ponder well what I say,
that no Finance Minister can manage the
monetary affairs of a country if he is
pressed by honorable Members for sums
that he is not prepared to meet. I
trust honorable Members will bear this in
mind, for I say it with the best feeling,
that after the financial year has begun,
and fix its commencement in whatever
month of the year you like, no claims for
funds should be made on the Finance
Minister. Never, when under a different
form of Government I held a seat in this
House, was I found amongst those who em-
barrassed the Government of the day by
their claims, and now that we are all alike
representatives, that the nominee element
has lx?eii sunk, I hope that honorable
Members will lay it down as a rule never
to press on the Executive Government
the expenditure of sums of money after
the financial arrangements of the year
have been made. Mind I would not wish
to prevent honorable Members from press-
ing on the notice of the Government such
matters as they may consider right, but

let this be done before the financial year
begins, say in the month of April, which,
in my mind, would be a very good month
for the purpose ; and let them after that
month observe a kind of reticence of their
wishes. If honorable Members will do
this, I promise them on my part to give
them the best of all reasons for continuing
in that course, by never embarrassing the
revenues of the country. I make this,
not apology for the old Government, for
they need none at my hands, but this
excuse for them and the deficit they have
left behind them, because, as honorable
Members well know, they were pressed in
the way I have alluded to ; and I can
recollect that even up to the close of last
session as much as 8,000 were in all
forced from them by this pressure from
the representatives. Thus much then I
offer in explanation of the deficit the old
Government has left us to begin with.
The balance sheet for 1856 has been
drawn in a tabular form, and is as fol-
lows : On the expenditure side of the
account there are, the deficit on the 1st
January, 1855, 65,225 17s. 5d., and the
late Government told us fairly enough that
there would be a large deficit for us to com-
mence with, though they estimated it at
only 40,000 or 50,000, not being very
much less than the actual amount. Then
the appropriations voted in 1855, for the
year 1866, amounted to 1,174,029; but
we have been able, owing to some of the
votes not being required for the services
such as the votes for the Artillery, and the
steamer "Torch," about which so much had
been said, and for other matters not neces-
sary to particularize, to save out of this
57,000 ; thus leaving only 1,117,029 of
appropriations to be met. Then follow the
Supplementary Estimate of 30,689 14s. 2d.
every farthing of which will be wanted :
sums chargeable on loans, 4,181 ; for
sewerage, 22,235 ; and for water works,
82,023 6s. 8d. ; making a total of
1,321,383. On the other side, to meet this
expenditure, we have made an estimate as
nearly as we can of the revenue for the
current year. This we are able to make
as accurate as will be necessary for all
purposes, seeing that we have the actual
receipts for the last ten months past ; and
that we can make with sometliing like
a certainty an estimate for the other two
months ; this we have set down at
1,060,000; and I will here say, that for
some of the figures I have used I am in-

MR. DONALDSON.

[1856.]

debted to the late Ministry, and although
I have not been able altogether to agree
with them, yet I own they have helped
me very materially in niy task. Then fol-
lowed amounts to be raised by loan,
viz., for public works and buildings,
4,181 ; for sewerage, 22,235; and for
water works, 82,023 ; being the exact
amounts charged on the other side ; thus
showing an estimated deficiency at the
end of 1856 of 152,942. This deficiency
will include the 65,225 deficiency on the
1st January, 1856, and the supplementary
estimate for the year. Having now brought
you to the end of 1856, 1 propose to carry
you to the end of 1857, in order that we
may take a view of what our position will
then be. Taking the deficit remaining as
I have just shown on the 1st January,
1857, we have 152,944 as the first item
to be provided for. I then estimate the
expenditure of the year at 1,060,914;
and it is a curious coincidence that the
expenditure estimated for 1857 should be
precisely the sum at which the revenue of
the preceding year had been estimated.
I and my colleagues have gone veiy
carefully over both our Estimates of
Expenditure and Ways and Means. I
therefore trust that whatever opinion may
be entertained of our scheme as a whole,
honorable Members opposite will not have
it in their power to accuse us of rashness,
seeing that we have computed no more
for the future than we have received in
the past. Then comes the following
items : Interest and special appropria-
tions, 127,500 ; chargeable on loans,
563,200 ; sewerage, 60,932 ; water-
works, 103,935. Then, on the other side,
to meet those charges, we have taken the
revenue of the year at 1,205,907 ; to
be raised by loan, 563,200 ; sewerage,
60,932 ; water works, 103,935. This, it
will be seen, would leave a deficit of
nearly 150,000 ; but we propose to wipe
off this in a way that I shall explain
more in detail to the House later in my
speech, when I hope to be able to
make honorable Members confess that we
are justified in the proposal we make,
which is that the money should be raised
on loan, by terminable annuities, and in a
manner that I shall, by-and-by, proceed to
explain. Taking this sum then to the
credit side of the account, there would be
an apparent credit balance of 14,749.
This, no doubt, is not a very large amount
for them to trade upon, and might be

thought to be drawing the revenue and ex-
penditure rather finely together. But
then honorable Members opposite must
remember that we propose no new tax-
ation, we do not suggest any additional
burden on the people ; and if we can
manage what we propose, it will be some-
thing worth remembering that we, the
first responsible Ministry of New South
Wales, though starting with a heavy load
of debt upon our shoulders, had managed
after the first year of our office to make
la carte blanche ; and that in the next year
we could start with a clear balance, and
that though in debt we had nothing to do
but to go steadily a-head and work it off.
There is every hope that we shall go on
improving, as I have shown we have
hitherto done ; and in proof of this I need
but point to the revenue for the last ten
months. When I held office with my
honorable friend the Member for Stanley
Boroughs as Treasurer, the amount of
Customs' revenue received during the first
six months was most disheartening, but
since the month of June the unfavourable
anticipations that were then justified have
become entirely out of place, for our Cus-
toms' revenue has increased from that time
in a most remarkable degree, but latterly
more particularly; and I have only to hope
that it will go on so increasing. No doubt
a great deal of the falling off at the
beginning of the year owed its origin
to the uncertainty .that mercantile men
felt, and the unsettlement, as I may say,
of the commercial mind, at the expected
ministerial changes, and when alterations
in the tariff had been counted on. We all
know how much this is the case, and that
until the financial statement is made in
England, by the Chancellor of the Ex-
chequer public interest is excited, and the
mercantile world remains in a state of
uncertainty until the changes proposed are
ascertained. In the Customs department
this sensitiveness is always more particu-
larly felt than in any other. There are
two things that are most sensitive, particu-
larly of the acts of a Government the
public credit and the Customs revenue ;
the latter is more especially so, and if at all
tampered with will never be a good one.
Although I am aware that there are great
temptations now to interfere with the
Tariff, because we could readily tax articles
of luxury which are yet also articles
of every day consumption, and might
have been tempted to take advantage of

[1856.]

MR. DONALDSON.

it, yet so strong has been my convic-
tion that to meddle with this revenue
would be most unwise that I at once set
the question at rest by making it public
that I gave up all idea of it ; find since
then the revenue has gone on gradually
progressing. I am happy to say that
during the last week this revenue has
reached the sum of 14,000, and that for
the last two months it has averaged
47,000 per month. I do not think that
we are unwise in assuming that for the
yi-ar 1857 it will average the amount
received during the last twelve mouths.
Again, it is a gratification to find the duty
on Colonial spirits also steadily increasing,
though it lias been checked to some extent
by the high price of sugar, and that it is
now very much larger than it was in June
last, or than it was then expected to be.
The following is an abstract of the revenue
and receipts from January to October,
1856, viz. :

Customs 385,030

Colonial spirits

Gold licenses

i- escort of gold, &c.

Land gales

Rents of land

Quit rents

Redemption of quit rents

Survey of land

Rents, exclusive of land

Postage

Fines and forfeitures

Fees of office

Sale of Government property
Reimbursements in aid ...
Miscellaneous receipts ...

Pilotage

Repayment of advances ...

Mint receipts

Railway tolls

Interest on City debentures
Assessment on ftoek
Immigration fund

385,030

41,357

24,523

3.040

i-J

179,119

49,791

729

149

307

8,336

47,633

24,451

8,047

19,671

1,01-2

55,317

4,681

2,995

1,643

9,289

10,051

4,295

31,277

18,865

931,620 2 4

LOANS.

Proceeds of sewerage debentures

Ditto water works ditto

Ditto public works ditto

Ditto railway ditto

Repayment of advance on account of
railway surveys

112,057 11 3

79,258 18 1

245,270 10

310,067 10

1,679,349 10

Thus 931,000 has already been received
during this year, and to make up the
estimate for the year would have to be

supplemented by one-sixth; whilst on
account of loans 747,729 has been re-
ceived. This may seem going into minute
details, but I can assure you that I go
back with pleasure into these statistics for
the past year, because it shows us that we
have some good prospects before us for the
year that is to come. For the information
of the country I wish to direct your atten-
tion to the Consolidated Revenue. The
balance is so small that were it not as it
were public property I should almost
hesitate to mention it. The condition of
the Consolidated Revenue is as follows :
The balance on the 30th September, 1856,
was, I am sorry to say, only 2,449 3s.,
but when you know that there is a large
current deficit, you cannot wonder that
the balance should be so low at tliis time.
When I come to another part of my state-
ment I shall show what I hope will be
considered a good reason why a Finance
Minister should always have a good balance
in hand, and be in a condition to keep his
head above water, whatever happens, and
not be harassed by any pressure of a mone-
tary character, which deprives the country
of its credit. I look upon it as essentially
necessary that a country should have a
good floating balance if it wishes to
borrow. The Consolidated Revenue has
received, since 30th September, 1856,
101,271 4s. ; out of this has been ex-
pended 84,688 4s. 2d., leaving a balance
of 19,032 2s. lOd. The revenue raised
by loan is as follows : 14,370 12s. 2d.,
the proceeds of the debentures of the late
Ministry and I must here take the oppor-
tunity of observing that although my
honorable friends opposite raised the loan,
they left me to sign the debentures. Every
two or three hours a heap of them was
brought to my table which I was com-
pelled to take home with me and sit up all
night to sign them. I very much regret that
I should have been compelled to deprive
my honorable friend of this honor. To
return to the subject of the revenue raised
by loan : I have said that the balance in
September was 14,370 1 2s. 2d. ; since that
period 214,688 12s. 6d. has been received,
making altogether 229,059 4s. 8d.; out
of tin's 69,825 16s. 4d. has been expended,
leaving a balance of the Consolidated
Revenue raised by loan amounting to
159,233 8s. 4d., which, together with the
balance of the revenue proper, leaves a total
balance on the Consolidated Revenue Fund,
amounting to 178,265 lls. 2d. I now

MR. DONALDSON.

[1856.]

come to that part of my statement, and I
hope honorable Members will bear with
me while I state at some length the
position in which I stand, relative to the
raising of certain loans, and I will here
guard myself by stating that I do not
advocate the principle x>f borrowing money
for cxurent expeiiditui'e. Such a principle
can only prove injurious to any country,
and I object to it entirely. But we nnist
deal with the facts as we find them. The
country is in a difficulty, and the country
must look that difficulty in the face and
take the best and quickest mode of getting
out of it ; and while I admit that to borrow
for the current expenditure is evil is in-
jurioxis in the extreme the condition in
which we now find ourselves will justify
us in the course I propose we should take,
and I hope, as I believe, that the scheme
which I shall propose, and which appears
to me most fair and most expedient, will
meet with the approval of every honorable
gentleman in the House, as by it we shall
get rid, and that with but little difficulty,
of the deficit which now exists, in a very
few years. You are all aware that there
ai % e three .modes of raising money : firstly,
by interminable obligations ; secondly, by
immediate taxation ; and thirdly, by ter-
minable annuities, the plan I propose to
adopt, which will entirely extinguish the
debt in a certain number of years. In
order to explain this matter I must go into
it at some length. Sir, the reason I
have chosen terminable annuities is be-
cause that is the medium course, we have
a debt to pay, and we must pay it, and in
order to free those who come after us we
must bear some imposts for a time our-
selves. I have taken some tremble to go
into a calculation with, reference to the
value of terminable annuities, and I find
that the present value of 1 for any
number of years at 5 per cent., is 7*721 -735,
which is equal to 7 14s. 5d. ; that is to
say, to purchase an annuity worth 1 pel-
annum for ten years, you must make a
present payment of 7 14s. 5d. In other
words, at 5 per cent. 100, to be absorbed
in ten years, would give a terminable
annuity of 12 18s. 4d. per annum. For
ten years at 6 per cent. and I will take
this, it being the highest rate, and the one,
considering the vahie of money in this
country, which we shall most likely have
to give 100 would bring 13 10s. lOd.
per annum for ten years. At this latter
rate, to extinguish a debt of 100,000 in

ten years, the colony would have to pay
20,312 10s. per annum. I refer honor-
abjie Members for the above calculations
to an excellent work of Mr. M'Culloch's,
with which is a good table of Mr. Jones'
relative to the value of annuities. At
the rate I have proposed, in ten years we
shall get rid of the deficit. I hope, there-
fore that this proposal will meet with the
unanimous approval of the House. I
think the principle of terminable annuities
at these rates the best means to follow ;
and this brings me to another part of my
subject. If this means is followed, when
we have these imposts established for a
few years the burden will not be felt, and
they may in future years be iised to cover
other debts. I take this point that
taxation upon property imposed for the
purpose of paying the annual interest on
terminable annuities would afford (proba-
bly after it had ceased to be considered as a-
burden) an excellent adjunct to our annual
revenue, ready to be applied, if desirable,
as interest upon a further conversion of a
permanent debt into terminable annuities.
Supposing, for example, that the whole
deficit was cleared off, that it was thought
desirable to treat in a similar way the debt
incurred for purposes of immigration, which
amounts to 400,000, the same principle
of taxation, nay, the same annual amount,
would gradually liquidate, at the rate of
150,000 every ten years, the whole im-
migration debt in less than thirty years
20,000 a year would cover 150,000
at 13 per cent. We all know that termi-
nable annuities are equally advantageous
to the country and to the capitalist. They
are tempting investments and therefore
are the best that we can offer, and
capitalists will be induced to invest in them
because they would receive a large amount
of interest which they could re-invest ; or
the interest being compounded, they would
in time receive an equal amount to their
first investment, and so reap considerable
advantage to themselves and at the same
time benefit the country. I have thrown
out these remarks as part of the scheme
which I propose. I admit in suddenly
taking them in hand, or even suddenly
considering them they could not be at
once comprehended by those who had not
studied them ; but as they contain propo-
sitions of very great impoi*tance to the
House and to the country, I hope honor-
able Members will study them. They
shadow forth the principles that will

[1856.]

MR. DONALDSON.

guide me in dealing with this question,
and I therefore hope they will receive
every favourable consideration at their
hands. Now, with these proposals as a
means of getting rid of our deficit, and
with these prospects before \is of managing
the finances of the country from year to
year, and of dealing with our revenue so
as to make our expenditure come within
our income, I will say a few words. With
regard to my scheme of taxation I am
happy to relieve the House by stating that
the Government has no intention of bring-
ing down any complete scheme of taxation
at all. Early next year, if the present
Ministry remain in office, we intend to
bring forward a scheme of taxation which
will fall principally upon property, as we
consider that mode of raising a revenue
the more equitable one, and by this means
we hope to relieve the labouring classes
from tlie prospect of imposts. As long
as this principle governs us we cannot
go wrong in dealing, with the question
of taxation, and I hope that, with atten-
tion to the subject, should the Ministry
hold office long enough to enable them to do
so, that we will come prepared to submit
such a scheme for raising the revenue of
the country as will be creditable to us
and worthy of the House. I am now
upon my trial as a financier, and I hope
for an impartial hearing, while I draw the
attention of the House to those principles
which will govern me in discharging my
duties as Minister of Finance. I am cer-
tain all who hear me have read the autho-
rity which I am about to quote, and by
which I will be in some measure guided.
I will quote some of Adam Smith's maxims
upon taxation. In the front that writer
says: 1. "The subjects of every State
ought to contribute towards the support of
the Government as nearly as possible in
proportion to their respective abilities
that is in proportion to the revenue which
they respectively enjoy under the protection
of the State." This is a principle capable of
fair application to any country in a prosper-
ous condition. Adam Smith says again :
"2. The tax which each individual is bound
to pay ought to be certain and not arbi-
trary. The time of payment, the manner
of payment, the quantity to be paid, ought
all to be clear and plain to the contributor
and to every other person." This was an
excellent maxim, and one that should be
as generally as possible followed. Again
he says : " 3. Every tax o\ight to be levied

at the time or in the manner most likely
to be convenient for the contributors to
pay it. 4. Every tax ought to be con-
trived as both to take out and keep out of
the pockets of the people as little as pos-
sible over and above what it brings into
the public treasury of the State." All
these maxims may be applied according to
the peculiar state of a country, and are in
a great respect applicable to all. Now,
although the maxims of Adam Smith are
generally correct, I confess I cannot give
my entire adherence to some of the prin-
ciples involved in the foregoing. No doubt
it was a correct principle to lay down, and
generally to follow, that each person in a
State should contribute to the support of
that State, according to his ability and the
protection which he enjoyed. But this is
a principle that is capable of being quali-
fied. In an abstract sense the principle is
right ; but, if earned to excess, as it might
be, would be found oppressive, unjust, and
unpopular, and, in fact, not applicable. I
will now proceed to lay before the Hoitse
the results to which I have been led in
considering the best means of apportion-
ing the revenue. I do not mean to say
that they are original ; but so far as I
know they will appear original to the
House, for I arrived at my conclusions
after mature reflections upon the subject,
in the same way, no doubt, that honorable
gentlemen would consider a similar subject.
The revenue of a country should be raised
in proportion to the amount of benefit each
party in the State received and enjoyed
through the protection afforded them by
the Government under which they lived.
There was a subdivision of interest which
ought to be taken into consideration. One
great consideration to keep in view is to
understand the interest which each class
in a community has in the State, and the
amount of benefit it derives from the pro-
tection of Government. The protection
afforded by a Government to the people
living under it was very varied in its cha-
I'acter. There is protection of life and
projKJrty, from which follows many other
interests assimilating very much to each
other. There is protection, as he said
before for life and property, a large benefit
derived by some, thei'e is the benefit
of education and religion peculiar to
every class in a community. The ad-
vantage derived from protection to life
and property is, however, of a character
which varies according to circumstances.

MR. DONALDSON.

[1856.]

With respect to these considerations
I think that taxation falling upon a
community ought to be so directed as
to fall upon individuals in proportion to
the number of population, rather than be
influenced by "wealth. That part of the
revenue, which is raised from the benefits
afforded by a Government through the
channel of religion and education fall upon
the mass, while the revenue raised through
protection to life and property is drawn
from a class, and comes under the head of
improvement to property. With these
sentiments I am of opinion that indirect
taxation should be levied from Custom-
house duties and other just and regular
channels of tariff. I have not, in consider-
ing this matter, touched the necessaries of
life. Beyond this, when it is found neces-
sary to supplement the revenue, we will
supplement it by a tax levied upon property.
This explanation of the scheme so far
devised is not new to honorable Members.
Last year, when the taxation question was
in some degree omitted, he took the same
view and he thought then that the revenue
should be supplemented. Whether the
Custom-house revenue will be found heavy
enough or not, and in some respects I think
it is too heavy, we will supplement that
revenue should it be found in any way
deficient, from other objects of taxation,
particularly those which bear upon im-
provement of property. If honorable
Members will do me the favour of follow-
ing me further, I will endeavour to show
that the time has now arrived when the
principle may be fairly and properly
applied to this country. Our Custom-
house revenue, taking it in round numbers,
is 400,000, levied upon articles of par-
ticular consumption. I will not go into the
subdivision of the question at any length,
but I will assume for argument's sake that
every man pays a certain tax for the tea
he consumes, according to the quantity
consumed ; that tax going as a matter of
course to the tariff. Taking the tariff,
then, at half a million a year, I will show
in a few words what I allude to as personal
objects, and which I conceive include a
larger amount of benefit as conferred upon
the consumer than was covered or provided
for by that impost ; such advantages and
benefits as are derived from protection to
life and property, the support of education,
and the maintenance of religion. For each
of these objects is to be paid out of the
General Revenue, and to each class I

put down the following items :

To be paid out of Revenue.

Interest on loans 120,000

Immigration 123,000

Roads and bridges 9o,000

Educational 61,600

Religion ^2,300

Charitable ... 14,500

Protection of Life and Property.

171,000

Alilitary

43,000

oj4 000

Penal establishments and gaols ...

37,000
40,000

Preparation of land for sale

' 62.000

70,000

Steam communication

20,000

82,000

Although the foregoing explanation is any-
thing but perfect as a scheme, it so happens
that the particular objects which confer
personal benefit upon all are not more
than covered by their direct taxation. I
therefore think the present time most
happy for starting from and abandoning
imposts which involve the foregoing ob-
jects, and to appeal instead to a tax upon
property, especially when it is probable
that a sum may be taken from the termi-
nable annuities to cover the duty ; and,
perhaps, also, to aid the annual votes of
money to be taken from the country gene-
rally. The interest upon debentures may
be fairly classed as one of those charges
which particularly render property valua-
ble, as it gives a stimulus to improvement,
and therefore the charge of interest ought to
be borne in a great measure by those who
own property. As the interest upon the
money raised for various improvements
causes the revenue to fall short, those who
are benefited by these improvements should
bear the expense arising therefrom, and
therefore I think that the present is a
very proper time to start upon a
new principle, and to levy a larger
impost from property than is the
case at present. Having said so much
of the principle that will govern the
Ministry, I will now go into the considera-
tion of the Estimates for 1857. Looking at
the enormous expenditure as the inheritance
of our first Responsible Government, it
is a remarkable fact that, although the
last Administration differed with us as to
certain applications of the expenditure,
there is not a difference of X2,000 in the
Estimates between the last Administra-
tion and the present. This is a remark-
able fact indeed. The Estimates prepared

[1856.]

MR. DONALDSON.

by us amount to XI. 060,914, without
the loans, while the sum set down by
the former Administration amounted to
1,060,159 withinl,000 of our Estimates.
I look, therefore, upon this expenditure as
the inheritance of the country, which will
take time and attention to modify and
improve. I always thought the simple
expenditure of the Government was too
large, and I think so still ; but, although
we cannot be expected, nor could any
Government be expected, all at once to be
aide, to curtail or improve, we will en-
deavour, as far as possible, should time
In- allowed us, to make such improve-
ments as may be found practicable and
necessary. The Government, however,
must get time to look into the question,
and consider how they can best remedy the
ovil. I admit that these Estimates are
taken at a maximum, merely for the pur-
pose of obtaining power to overhaul and
correct them, which could not perhaps be
so well done by fixing them at the mini-
mum. I hope that when we have been
some time in office there will be no
opportunity for any one to charge us with
having lost or omitted any opportunity
of diminishing the revenue of the country,
of curtailing the expenditure, and econo-
mising the public money as far as possible.
The fact that thei'e appears to be so small
a diH'eivnce between the expenditure now
proposed and the expenditure proposed by
the former Administration, shows that it
is necessary to take a large expenditure for
1857, iii order to bring the subject to an
early settlement. I hope honorable Mem-
bers will do me the credit to believe that
we are sincere in our efforts to save the
expenditure of the country, and also that
they will not cavil or trifle with the
Estimates which we lay before them, but
allow us to have a fair trial ; and when we
come before them next year, if we are not
able to show that we did not make use of
our power, by curtailing all that could be
curtailed in the way of expenditure, their
opposition to us will be considered only just
and proper. But honorable Members must
take into consideration the short time that
the Government has been in our hands,
the little knowledge we individually
possess of Government establishments,
the difficulty of putting such establish-
ments upon a good and permanent footing
at once, and make allowance accordingly.
With these remarks I will proceed to allude
to those parts of the Estimates to which I

particularly desire to draw your attention.
We have effected some saving no doubt
it was not much by late arrangements.
I will refer now to the salaries which,
although not fixed so low as was intended
by the former Administration, are only
the same now as they were when I was in
office before. It is intended in some instances
to abolish the temporary gold increase, and
to fix the salaries according to a permanent
scale. The principle we intend to follow
with regard to the salaries will be found to
work both economically and liberally. It is
not intended to decrease the salaries much,
for, taking into account the high price of
living and the high rate of rents particu-
larly, I do not think that the clerks em-
ployed under the Government could be
expected to do their duty to the public
with efficiency if their salaries were made
too small. It is intended to take 25 per
cent, of the temporary gold increase from
the salaries of some, and, with respect to
the clerks, we expect at an early date to
classify them, and to deduct from their
salaries 25 per annum, beginning with the
highest to the lowest. I would not object to
give an increase, year by year, to those who
were deserving of it ; and one difference
between the scheme of the present and the
former Administration is this, that it is
never intended by the present Government
to give an increase unless in cases of acknow-
ledged ability. The system of increasing
salaries on certificates of service for five or
any number of years is entirely abolished,
and 110 increase upon any account will be
given, unless to highly-deserving persons.
Encouragement will be given to men of
aptness and fitness, and the selection of per-
sons to office will be governed by their
efficiency only. The system of regulating
the Government expenditure will be found
both just and economical and proper
towards both the Government and its
employes. Our intention is to employ and
pay only those who are really capable of
performing the duties entrusted to them.
And I will say further that while we
remain in office no man will receive a
salary who has not justly earned it. I am
not an advocate for cutting down the
salaries too much. Although we have
effected reductions in some cases we have
left the small salaries untouched. The
expenditure for police, navy, and military
remains the same, the large salaries being
those upon which the chief reductions have
been made. Now, alluding to the proposed

MR. DONALDSON.

[1856.]

expenditure of 1,060,000, if people would
only look at the manner in which this
money was to be disposed of, and consider
how little of it was to be devoted to the
mere purposes of Government, and how
much towards promoting the general in-
terests of the country, they would see but
very little to complain of in the state of our
public finances. I do not think honorable
Members have been in the habit of looking
so closely into the matter as they might
have done. I did not myself, until lately,
see the advantage of contrasting the expen-
diture of this country with that of other
countries, and noticing the proportion set
apart for public purposes, as compared to
that devoted to mere purposes of Govern-
ment. Among the items to be defrayed
out of the current revenue, independently
of loans, were, interest on debt, 120,000 ;
immigration, 123,000; roads and bridges
and public works and buildings, 95,000;
educational purposes, 54,500 ; religion,
42,300 ; charitable purposes, 14,500.
Then for the protection of life a,nd pro-
}>erty there was proposed to be applied the
large sum of 214,000, namely, police,
171,000 ; and military, 43,000. For
gaols and penal purposes it was proposed
to expend 37,000, and for the adminis-
tration of justice 40,000 all of which, I
am happy to say, will come out of the
i-evenue. It will be seen by comparison
that in all these respects our expenditure
bears a favourable contrast with the ex-
penditure of the mother-country. Then,
we pay 70,000 in preparing the land for
the occupation of our fellow-countrymen
at home ; 20,000 for steam communica-
tion ; and 62,000 for postal services
making an aggregate expenditure of more
than 800,000, irrespective of the Execu-
tive, Legislative, and other establishments.
This is a startling fact, and one which I
hope will induce the House to pass these
Estimates without that bickering as to
detail which usually accompanies their dis-
cussion. Having gone so far, I now come
to the "Ways and Means, which will pro-
bably be laid on the table this evening.
They are extremely simple, and the items
set forth in them are, I am happy to say,
nearly all covered by existing statutory
arrangements, so that it will be unneces-
sary to impose any additional taxation of
consequence. The amount to be raised by
loan is 563,200, and the amount of
ordinary revenue is 1,205,000, nearly the
whole of which is already provided for.

The new items which may be said to come
under the head of taxation are the pro-
posed export duty on gold and the fees
from miners' rights, which may be regarded
as mere substitutes for the gold licenses
and royalty. The other new items consist
of a trifling license fee from wholesale
spiiit dealers and bonded storekeepers.
With these unimportant exceptions, the
Ways and Means will be derived from the
same sources as before. That such should
be the case that we should be in a position
to meet so large an expenditure without
imposing any additional taxation is, in my
opinion, a matter upon which I may well
congratulate the country. It is the inten-
tion of myself and colleagues, during the
recess, to devote our earnest attention to the
whole question of taxation, and I trust that
we shall be enabled before the opening of the
next session to devise some system which
shall meet with the general satisfaction of
this House and of the country. We shall be
prepared to submit to the country a system
of taxation which, bearing upon property
for the further supplement of the revenue
and releasing labour from the burden, in
imitation of the great fiscal principles
which distinguished the financial scheme
of the mother country, apportions the con-
tributions so that the humbler classes gain
by the contributions of the richer. We
shall do this not by placing undue bur-
dens on the squatters, as some honorable
Members opposite have signified their wish
to do, nor yet by resorting to such absurd
temporary expedients as taxation by the
cubic foot. We hope to frame such a
scheme by the session of 1857 as may
last at least until 1877. With regard to our
large and rapidly accumulating public
revenue, we propose that 400,000 of it
shall be expended in the construction of
railways, but not as heretofore at the rate
of 15,000 per mile, but according to some
well defined basis by which railway exten-
sion can be earned on with far greater
economy and rapidity, not only to the
north and south but to the east and
west in fact to all parts of the countiy.
In appropriating money for this pur-
pose due discrimination will be exercised
so as not to make one part of the country
pay for the improvements of another.
I would not, for instance, impose a
tax upon water-carriage up the Man-
ning River for the purpose of construct-
ing a railway to Parramatta. I would
make all parts share and share alike.

[1856.]

MR. DONALDSON.

We ask you for large sums, it is true,
but they are for purposes of great
public utility, and we also assure you that
the strictest economy will be observed in
their expenditure. With regard to the
principle of borrowing money, I have
always been of opinion that the issue of
debentures for short periods was a dead
loss. It appeal's to me that there are only
two or three ways in which public debt
can be economically contracted, and these
are either by making the debentures in-
terminable (giving the Government the
privilege, however, should they think fit,
of taking them up at par at the end, say,
of five and twenty years) or by the issue of
terminable annuities, with the condition
that they shall not be made payable in
England, by which the colony would lose
15 per cent. I am also prepared to issue,
under certain conditions, debentures for
small amounts, so as to enable the poorer
classes to share in the speculation. People
who have a little money to spare will see
when, for the use of 10 for six months,
they will get five shillings, that it will be
better to invest that sum in Government
securities than to squander it in public-
houses. Another advantage which will be
gained in a moral point of view will be,
that the working classes will see that by
keeping the debentures in their own
hands they will have an accumulative
value which they will not possess if they
are passed from hand to hand. An hono-
rable Member near me (Mr. Barker)
whispers something about interfering with
the Savings' Bank ; but I do not think
that this arrangement will interfere with
that institution. The Government will
not force the debentures on the public ;
but I feel assured that when the labouring
classes find that for a 10 debenture they
will receive five shillings for six months,
and can also turn it into land if they
choose to purchase at a public sale, they
will come to the Government with their
savings. Much as I admire the Savings'
Bank, of which I am a trustee, as well as
the honorable Member (Mr. Barker), I
cannot but feel that the impossibility of
transfer, the risk of losing the deposit
papers, and the difficulty arising from dis-
tance, are circumstances which gave a great
superiority to the debentures, independent
of the higher rate of interest. Admirable
as the Savings' Bank is, we cannot conceal
from ourselves the fact that it is attended
with considerable expense, as is evidenced

in the large house which they have built,
and in the' salaries which are paid for
management. But leaving out the other
advantages attending the small debentures,
the chief advantage is to be found in the
moral effect they will have on the labouring
classes. There is another reason, of a
political character, which possesses more
weight in favour of the debentures. The
Savings' Bank, having deposits to the
amount of 6,000,000 always at call, is
liable to a run. It is true the Government
holds 600,000 by way of safety-valve ;
but still confusion is liable to be created
by the public making a run on the Bank.
Now, on the other hand, every man holding
a 10 debenture becomes a policeman,
interested in the good order of the State
becomes one of those in whom the
government of the State is vested. These
are among the reasons, social, moral, and
political, which induced the Ministry to
determine on issuing debentures for small
amounts. I again repeat, in order that I
may not be misunderstood, that I shall
never advocate the borrowing of money to
meet the current expenditure ; nor should
I mention the borrowing of money now,
were it not that the borrowed money shall
not become a permanent debt. For these
reasons it is that I purpose to make up
the deficit by a loan. Whoever has the
administration of the public affairs I would
impress upon the House that the eyes of
the financiers of Europe the eyes of the
Ricardos and the Rothschilds will be
upon the financial arrangements of the
colony, for according as our plans are
well or ill advised will the European
capitalists be prepared to lend or withhold
their capital. I believe the credit of the
colony to be good perhaps I may say too
good, seeing that there was a tendency on
the part of all Governments to borrow.
Indeed, I feel that we require some one at
our elbow to suggest to us that we must
not squander our money in the construction
of expensive railways that costly works
require to be looked after when constructed,
and require a large expenditure to keep
them in repair. We must have a debt if
we are to have public works. The test of
the credit of a country is twofold. In the
first place to have a public domain which
is at all times a source of revenue ; in the
second place to have a population capable
of bearing taxation. Now, as to our
public credit, we are better off than the
mother countiy, because she has not, like

MR. DONALDSON.

[1856.]

us, a public domain. She, no doubt, lias
a people capable of bearing unlimited
taxation, and hence her credit is unboun-
ded; but we have both a public domain
and a people capable of bearing taxation.
England has a debt of eight hundred
millions ; but she borrows from her own
people, so that her debt was absolutely
a benefit to her working classes. T re-
peat that it is so ; for the difference
between a debt borrowed in the country
and out of it was as great as the difference
between A and B. The great object of a
financier in this colony his decus et
tutamen in fact should be to borrow what
money was required from the people of
the colony. No doubt the attempt will
encounter some difficulty ; but a remedy
will be found in the rapid steam postal
communication which will soon be estab-
lished between this colony and Europe,
by which means the European capital-
ists will be brought to our doors. I lay
it down as an axiom, that debt borrowed
in the country, and the taxation to pay
the interest on which is levied on capital
and not on laboiir, is an advantage to
a country. I put it to the Honorable
Member for Brisbane and Bligh, whether
if a servant of his held a Government
debenture, the interest on which was paid
by a tax on property he did not pay, and
the servant pocket the money 1 I hold
that axiom, and I am prepared to argue
the point at any future time with the Hon.
Member (Mr. Robertson) or with any one
else. I object, however, to borrowing
money under any circumstances in a Colony
like this, except it was intended to be
expended in improvements, and then only
on such improvements as were likely to
afford a return. I am of opinion that
money should not be expended in erecting
costly railway termini and stations, nor in
laying down double lines of rail where a
single would answer, nor in otherwise in-
curring unnecessary expense. On the con-
trary, I would, in the first place, construct
cheap and plain works, and improve them
as the colony progressed. Let them con-
trast their position with that of the Mother
Country. We have a small debt, and
millions of acres as a resource whence to
obtain the means of paying it. In this
respect have we not a great advantage over
the Mother Country, and over every other
country 1 ? If we only continue to be
favoured with the blessing of Providence,
and be guided by ordinary foresight, we

have a future before us more abundant in
promise, more replete with brilliant pros-
pects, than is the future of any other
Country of the present day. I beg to
draw your attention again to our Ways
and Means. I say, that we propose no
new taxation as such. We propose to
increase the licenses, to assist the Customs
revenue by a small tax on bonded ware-
houses, by a gold duty, which was only a
change of the system by which a revenue
was hitherto drawn from the gold produced
in the Colony, and by a miner's right, which
was only the digger's license fee in a new
shape. Of these, which are the only
exceptions which I make, the merits will
be discussed hereafter. The resolutions
which I propose to submit to the House
are these :

1. That there shall be taken and levied upon
all wholesale spirit dealers an annual fee, that
is to say, a fee of 30 upon every wholesale
spirit dealer in Sydney ; and also a fee of 15
upon every wholesale spirit dealer in all other
parts of the Colony.

2. That there shall be taken and levied upon
owners of all licensed bonded warehouses in all
parts of the Colony an annual fee at and after
the rate of 50 for any such licensed bonded
warehouse : Provided that an additional annual
fee of one pound sterling for every ten tons of
cubical contents over and alx)ve the first fifty
tons (calculating at the rate of forty cubic feet
to the ton), which such bonded warehouse is
capable of containing within the four M'alls and
upon the several floors or divisions of such
bonded warehouse, shall be annually levied upon
all such owners of licensed bonded warehouses
as aforesaid.

3. That the sum of four hundred thousand
pounds be raised by the sale of Government
debentures, to be expended during the year
1857 in the extension of railways towards the
north-western and southern divisions of the
Colony.

4. That a sum not exceeding one hundred and
fifty thousand pounds be raised by the sale of
terminable annuities having ten years to run, to
meet the expenditure in public works and other
requirements of the Public Service not otherwise
provided for in the years 1854, 1855, and 1856.

5. That the sum of one hundred and thirty
thousand four hundred pounds be raised by the
sale of Government debentures, to pay off a
like amoimt of Government debentures falling
due in 1857.

6. That a sum not exceeding thirty-two
thousand eight hundred pounds, to be raised by
the sale of Government debentures, to be
expended in certain public works in the year
1 857, as set forth and specified in the Estimates
of Expenditure under head No. 6 for "public
works to be provided for by law," page 81 of
the Estimates of Expenditure for 1857.

I shall now draw attention to the practice
of Great Britain in the matter of bor-
rowing. Without coins: into the merits.

[1856.]

MR. DONALDSON.

of the scheme which we have adopted for
borrowing the deficit, I shall show, by
quoting some recent Acts, how far \ve axe
following in the wake of Great Britain.
I shall show that in the year is ">''> no less
than five modes of borrowing money were
adopted by Great .Britain. The first quo-
tation is from an Act (19 Victoria, No. 4)
to apply the sum of 1,631,005 Is. 5d.
out of the Consolidated Fund to the ser-
vice of the year ending 31st March, 1856.
It is as follows :

1. There shall and may l>e issued and applied,
for or towards making good the supply granted
to Her Majesty for the deficiency in the grants
for the service of the years ending the thirty -
first day of March, one thousand eight hundred
and fifty-five and one thousand eight hundred
and fifty-six, the sum of one million six hundred
and thirty-one thousand and five pounds one
shilling and five-pence out of the Consolidated
Fund of the United Kingdom of Great Britain
and Ireland, and the Commissioners of Her Ma-
jesty's Treasury of the United Kingdom of
Great Britain and Ireland, or the Lord High
Treasurer of the United Kingdom of Great
Britain and Ireland, for the time being, are or
is hereby authorized and empowered to issue
and apply the same accordingly.

The next Act under which money was
raised was 19 Victoria, No. 6, and was
intituled " An Act for raising Jive mil-
lions by way of annuities." . By the third
Act the sum of three millions in exchequer
bills was founded, and sums of money
raised by way of annuities. The next was
an Act to apply the sum of 26,000,000
out of the Consolidated Fund to the service
of the year 1856. In this Act occur the
following passages :

We, your Majesty's most dutiful and loyal
subjects, the Commons of the United King-
dom of Great Britain and Ireland, in Parlia-
ment assembled, towards making good the
supply which we have cheerfully granted to your
Majesty in this session of Parliament, have
resolved to grant unto your Majesty the sum
hereinafter mentioned; and do therefore most
humbly beseech your Majesty that it may be
enacted ; and be it enacted by the Queen's Most
Excellent Majesty, by and with the advice and
consent of the Lords spiritual and temporal, and
Commons, in this present Parliament assembled,
and by the authority of the same, as follows :

II. It shall be lawful for the said Commis-
sioners of Her Majesty's Treasury from time to
time, by warrant under their hands, to cause or
direct any number of Exchequer Bills to be
made out at the receipt of Her Majesty's Exche-
quer at Westminster, for any sum or sums of
money not exceeding in the whole the sum of
twenty-six millions ; and such Exchequer Bills
shall be made out in the same or like manner,
form, and order, and according to the same or
like rules and directions, as are directed and
prescribed in an Act passed in the forty-eighth
year of the reign of His Majesty King

George the Third, chapter one, and in another
Act passed in the session of Parliament holden
in the fourth and fifth years of the reign of His
late Majesty King William the Fourth, chapter
fifteen, and in another Act passed in the session
of Parliament holden in the fifth and sixth
years of the reign of Her present Majesty,
chapter sixty-six.

"V II. It shall be lawful for the said Commis-
sioners of Her Majesty's Treasury to issue and
apply from time to time all such sums of money
as shall be raised by Excheqiier Bills to be made
out in pursuance of this Act to such services as
shall then have been voted by the Commons of
the United Kingdom of Great Britain and
Ireland in this present session of Parliament.

VIII. The principal sum or sums of money to
be contained in all such Exchequer Bills to be
made out by virtue of this Act, together with
the interest that may become due thereon, shall
be and the same are hereby made chargeable
and charged upon the growing produce of the
Consolidated Fund of the United Kingdom of
Great Britain and Ireland in the next succeeding-
quarter to that in which the said Exchequer
Bills have been issued ; and it shall be lawful
for the said Commissioners of Her Majesty's
Treasury for the time being, and they are
hereby authorized, from time to time, by war-
rant under their hands, to direct the Comp-
troller-General of the receipt of the Exchequer
at Westminster, in such manner as they shall
think necessary, to grant a credit on the -Exche-
quer Funds in the Bank of England unto such
person or persons as shall be named in the said
warrant, which credit shall be chargeable on
and paid out of the growing produce of the said
Consolidated Fund of the next succeeding quar-
ter to that in which the said Exchequer Bills
have been issued, for any sum or sums of money
not exceeding in the whole a sum sufficient to
discharge and pay off the principal sum or sums
of money contained in such Exchequer Bills
then outstanding, and which may have been
made out and issued by virtue of this Act,
together with all such interest as may be due
thereupon.

The last of the five Acts to which I refer
was for raising the sum of 21,182,700,
by exchequer bills, for the service of the
year 1856. Thus in one year were forty-
seven millions borrowed 011 a revenue
which was to accrue, and five millions for
annuities. The debt was no doubt con-
tracted in reference to a war ; but the
occasion of the exigency did not much
affect the question.

I shall now conclude my observations,
and I can only express my regret that
my health has not enabled me to
express myself in a voice more clear
and intelligible. But far more earnestly
do I wish that I could have made
the statement itself more clear ; that
I could have devised, and could have
explained, a system of finance more full
and complete in all its details than that
which I have very inefficiently expounded

MR. DONALDSON.

[1856.]

to the House. To have devised a com-
plete scheme of finance which would have
satisfied the Assembly and the Country
would indeed have made this a proud day
for me. But in what I have failed I now
ask the House to assist me. It is one of
the highest and most important functions
of this Assembly to aid in rendering as
perfect as possible the system by which
the financial affairs of the Country can
be earned out. If in my endeavours,
if in the scheme of policy I have endea-

voured faintly to develop, I have come
something near the mark if I have
marked out a path which will guide the
House to a correct understanding of the
facts connected with the question, and the
right principles under which those facts
should be treated, I am satisfied, and feel
that if this verdict should be recorded to
me I have done my duty to this House and
to the Country. He now moved that the
Speaker do leave the Chair, and the house
resolve itself into Committee of Supply.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE STUART ALEXANDER
DONALDSON, made 20th August, 1857.

[ From the Sydney Morning Herald of 2\st
August, 1857.]

LEGISLATIVE ASSEMBLY.

Thursday, 20 August, 1857.

FINANCIAL STATEMENT.

Mr. DONALDSON i-ose and said : Mr.
Holroyd, in bringing before a Committee of
(lie Whole House this evening what may
IK- called, in Parliamentary language, the
Budget for the year, I have to crave the
i IK I ulgenee of honorable Members. I have,
indeed, to pray for more than the ordinary
indulgence which is allotted to Members of
this House. In starting, I will, in the
first instance, say that I have taken the
very first opportunity which, according to
the rides of Parliament, it was in my power
to do, to state to the Assembly our finan-
cial position, and the principles on which it
is proposed by the Ministry to raise the
necessary revenue to cany on the business
of the country for the coming year. I have
taken this course because, not only as a
general rule, I believe it right and proper
that Parliament should, as early as possible,
be placed in possession of information as to
the required expenses of the colony, but
because in this session, commencing as it
did at so late a period of the year, it is
more urgently necessary the House should
have it with the least possible delay. It
is right that time should be afforded for
the fullest consideration of any scheme
of new taxation, and to make up our
minds fully as to what the public require-
ments and the faith and credit of the
Government demanded, as well as to calcu-
late fully what amount of revenue the
Government of the country can a lion 1 to
pay. This is the first session in which a

Responsible Government in this colony has
had to i-eview the system of finance which,
with the full control of all its revenues, it
has devised for itself. It is now for us to
look back on the past, and carefully weigh
the future, and then to say how far we have
as yet shown ourselves able to manage our
own affairs. This is the first year of our
nonage. We have for the first time opened
an account with our own banker, and it
behoves us to see, from our past year's
experience, whether we can make both
ends meet, and whether we have been dis-
posing of our means economically and well.
It is well to be remembered in the con-
sideration of the present circumstances of
the colony, that when we undertook the
management of our own financial affairs
Great Britain was engaged in a devastating
and disastrous war. The two greatest com-
mercial countries in the world on the one
side were arrayed against another, the most
extensive and autocratic in the world. It
is impossible but that this war and the
vast expenses it entailed must have had a
most serious effect on the trade and com-
merce not only of Great Britain but of
every European country, and particularly
of the British colonies. The intense
demand for money thus occasioned would
infallibly lead to the diminution of capital
employed in colonial enterprise, if not the
withdrawal of the capital already embarked
in such enterprise. Under such circum-
stances as these, Sir, I do not hesitate to
say that it is a matter of deep thankfulness
a matter that should call forth our
gratitude that no domestic or financial
ditliculty has overtaken us. I shall pass
over the detailed statistics as to what the
material progress of the colony during
the past year has been, but the results
sullicieiitly afford matter of congratulation

MR. DONALDSON.

[1857.J

that we live in a country at once so young,
so great, and so prosperous. It is not my
intention, Sir, to go into all the details
of the past financial system of the country.
It was my duty to do this last session, in
order that I might expose the evils of that
system, and to explain those reforms
which I proposed to make on it. Now I
have only to refer to the financial arrange-
ments of 1856 and 1857, and see how far
the results will be consistent with those safe
and sound principles which ought to regu-
late the future financial policy of the
colony. I will state, Sir, that I believe
the point has been reached at which indi-
rect taxation on labour combined with
capital should cease, and that any addi-
tional taxation should be imposed on
capital alone. It has been decided by this
House, on what I consider correct fiscal
principles, that ad valorem duties should be
abolished, and I think it by no means
desirable that the particular duties on
articles of necessary consumption should be
increased. During the past year, Sir, the
only increase to the indirect taxation of
the country has been the license fee re-
quired under the Bonded Storekeepers'
Bill, and the fee demanded from wholesale
spirit merchants. The former had not
been appealed against in any way, and the
latter was, I believe, found not to be in
any way oppressive. I am aware that
under a wrong impression some few of
the wine and spirit merchants have paid
their license fee under mistake, but I am
not aware that there has been the slightest
opposition expressed to the principle of the
measure under which that fee is levied.
Then, with regard to the system of borrow-
ing money, I believe the principle of bor-
rowing on permanent instead of temporary
securities is a good one that it has been
productive of great saving and good to the
colony, and that it has met the approval of
the public generally. The plan I adopted,
under the authority of this House, was to
make the debt of the colony permanent
to make the debentures issued intermin-
able, and the interest on them payable in
England ; and by the adoption of this sys-
tem the colony has been saved at least 2^
per cent. I believe it to be my duty, in
entering into the statements I have to
make, to put the House in possession of
the fullest explanation in my power, and
f shall not withhold anything which I
think can throw any light on this im-
portant subject, and if other papers or other

figures are wished for by any lion. Member,
I shall be most happy to furnish them.
[The hon. Member here entered into a
statement, showing that the actual deficit
in the revenue was decreased in the present
year, while the estimated amount of re-
venue was considerably exceeded.] I do
not say that in having been fortunate
enough to secure this successful result we
have done better than others would have
done had they been in our places ; but it
is plain that the measures which have been
adopted have tended to put the finances of
the country in a better position. I believe,
apart from this, they have been of a nature
to advance the credit of the country. Nor
is it enough to say that, by the new system
of borrowing, 2^ per cent, only has 'been
saved. A great amount of money has been
retained in the country by giving these
debentures a value as a security in England.
They are I speak of the interminable
debentures the funded debt of the coun-
try, and are sought for as the secuiities for
the funded debt of England are sought.
The consequence is that the Banks are
buying every debenture they can pick up
to send Home to England as a remittance,
and every one that goes Home not only
saves the country 2 per cent., but the
loss of interest on capital during the time
which would be otherwise required to send
Home the money which would be required
for such remittances. I think that this is
quite sufficient to show that for eveiy
economic purpose, if a debt must exist in
any country, it is better that it should be
a funded debt than a floating debt. This
step of mine, I do not hesitate in saying,
was one in the right direction ; it was, in
fact, one pace onwards towards the conclu-
sion we have now arrived at, that funded
debt will be the most beneficial to the
colony. I do not at all demur about making
the admission that by a system of termin-
able annuities, you will always have staring
you in the face a debt that possibly you may
not be prepared to meet, and that will be
constantly recurring year after year, pos-
sibly for many years to come. The arrange-
ments sanctioned by the Legislature have
been already commenced ; 100,000 worth
of debentures have already been sent Home
to England for sale not however to be
forced upon the market at an improper
period, for I conceive that it would be very
bad policy that instruments, the value of
\\ liidi we all know, should be forced into
the market at a time when they may not

[1857.]

MR. DONALDSON.

be required. It was on this account, then,
that I sent Home the documents through
the banking agents of the Government, the
Oriental Banking Company, for sale in the
English market, but only if occasion might
offer. My object in doing this was not, as
the hon. Member for Northumberland (Mr.
Piddington) once said, to sell instruments
bearing 5 per cent, interest merely to
invest the proceeds in securities that bore
only 3 per cent. ; but in order to have
money at the disposal of our agents, money
in a useable condition, to meet those
demands upon the Colonial Government,
that have their issue in the mother
country to meet claims for railway stores
and others of a similar nature that would
arise" there. On account of these deben-
tures we have taken from the Oriental
Bank an advance, nominally, of 90,000
and this amount will form a portion of
those arrangements for the year, to which
I would draw the attention of the House.
I propose to lay on the table of the House
certain, tabular returns connected with the
sale of these debentures, in which will be
shown not merely the amount of debentures
sold, but also the actual amount realized by
such sales, with the various prices given for
all debentures sold dining 1857. Before I
go further, I would wish to allude briefly to
the six Bills I have introduced this day,
and if hon. Members will but look at them
and join them with the financial statement
that I hoj>e to lay clearly before them, ere
I quit this Hoiise, they will be in posses-
sion of a complete codex of the true
financial position of this country. This
codex will show, as I think, a progressive
and a safe financial policy, which, after
having passed through the constitutional
checking of the Opposition, by which it
will no doubt benefit, will be able to bear
the test of public scrutiny hereafter. I
will now not do more than allude to the
speech of his Excellency the Govemor-
General in opening the Parliament. In
that speech, the paragraphs bearing upon
the financial position of the country are
those numbered from 15 to 22 inclusive.
These paragraphs have this day had their
fruition. The Estimates are now on the
table of the House ; the Treasury Bill, the
Auditor General's Duties Bill, the l!i\cr
Murray Customs Bill, the Public Debt
Treasury Bill, and the Customs Laws Con-
solidation Bill, are now before the House,
and these are of a kind to bear the test and
scrutiny not only of this House but of the

country. Having opened the subject thus
far, I will now proceed to deal with the
actual accounts of the country as they now
stand. It will be in the recollection of
hon. Members that it was my duty to in-
form them that there was, on my taking
office, a very serious deficit in the revenue.
On my doing so, the House was good
enough to place at my disposal the means
of covering this deficiency, and a Bill was
passed providing for its being met by loan.
Of that Bill, and the powers contained in
it, the Ministry have not yet availed them-
selves ; it is still, however, in existence,
and I am glad that it is so, because it
places any Finance Minister and I know
not how soon some gentleman, perhaps from
the other side of the House, may succeed
me it places him, I say, in an easy posi-
tion, since it makes his credit good, by
enabling him at any time to meet demands
that may be made against him. But I also
hope, that as the Bill has not yet been had
recourse to, there will not be any occasion
for future Ministers to avail themselves
of its provisions, and that though they may
still have the credit to fall back upon in
case of need, they will never be forced
to touch it. Happy, indeed, will that
Secretary for Finance be, who, having
arrived at the policy that I and when I
say I, I mean the Government with which
I am connected have shadowed forth,
will year by year diminish this deficit,
until, at last, he will be able to say to this
House : "I have cancelled the authority
you gave to raise 150,000 on loan ; as I
am glad to say that now it will 110 longer
be required !" Such a statement as this
will not be made this year nor yet next
yea r ; but I certainly tnist that, by carrying
out a sound system of financial policy, such
a result may, at no very distant date, be
anivcd at. As far as I am concerned, the
House will, no doubt, be glad to hear that
I have borrowed nothing under the power
given me by this Bill ; though for this
result I take no credit to myself, but am
inclined to lay it rather to the account of
the advancing prosperity of the country.
By the statement of the accounts that I am
now about to go into, it will be found that
the paragraph in the Governor General's
opening speech to the Parliament, which
says

The financial condition of the country has. during
the recess, received my most anxious attention.
It is a subject of congratulation thutthe deficit in
the revenue existing at the commencement of

MR. DONALDSON.

[1857.]

1856, has been diminished by ecommy and the
improved state of the public income, and that, up
to the present time, I have not been compelled to
avail myself of the authority to borrow any por-
tion of the sum of one hundred and fifty thousand
pounds, placed at my disposal to cover this
deficit.

has been fully borne out. Now, before the
end of 1856, 1 laid before the House a state-
ment of the estimated deficit of the revenue
on the 31st December, in 1856; and of the
estimated deficit on the 31st December,

1857. The estimated deficit at the end of
1856 was 151,623 4s. 5d.; but the latter
part of the year gave an increase of re-
venue over the estimate of 31,279 9s.
9d. The return in which this account is
contained, was laid before hon. Members
in November last, and, if they glance over
it, they will see that the estimated deficit of
1856 was thus reduced at the close of the
yi-iir to 120,343 14s. 8d. The amount of
Estimates that I laid upon the table of
the House, to be voted by hon. Membei's
in 1856, for the service of 1857, amounted
to the large sum, I will confess, of
1,103,940 15s. lid. I have the satis-
faction of informing honorable Membei's,
however, that of this last amount the
Government have not been under the
necessity of appropriating some 30,000,
and this may be said to have been saved
to the country. The saving here named
has arisen in this way : The amount for
interest on debentures was estimated at
130,000, but owing to the way in which
we boirowed the money, and to the fact that
the exchequer balances, by proper finan-
cing, have always been kept flowing,
the interest account has been much less than
was anticipated ; and under this head alone
something like 20,000 have been saved.
Further than that, a sum of 10,000 had
been saved out of the votes passed by the
House, but not appropriated. Of this last
sum nearly one-half consisted of the votes
for pensions to the Judges, none of which
has been required. This will leave the
amount of actual appropriatioil for 1857
at 1,073,940 15s. lid. The proposed
Supplementary Estimate of this year
amounts to 52,757 10s. 8d. This, no
doubt, is a large sum. I have to propose
it with regret, but I do propose it because
I consider that every item of the expen-
diture has been necessary. Whether it is
to be sanctioned or not it is for the House
to say ; but I am compelled now to take
the whole amount MS it' jrnmtrd, in order
to bring up my balance to the pro}>crti

The estimated deficit for 1856, the appro-
priations, and the Supplementary Esti-
mate for 1857, will amount therefore
to 1,247,042 Is. 3d. So much for the
debtor side. Now let us turn to the
creditor part of the question. On the
subject of revenue, we can come to a
pretty accurate conclusion of the amount
likely to be derived from various sources,
seeing that already seven months of the
year have passed over, and from the result
of these a very fail- guess may be made of
what may be expected from the others.
Now the amount of revenue actually
collected up to the 31st of July of this
year has been 641,521 18s. 2d., whilst
the amount estimated up to the end of
December, 1857, is 480,870. This will
make the whole amount of revenue for the
year 1,122,391 18s. 2d. The revenue, I
may here mention, has not reached the
amount I last year estimated it at. One
item, the land sales, has fallen off very
considerably, not touching anything like
the sum that I had set down for it.
Whether this has arisen from the agitation
of hon. Membei's opposite, or whether
the supply of land has not been in pro-
portion to the demand for it, or whether
the state of the market prevents the de-
sire to acquire land, I shall not now stop
to consider ; certain it is that the sales of
land have fallen off very considerably.
This, however, can be no fault of the
financier. 1 do not state it with a view of
impugning the ideas of hon. gentlemen
opposite, or of supporting those of this
Government, but merely as a fact that is
worthy of remark. Some explanation for
it may perhaps be afforded when the Land
Bill comes under the consideration of the
House ; at all events, an opportunity for
enquiry will then be given, and if any
blame can be attached to the Ministry for
this falling off, I shall be prepared to take
my share of it. However, I now mention
the circumstance, simply in my capacity
of cash-keeper, in order to show the House
the great necessity there is for the exercise
of economy and care on all sides. The
amount of revenue, deducted from the
claims for the year that it has to meet,
leaves an estimated deficit, at the close of
the present year, of 1 24,650 3s. Id. And
here I would call to the minds of hon.
Members the statement I made to them
last year when laying before them my
financial statement for the year. I was
then accused of being too sanguine, but

[1857.]

MR. DONALDSON.

my views did not keep pace with the
actual fact. I now take no credit to myself
for being so near the mark as I was in my
estimate, because I am quite prepared to
admit that the revenue of this or any other
country depends upon circumstances that
neither I nor any other person in it can
foresee ; and moreover, I cannot take this
credit to myself, inasmuch as I estimated
the surplus revenue over expenditure at
14,000 whilst it turns out in fact to be
24,000, an error certainly on the right
side. Having arrived at this, however, the
House, may now see what our position
will be at the close of the year 1858. I
lii-st carry into account the estimated de-
ficiency of 1857, as shown in the return
now laid on the table, which is 1 24, 650
3s. Id. The appropriations required by
the Estimates for 1858, now on the table
of the House, amount to 1,396,232 4s.
4d., an enormous sum I will admit, but
one considered by the Government neces-
sary to meet the requirements of the ser-
vice. Then the amounts to be raised by
loan are, for public works, 50,500, and
to pay off debentures falling due this year,
100,000, making together 150,500,
which will have to be deducted from this
Estimate, and thus leave 1,245,732 4s.
4d. to be provided for. This, taking into
account the authority to borrow, of which
1 have already said that this Government
has not availed itself, will leave to the
credit of the Consolidated Revenue an
apparent balance of 23,017 12s. 7d. It
has been shown in the statement of Ways
and Means that the revenue for 1858, based
on a moderate calculation, will amount to
1,243,400. By taking credit for the sum
of 150,000, authorized by the House to
be borrowed, to cover the deficit of 1857
there will remain an estimated balance
of 23,017 12s. 7d. Now, the state-
ments in this respect nmst be at present
necessarily very brief, but the particulars
will be open to the scrutiny of honorable
Members ; and I must say that the subject
is one which demands from the House con-
siderable investigation. The expenditure,
of course, will be laid before the House in
detail the particulars of the deficit will
also require explanation. It will be seen
that the estimated revenue and receipts
of the country for 1858 amount to
1,393,400 ; but, before I go further into
the subject of the Estimates, which I will
have to do at some length by-and-by, I will
bay a word or two about the statement of

Ways and Means for next year. I propose
to divide the subject under two heads, the
Estimates and the Ways andMeans. I have
said that the Estimated Expenditure for the
year to be provided for out of the current
revenue, amounts to 1,245,732 4s. 4cL ;
and when I state that such is the case, and
have explained all the particulars connected
therewith, I am sure the Government of
which I form a part will no longer be
taunted with not having devoted our at-
tention in any way to principles of
economy in carrying on the financial affairs
of the country. I have succeeded in
effecting a greater saving for the year
1 858 by my system of managing the de-
partment of which I am the head than
was ever effected in any one year since the
commencement of the Government. That
may appear a rather vaunting statement to
make, but I am prepared to prove it by
figures. It has been charged against us
that we have not economized, or cut down,
or diminished the expenses of the Public
Departments, or took any means of saving
the public money ; but I will be able to
show by the deficit statement that I have
not been blind to matters regarding the
economizing of the public funds. By the
means I have adopted for transacting the
Bank agencies of the country I have
effected a saving for the year of 6,000,
and that sum was rather below the mark ;
but the figures will be laid before the
House, and the facts will then speak for
themselves. It will be seen that under
arrangements entered into for the sale
of debentures with the Bank of New
South Wales 650,000 worth of deben-
tures have been sold, the Bank charging
not only 1 per cent, for negotiating them
but | per cent, commission for paying
them off at maturity. I do not blame
our predecessors for their management of
these matters ; they might have managed
them in some respects favourably to the
country ; but certainly, in their dealings
with the Banking institutions, their finan-
cial policy was neither beneficial nor
sound. I take a lenient and limited view
of it when I say that, in negotiating the
debentures to the amount of 650,000,
they have entailed upon the country
an expense of nearly 10,000 for com-
mission. Whatever our faults may
ha\e been in the management of affairs,
\\e could never be charged with mis-
management of that kind. By the way I
deal with the Banks with regard to de-

MR. DONALDSON.

[1857.]

bentures, the Government lias not to pay
commission upon its banking accounts,
and on that transaction alone would
have saved 6,500. With reference
to our commercial agency I have effected
a saving of between 3,000 and 4,000,
that is on a very moderate calculation. In
the salary of the Colonial Agent-General,
I save 300 a year, one-third of a
bonus on 1,050 a saving is effected of
350, and the bonus of 1,050 was also
saved to the country, and was already
paid into the Treasury. I have effected a
saving at the rate of two-and-a-half per
cent, commission on railway plant alone,
which on 150,000 amounts to 3,750;
these sums make in all a saving of 4,400,
together with a sum of 3,000, saved to
the Customs in the Department of Finance
and Trade. I would say in passing, that
the Estimates show an increase of 3,500
on the Customs, but it must be borne in
mind that though the staff employed in
that department has been reduced there
is an increase for the lockers of bonded
warehouses ; these would be separately
paid by the imposts upon the stores. In
the Customs Department a saving in the
end will be effected of 300 ; in the
Light and Pilot Office 2,070; in the
Mint, 2,800; in Pilotage 1,200; the
system adopted to effect the saving in this
particular instance I will fully explain
before sitting down. In the Stamp and
Printing Department 915 has been saved.
In the saving of this latter item some
credit, I believe, is due to the honorable
Member opposite, who preceded me as the
head of the Government. I cannot say
from whom the plan for the change that
has been effected in this particular office
emanated, but it was adopted by the present
Government, and carried out at once.
Formerly the support of the Stamps and
Printing Office entailed a heavy expense,
comparatively speaking ; there were two
clerks paid, two rooms paid for, and a
watchman, <fcc. ; now all the business in
that department is done in the Govern-
ment Printing Office in a single room by a
single individual, at a saving, as I said
before, of 915. In the Survey Office we
have effected a saving of 3,200 ; in the
Audit Office, 260 ; and in the Shipping
Master's Office, 500. This latter saving
I hope to effect by an arrangement which
will be laid before the House shortly, and
which I hope will meet with its concur-
rence. I allude to the amalgamation of

the duties of the Shipping Master's Office
and those of the Water Police Office. I
may remark, in passing, that the hon.
Member for Monaro (Mr. Egan) made a
great complaint the other evening with
regard to the proposed amalgamation of
these two offices, assuming that the change
was proposed merely for the pui-pose of
promoting some parties, and that those
replaced would consequently be pensioned
on the country. This was a hasty assump-
tion, and one which would be found totally
at variance with facts that would subse-
quently appear. I do not like the principle
upon which charges of this kind are made
that of hanging a man first and trying
him afterwards. Had the hon. Member
waited till he had seen the project of the
Government developed, he would have seen
that the change proposed Avould effect a
saving to the country of 500, and that
they were not going to give pensions. In
the Registrar General's Office we will effect
a saving of 400 ; in the Sydney Police
Department 300* ; in the Government
establishment at Port Curtis 500, making
a saving in those three departments of
1,200. The various sums added together
show a saving to the country of 23,700.
Now, I will ask honorable Members and the
country to give us credit for acting econo-
mically ; for, from these statements, it
must be clear that we have not been blind
to the principles of political economy in
making up the Estimates for the year. I
will now proceed to matters requiring large
sums, and I will call the attention of the
House to the fact that the siims I will now
enumerate are for the purpose of carrying
out gigantic undertakings, and for carrying
out measures of vital importance to the
whole countiy. These are improvements
of internal communication, as regarded the
public roads of the interior, the education
of the people, and the establishment of
municipal institutions in various parts of
the country. We are estimating 20,000
more for the repairs of the roads than
was asked for last year ; 35,000 endow-
ments for the establishment of municipal
institutions, by means of which the people
of important districts in the interior would
have confided to them the entire manage-
ment of their own affairs. We propose
50,000 for advancing the important
cause of education being 12,650 more
than was voted last year for the same pur-
pose. These various increases amount to
67,650, apparently a very large sum

[1857.]

MR. DONALDSON.

indeed ; but when it is remembered that it
is to be devoted to great and progressive
objects, the House and the public, I am
sure, will gladly bear it, as the country can
a fiord it, especially when it is seen that
the Government is cutting down expen-
sive establishments that hitherto existed,
and which cost the country so much.
Again, it must be remembered that the
cost of postal communication had enor-
mously increased ; but this extraordinary
increase in the expenditure was undertaken
for the public good. And, again, I say we
deserve credit when I inform the House
arid the country that we propose to borrow
61,000 less for public works than was
proposed for the same purpose in 1857,
and which loans were then asked for.
Having said so much on the .subject of
economy and saving on the Estimates, I
will now refer to the subject of Ways
and Means. There have been great and
important improvements effected in the ex-
penditure of the public money improve-
ments of vast public importance. I may
here say that I again claim credit for the im-
provements effected in the various depart-
ments of the Government under me, im-
provements which will develop themselves
by-and-by. A great deal of acrimonious
feeling has been allowed to characterise the
debates in the House lately ; but I hope,
after all, that the Government will receive
some of that credit due to it in justice
for the Ministerial improA r ements in many
of the departments, as well as for the sys-
tem of economy that has been carried out.
Among other improvements, I may par-
ticularly invite attention to the changes
made in the Department of Finance and
Trade, which will develop themselves and
prove beneficial if the River Murray Bill,
which I have introduced to the House this
evening, becomes law. The Bill to which
I allude was much called for, and when it
had passed the House it would effect a very
beneficial change as regarded the revemie
of the country, and prevent that system of
smuggling which is now too frequently
practised on the frontier of the two colonies.
I saw a few days ago a notice in one of the
papers and, though I do not attach much
credit to these reports, yet I must say that
they are at times worthy the attention of
public men that twenty-five tons of to-
bacco were lately landed at Cuppa, on the
southern bank of the River Murray, on
which not one farthing of duty had ever
been paid. I do not believe the statement

in its full extent; but, although if only
partially true, there was sufficient to show
the necessity which existed for a most
watchful and diligent searching for of duti-
able goods passing on that great highway
of the south. Tliis was a siibject of vital
importance, especially when it was con-
sidered that we had a colony near us on
our frontier almost- I am sorry to say,
hostile in their financial legislation to
us. The Murray is our largest river,
up which boats of light draught of
water can be brought far into the
interior ; and it is most important that
such a Bill as I propose should be passed
to protect our Customs duties. A great
change was required with regard to this
opening branch of Customs. South Aus-
tralia is prepared to charge a rate upon
the entry of goods, and this would tend to
increase the revenue in that direction. I
hope, from the steps proposed to be taken
in this matter, that the Government will
have that credit which is due to it on
account of its watchfulness over the inte-
rests of the country in this respect ; and
before I sit down I hope I shall convince
honorable Members that we have observed
the great principle and the true object of
economy so necessary to carry out in a new
and rising country like this ; that we have
not overworked the screw, nor confined
ourselves to miserable cheese-paring ; but,
on the contrary, that we have directed our
attention to the true principles of economy,
while, at the same time, we have not acted
niggardly, in endeavouring to meet the
legitimate and progressive systems of im-
provement. We have advanced the means
of rendering postal communication quick
and frequent ; we have done all that was
in our power to increase the means of
internal communication from one end of
the country to the other ; the cause of
education has received our deepest atten-
tion ; and we have perfected a Bill by which
municipal institutions will ere long be
established throughout the country, so that
the people living at a distance from the
metropolis shall have the entire control of
their own affairs. Before I make some
remarks upon the general subject which is
of so much interest to myself, and which I
am sure is of great interest to the country,
1 will take up the second part of the sub-
ject, and go to the consideration of the
Ways and Means ; and, no doubt, this is a
subject that will be looked to with interest
by the country at large, as I have devoted

MR. DONALDSON.

[1857.]

much attention to the preparation of the
statement of the Ways and Means. Having
detailed to the House our expectations
it will be necessary for me to develop our
policy, and to justify that policy and ex-
plain it in detail. The Ways and Means
of 1857 were laid on the table of the House
something in the style they were laid on
the table of the House in by-gone times,
namely, as a document sent dowii by the
Governor-General. Now that is not the
Parliamentary practice. I think the state-
ment of the Ways and Means ought to be in
the budget of the Government, and should
be taken from the speech of the Finance
Minister, instead of being sent down in the
shape of a document to be laid on the table
of the House. I do not think it ought to
be one of those documents which in former
times emanated from his Excellency the
Governor-General, and was brought down
in the shape of a message. In stating what
are the finances of the coxmtry, it is my
duty also to state what are the imposts we
intend to levy on the country : The revenue
to be derived from the Customs for this
year I have estimated at 515,000. Last
year's was estimated at .550,000. I will
give two reasons why I take this small
amount. In the first place the price of
dutiable articles, particularly spirits, was
so much increased 011 account of the failure
of the crops in France, that it will naturally
have an effect oil the revenue of the Cus-
toms of 1 858. Again, the drawbacks I have
put down at 20,000, but I do not think
they will be as much as that ; and I antici-
pate that the result will be that the amount
of Customs revenue will be something like
520,000. The duty on spirits distilled
in the colony I estimate at 70,000. Now,
before I go any further, I will disclose
one portion of our intended imposts.
And although it affects the Customs'
tariff, it affects only one article, and the
necessity for taxing this article has only
arisen since the Governor-General's speech.
The Government proposes to put a tax on
opium. I shall conclude my speech by
moving that the House agree to this
resolution to-night, in order that my re-
marks may not go forth to the world be-
fore the duty is declared, so that nobody
will be able to benefit by this knowledge.
The Government of Victoria has put a
tax on opium, and has urged on us not to
receive any from South Australia which
had not paid the duty. There is no moral
obligation on the part of the Government

to prevent the Chinese from eating
opium; it is not made a necessity, but I
think it will be but right to fall in with the
views of the sister colony, and put a duty
on at once, so that of course any opium
being sent across the boundaries will be
subjected to duty. 10s. a pound is
the amount of duty proposed, and I con-
fess I think it ought to have been Is. an
ounce, or 16s. per lb., the same as in Vic-
toria, as an assimilation of tariffs is of
some importance. The duty on gold is
estimated at 15,000, a little less than
last year. Miners' rights and business
licenses, 10,000. Fees for escort and con-
veyance of gold are put down at 1,000,
about 3,500 less than last year. The
Mint receipts are put down at 8,000,
although my gallant friend at the head of
that department thinks it will be increased,
owing to the gold that is being sent from
Victoria for coinage, but I confess I am
not sanguine on that point and think there
will not be much difference between the
revenue for 1858 and the present year.
Now I come to an item in which the
policy of the Government is concerned,
and it may be expected that I should go
into the land question, but I do not think
it necessary for me to enter into details
this evening. I have put the proceeds of
land sales down at 210,000, that is nearly
the same amount as was realized in 1857,
because I do not calcxilate on any extreme
demand during next year. I shall have to
explain the next item, because I have put
down the large sum of 248,000 for the
rent of lands. I do not, however, as I said
before, intend to go into details of the
land measure, because it will be ex-
plained by my lion, colleague, Mr. Hay,
when he brings in the Land Bill. I will
only, therefore, take a Imsiness view of it,
and say that I am convinced of its fair-
ness and equity. We propose to consolidate
the laws relating to the waste lands (that
is, the 10 for the rent of land for 4,000
sheep, charged under the orders of Council,
and one half-penny per head for sheep and
horses under the Assessment Act) in a
just manner, and without striking at the
interest of those who hold them with per-
fect good faith in the Crown. Our pro-
posal, we believe, will meet with the
approbation of the country on account of
its fail-ness, for we propose to levy a sum, at
a certain rate, on sheep, cattle, and horses
and because it will settle their tenure of
these lands, I say we propose to raise a

[1857.]

MR. DONALDSON.

rate moi-e equitable, if not more reasonable,
both with a view to the interests of the
squatters themselves, and the exigencies
of the country. I am aware it may be
considered unpopular by those who will
have to pay it, but I think when the first
burst will have passed over it will have
the support of all hon. Members present.
The exposition of his hon. colleague, and
the discussion that will arise on the land
question, will show how far the present
Ministry deserve to be taunted with
having the squatting interest with us,
because the tax would fall on them. We
propose to levy a rate of 3d. per head on
sheep, and Is. Gd. per head on horses and
cattle per anmim. It appears from the cal-
culation I have made, and I have based
my calculation on the minimum, making
no allowance for the increase of last year,
that there are, 5,227,773 sheep in the
colony, which is one million less than last
year's return. I have made this allowance,
owing to the bad weather and the quantity
sent to Victoria. The probable revenue
will be 65,347. There are 1,417,627
head of cattle, which would bring in
116,322, and 48,993 head of horses, will
give us 36,744. These sums added
together give over 2 1 8,000. The further
portion of the Government scheme will be
fully developed when the Land Bill is
discussed. The sections of land which are
let in the intermediate districts for a
certain sum, namelyl per section, will be
doubled that is those sections where the.
grass is good the rate will be 2 per
section. The other sections will remain
at the same rent. This would give the
Government above 30,000, and would
make, together with the sum I have named,
248,000 as the income for rents of land
for the year 1858. I will not go into this
subject more deeply. I have given in a
few words some of the reasons which have
attracted the attention of the Government,
and they must have further consideration
when the question of the land policy is
considered. I think that the country
gentlemen and squatters who occupy the
waste lands (and I occupy them myself,
to a great extent), even those who occupy
them on favourable terms, will, when
they consider the subject fully, fall in
with the Government in acknowledging
the justness and fairness of the proposed
scheme. The quit rents, redemption of
quit rents, and survey of runs, &c., I
estimate at 800. The rents, exclusive of

land, I put down at 10,600. The licenses
are estimated at 60,000, and I do not
think a larger sum will be realized. For
postage 36,000 is put down ; fines and
forfeitures, 8,000 ; fees of office, 30,000;
sale of Government property, 1,000 ;
reimbursements in aid of expenses incurred
by Government, 10,000 ; miscellaneous
receipts, 5,000 ; and immigration remit-
tances, 25,000. I do not think this sum
is too large for immigration, and I would
at the same time draw attention to the
improved regulations which have been laid
on the table by the hon. Colonial Secretary.
Now this gave us, for Ways and Means,
1,243,400, and 393,900 to be raised by
loan. It will be seen that we propose the
enormous increase of 67,000 for educa-
tion, roads, and municipalities. Without
reference, therefore, to the squatting
question, we shall derive great benefit from
the progressive policy which we have recom-
mended in our increased expenditure.
Now, in the scale of taxation which has
been prepared, after making due allowance
for the cost of collection, there will be
found no addition to the duties now im-
posed on imported articles, except opium.
As I have said before, the principle of ad
valorem duties has been eschewed by this
House. The revenues from the Customs
will probably be decreased in consequence
of the very high price of spirits. But I
hope the establishment of municipalities
in the interior will be the means of re-
lieving ihe revenue of a large burden of
local expenditure. The amount, too, which
will be derived from the proposed assess-
ment on stock will be large. Some honor-
able Members on the cross-benches seem to
be restless and excited in respect to the
course we intend to take in respect to
taxing land and stock, but it is important
they should hear what that course is, and
I hope they will give me their attention.
I have now gone through the details of the
accounts of the year in respect to Ways
and Means. It is not my wish to detain
this House one moment longer than is
absolutely necessary by statements of my
own. But I shall now produce some details
which I have caused to be printed, and
which 1 think it is highly necessary the
House should have before it in the con-
sideration of the finances of the country.
The first of these documents shows the
balances in the Treasury, and the dis-
tribution of these balances on the 31st
December, 1856; the total balance then

MR. DONALDSON.

[1857.]

was .275,567 2s. 5d. The next shows the
balances in the Treasury on the 30th June,
1857, and their distribution ; the balance
on that date was 321,141 11s. 9d. The
next statement is that of the balances in
the Treasury on the 18th August, 1857
for I have had these balances made up to
the last moment, on which day they
amounted to 356,222. The next is the
balance sheet showing the actual deficit
of revenue on the 31st December, 1856,
being 120, 34 3 14s. 8d., and the estimated
deficit on the 31st December, 1857, being
124,650 3s. Id., or a reduction in the
amount of the deficit of 26,973 Is. 4d.
The next is the balance sheet of the
Loans account, showing the balance on the
30th of June, 1857, to have been
101,220 17s. 3d. The next is the Lodg-
ment account, from January to December,
1856, showing a balance on 31st December
of 100,440 Is. 9d. The next is a similar
account, from January to June, 1857, the
balance being then 143,915 3s. 4d. The
next was the balance sheet of the Consoli-
dated Revenue, from January to December,

1856, showing the consolidated balance to
have been 74,957 6s. lid., and the Loans
balance, 94,567 12s. 6d., or a total of
169,524 19s. 5d. The next is a similar
statement for the period January to June,

1857, the balance, 30th June, being
45,976 17s. 6d. These papers will, I
think, facilitate the discussion of the
financial arrangements. I wish further to
draw the attention of the House to the
subject of the Exchequer balances. By
leaving large balances in the Bank, on
which an agreement has been made that
4 per cent, interest should be allowed, an
addition to the revenue has been made of
some 3,400. Perhaps some credit is due to
the honorable Member for Sydney (Mr.
Cowper) for having first earned out
this arrangement, but he was indebted to
the honorable Member for the Stanley
Boroughs when he was Colonial Treasurer,
for the suggestion. His suggestion was
acted on by Mr. Cowper when he succeeded
to office. I find that from the 1st of
January to the 30th June, 1857, these
balances liave sometimes been as high as
208,000, but the general average did
not range higher than from 75,000 to
100,000. The arrangement with the
Joint Stock Bank was that 4 per cent,
interest should be allowed on the balances
in the Bank up to a sum not exceed-
ing 200,000. It was now suggested

by the Bank that the average amount
on which interest should be paid should
be reduced to 100,000 ; and I do
not think this is unreasonable. Besides, I
think it is very easy to make arrangements
with the Banks which will save the country
an amount fully equal to the extra amount
of interest that has been obtained, as for
instance, making the Banks do the business
of the Government in the matter of the
funded debt of the colony, in the same way
as the Bank of England does the business
of the Imperial Government. The Banks
here would pay the coupons attached to the
debentures, and thus a large amount of
trouble will be saved to the Government.
I propose, therefore, that, in consideration
of the Bank performing these duties, the
amount of the balances deposited by the
Government, on which interest is now
payable, shall be reduced. Another relief
to the necessity of borrowing money by
the Government has been the deposit in the
Bank of the various moneys in the Supreme
Court and other offices for the use of the
Government. These moneys now amount
to a sum of nearly 75,000, as will be seen
by the Lodgment account I have laid upon
the table. The result, then, of the measure
of last year, which ordered these moneys
to be paid into the public treasury, has been
the saving to the public of a sum of
2,800. I shall not, Sir, encumber my
statement with more figures than I can
possibly avoid, as I do not wish to weary
the House. The figures I have already
made use of show that the financial
measures adopted by the Government
have been successful. It is, however, a
matter of satisfaction to me to think how
much the Governor-General is justified in
the language used in the paragraph of his
opening speech, in which he says that the
commercial and monetary state of the
colony is sound and satisfactory ; and if
anything can prove this more than another,
and show us that we have fallen upon
happy times for the financial benefit of
the colony, it is the wonderful position
that our Banking institutions have arrived
at. I do not by this mean to say that
the foreign Banks and by foreign Banks
I would be understood to mean Banks
established from capital drawn from
beyond our boundaries have not taken
advantage of their position to use the
capital of the colonists deposited with
them to transact their business and to save
the capital of their English shareholders ;

[1857.]

MR. DONALDSON.

nor do I mean to say that the Colonial
Banks have not to some extent followed in
their steps in this respect, or that they
have acted more favourably ; but what I
would wish distinctly to enunciate is, that
these institutions are both sound and satis-
factory ; and, what is more, that they will
bear comparison most admirably with simi-
lar institutions in the neighbouring colony
of Victoria. If the House wants any argu-
ment to convince it of this, one fact can be
stated that is worth a thousand arguments,
and it is this : that the powerful and
wealthy Government of Victoria wealthy
in proportion to us, for where we receive
10,000 of revenue they receive 30,000,
and where we reckon our expenditure by
hundreds of thousands, they reckon theirs
by millions this powerful colony came
into the Colonial money market with
their debentures bearing 6^ per cent, inte-
rest, and they were sold at 103 ; whilst we,
with our debentures bearing only 5 per
cent, interest, have sold at 98. Now,
an instrument bearing 5 per cent., being
worth par, a similar instrument bearing
O. 1 , per cent, would be worth 130. Instead
of this, however, whilst our securities are
selling at 9S, theirs only realize 103.
We have a right, then, to say that our
securities are worth 6 per cent, more in
the money market than are those of our
neighboui-s. When I speak of the money
market, however, I mean the market of
the colony, or the sale amongst ourselves.
Another thing that is most satisfactory in
this colony is, that, whilst we can readily
get 7 per cent, for our money on mortgage,
and some persons even get as much as 8
per cent., our securities were sold at what
amounted to no more than <5 3s. per cent.
This is the object upon which I would most
congratulate the House ; and if I had not
been so exhausted from physical sufferings,
it was my intention to have gone into a
number of statistical tables, comparing the
state and position of the Banks and of the
commei-ce of Victoria with those of this
country ; this, however, I may do at some
future time. I, at the same time, depre-
cate the practice of vaunting the capabili-
ties or advantages of one country over
another ; I wish to create no jealousy, to
lir-ct no enmity between them. On the
contrary, I would rather wish to see them,
like two sisters, going hand in hand to-
gether on the same road to advancement ;
and I hope that by the Bill laid upon the
table this night, for the collection of Cus-

toms' duties on the Mtu-ray, a link of the
chain has been forged that is to draw us
together in the closest bonds of amity and
mutual support. In all our relations with
that colony, I hope the same feelings will
exist, and that we shall wish as well to
each other, and try to do for each
other, as much as I and the Treasurer
for Victoria (Mr. Ebden) would do. In
early youth I was a schoolfellow of that
gentleman, and many a time he and I
struggled for the mastery, and fought many
a pitched battle in consequence. Now we
are holding parallel offices in neighbouring
and, I may say, sister colonies, and I hope
and trust that our friendship and long
connection may be the type of good feeling
that will always be found to exist between
the two countries, which are one in their
interests and mutual concernments, and
should be one in friendship and amity.
Thus, then, it is not in exultation that I
draw this parallel between the two coun-
tries, not to glory over their weakness, but
to place before this House stern stubborn
facts, which, like milestones, may guide us
on our way, and which, being pointed out,
may not only improve ourselves, but be of
benefit to our neighbours. Though the
people of Victoria have this enormous
traffic, though they raise amongst them
this great revenue, their commercial and
monetary institutions are not more stable
than ours. On the contrary," the fixed
capital applicable for investment is much
larger in this country than in Victoria, and
the reason for this will be patent to any one
who knows the difference between the two
countries. The population there is much
more fluctuating than what it is here ;
besides that, that country is newer, the
people having no ties to bind them to it, but
seeking only to make a fortune and to go
away from it ; whereas here, the population
is settled fixed to the soil. Here our
people have families born in the land, and
growing up to dignify and adorn, it, and an
attachment has been begotten that cannot
exist in a mere country of yesterday.
Here, our citizens have their children and
their properties around them, whilst their
savings have been invested in the Govern-
ment securities, thereby making them
better citizens and more peaceful men. We
shall never have amongst us the same dis-
turbances that have convulsed our neigh-
bourseither on our diggings or elsewhere.
The contrast between our people and those
of Victoria is enormously in our favour.

MR. DONALDSON.

[1857.]

Our capital is large, our business steadily
progressing, and we show all the advan-
tages of good government amongst us. In
saying this, I do so with no feeling of vain
lx>asting, but with the hope that, having
the example before them, the people of
Victoria may strive to emulate it. I, and
all those who listen to me, must be anxious
that this should be the case, because it is
evident that no revolution, no social con-
vulsion, can occur there but it must to some
extent shake, perhaps damage, \is. Our
only desire then should, as it would he
hoped, always be, to go hand in hand
together, advocating and guided by prin-
ciples of a sound commercial policy and of
social legislation. I have said this much
on the sunny side of the picture, but I
cannot close these remarks without a few
words upon the less gratifying prospect
that may, perhaps, open upon us. It is
not wise to look solely to the bright side
of the question, but we must like men face
the storm when it threatens in order to
avert the evil it may entail. I feel it my
duty, then, to mention these matters, to
warn hon. Members and the country of
what may occur, so that when I am sxic-
ceeded in my office by perhaps a better
financier than myself, though certainly not
by one more willing to render service to
the country, he may not. be without warn-
ing of what is before, and may be able to
view both sides of the picture. So long as
the tightness in the English money market
exists, so long as the course of trade feels
the impulse of the war so recently con-
cluded, so long will money be worth more
in England than it is here, and so long will
the capitalists of England and of Europe
not be customers for our debentures. On
the contraiy, there is now a large amount
of capital here, for which investments are
sought for in England. So long as this is
the case it will be impossible for us to bor-
row money to go forward with the improve-
ments that the advanced state of the
country imperatively demands at our hands,
on such favourable terms as we have done.
This is the rock that I see a-head, and of
which it will be as well to beware in time.
Unless, then, we are driven by the force of
circumstances to modify our arrangements,
the Government proposes to issue no more
terminable annuities. As careful men they
are bound to look at the demands that may
from time to time come against them, and
that may come, too, at the very moment
when they are least prepared to meet

them ; at a time when, from monetary
depression, funds will be hard to raise ;
and in such a case how are our liabili-
ties to be met 1 Debentures must be
met when due at any cost, and I prefer
to look to a funded debt, rather than to
the issue of terminable debentures, which
issued at a loss will, in their turn, come
upon us perhaps at another moment of
monetary collapse. (Hear, hear, from Mr.
Gordon.) The hon. Member who cries
" Hear, hear," is I know very much of my
opinion with regard to these terminable
debentiires, but let him rest easy under the
assurance that so long as I have the
financial management of this colony I will
never go into the money market of
Europe to have the scrip of this colony
disposed of at a sacrifice, lowered in value,
and hawked about like an assignat of the
old French Revolution. I will never con-
sent to sell our paper unless upon terms
that will benefit the country. At the same
time we may be sure that we shall not,
for some time to come, be able to borrow
money on the same terms that we have
done hitherto. As the debentures full due
they must be taken up. Renewing them
is a method the most costly, most uncer-
tain, and most dangerous that can be
conceived ; because, as I have said,
when called upon to meet them we may
not be prepared to do so. Some of these,
to a very large amount, will have to be
met this year, and the time of their falling
due is one to which I look with some
apprehension. This will always be the case
year after year until we have the whole
public debt of the colony funded, and the
mind of the financial head of the Govern-
ment, whoever that may be, set at rest, at
all events upon the subject of meeting
claims coming year after year upon him.
I lay down these opinions not dogmatically
or with a desire of obtruding them upon
hon. Members, but merely to put them
forward as a caution for hon. Members of
that House who will have to deal with
this important and interesting subject.
Another question that the House is called
upon to deal with, and to which I would
draw attention as one of danger, is that
of the Australian Federation. As it was,
great damage had been already done by
the thoughtless proceedings of South
Australia. I hope, however, that eventu-
ally that Government will fall into our
views, and that they will consent to an
assimilation of their tariff with that of

[1857.]

MR. DONALDSON.

this colony and of Victoria. If they assist
us, as they easily can do, then the River
Murray might readily be made the great
channel of communication between the
three countries ; but as they have hitherto
differed from us, and have seemed deter-
mined to take the more narrow and selfish
view of the case the one the least states-
manlike that could be conceived it makes
me have some fear on this subject. Now,
before I conclude, I must thank the House
for the patient manner in which they have
borne with my very shameless attack upon
their time, and promise to be very brief
in the few additional remarks I have
to make. I would now merely call upon
lion. Members as a matter of policy to aid
the Government in closing the financial
year at a certain period, as it will be
utterly impossible that any Government
and I speak for Governments that are to
follow this, as well as for the present
administration can meet the demands
upon it if the finances are to be opened at
every period of the session. Whatever
demands lion. Member's may have upon
the funds of the colony, let them at all
events be made at as early a period as
}>ossible ; and whatever the claims may be
let them be abandoned when once the
Budget is opened, and the Ministerial
financial policy is before the countiy.
The House as a general iiile and when I
am on the other side of the House, as
some day I must be, I shall take care
to follow this rule ought never to grant
more on the Estimates of the year than
.Ministers have demanded. No doubt
when a saving of 50,000 has been made
on the Estimates, claims to that amount
may be recognized. Ministers having
agreed to find the amount there is no
reason why it should not be spent. But
the sum placed on the Estimates ought
never to be exceeded. If this rule is not
followed and I hold it out as a caution
to the House and to thecountry there will
be no remedy in the hands of Ministers, but
in increased taxation. Now the principles
of taxation I have laid down are sound, and
based upon correct calculations, arrived at
after much thought and consideration. I
will lay before the House a system of
legislation in this respect which will bear
the closest examination. It cannot be said
that the country was too heavily taxed,
but still it is taxed (piite heavilv enough,
and the House will bear in mind that if
it should desire to entail fresh expendi-

ture the Government will have to meet it
with a fresh tax upon the country. The
Government does not propose anything of
the kind, and from the statements I have
made it may be seen that they can go on
very well with the Estimates shadowed
forth. I would remind the House that
while in older countries the people
are overtaxed, as they were in Great
Britain, they had different sources of
revenue ; there was a property-tax, a
poll-tax, a window-tax, a bread-tax, a tax
upon almost everything ; but here this
could not be the case, nor was it necessary.
Whatever we save from the revenue will
relieve taxation ; and in a new country
like this, when the demand is great, it
must be met by fresh taxation. It
would be better in such a country as this,
for the sake of economy, for the Govern-
ment to be poor and needy than to have
an overflowing exchequer, as it would be
sure to spend all its surplus funds. I would
not complain of a Government levying a
tax when it was needed, to carry out a
necessary and proper object. Nor would I
object to see money expended upon impor-
tant improvements ; but I would object to
people in power whose policy of finance
would result in getting the country into
debt. It will be a great boon to the people
of the interior when they get municipal
institutions established, because they will
be able to manage their own affairs. Then
indeed, those demands for improvement, so
often made in vain to the central Govern-
ment, the people themselves will have
the power to carry out. It will be
a great step in advance to see such
institutions break down those centralising
influences which now exist. These in-
stitutions would not only advance the
general interest of all but improve the
social status of the people. These great
beneficial changes the present Government
is certainly prepared to cany out. I will
now say a few words with reference to the
10 debentures. The Government has
taken great trouble to distribute these
debentures amongst the industrious classes
which have been sold to the amount of
some 4,000 or 6,000. Arrangements
have been made to distribute them in
every part of the interior. Every means
will be taken to guard against any pos-
sibility of loss to which it might be
supposed the documents were liable in
their transit to and from the interior.
The Govenmieiit, I may say, does not

MR. DONALDSON.

[1857.]

wish to force the people, nor does it
wish that the people should suppose that
they desire to force them to enter upon
these investments, if they do not them-
selves see the advantage of the investment.
This document which I now lay on the
table, is a 10 debenture, and is in every
respect similar to a debenture for any
larger sum ; and I hope that when the
system is known it will become popular,
and be extensively taken advantage of,
and thereby prove its usefulness. I could
dwell much longer upon this subject, but
time does not permit ; and I must even
now thank the House for the indulgence
which it has extended to me in listening
so long and so patiently to my address. I
might here, in conclusion, appropriately
use the quotation used on a somewhat
similar occasion by Mr. Gladstone in
1853

" Immensuni spatiis confeciraus aequor
Et jam tempos equum fumantia solrere colla."

I hope that whatever may be the opinion
of the House as to other portions of our
policy, that it will do us the justice

to admit that in our financial policy
we have been actuated by a sincere desire
to economize the public money. Speeches
have been made at public meetings,
and rambling addresses made by parties
here and there throughout the country,
respecting the policy of the Government,
in which we have not only been twitted as
being the representatives of wealth, but the
possessors also of large tracts of territory,
for which we paid a very small consideration.
Sir, I hope that honorable Members will
wait to see whether we have not endea-
voured to distribute the burdens of the
country fairly, and to disburse the public
money justly. If we are the representa-
tives of wealth we have not failed to show
that we are prepared to tax ourselves, to
show that we have adopted an equitable
system of taxation ; that we intend to
expend the public money in carrying out
works of great national importance ; and
that we have not selfishly attempted to save
ourselves fi-om cost, or to benefit ourselves
in any way at the expense of any portion
of our fellow colonists.

THE HONORABLE RICHARD J!ONES.

NEW SOUTH WALES,

THE FINANCIAL STATEMENT of the HONORABLE RICHARD JONES,
made 4th November, 1857.

[From the Sydney Morning Herald of 5th
November, 1857.]

LEGISLATIVE ASSEMBLY.

Wednesday, 4 November, 1857.

FINANCIAL STATEMENT.

Mr. JONES in moving " That, towards
making good the supply granted to Her
Majesty, for the Supplementary Service of
the year 1857, the sum of 49,894 17s. 2d.
be granted out of the Consolidated
Revenue Fund of New South Wales,"
said, Mr. Chairman, this amount being
already sanctioned by the House, in
making this motion I take the earliest
opportunity of laying before the Com-
mittee a series of returns which will
make clear the statement I am now about
to make, showing what the financial posi-
tion of the country really is, what are the
intentions of the Government for providing
the Ways and Means for the year, and
what appropriations they intend to ask
for out of the revenue of the ensuing year.
In making this statement I am aware that
I shall have to trespass at considerable
length on the indulgence of the House,
because, however brief I may endeavour
to be, yet the many topics that are em-
braced in this subject must necessarily
take up a great deal of time, even though
they be but lightly touched. Again, in
undertaking this task I must necessarily
labour under great disadvantages in the
eyes of the House, when compared with
my predecessor in office. The subject is
avowedly a dry one, and it is not in my
power, as it was in his, to relieve it of
its dreariness. I have not the facility of
language or the power of embellishment
possessed by that hon. gentleman, and
which he knows so well how to use to take

from the dry character of a debate. Feeling
that I can never hope to imitate my hon.
predecessor, I shall solely endeavour, in
performing the duty before me, to lay
before the House a plain and simple state-
ment of the financial position of the
country, so as, by the aid of the documents
now in the hands of hon. Members to
exhibit to the House in as clear a form as
possible the views that I myself entertain.
Perhaps it may be convenient, before I
proceed to deal with the question at large,
that I should explain to the House the
position in which we now actually stand,
on a comparison of revenue with expen-
diture for the current year. It may be
remembered that my predecessor in office
made a financial statement some short
time back, in which he showed the actual
state of the revenue to the end of July,
the estimated revenue to the end of
December, and what was expected to
be the deficit at the end of the present
year. I have also followed this plan in
the papers now laid upon the table, and
on a reference to them I find that up to
the 30th September, 1857, the amount of
revenue actually collected is 886,418
8s. 2d. ; and I have estimated that the
revenue to be received during the last
three months will amount to 259,920,
making the total for the year 1,146,338
8s. 2d. If hon. Members will turn to
the statements on the table, which my
hon. predecessor used, they will find
that the amount of revenue actually
received up to the end of July was
641,521, whilst the amount estimated
to the end of the year was 480,870;
or a total revenue for the year of
1,122,391. The expenditure that my
predecessor proposed to provide for out of
this revenue amounted, reckoning the
deficit, to 1,247,042. Now it will be
seen by a comparison of these two docu-

MR. JONES.

[1857.]

ments that I have estimated the revenue
of the current year at about 21,000
beyond what my predecessor has done.
The increase which this statement shows
arises partly from an increase in the
revenue actually received up to the end
of September, and partly from my having
anticipated receiving a larger amount of
revenue during the last months of the
year than my predecessor has done. This
increased revenue arises from an actual
excess of receipts and from more favour-
able anticipations on my part ; and I
believe I may say that I have gone care-
fully through the Estimates and that
I firmly expect that my anticipations
will be fully realized. There is also
included in my Estimate a sum that
I expect to receive for interest on
the City debt up to the end of the
present year, amounting to 8,000, a
sum not taken into account by my pre-
decessor. In the debtor account, laid on
the table by me, there is beyond that
brought forward by the late Ministry, a
further sum of 30,703 additional Supple-
mentary Estimates for 1857, already
partly disposed of by the House. A
very considerable portion of this Estimate
is made up of sums for public works,
and for the fitting out of an expedi-
tion in search of Leichhardt. A large
sum has also been demanded for the
department of the Administration of
Justice, and I am quite sure, therefore,
that the expenditure for the year is in
every respect such as the House can with
consistency sanction. I will now proceed
to deal with the Ways and Means of 1858.
The returns which bear on this point
are Nos. 2 and 8 in the documents now
before the House, and the detailed state-
ments appended thereto. It will be
seen on a perusal and comparison of
these returns with those furnished by my
predecessor, that I anticipate a nominal
increase of 104,000 over and above the
amount estimated by my predecessor as the
revenue for 1858. This amount is made up
in the following manner : In the Customs
I have an increase of 20,000; in the gold
revenue, of 5,500 ; in the Mint receipts,
of 3,000 ; in rents and tolls, of 6,000 ;
in licenses, of 4,700 ; in railway tolls,
of 62,000; and in City interest, of
20,000 ; making with a few others a gross
total of 122,000. But from this there
has to be deducted the sum of 18,000,
being the deficit on revenue from land,
which will be less by that amount than that

anticipated by the former Ministry.
Deducting this from the gross total we
have the net total of 104,000, before
named bv me to the House, as the
nominal increase of revenue that I anti-
cipate beyond that estimated by my
predecessor. Perhaps it would be as well
that I should explain to the House why
it is that I anticipate this increase of
revenue. With regard to the four first
items, the result has been arrived at by a
careful revisal of the estimates by the
present Ministry, after a consultation
with the heads of the different depart-
ments ; and I have every reason to believe
that the larger estimates will be found to
be fully justified by the results. The
increase from tolls and rents will be
owing to the change that the Government
intend to make in the main roads of
the Colony. We propose to take upon
ourselves the care and maintenance of
these roads, and in taking upon ourselves
the expense we shall also take over the
sums derivable from the tolls now estab-
lished on those lines. The amount thus
receivable will reach, as nearly as I can
arrive at it, somewhere about 6,000.
The sum set down as income from railways
is the gross revenue of the Railway
Department. The late Ministry, in
framing their Estimates, instead of taking
credit for the whole receipts of the
department, took credit only for the net
amount of receipts after allowing for
the current expenses. The increase of
62,000 is therefore a nominal one,
being a matter of account only, since
we, in taking credit for the gross
receipts, have charged on the other
side the total amount of the expendi-
ture of the department. I also take
credit for the sum of 20,000, being the
interest on City Debentures ; and the
House will see that I have estimated that
the sum of 140,000 will be required
next year to pay the interest on the
public debt of the Colony, and in this
is included the city debt, the interest on
which we are entitled to take credit for,
as it will have to be refunded by the
corporation. It will also be observed
that our estimate of the land revenue
is not so much by 18,000 as that which
the late Ministry expected to raise. This
arises from the fact that our predecessors
expected to raise a larger amount from
assessment and leases than the present
Administration intend to charge. The
amount that we expect to receive for

[1857.]

ME. JONES.

the assessment on stock is about 30,000 ;
but whilst we do not expect so much
under this head, we anticipate receiving
more from the sale of land than did our
predecessors in office. At the same time
we do not anticipate that the change we
propose making in the upset price of
land will lead to any very great or re-
markable augmentation of the land fund.
We do not look forward to any of the
consequences that have been alluded to
both in this House and out of doors,
that anything like a land mania will be
produced by the lower price, or that there
will be even any considerable augmenta-
tion thereby of the demand for land.
Hon. Members who have been in the
habit of paying attention to the land
question for the last four or five years,
and examining with any degree of care
the returns that have been published,
will see how the land revenue has been
derived. The great bulk of the land
revenue has been derived from town and
suburban allotments, and from land which
may justly be called agricultural. The
amount derived from the sale of land for
pastoral purposes has been small. The
Government do not expect that the scale
they propose will affect the sale of the three
first classes, of land, namely, town, subur-
ban, and agricultural ; and although they
propose to reduce very much the price of
land for pastoral purposes, they do not
believe that the reduction will lead to
any sudden or large increase in the laud
revenue. They contemplate the effect
will be, in consequence of this change,
gradual, and should Parliament sanction
it, it will be one of a progressive character.
When people know that land for pastoral
purposes can be obtained now and here-
after at 5s. per acre, there will be no
inducement for people to rush into the
market and invest all their means in
buying up land, when the area for sale
may be said to be unlimited. There can
be no particular reason for speculators to
embarrass themselves by running up the
price of land, because they must know
that when they have exhausted their
money there will still be the same class
of land for other purchasers. We
therefore do not expect any great increase
in the land revenue to arise from this
change in the price of land, but we
believe that the effect will be one of
a gradual and progressive character. It
will be bought by people who wish to
increase the quantity of laud they possess

already, and not with a view of em.
barrassing themselves by the purchase
of these lands. It will also be observed
that the Government have based their
Estimates of Ways and Means and
Expenditure on the presumption that
the House will give its sanction to the
changes proposed to be made in the law
relative to the lands of the colony. If that
is not done there will be a sum of
90,000 or 100,000 which the House
will have to provide for in another way,
because the amount to be derived from the
rents and assessments is calculated to
reach 80,000 or 90,000. This change
the Grovernment estimate will produce
80,000 or 90,000 ; therefore, if the
House refuse to sanction the change in
the law, or the increase in the assessment
now levied, it will either have to diminish
the expenditure the Grovernment intended
to make, or let the Government meet
the expenditure by some other source
that is, of course, for the House to
determine. It is on this that the Esti-
mates have been based, and if there
is a diminution of the amount then we
must either reduce the expenditure or
derive revenue from other sources. If
hon. Members will refer to statement
No. 2 they will see that the estimated ex-
penditure for the year 1858 amounts to
1,299,187 16s. 10d., while that proposed
by my predecessor was 1,245,732 4s. 4d.,
showing an increase of 53,455 12s. 6d.
But as this is only the aggregate
amount, it is necessary that I should go
somewhat into detail to explain how
the increase has arisen. The decrease
will be in the following items :
Postal conveyance, 5,000 ; conveyance
of the English mails, 4,000 ; education,
10,000 ; Immigration, 25,000 ; munci-
palities, 35,000 ; public works, 50,000 ;
minor items, 16,000. This will make a
total of 145,000 ; from this will have to
be deducted for loans 50,000, leaving the
actual decrease to be accounted for
95,000. I will now proceed to explain
the way in which we arrived at these
diminished estimates of expenditure. In
regard to the conveyance of Colonial mails
there is 5,000 diminution, and we are
justified in this reduction by the amounts
at which the contracts have been takrn.
The Postmaster General believes that the
estimate previously submitted to the
House, less this" 5,000, will cover all the
expenditure for the ensuing year. The
same officer has also given the Govern-

MB. JONES.

[1857.]

merit the assurance that the proportion
of the subsidy to be paid to the Euro-
pean Mail Packet Company will not
exceed 24,000. It is estimated, from
computation of the number of letters
posted and received here with the num-
ber at Victoria, that we shall have
only to pay 24,000 as our contribu-
tion. I have taken the sum of 26,000
to allow for any increase that may occur,
and this will be 4,000 less than it was
formerly estimated at. The next diminu-
tion is 10,000 for educational purposes.
The late Government proposed the sum
of 20,000 for education, but the present
Government, although not unfriendly to
education, are not prepared to ask the
House to assent to such a large expendi-
ture until they have seriously considered
the system under which the money is to
be expended. Until that is done they
will not ask for such a sum for education.
They therefore propose to confine them-
selves to asking for the increased amount
of 3,500 for the Denominational system,
so as to place the two systems on an equal
footing. The item of 35/K)0 for muni-
palities we consider will not be required,
because under the Bill submitted by the
late Government, and the Bill submitted
by the present Government, it is scarcely
possible that any municipal body can be
organized in sufficient time to come on
the Treasury for contributions arising
from assessment. The Bill before the
House provides that after the petitioners
of a certain district desire to be incor-
porated a period of three months must
elapse. After the expiration of that period
it will take some time before the elections
can be gone into and the machinery com-
pleted to get municipal bodies into working
order, so that it is impossible they can
require any subscriptions during the en-
suing year. We therefore think this sum
will not be required. "With respect to
the sum put down to carry on public
works by loan, the present Government,
do not, in regard to some of the services,
contemplate expending anything. The
principal item which the late Government
proposed to be expended by loan was the
extension of the Parramatta Lunatic
Asylum. The present Government are
not satisfied with the extension, or that it
would be very useful if undertaken ; they
therefore do not propose to ask the House
to sanction so large a sum in extending
this property. That will save 30,000 ;
but in lieu of this sum for the Parramatta

Lunatic Asylum they have submitted an
item of 1,000 for the asylum at Tarban
Creek, -which with the extension that has
already been secured by the alteration of
the Lunatic Asylum at Parramatta will
provide all the additional accommodation
required. They desire, before putting the
Colony to this large expenditure, to have
full opportunity of carefully considering
the proposed plan. The next item which
we propose to remove from the Estimates
is the sum of 10,000 for the erection of
the bridge over the Murray. The Govern-
ment, in making inquiry into this item,
directed a surveyor to prepare a plan and
estimate of the cost of this bridge, but as
he has not yet sent in any report on the
subject we are unwilling to ask the House
for this amount until, at the same time, we
are in a position to lay before the House
some reliable information as to the pro-
bable cost of the work to be undertaken.
While we have left this item out of the
Estimates submitted to the House we
are quite prepared, in the event of receiv-
ing the report, to place on the Additional
Estimate, which will have to be prepared,
any reasonable amount that this work
may cost, and which can be defrayed out
of the current revenue of the Colony.
We are not, however, prepared to
ask the House to carry out this work,
however important, without reference to
the total cost. The determination of
whether we will or will not place this
sum on the Additional Estimates, will
depend, in the first place, whether we
receive the report from the surveyor in
time to make provision for it in the
Additional Estimates, and whether the
Estimate is one that we can ask the
House to sanction. There is also 10,000
towards clearing the Murray. The present
Government does not intend asking the
House for so large an expenditure, which,
although it would be of great benefit to
the Southern Districts, it is not satis-
fied that it should be paid out of the
general revenue. The next works are
the Dry Dock at Cockatoo, the Abattoirs
at the Glebe, and other works of a minor
character, and for which the amounts put
down are so trifling that I need not par-
ticularize them. With regard to these
works the Government intend to pro-
ceed with them, but to defray the cost
out of the revenue of the Colony. I
take this opportunity of stating, with
reference to the Estimates, that the pre-
sent Government has not made any

[1857.]

MB. JONES.

alteration in the establishments as sub-
mitted by its predecessors. It will be
found that in no material respect have
we differed from the Estimates they
placed before the House. There are
some trifling changes, perhaps ; items
are larger in some cases and smaller in
others, but there is no material altera-
tion. The Government in coming to this
conclusion was influenced by this con-
sideration : we felt unwilling to make
any material or radical change in the
establishments of the country until we
had time to inquire into their working.
We felt unwilling to propose changes
which might be prejudicial to the Colony
until we were satisfied that the expen-
diture was more than was required for
the government of the Colony. What
the changes are which we do propose to
make in the establishments will be ex-
plained when the House comes to deal
with them in detail. I will now proceed
to point out the items of increase in
our expenditure, which are as follows :
Towards taking up I cannot call it
payment the debt incurred towards the
liquidation of the deficit known to exist
at present, the Government propose to
appropriate the sum of 16,000 out
of the revenue of the present year.
To paying off debentures, 35,000 ;
interest, 10,000 ; railways, 67,000 ;
making a total altogether of 128,000 ;
minor items, 20,000. These make a
total increase of 148,000. Deduct the
amount of decrease, and it leaves a net
increase of 53,000. It is necessary
to explain how the items of increase
arose. It appears that when the House
gave its sanction to the Loan Act to
cover the deficiency, it gave it in the
belief that at the close of the year the
deficit would amount to 150,000. In
doing so the House assumed that the
power to raise the loan must be restricted
to the actual amount of the deficiency ;
and, although authority was given to raise
150,000, the Government was not jus-
tified in raising that amount if, what proved
to be the case, the deficit only amounted
to 120,000. It would be seen by state-
ment No. 1 that the actual deficiency
amounted in round numbers to 120,000.
There was no authority given to the
Government to exceed the actual deficit,
and they were not justified in raising an
amount above that. There was also this
understanding at the time, that the pay-
ment of the deficit should extend over

ten years ; assuming therefore, that
150,000 was sufficient to meet the deficit,
thatamount was each year to be diminished
by the sum of 15,000, so that in ten
years the whole sum would be taken up.
Now I am sorry to say that the late
Government does not appear to have kept
this stipulation in view, because it did
not make any provision for diminishing the
deficit during the present year, and more-
over I find that it actually increased the
deficit by 4,000 or 5,000. Besides
it will be observed that the deficit of
1856 is now ascertained to be only
120,343, while the estimated deficit
of my predecessor for that year was
124,650, thus showing that, instead of
one-tenth of 150,000 being deducted,
there is an increase of 4,000. I am
sorry to say that 1 have been unable to
make any provision to reduce the deficit
for the current year, and that I have
also been obliged to go beyond what my
predecessor contemplated, having added
to the deficit a sum of rather more than
8,000. Instead, therefore, of paying off,
as the Legislature intended, one-tenth
of the deficit annually, we will actually
have increased it at the end of the present
year. Now, in order to enable the
Government to carry out the spirit
under which the House sanctioned the
loan of 150,000, I propose that it
shall be paid off in nine years. I
have therefore provided that during the
current year one-ninth of the sum of
128,000 should be taken up, so that next
year it would leave the deficit at 112,000.
That sum if divided by eight will require
14,000 to be paid yearly to carry out
what was originally intended by the Legis-
lature. I have appropriated during the
current year the sum of 16,000 to be
set aside to diminish the deficit. The next
item of increase is 35,000 for pay-
ing off debentures. It will be seen that
the present Government propose to set
apart from the revenue of the ensuing
year 35,000 towards diminishing the
debt of the Colony. I think, as we will
be compelled for some few years to come
to make large additions to this debt,
for the purpose of carrying out public
works which we cannot hope to provide
for out of the ordinary revenue, we should
jealously guard against every unnecessary
increase of it. It is therefore but fair that
we should from time to time make pro-
vision for diminishing our public debt by a
certain amount each year. I think this is

ME. JONES.

[1857.]

also desirable, as a measure for placing the
credit of the Country on a secure footing.
Those who have money to lend, both here
and at home, when they see this Colony
going on year after year increasing their
debt, without making any provision for
paying it off, will be less inclined to lend
than if they saw that we were setting
aside a sum yearly for its liquidation. I
propose and intend, whether I am one of
the Ministry or not, to bring in a Bill
to the effect that a sum of 50,000
shall be appropriated annually for the
liquidation of our debt. The large amount
which is put down for railways is merely
a matter of account. Up to this time the
expense of working the railway depart-
ment has not been submitted for the
approval of the House. The only amount
that has hitherto been thought necessary
to submit is the net revenue. The present
Government, however, propose that the
expenditure of the Railway Department
shall, like that of all other departments,
be submitted to the House. I can see
no reason why this service should be
withdrawn from the appropriation of
Parliament any more than any other
department. The whole of the Eailway
Deartment will therefore be brought for
the first time under the control of the
House. The Government, having debited
the whole expenditure, takes credit for
the entire amount of revenue to be derived
from railways. Although these two sums
go to swell the nominal amount of income
and expenditure the balance will of course
remain the same. The lesser items, which
make up the increase referred to, do not
call for special remark, as the details will
shortly come under consideration in Com-
mittee of Supply. Although the present
Government do not seek a loan for minor
purposes, it proposes to raise no less than
than 754,300, to cover the expense of
railway extensions and surveys, which,
with the amounts otherwise to be made
available, will construct 70 miles of rail-
way, besides providing the necessary
loccmotives. This extension will be
divided as under : 22 miles from Parra-
matta to Penrith, 28 miles from Maitland
to Singleton, and 20 miles from Campbell-
town to Picton. The total expense will
be 827,500, including 27,000 for
surveys. The cost per mile will average a
little under 12,000. Although the
Government ask for this large amount at
the present time, it is contemplated that
the raising of the money shall extend over

a period of two years. It is also arranged
that on each line the point to be reached
shall be one at which the whole traffic
of several districts is concentrated, and
to which, therefore, the Government will
be justified in extending the lines of
railway. Whilst the construction of
these works is going on it is proposed
that provision should be made for carry-
ing on thorough and systematic surveys
throughout the country, say from Picton
to Albury on the southern side, Penrith
to Bathurst on the western, and Singleton
to Armidale on the northern. The
object of these surveys is to ascertain
the real character of the country so as to
obtain authentic data for determining
the cost of constructing locomotive
railways, horse railways, and roads of
a less expensive description. In con-
junction with these surveys inquiries
will be instituted to ascertain beyond
doubt the nature and extent of the exist-
ing traffic, and of any probable increase,
with a view to assisting the Government
and the Legislature in determining which
will really be the best mode of securing
good internal communication, whether by
railways of the present class, by tramways
of any kind, or by superior macadamised
roads. It is supposed that by this means
the Government will be enabled to form
an estimate as to whether the traffic in
particular districts would pay for the con-
struction of a railway, because if it did
not it would be worse than useless to
incur the expenditure. There can scarcely
be any doubt that the present Government
is fully justified in carrying locomotive
railways to the points now determined
on, as it is all but a matter of certainty
that up to these points the traffic will be
sufficient to meet the expense. I do not
think it necessary now to go into an
exposition of the present Government's
railway policy, as that is a matter which
can be more appropriately dealt with when
the vote for railways comes under discus-
sion. I may, however, take this oppor-
tunity of stating to the House the order
of railway extensions already determined
upon. As the Western District has
hitherto been most neglected, it is pro-
posed to proceed with the Penrith line
first, and for a similar reason the Northern
line second. I will now allude to the
question how a loan may be raised ? The
honorable Member who cheers me is
doubtless aware of the dark cloud which
hangs in the distance. 1 do not know

[1857.]

MR. JONES.

what his experience may have been, but
I know mine has taught me that a loan
cannot be readily raised at the present
time. On the present Government assum-
ing office it found that the contracts
taken on the works in course of execution
would absorb 200,000 by the 31st of
December of the current year, and
250,000 by the 30th of June, 1858.
This position is rendered extremely un-
pleasant, from the fact that there is no
demand for our securities, either in the
Colonial or English market. The 100,000
of interminable debentures remitted home,
were, it is generally known, pronounced
unsaleable at the limit given, and even
without a limit it is considered very doubt-
ful whether they would have sold. Here,
the feeling is not so strong against inter-
minable debentures, but nevertheless it can
scarcely be said that there is any demand for
them, or indeed for securities of any kind.
The consequence is that the Government
have been obliged to replace the 100,000
with the Oriental Bank at home by ter-
minable securities. In the meantime the
Government offered terminable deben-
tures for sale in the Colony, but although
there was a larger amount tendered for
than required, the prices were such
as not to justify us in negotiating
hence the necessity of replacing the
100,000 alluded to by different securities.
The present Government thought fit to
test the market in regard to terminable
debentures, and I am compelled, in all
honesty, to say that there was no greater
desire to invest here in terminable than
there was in interminable debentures.
Although these terminable debentures
were duly advertised, only 12,000 have
been tendered for, and of these only about
1,000 worth have been accepted by the
Government on terms it was thought
prudent to accept. Some exception had
been taken out of doors to the issue, by
the present Government, of debentures
which would fall due at an earlier date
than that for which previous debentures
were issued. But I think that these
objections have been made without due
regard to the facts of the case. "When
the present Government came into power
they found that the interminable de-
bentures were unsaleable. We found,
moreover, that under the issue of termin-
able debentures which had already taken
place, 700,000 or 800,000would fall due
about the same time. As I do not think it is
prudent to crowd into this enormous

debt further liabilities, to become due in
the very limited space of one or two
years, I have thought it advisable to dis-
tribute the debt in such a manner as to
make the payment most easy to the
country, whilst affording the greatest
facilities for borrowing. I consider that
every Government has a right to make
its own financial arrangements, and if
it find it cannot borrow securely on
long-dated debentures, or that it could
sell on better terms for short-dated
debentures, it was bound to do so.
When, therefore, I find that the short-
dated debentures are preferred in the
money market, both here and at home, I
can see no reason why the Government
should not make its debentures payable
in fifteen or sixteen years, provided that
by doing so it will relieve the Colony
from too heavy a demand, at a time when
other large liabilities fall due. If there
were a shadow of doubt as to the
solvency of the Colony, or of its honour
and honesty in regard to the payment
of its debts, I could then forgive any
squeamishness as to creating a short-
dated debt ; but I have no such doubt I
have the fullest reliance on the capabilities
and resources of the Colony and of the
honour of the people to support the
Government in meeting all its engage-
ments. Those who acknowledge that the
credit of the Colony is good had no reason
to complain that the Government should
issue its debentures on such terms as
seem most desirable. I will now address
a few words to the House respecting
the securities issued by the late Govern-
ment and those issued by the present, and
I think the policy I and my colleagues
have adopted will be found to be a
sound one. The policy of the former
Government was to issue debentures,
which the Colony might never be called
upon to pay. I have nothing to say
against that policy, which was sound so
long as it was practicable ; but when these
interminable debentures became unsale-
able it was the duty of the Government to
find some other security. It appears to me
that in the considerations which in-
fluenced the issue of these interminable
debentures several important matters were
overlooked. It could not be doubted
that the great bulk of the money to be
borrowed for the furtherance of the
Public Works of the country must be
borrowed from the Mother Country.
Now I would ask hon. Members to com-

MB. JONES.

[1857.]

pare the financial condition of this country
with that of the Mother Country. In the
old country there are men so wealthy as to
be able to lend all the money she might
require for her own use, and all that may
be required for the use of others. But
these wealthy people lent their money on
the credit of old established nations, that
could not fail to pay the interest they
asked for their money, or the principal
when it became due. But these wealthy
capitalists of the European market, before
they invested their money in Colonial
securities, must have such conditions of
redemption as will suit them. Now I find
that about 100,000 of these interminable
debentures which had been found unsalea-
ble in England, have been returned through
the Oriental Bank, to the Colony. I am
also aware that other of these debentures
which had been purchased by private
parties and found unsaleable at home,
have also been returned to the Colony.
I quite admit that the policy of borrow-
ing on an interminable security, so long
as the security is known to be good,
is a correct one ; but the difficulty here
is that this policy on trial has turned out
to be impracticable. To carry on the
Government we must have some security
on which the capitalist will be willing to
lend. The English capitalist thinks it
better to have terminable securities
whereby in a certain number of years the
liabilities of the Grovernment must be dis-
charged. But the great question which
arose was, how were the present liabilities
of the Grovernment to be met ? Both the
English capitalist and the Colonial capi-
talist refuse to accept the interminable
Debentures. I can see, then, only two
ways of meeting the embarrassment of
the Government. The first is to issue
Exchequer Bills wherewith to pay off the
liabilities of the Government, or other-
wise to obtain accommodation from the
Banks. I think the better plan will be
to bring in a Bill to authorize the issue of
Exchequer Bills. The issue of these bills
would be a great public convenience. If
this course were not adopted but one alter-
native would be left. The Government
must stop the public works in progress, or
appeal to the Banks for temporary
accommodation. I see much objection
to either of these courses. To stop
the public works would be to throw many
people out of employment, destroy or

render ineffectual much that has been
done, and to create much public inconve-
nience. 1 On the other hand, the Banks, it
is well known, have not at present more
money than was required for their business
with their ordinary customers, and if the
Government obtained any assistance from
them it might seriously affect the terms
on which they lend money for the purposes
of trade. I think, therefore, it would
be better that a Bill should be brought
in to authorize the issue of Exchequer
Bills. But while I would adopt the
main principles on which these bills
are issued in England I am prepared
to go further. In England, after one
year's currency, Exchequer Bills are
received in payment of taxes, but I
would make the bills issued from the
Treasury of this Colony a legal tender
both for Customs duties and the price of
land sold by the Crown. It is true that
that it may be argued that by taking
this course these Government securities
might be returned to the Treasury sooner
than desirable an objection, however, of
not much force, for to make the bills
available in this way would make them
much more popular. It was, however,
by one of these two alternatives alone
that the Government could be released
from its present embarrassment. I wish
to cast no reflection on the previous
Government for the policy it adopted in
issuing interminable debentures, for at
the time they were issued there was every
prospect that they would sell. I have
nothing more to add to the remarks I have
addressed to the House. I hope I have
explained sufficiently what the revenue
of the country is expected to be, and how
it is proposed the expenditure should be
distributed. I also think I have sufficiently
explained how the loans now in existence,
or that may be required, should be main-
tained or raised. In adopting the course
I have shadowed forth I can foresee no
danger to any Government that may follow
that to which I have the honor to belong.
The financial policy which my schemes
comprehend will at all events involve no
danger to our successors. I now move,
That towards making good the supply
granted to Her Majesty for the supple-
mentary service of the year 1857, the sum
of 49,894 17s. 2d. be granted out of the
Consolidated Eevenue Fund of New
South Wales."

JHE HONORABLE ROBERT CAMPBELL.

r v
j.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE EGBERT CAMPBELL,

made 7th April, 1858.

[From the Sydney Morning Heratd of 8th
April, 1858.]

LEGISLATIVE ASSEMBLY.

Wednesday, 7 April, 1858.

FINANCIAL STATEMENT.

Mn. CAMPBELL rose and said : Mr.
Chairman, before making the financial
statement of the year it ia necessary that
I should make some explanation to the
House. The Assembly, by its vote on a
former occasion, sanctioned the expendi-
ture of the sum of 80,485 Is. 9d. to
meet certain expenses on the Supplemen-
tary Estimates for the year 1857, and it
further voted the sums necessary to
meet the expenditure of the year 1858.
As it is necessary for the Government to
provide the ways and means for the pay-
ment of these sums, I will now proceed
to explain how we intend to do this. I
feel, however, that it will be unnecessary
for me to say much, as the papers I have
laid on the table are almost identical with
those which were laid on the table and
explained by my predecessor. The only
material difference between the documents
was that the deficit on the 1st of January,
1 S -")S, as now shown was 95,665 5s. 6d.,
while that shown by my predecessor was
128,544 4s. 2d. The Estimates of the

Ways and Means therefore have in no
respect been altered from those of my pre-
decessor except in the way I have stated ;
and it is hardly necessary, except for the
information of new Members, for me to
enter into any explanation at all. Now, in
proceeding to exhibit the present state
of our financial affairs, I would first
call attention to paper No. 3, which
I have laid on the table. From this
paper it will be seen that the estimated
expenditure of the Colony for the year
1858 is 1,266,238 8s. 6d. It must be
remembered, however, that this sum
includes 35,000 for the payment of
debentures, and 66,800 for the working
of railways it having been decided that
the railways should, like the Customs, be
made a department accountable to the
Government both for its revenue and its
expenditure. The difference in this esti-
mate from that laid before the House by
my predecessor is that his amounted to
1,299,000, whilst the present estimate
was only 1,266,238 8s. 6d. The reduc-
tion is accounted for by the removal of
the military, a considerable reduction in
the railway disbursements, and some small
reductions in the Postmaster- General's
Department. Out of this sum of
1,266,238 there was then 35,000 for the
payment of debentures, which at all events
showed that the Government was desirous
to diminish the public debt. It also pro-
vided for the payment of 140,000 of
interest on debentures, but as all our
loans had not been realized the amount
actually required for interest would pro-
bably not exceed 120,000. I will now

MB. CAMPBELL.

[1858.]

proceed to read in detail the proposed
expenditure for 1858 :

75,461 14 8

ExGcxitive mid Ijc* r isljitiv6

19,035 7 4

Chief Secretary Depart-

mental salaries and contin-

gencies

15,041

Secretary for Finance and

Trade Ditto ditto

12,224

Secretary for Lands and Public

Works' Ditto ditto . .

74,586

Auditor General Ditto ditto

5,042

106,894 5 4

Chief Secretary

Postal

88 537

Educational

48,916

Immigration

118,604

Municipal institutions

10,000

Grants in aid, &c

1,800

Printing, &c.

14,087

Lunatic asylum and medical

officer

27,090

Charitable allowances

13,186

Aborigines

2,000

Military, and 2 companies

Artillery

18,945

Police .. 170,144 1 5

Gaols . . 35,684 11 3

205 828

Miscellaneous

" 3,700

Unforeseen expenses

2,000

554 695 10 1

Administration of Justice . .

41,310

Prison labour

3,400

44.710 2

Secretary for Finance and Trade

Customs

Drawbacks

Distilleries

25,900 10
20,000
2,409 7

Mint
Gold

. . 11,466 10 5
receivers 175

48,369 17

Shipping Masters . .

Lighthouses, Steam Navi
gation Board, pilots,
and harbour masters

Port Curtis establishment

Miscellaneous

11,641 10
2,006 9

21,719 10

.30

3,767 6 9

Secretary of Lands and Public Works-
Gold Fields 20.131 17 4

Railways, exclusive of loans 65,000

Roads" 83,462 10

Telegraphs 000

Public Works
Buildings, re-
pairs, &c. . . 57,483
Steam dredge. 2,000

59,483

Lighting public lamps . . 350
Government Domain and
- Botanic Gardens.. .. 4,135 15
Surveyor of Coal Fields . . 680
Compensation to Rawlings 431

233,674 2 4

Interest on outstanding

debentures, &c 140,000

Endowments 8,000

Amounting in all to 1,266,238 8 6

Now it would be seen that though this
estimate contemplated a reduction of the
military expenditure still the withdrawal
of the military would necessarily lead to
an augmentation of the police force, and
consequently to an increased expenditure
in that department. I may also remark
that the expenditure for the Adminis-
tration of Justice does not include the
salaries of the Judges. The whole amount

required for the expenditure of the Coun-
try in 1858 was 1,266,238 8s. 6d.

ME. DONALDSON : Is the expenditure
for the Electric Telegraph included in
this estimate ?

MB. CAMPBELL : Yes, it was included
in the sum of 59,483 in the department
of Secretary for Lands and Public Works,
and estimated for buildings and repairs ;
but when the Estimates come on I shall
be prepared to go into all these depart-
mental details. In explaining this esti-
mate of expenditure I have again to
repeat that it provides 35,000 towards
the liquidation of the Public Debt of the
Colony, and 65,000 for the working
expenses of our railways. The next por-
tion of the statement of the finances of
the Colony to which I desire to direct
the attention of the Committee is the
Loans Account. It was there shown
that it was proposed to raise the sum of
732,000 for railways. This was for the
extension of the lines from Campbelltown
to Menangle from Parrarnatta to Pen-
rith and from Newcastle to Singleton.
Whether the loan should be raised, and
the works proceeded with would depend
upon the House ; but I believe that it is
desirable they should be carried on, as
they will tend greatly to advantage the
Colony without unduly increasing its
monetary burdens. [Mr. Campbell then
read a letter from the Chief Commissioner
of Railways, showing that the expenditure
on the railway lines had been decreased,
whilst the income from them had in-
creased.] The loan then for railway
purposes, and for renewing debentures
issued on railway account, would be
797,000. I now come to the subject
of the deficit on the 1st of January last,
viz. : 95,665 5s. 6d. This amount was
much smaller than that estimated by my
predecessor, who had in his statement of
accounts in connection with Ways and
Means shown the estimated deficiency
to be 128,544 4s. 2d., but I think I
can prove that the deficit is not likely
to exceed the sum stated by me. In the
estimate of my predecessor I find that
the revenue actually collected up to the
30th September, 1857, was 886,418
8s. 2d., and that the revenue to the 31st
December was estimated at 259,920.
Now these two sums added together
gave 1,146,338 8s. 2d. ; but hon. Mem-
bers would be glad to know that the
revenue and receipts actually collected
during the year 1857, amounted to

[1858.]

MR. CAMPBELL.

1,179,104 6s. 10d., an increase which
justifies the Government in now estimating
the deficit at only 95,6G5 5s. 6d. It
may be recollected by lion. Members that
the Government was empowered to raise
by loan the amount of the deficit as
originally estimated by the hon. Member
opposite, Mr. Donaldson. It must, there-
fore, be satisfactory to the House to hear
that the deficit is now reduced, and that
without the aid of a loan, to 95,000.
The amount of appropriations for 1857
as now shown is the same as that in
the estimate of my predecessor, viz.,
1,103,940 15s. lid., from which, however,
has been deducted (as in the statement of
my predecessor) 30,000 for sums not
likely to be required. Hon. Members
will understand the necessity of such a
provision as this, when I inform them
that some of the details of expenditure
are probable and not actual. The
deficit of 95,000 having been provided
for by the authorized loan referred to,
there was only the estimated expenditure
of 1858, viz., 1,266,238 8s. 6d., charge-
able on the estimated revenue of that
year as shown in Ways and Means.
Now under existing laws it is anticipated
that the revenue of the present year
will be 1,233,561, but the Government
require a larger sum than this. It was
proposed during the last session that the
deficiency should be made good by an
assessment upon stock ; a proposition
that would again be brought under the
consideration of the House. I believe,
as intimated in the address of His
Excellency the Governor-General, that
this is a legitimate way in which to
make up the deficiency : the amount pro-
posed was 7 10s. per 1,000 sheep, and
7 10s. for every 160 head of cattle ; and
it is thought by the Government that
this proposed assessment will bring in
about 114,000. I hope hon. Members
will see the justice of such an assess-
ment, and that they will agree to it,
especially when they consider it as only
a temporary measure and not a permanent
act. No doubt when a new and a larger
Assembly meets it will determine the
amount and the way the occupiers of
Crown lands shall pay for the benefits they
derive. If the House does not permit this
assessment to be levied there will be a con-
siderable deficiency. There was, however,
no reason to fear that the revenue would
not be equal to the amount estimated. It
it true there has been a reduction in the

revenue derivable from the manufacture
of Colonial spirits, but this can be ac-
counted for in one or two ways : sugar
has been dear, and the Government has
also discovered, the existence of an illicit
distillery, throwing off 800 gallons per
day, in the neighbourhood of Campbell's
Wharf. I am happy to say that the
public works have not been stopped, and
I hope the time is coming when the
ordinary revenue will recover from the
loss thus sustained ; but for that there
would have been no occasion to appeal
to bankers and others to assist us in
carrying on important operations. I will
now go 011 to the next item. The Loan
to be raised for railway extensions was
732,000, and for the payment of deben-
tures falling due, 65,000. There was a
cash balance of 81,322 11s. 6d. on the
Consolidated Revenue Fund on the 1st
January, 1858. It was a source of gratu-
lation that the revenue showed . this '
result ; but I am bound to tell the Com-
mittee that a supplementary estimate for
this year will be submitted which will
very considerably reduce the balance
stated. The present Ministry, in not
interfering with the estimate submitted
to the last Parliament, has seen reason
for not introducing on the present
occasion any new or revised scale of
taxation. That would no doubt form
one of the first duties of the new Parlia-
ment. Considering our extensive public
works I think it is requisite that a Bank
of issue should be established. I how-
ever merely allude cursorily to this sub-
ject. It is also in the minds of many
hon. Members that there should be an
income-tax as in England, by means of
which (and I am favourable to it on this
ground) absentee proprietors, it is sup-
posed, would have to contribute their
fair proportion to the revenue of the
country. The present debt of the Colony
is not so large that it should startle
hon. Members. On the 31st December,
1857, it was, according to the paper
he had laid before the House,
only 2,306,350, and of that amount
1,100,000 had been expended on rail-
ways, which were to the Colony as valuable
as a tool to an art i/an. In fact, the
public debt was represented by assets
which were a continual source of benefit
to the public. But, whatever sums the
Committee might now authorize, new
public buildings could only be erected by
borrowed money in the first instance ;

MB. CAMPBELL.

[1858.]

there was therefore upon the Government
a check on a reckless expenditure for the
construction of public works, as past ex-
perience was sufficient to convince us that
we could not now do as previous Minis-
ters had done that is, undertake public
works first, and then afterwards try and
raise the loans for loans would now have
to be raised first. I can safely say that
wherever opportunity has ofiered the
Government has exercised economy, and
I hope hon. Members will bear that in
mind, and consider it a reason why too
much time should not be spent at this
particular period in the manner in
which it has been spent previously.

We were now expending money in an
unsatisfactory way, and I think the sooner
the House returns to the old plan of con-
stitutionally voting the Estimates prior to
the year for which they are taken, the
better it will be. The Ministry of the
day I conceive would be then more de-
pendent on hon. Members than at pre-
sent, and the opportunity of remaining
in power longer than the House wished
would not be so favourable. In con-
clusion, I beg, sir, to move, " That a sum
not exceeding 80,480 Is. 9d., be voted
out of the Consolidated Eevenue Fund
of the Colony to meet the amount voted
in Committee of Supply."

, .\FTKBWATJDR SIR CHARMCS I'OWI'Kli, K.C.M.CJ.)

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE CHARLES COWPER
(acting for the Colonial Treasurer), made 21st December, 1858.

[From the Sydney Morning Herald of 22nd
December, 1858.]

LEGISLATIVE ASSEMBLY.

Tuesday, 21 December, 1858.

FINANCIAL STATEMENT.

MR. COWPER said : I now beg to
move the following resolution, " That to-
wards making good the Supply granted to
Her Majesty for the service of the year
1859, the sum of 3,518 7s. 8d. be granted
out of the Consolidated Revenue Fund of
New South Wales." This being the first
motion of the Committee of Ways and
Means, I shall follow the usual course, by
addressing a few general observations to the
Committee in reference to the Estimates
of Expenditure, but more especially to the
Ways and Means, and endeavour to show
the way in which it is intended to provide
for the estimated expenditure of the Public
Service in 1859. I believe it will be
admitted that, notwithstanding the circum-
stances under which the Estimates have
been prepared, there is an amount of
information in this document greater than
hon. Members have had on any former
occasion. We have already dealt with
some of the Estimates, and I do trust that,
notwithstanding all that has been said
about granting the Government only six
months' supply, we will not find the
majority of the House limiting the supply
to that period. I shall not, however,
anticipate the debate on this question, that
will take place to-morrow on the contin-
gent motion of the honorable Member for
Mumimbidgee (Mr. Hay) ; but I do hope
that the observations I shall make may
have some effect in satisfying honorable
Members that the Government can, until

the new Parliamant meet, be safely en-
trusted with the expenditure of public
money. I have no doubt that, in reference
to the Estimates, there will be a feeling
of disappointment on the part of some
honorable Members that there are not
larger reductions, but I trust we will be
able to show that reductions have been
made, although not large, and that the
Government have not been neglectful of a
vigilant control over the different depart-
ments, with a view of ascertaining how far
changes can be made with advantage to
the Public Service. And during the time
the present Government have been in office
they have endeavoured to make the public
service more efficient if the expenditure
cannot be reduced. I may mention some
instances in which the Government have
taken steps in this matter, and I think it
will satisfy the House that the Govern-
ment have done their duty, so far as the
circumstances would allow them. It will
be in the recollection of honorable Members
that from time to time suggestions have
been made to consolidate the duties of
some officers by making changes in the
departments to which they belonged, and
so reducing the expenses. But there was
one difficulty in doing this which met the
Government. The difficulty was how
these gentlemen were to be compensated for
the loss of their offices. There were two
or three officers whose services the Govern-
ment had dispensed with whose claims were
embarrassing. In the department of the
Colonial Secretary, in carrying out the
design of the House, reductions had gra-
dually been made. Those who have read
the evidence before the Retrenchment
Committee will be aware that a great
deal of labour had been expended in pre-
paring the Blue Book. It is the business

MR. COWPER.

[1858.]

of the clerks to prepare this book, a copy
of which is sent to the Secretary of State
for the Colonies. Now, considering the
changes which the Government of this
colony has undergone, it does seem un-
necessary to go on preparing a docu-
ment, which contains several hundred
pages of writing, in the manner in which it
has formerly been prepared. This book
interests nobody, except those in the
colony, and the yearly preparation of it
costs a sum not much less than 800.
The collecting the statistics (which we
propose to prepare in a less elaborate
form) almost found occupation for two
clerks one at a salary of 550 per annum,
and the other 230. These two clerks, I
may say, were exclusively employed in
preparing this document. Now, consider-
ing that the Secretary of State did not
require the information he had received,
and considering that the preparation of this
document was so costly and so useless, and
moreover that a large proportion of it might
be collected and circulated not only for the
information of the Home Government but
for Members of our own Parliament, it
seems to us that the time has arrived when
these statistics should be printed, and a
total revision of the Blue Book take place.
In consequence of this decision the services
of the gentleman who received 550 per
annum will be dispensed with. This was,
therefore, one of the cases in which the
Government felt a diflkmlty with regard to
the amount of compensation which should
be given to a gentleman who had performed
his duties satisfactorily and for a length of
time, but whose services were unnecessary
owing to the abolition of his office. I am
aware that the impression prevailing is that
the Superannuation Act ought to pro vide for
such cases. I cannot, however, see that the
Superannuation Act does necessarily apply.
There was no doubt that if this gentleman
was fit for promotion, or for taking a higher
office, we could appoint him to some other
duty, but I apprehend, if there was no such
vacancy, to appoint him to an office with a
smaller salary attached would be an in-
justice which we are not inclined to commit.
Besides, the gentleman alluded to has been
in the Public Service for thirty years, and
has therefore a claim for a large retiring
allowance under the Superannuation Act,
and this was the case with many other
officers. There was also the case of the
Deputy Surveyor General. Owing to
certain circumstances that had occurred,

this gentleman was called upon to perform
a particular duty, and the duty was one
which 'he was incompetent to perform.
The Government, feeling that the Deputy
Surveyor General ought to perform this
duty, which he said he could not physically
perform, considered that this acknowledg-
ment was virtually a resignation of his office.
This is therefore another of the cases which
we would have to consider ; because, if the
Public Service is to be made efficient, and
if the expenditure of the Government is
to be reduced, it can only be done by
reducing the number of officers and retain-
ing those only that are efficient. Now, we
had a Surveyor General who never felt
called upon to travel, and the Deputy
Surveyor General said he was not compe-
tent for that duty ; this case, therefore
required that some action should be taken.
Then there was the Shipping Master's
Department. It was admitted that the
duties of this office and that of Water
Police Magistrate could be performed by
one officer. Now, the Government had
accommodated both departments in one
building, because they did not feel justified
in asking Parliament for two offices. The
Government had therefore merged both
these departments into one, and this
arrangement, I hope, will be found satis-
factory. The Water Police Magistrate
claimed to retire, on the ground that he
was not able to do both duties, and had
established a claim for a retiring allowance
of three-fourths of his salary, so there
would be three instances in which claims
would have to be provided for. One
instance of 600 a-year, another of 400
a-year, and I am not sure whether, in the
other case, it is not something like the
same amount. If these gentlemen were
really entitled to retiring allowances, and
if the law allowed them, I should be the
last to deal with these vested interests in
an unjust manner although in the Super-
anmiation Act I do not see there is any
warrant for allowances in such cases ; still,
it might affect the efficiency of the depart-
ments if they were not provided for. They
would find by the 52nd clause of the Consti-
tution Act that not more than 3,500 was
granted for retiring allowances. Then
came the question, if the Government had
to dispense with the services of several
officers, whether the retiring allowance
must be made under the Superannuation
Act ? The only rule that had been made
on this subject was made by the House in

[1858.]

MR. COWPER.

consequence of the message of the Governor-
General in 1857 with respect to the rules
for granting compensation. There was no
statement made as to how this compensa-
tion was to be granted ; but by implica-
tion the officers dismissed were to receive
pensions under the Superannuation Act.
I have alluded to the subject because it
was constantly brought before the Govern-
ment, and because I believe that an equit-
able adjustment of it would facilitate the
progress of departmental reform. With
regard to the particular cases I have
alluded to, if their services are dispensed
with, the minute I have 1'eferred to will
enable the Government to make some com-
pensation until the question is determined
by Parliament. I think the arrangement
we have made with regard to the Blue
Book will be satisfactory, as it is intended
to transfer this work to the Registrar
General's department ; and as a large
portion of the document will be printed
we will have the book circulated many
months before the time it was usually
laid on the Table of the House. I find
that for the last few years it has not
been possible to lay it on the table before
September, when half the session was over.
I hope we will have the document in
print at the commencement of the session ;
besides affording the Secretary of State all
the information he requires it will cost
much less to the colony. It will thus
be seen that the department of the
Colonial Secretary has undergone some
slight reduction. I have no doubt that if
the Government re-constructed the service
or constructed it for the first time, men
fresh to office could be got to perform the
duties at smaller salaries than paid to those
gentlemen who had become entitled to their
salaries after a long period of service.
But I apprehend it is not the desire of
Parliament to make large reductions in
the salaries of gentlemen who have long
and faithfully served the Public. The
subject of departmental reform has also
occupied the attention of the Govern-
ment a great deal in another way, and
it is painful to review the circumstances
in which some officers of the Govern-
ment had been placed. I refer to the
number of gentlemen who have been
found guilty of defalcation in the
Public Service. Honorable Members no
doubt bear in mind the discussions that
have taken place in respect to the iron
chest. My honorable friend, the Colonial

Treasurer, who, I regret, is absent from
illness, has had great anxiety with regard
to his branch of the Service, for I find he
has had seven or eight officers charged with
defrauding the revenue of large sums of
money. With regard to the iron chest,
there was a deficiency of from 1,500 to
1,600; and with regard to the suspense
account, one of 1,857 in addition. Then
again, with respect to the Crown Lands
Department, there were four gentlemen
who had received money in the interior
who had not accounted for it, three of whom
had absconded. The Government, feel-
ing that these matters were growing to a
height, offered a reward for each individual,
but they succeeded in capturing one only,
who was committed for trial, but was
acquitted, notwithstanding the labour and
expense the Government had been put to.
Three other parties were defaulters, but
only one conviction had taken place, and that
was where the person charged pleaded guilty.
All these things, I think, show that the
Government have been carrying out the
work of departmental reform, and have
had their hands well occupied with this
important question. I hold a statement in
my hand by which it will be seen that the
defalcations of the parties referred to
amount to between 4,000 and 5,000.
I mention these matters because honorable
Members seem to think that unless the
Government make immense reductions, or
abolish some departments entirely, they can-
not be in earnest in carrying out depart-
mental reform. The Government, I say, have
had their hands fully occupied in bringing
the departments into proper order, and, by
making alterations and establishing new
regulations, have succeeded in bringing the
Public Service to a state of considerable
efficiency. While alluding to these irregu-
larities I will refer to another matter a
serious one indeed which is undergoing the
ordeal of inquiry. I allude to the Customs
frauds. The general impression is, that all
the duties that ought to be collected are not
collected. There was a Select Committee
of this House appointed to inquire into this
matter but no immediate result had been
brought out by the inquiry. A short time
ago, however, the Government obtained
certain information, which determined
them to prosecute the inquiry with the
utmost vigour. My honorable colleague,
who is now absent, is entitled to the grati-
tude of the country for the time and
attention he devoted to this matter. In

MR. COWPER.

[1858.]

every step we took we were foiled, until at
last the case lias been brought to such a
state that the result can, I think, be no
longer doubtful. Several parties have been
suspended, and the evidence, as it appears
in the newspapers, shows that avast amount
of irregularity exists in the Customs depart-
ment. The great increase in the Customs
revenue during the last few weeks (and no
doubt the increase is to be ascribed to the
inquiry) proves that the revenue has been
defrauded of a large amount. Already four
seizures have been made of goods which
the Government had the greatest difficulty
in tracing, and it is believed that other
seizures will yet be made. I believe that this
system of defrauding the Government has
been carried on to such an extent that it
has actually reached Port Curtis. There is
strong reason to believe that one vessel was
engaged there in defrauding the revenue in
the same manner as was contemplated by
the owners of the Louisa. In this case the
Government felt the fraud was of so
serious a character that they offered a
reward of 500 ; but up to this time, so
skilfully had the parties managed, that
they had escaped from the country, and the
reward offered has produced no information.
There is one branch of the Public Ser-
vice which honorable members thought
should be reduced to a large extent. I
allude to the police. The expenditure for
police and gaols in 1858 amounted to
about 208,000. For the year 1859 the
estimates for these services amount to
203,000, so that there is a reduction of only
5,000. I confess I think a large reduction
might still be made, for if we cast our
eyes down the columns of the estimate we
will find 13 constables for one district,
and 8 in another, and 25 in another. It
does appear, therefore, that a reduction in
the police should be made, but when we
applied to the local authorities we were
told that there were only sufficient to secure
the public safety, and in some instances
applications were made for an increase to
the number. From Parramatta alone there
was a demand for six additional constables.
In all the outlying districts the demands
for police are large, but in other parts of
the country the disparity of numbers is
so great that it is almost impossible to
understand how so large an amount of
expenditure can be required. We cannot
reduce the pay, because I think it would
be hardly fair that able-bodied and well-
conducted men should receive less, so

long as other districts had to be supplied
with police. Unless therefore we recast
our system of police, I cannot see how it
is to be done. This subject I have had
under serious consideration, and I have
repeatedly refused applications to increase
the police ; but, although a committee,
presided over by my honorable friend and
colleague, has taken the matter into con-
sideration, I apprehend, it will be abso-
lutely necessary that another Select Com-
mittee should deal with it before any
organic change can be effected. It would
seem that there is a considerable increase
of expenditure for the Administration
of Justice, but that is on account of
the District Courts. Notwithstanding all
that has been said on this subject, I think
the operation of these Courts will be
found very beneficial in bringing justice to
those districts where they are to be held,
and that they will also be found useful in
reducing the labour of the Supreme Court.
I think we ought to wait and see the working
of these Courts before increasing the number
of Judges, for I believe that the effect of
the District Courts will be that many of
the cases that are now taken to the Supreme
Court will be settled on the spot at once.
In the Harbour and Lighthouse and Pilot
Department some reductions have been
made. With regard to the sum put down
for public works, the Government, so far
from reducing the item, has estimated a
larger sum than has been appropriated in
former years. I find that the total sums
devoted to public works, buildings, roads,
and bridges, exclusive of loan services,
were in 1855, 9,614 7s. 6d. ; in 1856,
92,909 10s.; in 1857, 129,930 17s. Id.;
in 1858, 226,192 4s. 6d. So that hon.
Members will see that a gradual increase
in the expenditure for public works has
been going on for years past. It must be
a gratifying feature in our finances if we
can increase the expenditure for public
works without resorting to loans, and at
the same time reduce the expenses of the
departments without impairing the efficiency
of the Public Service. I say if we bring
about these reforms the country will, I
think, be satisfied that much will have been
done towards bringing the Government
into a satisfactory working state. While
I find that the cost of the several establish-
ments of the country was 633,572 19s. 5d.
in 1856, I find that for 1859 the cost of
the establishments which existed in 1856
was only 605,522. We have now the

[1858.]

MR. COWPER.

expenditure of the railway department
to provide for out of the revenue. Against
that expenditure, there is, however, a gross
revenue of about 100,000. So that as
the expenditure for this department was
1 n't ween 60,000 and 70,000 there would
be a surplus revenue of over 30,000. I
think this is very gratifying, because if
these short lines, which were constructed
at an enormous cost, were enabled to pay
anything like interest, it would be natural
to expect that if extended into the interior
at a much less cost per mile, we would
get a considerable increase in the interest
on the capital expended. These are all
the observations which seem to me necessary
to make with regard to the Estimates.
In 1856 there was a reduction of 84 in the
number of individuals employed in the
several departments ; but since Respon-
sible Government this number has been
reduced, and now amounts to 64, so that
there has been some reduction. I trust that
these departments will still be found effi-
cient, and that they will exercise such vigi-
lance in collecting their revenue as will
result in securing considerable increase.
I know some persons imagine that if the
Customs revenue was properly managed
it would bring in 50,000 more than
it now does. At present there is an
increase going on, and it cannot be
accounted for, except that the revenue is
collected with greater zeal and accuracy
than previously. There is one establish-
ment to which the attention of the
Government has been particularly drawn.
I refer to Cockatoo Island, and think that
great ad vantage would be derived by placing
the establishment on a new footing. This
question is however mixed up with the
question of the management of our convicts.
Before any change of system can be effected
it will require mature consideration on the
part of both the Government and the
Legislature. I am well aware that the
working of the present system is veiy
unsatisfactory. It appears to me that the
visiting Justices should have supervision
without the intervention of the Sheriff.
I must also say that from some cause or
other the gaols are not in the effective state
they ought to be in ;. but inquiries are
now going on with reference to the Parra-
matta and Sydney Gaols. It is said that
the convicts are not employed as often as
they might be, and that hard labour was
anything but hard labour there. For these
and other matters legislation is necessary, as

well as the changes which the Government
propose to introduce. The sum required
to meet the estimated expenditure of the
ensuing year is 1,465,325, and the loans
proposed to be raised are as follows, viz. :
For public works, 16,600; to pay off
debentures, 80,000. Total, 96,000. We
do not propose to ask the House for
any loan of a large amount this session,
as the vote of last year will be sufficient
to carry on the railways already sanctioned.
In drawing attention to the Ways and
Means, it is satisfactory to find our position
so much improved. In 1857, the honor-
able Member (Mr. Donaldson) then Colonial
Treasurer, drew attention to the deficit of
150,000, and got the assent of the House
to a Bill to enable him to raise by loan
the whole of that sum.

MR. DONALDSON : That deficit was for
1856.

In August, 1857, the honorable Member
made his financial statement, and said
happy the Finance Minister would be
when this deficit was worked off without
the issue of a single debenture. I can now
say that considerable advance has been
made towards this result, for as yet no
debentures have been issued on account of
that deficit. The honorable Member in
August, 1857, apprehended a deficiency of
about 124,000, and afterwards, on the
4th of November, his successor (Mr.
Jones) made it about 128,000. In
consequence of the actual revenue
having exceeded the estimate, my honor-
able colleague, Mr. Campbell, produced
another statement, in which the deficit
was shown to have been reduced to
95,000. I will now assume that the
deficit at the end of this year (1858) will be
69,426 7s. 9d., and that there will be
according to the statement now submitted
a balance at the end of December, 1859,
to the credit of the Consolidated Revenue
of 24,756. So that by the end of next
year the whole deficit of over 150,000 will
have been paid off, and there will then
remain a credit balance of 24,756. I will
now draw the attention of the House to
the statement of the estimated revenue, in
order to show how the revenue has gone on
increasing during the last two years, and
the possibility of its increasing still further
during the year 1859. I find that the
revenue of 1857 was 1,112,406, and
that the actual and estimated revenue of
the current year amounts to 1,386,677.
The revenue for 1859 is estimated at

MR. COWPER.

[1858.]

1,450,081. This estimate cannot I think
be considered excessive, as it is warranted
by the increases that have taken place in
the revenue of the years 1857 and 1858.
The Government entered office under
serious difficulties, for my honorable friend
Mr. Jones took office at a time when
a large amount of money was required
by the Government, and when the Ex-
chequer was very low. As Mr. Jones felt
uncertain what the state of the money
market would be, he determined to advise
the Government to withdraw the intermi-
nable debentures, and send 100,000
of terminable debentures to England to
replace them. This was done, and events
have shown it was a wise course, because,
by withdrawing the interminables, they
were replaced by others which have since
found a ready sale. But when my honor-
able friend found great difficulty in raising
money not only in England but here, and
that there was no probability of selling our
debentures, he advised that a Bill should
be passed authorizing the Government
to issue Treasury bills to the amount of
400,000. Well, I have the satisfaction
of informing the House that only 40,600
of these Treasury bills have been issued,
and that the Government do not intend to
issue any more of them. Whatever, then,
honorable Members may have thought at
the time of the policy of this measure,
very little injury has been done, because but
a small amount of these Treasury bills has
been issued. The Government have gone
through the particular trials to which they
were exposed, the public expenditure has
been met, the public works have not been
stopped, and no loan has been raised at
a sacrifice, for owing to a sudden and
favorable reaction in the money market,
the Government were relieved, when they
hardly expected it, of a great difficulty.
The correspondence that took place between
the Banks and the Government at that
period has been printed. Although for a
short time the Government were placed
in a position of embarrassment, owing to
the tightness of the money market, they,
fortunately, have had no serious difficulty,
and trust moneys were never touched.
The sale of the Treasury bills, which were
considered objectionable by some honorable
Members, has not proceeded beyond
40,600, and we have not issued one
debenture under the authority given by
the House to meet the deficit of 1 856. The
Expenditure and Revenue Estimates as

submitted to the House, will, I trust,
be considered satisfactory. The Customs
revenue' has shown for some time past a
considerable and sensible improvement. I
will now proceed to show, from data, what
the improvement is. I find that in Decem-
ber, 1855, the revenue was 2 9, 053 14s. 4d. ;
in December, 1856, 44,090 14s. 2d.; in
December, 1857, 48,510 11s. 8d., and
during the two first weeks of the month
of December of the present year we have
received for Customs revenue 13,381 4s.
4d., and 17,841 7s. 6d. The latter
is a larger amount than has ever been
received at the Customs in one week,
except a week in April, 1858, when it was
17,638 7s. 4d., which was caused by an
expected alteration in the tariff. So the
Customs revenue, it will be seen, has gone
on gradually increasing during the last three
years. I think this is satisfactory, because
honorable Members will remember that
this increase was not caused by a rise of
duties. We have got over our difficulties,
and the revenue has increased, and will
continue to increase, if we have proper
servants to collect it. In the first week of
this month the Customs receipts were
13,381 4s. 4d., and in the next 17,841
7s. 6d. ; total for two weeks, 31,222 11s.
10d., against 48,510 11s. 8d. for the
whole of December, 1857. These results,
I think, show that so far as the Customs
are concerned, we have not been backward
in performing our duty. There was con-
siderable apprehension that the revenue
from sale of lands would fall off in
consequence of the proposed reduction of
price. It was predicted that because that
was the policy of the Government, the land
revenue would be reduced. It is therefore
satisfactory to the Government to be able
to prove that this prediction has not been
fulfilled. The land revenue in 1856
was 245,555 2s. 5d. In 1857 210,333
17s. 3d., and during the present year
241,580. Now, considering we have
gone through a time in which the public
mind was disturbed with regard to the
land question, it is satisfactory to be able
to show that the land sales have amounted
to so considerable a sum as that which I
have stated. Indeed the revenue generally
has kept up well. The collections under
the head of gold revenue show a con-
siderable augmentation, and coupled with
this I think it is satisfactory to know
that the yield from the gold fields has
gone on increasing. During the month

[1858.]

ME. COWPER.

of November, 1857, the receipts of gold
dust amounted to 14,454 ounces, and
during the month of November of this
year we received 26,577 ounces, thereby
showing an increase of 12,123. This
increase has not been confined to one dis-
trict alone, as the Southern, Western, and
Northern Gold-fields all show an increase,
and I have no doubt when the regula-
tions which my honorable colleague have
introduced come into operation, we will
have a still larger increase. While our
income from the different branches of
revenue has been improving, it is satis-
factory to be able to report that the value
of our Government securities has also been
steadily improving in the London market.
Reverting to the difficulties referred to in
the early part of my address, I am glad to
able to say that during the very worst
times of the panic, and when discount had
increased to 10 per cent., the debentures
sent to replace the 100,000 interminable
ones were sold, and realized 95,640 5s.
Since the sale of these debentures the
rates have been improving, and we have
reports of sales of 11,900 at 99, 3,400
at 99, 6,600 at 99 10s. ; 6,500 at
99|, 27,000 at par, and 100,000 stated
to be sold at from 99 to 99f, all of
which, I believe, are debentures of thirty
years' currency, so that if they were sold at
\ per cent, less than those for twenty-five
years the country could well afford to
lose the difference. I think these satis-
factory sales are chiefly the result of the
efficient manner in which the Bank brought
our securities into the market, and from
communications I have received it would
appear from the course the Bank has taken
that it has managed the agency with great
credit to itself. We find that our securities,

bearing 5 per cent, interest, were now sold
at 99, 99, and 99f, and I believe that
there is nothing in the state of the London
market that can lead us to apprehend a
reaction. I believe that for months to
come the securities of this colony will realize
similar rates. There is no doubt some
reason for anxiety when we consider the
large amount the colony will be obliged to
raise ; because, if we look forward to the
year 1860 we will see that the large sum of
418,000 will then fall due. The Govern-
ment are directing their attention to this
matter, so that whatever may be the state of
the money market then they may not be
placed in the position they were in when the
Banks acted towards them as they did. That
time of difficulty passed away without much
inconvenience having been experienced, for
as the revenue increased the public credit
was sustained, and we were thus enabled
to meet in due course all lawful claims
against the Government. I believe I have
alluded in a general way to all those points
which it is usual and necessary to explain,
but if there is any matter which honorable
Members may wish to be more fully in-
formed about, I shall be prepared, so far as
I can (because hon. Members are aware this
duty is not within my province), to give
them every information. I am satisfied
that my honorable colleague the Colonial
Treasurer, for whom I am acting and from
whom I obtained the particulars of the
statement I have just made, has bestowed
the utmost attention to the careful manage-
ment of the finances of the country generally,
but more especially with respect to the
collection of its revenues, and the correction
of those abuses which led to such melancholy
results. I now beg, Sir, to move the resolu-
tion I have already read to the Committee.

----- . - -

JHE ^ONORABLE LIAS PARPENTEF^

-*-

t j sr^:

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE ELIAS CARPENTEB
WEEKES, made 6th October, 1859.

[From the Sydney Morning Herald of 1th
October, 1859.]

LEGISLATIVE ASSEMBLY.

Thursday, 6 October, 1859.

FINANCIAL STATEMENT.

MR. WEEKES then rose and said : Mr.
Piddington, As this is the usual period
for laying before the House a statement of
the financial condition and prospects of the
country, I avail myself of the opportunity
to do so, and in making this, which is
almost necessarily a dry, although not
altogether an uninteresting, exposition,
I crave the attention and indulgence
of the committee while I submit the
accounts to them. I will not trespass
longer on the patience of hon. Members
than will enable me to state, as clearly as
I am able, the real state of the financial
affairs of the colony ; and I think I shall be
able to show before I sit down that, without
taking any exaggerated view, our condi-
tion is highly satisfactory. Before, how-
ever, entering immediately into the mat-
ter of the public finances, there is one
subject which I feel desirous of bringing
under the notice of the committee and the
country. It is a subject which has fre-
quently been commented upon, not only
here and in the neighbouring colonies,
but also by the English Press, to our dis-
advantage. I mean the circumstance of
the balance of trade being steadily against
the country from year to year the
difference being on imports and exports,
amounting to between one and two mil-
lions sterling. This circumstance, I repeat,
has frequently been commented on in
England as not affording a very favour-
able symptom of our progress. It was not,
I think, until very lately that any steps

were taken to show how the case really
stands in connection with the allegation
that the balance of trade was so much
against us. Since 1857, however, steps
have been taken which will have the
effect of putting the matter in a rather
more favourable light. I find, from the
published statistics, that in 1855 our
imports amounted to ,4,600,000 ; in 1856,
to 5,400,000 ; in 1857, to 6,700,000 ;
and in 1858, to 6,059,000. Against
which the exports were, in 1855,
2,800,000; in 1856, 3,400,000; in 1857,
4,011,000 ; and in 1858, 4,186,000.
Now from these figures the committee will
see that there is a considerable difference
between our exports and imports, and
unless the difference is explained it must
I admit tell rather against the country.
But it is well known that a great deal
of the trade of the colony goes south-
ward. Of this the overland trade, as
it is termed (and my predecessors have
alluded to it as accounting to some
extent for the deficiency) no record,
until lately, has been kept. There has
been no account taken of the vast quan-
tity of stock going over the Murray
to Victoria, and forming part of our
exports. From the records of Victoria
for the year 1857, I find there were
imported into that colony 102,000 head
of horned cattle, 435,000 sheep, and 5,500
horses. In the following year (1858) our
own records show that there were exported
hence 130,000 head of horned cattle,
469,000 sheep, and 6,700 horses. But in
comparing the exports of the two colonies
I find in addition to this large quantity
of stock, for which we get no credit, that
there is a considerable quantity of wool,
the growth of the southern country,
conveyed overland and shipped from
Victoria, for which that colony gets credit,

MH. WEEKES.

[1859.]

notwithstanding it is the produce of
New South Wales. That which I am
showing is quite clear from the following
statement : In 1857 there were in New
South Wales 8,000,000 sheep. Of the
clip of these 8,000,000 sheep the export
is 17,000,000 Ibs. While the sheep of
Victoria only number 4,600,000, that
colony exports more wool than New
South Wales with double the quantity of
sheep. It is therefore clear that a very
large quantity of the wool of the Southern
Districts goes overland to Melbourne, for
which Victoria and not this colony gets
credit If the committee will take the
trouble to run up these several amounts
they will find that the result will nearly, if
not quite, account for the difference between
our exports and imports. I was desirous
of showing this, because there have been
doubts expressed of our prosperity from
that very cause. I hope, however, that
in future these overland exports will be
taken into consideration. If the committee
will turn to the last page of the Ways and
Means they will find that the total debt
of the colony is now 6,534,530. There
are at present Loans now in the course of
being raised ; that is, the debentures have
all left the colony, and are in the hands of
the Oriental Banking Company of London
the Financial Agents of the Govern-
ment for negotiation. It may not perhaps
be uninteresting if I state to the committee
the prices that have been obtained up to the
date of the last accounts received from the
Oriental Bank for nearly 600,000 of
these debentures. From the 1st of January
to the 31st August of the present
year 36,700 have been sold at 98i ;
27,000 at 99 ; 38,700 at 99 ; 37,000
at 99f ; 91,700 at par ; 39,500 at | per
cent, prein. ; 70,000 at i prem. ; 79,000
at | prem. ; 5 1,000 at prem. ; 43,000
at 1J prem. ; 10,000 at If prem. ;
4,500 at 2 prem. ; 42,500 at 2 prem. ;
25,000 at 3 prem. This takes us up to
the time of the sudden declaration of war
between France and Austria, when our
securities, in common with all others,
suffered a decline. The fall in the deben-
tures of New South Wales was, however,
less, I believe, than the fall in consols.
They maintained their favourite character
in a very marked manner when the great
decline took place. The tide has since
turned, and our debentures are again
gradually recovering their old position, the
last account showing that they were still

rising. As one of the Bills which will
be brought before the House during the
present 'session is a Bill to repeal an Act
for raising 150,000 to make good a defi-
cit, I think it will be well if I give a slight
sketch of the rise and progress, or rather
rise and fall, of that deficit. As has been
before stated, the inauguration of respon-
sible Government found a balance on the
wrong side of the public ledger. The
deficit on the 31st December, 1855, was
65,000; on the 31st December, 1856, it
amoxinted to 151,000 ; and on the 23rd of
February in the following year the House
granted permission to borrow the sum. of
150,000 by the issue of debentures, to pay
off this deficit. I think it is a matter of con-
gratulation to the country that there has
been no necessity to raise a single shilling
by virtue of that Act that the resources
of the country have overtaken the
deficit, and that it is now entirely extin-
guished. On the 31st December, 1857,
the deficit was 124,000. There were
no less than three Colonial Treasurers
who took in hand the affairs of 1857.
They differed slightly in their estimate
of the deficit, the last one more closely
approximating the reality, from having
a later view of the year. On the 31st
December, 1857, the deficit was reduced
to 95,665, the amount with which we
began on the 1st January, 1858. The
figures of that year's balance-sheet differ
very slightly from those which were laid on
the table last session ; but now in October,
1859, I am enabled to take a view of 1858,
which of course my predecessors could
not. From lapse of time I am. now
enabled to state that principally by the
saving of items which were voted, but not
used, to the amount of 124,000, the de-
ficit at the end of December, 1858, was con-
verted into a credit balance of 48,227. I
therefore hope that we have got rid of
deficits for ever. I now approach the year
1 859 with a credit balance of 48,277. The
sum estimated last session for the services
of the current year was 1,465,325 ; but
the reality turns out to be 1,507,587, or
an increase of 42,262. Against that,
however, I get credit for a sum of 40,000,
being the proportion of the 50,000 appro-
priated by Act for the mail service, vid
Panama, which is not likely to be re-
quired. I think I am fairly entitled
at this period of the year to assume
that there is no probability of that
40,000 being wanted for the year 1859.

[1859.]

MR. WE EKES.

Tliis leaves the sum of .1,467,587 as the
estimate of expenditure. Then there are
91,600 for loan services, viz., for
public works, 11,600 ; to pay off deben-
tures in 1859, 80,000. There is also a
further supplementary estimate for this
year, amounting to the large sum of
,113,587, out of which I propose that
.85,000 should be charged against the
ordinary revenue, and .28,507 should be
covered by loans. If the committee will
turn to the supplementary estimates they
will see the items of which they are com-
posed. There was a variety of items of
all kinds and descriptions, as for example,
to make up deficiencies in votes for stores,
grants in aid of public institutions, chari-
table allowances, aborigines, and a number
of other services. .2,000 are placed upon
the Estimates as a further allowance to
jurors and witnesses in connection with
the Moreton Bay Court. A report was
made to the Government that all the
funds placed to the credit of that Court
for jurors and witnesses had been ex-
hausted, and 2,000 was the smallest sum
with which they could be able to earn-
on and pay the necessary expenses of
witnesses and jurors : and the argument
used in support of this demand was that
the witnesses from all the ports to the
northward hud tii-st to come to Sydney in
order to reach Moreton Bay. Therefore a
large unavoidable expense rendered this
supplementary estimate necessary. There
\\as also a sum of 12,000 for the pur-
chase in England of 2,000 stand of rifles,
of the most approved description. The
Government decided to take this course
on their own responsibility, relying upon
the confirmation of the House of the
step taken in the matter. Sir, it was done
at a time when the country was in almost
hourly expectation of the arrival of in-
telligence of a war with a powerful
European State. There were no arms in
the colony no rifles of any kind, and
but a very small quantity of the ordinary
musket or carbine ; therefore the Govern-
ment decided to send immediately for
two thousand stand of rifles of the most
a] (proved construction. The selection of
the^e rifles has been confided to General
Hay, the superintendent of the School of
Musketry at Hytlie. That gentleman has
been requested to be good enough to
attend to the selection of the weapons,
and I have no doubt when they arrive we
shall find them of the most approved

construction. A large sum, no less, in
fact, than 7,500, next appears as com-
pensation to Mrs. Want, for loss sustained
by the railway accident. This, Sir, was a
case which was submitted to arbitration ;
an arbitration bond was duly drawn up ;
arbitrators were appointed, and this was
their award. I must say that the Govern-
ment admit, and, I think, everybody else
will admit, that it is an award in excess of
what it ought to have been. The Govern-
ment, however, had no alternative. They
desired, if possible, to have waited until
they could have obtained the sanction of
the House to it, but they were threatened
with extreme proceedings, and feeling that,
under this arbitration bond, they might
perhaps have amounted almost to a stoppage
of the Railway works, the Government
made a partial payment on account of the
item. There is a further sum of 650
for certain legal expenses incurred in this
matter. There is next a sum of 3,000
for alterations and repairs in the Legis-
lative Assembly chamber, and I hope that
when the Committee of Supply come to
deal with this item they will, on account
of the increased accommodation that has
been afforded, pass it without opposition.
There is also a sum of 1,200 for ad-
ditions to the Government Printing Office,
rendered necessary by the impossibility of
grappling with the work now crowding
that office. The sum of 5,000 is also
required for increased chamber accommo-
dation at the Court of Quarter Sessions ;
and under a resolution of the Assembly
a sum of 15,000 for the purchase of the
alpacas. To be provided by loan there
are the following sums : For the con-
struction of a coal wharf at Newcastle,
2,100; for a steam crane at that port,
800; for the Glebe Island punts, 1,882;
for the harbour defences, 2,425 ; for
additions to works at Fort Macquarie,
.4,500 ; and for the construction of a fort
on Garden Island, 16,800. It will thus
be seen that a large sum is proposed to be
expended in erecting fortifications on
Garden Island, which, from its command-
ing position, competent men say will
render this harbour almost impregnable.
These are the principal items of sup-
plementary estimates for the year 1859.
On the other side the statement laid on
the table of the House last session, esti-
mated the probable revenue at 1,490,081.
Now I am able to give the actual revenue
up to the 31st of August last, namely,

r>4

Mil. WEEKES.

[1859.]

925,531, which with the estimated re-
venue from the 1st of September to the
31st of December, 621,925, will make
a total for the year of 1,547,456, being
an excess of 57,375 over the previous
estimate of revenue. The increase on that
estimate will be found to consist of
24,000 on the Customs, 59,000 on the
Land revenue, 2,400 on Postage, 5,000
on Licenses, 1,000 on Electric Telegraphs,
and 2,000 on the Harbour Dues. There
is an increase on the miscellaneous receipts
of about 10,000, but a decrease on the
other hand of about 7,000 upon the
Duties on Spirits distilled in the colony.
There is a decrease of nearly 7,000 on
Gold Duties, of 3,000 on Mint receipts,
of 500 on Rents, and of 37,000 on Rail-
ways. The reason given for the deficiency
in the Railway receipts is, the non-com-
pletion of the branch to Parramatta, the
expected increase from that source not
having taken place, and also of the Pitt-
street tramway. It was also expected that
there would have been a larger coal
traffic at Newcastle, and that the cuttings
at Kenny's Hill would have been in a
more forward state, by which a much
larger traffic would have been induced to
the Campbelltown station. On the whole
the increases amount to 124,000 and
the decreases to 67,000, thus giving a
balance in favour of increase of 57,000.
This carries us down to the 31st of
December, 1859, and I now go into the
year 1860 with a ci-edit balance of
43,066. The committee will find, by
referring to the balance-sheet, that I esti-
mate the revenue for 1860 at 1,655,339
as against 1,547,456, which will be about
the revenue for 1859. The amount to be
raised by loan for public works and
buildings is 242,812, and for the pur-
pose of paying off debentures falling due
in 1860, 365,600 (which is brought in
here as a mere matter of account), thereby
making a grand total of 2,263,751. On
the other side I estimate the expenditure
for general services to be 1,260,240 ; for
special appropriation, 276,833; and for
charges provided by the Constitutional and
Colonial Acts, 60,350, making a total
of 1,597,423. The charges proposed to
be covered by loans amount to 608,412,
and consist of the following items, viz.,
public works, 242,812 ; and to pay off
debentures, 365,600. From this state-
ment it will l)e seen that I anticipate at
the end of the year 180(1 a balance to the

credit of the Consolidated Revenue of
100,982. I am desirous of calling the
attention of the committee to two items
in the Estimates of Expenditure. In the
first place I quite agree with the principle
that was laid down by the hon. Member
Mr. Jones, when he held the position I
now have the honor to occupy, that is,
that a sum of 50,000 and I think that
is as small an amount as could be named
should be paid annually out of the
revenue for taking up debentures. I
have done this, not by forming any sink-
ing fund, which may be a subject for future
consideration, but by providing for the
payment, out of revemie, of Immigration
Debentures falling due in 1860 to the
amount of 53,000, as I do not think it
is desirable to renew debentures of that
class. The, debentures falling due in 1861
are only 27,600; those in 1862 only
1,000. Then we take a step to the
year 1866, when there will be a sum of
300,000 to be paid off. No ministry
ought to be exempt from paying these out
of revenue, for an annual appropriation of
50,000 will enable the Government to
pay off the whole amount at maturity in
that year. I think it will go far to sup-
port our credit and character as men of
business if we show our intention to pay
off our debt by degrees, instead of simply
contenting ourselves with borrowing money
over and over again for the purpose of
retiring our debentures as they fall due.
We ought, rather, to show that we are
desirous of taking some steps for the liqui-
dation of the public debt by appropriating
a fair sum every year out of the Consoli-
dated Revenue Fund. The Estimates of
expenditure have been prepared with great
care, and I think the committee will find
on investigation that they contrast favour-
ably with the Estimates for the preceding
year. On comparing the two years, 1860
and 1859, it will be seen that there are
increases in certain departments I allude
only to departmental expenses. There are
increases in some departments to the
extent of 19,000 while in others the
decreases am Tint to 29,000, thereby
showing a balance in favour of 1860 of
10,000, which proves, at all events, that
we are going in the right direction, al-
though not quite so fast as some hon.
Members may desire. Another thing
which the Government always do, when a
vacancy occurs in an office, is to consider
whether the post can be done away with

[1859.]

MR. WEEKES.

altogether. They did so with respect to
the position of Police Magistrate in Syd-
ney. They thought it would be as well
to try whether in populous towns where
there are large benches of magistrates, the
country could not be saved the expense of
paid magistrates. I think police magis-
trates are likely to be necessary in thinly-
populated places, but in populous towns
they ai*e not necessary. We have tried
this in Sydney and in Parramatta, and
although it is true that remonstrances have
been made against the arrangement in both
places, 1 can see nothing to induce us to
alter our decision. I think it is a reflection
on a bench of magistrates, so large as that
of Sydney, when they cannot find a suffi-
cient quorum or roster to take a fair share
of the duties of the office they have
accepted, and thus save the country the
expense of a police magistrate. There is
another item, which is both a new one and
a large one. namely 25,000, for warlike
stores, ordered from the Home Government
in 1855, about the time of the Russian
war, and before Responsible Government
began. The Executive Council of the day
decided to order a large quantity of warlike
stores from the Home Government, in the
hope that they would make us a present of
these articles, but at the same time stipu-
lating that if thej r did not do so the colony
would pay for them. A letter has come
out from the Secretary of State for the
Colonies, enclosing a little bill of 25,000
against us, which he would like us to see
about settling as soon as possible. The
Government, however, have decided not
to take any steps in the matter until they
obtain the decision of the House. It will
be submitted in due time, and whatever
the decision of the House may be we
will act accordingly. In the Department
of Lands and Works there is a sum of
8,000, which I will explain to the com-
mittee when it arrives at that vote, and a
schedule of the items composing that sum
will be prepared and delivered to hon.
Members. There are various large sums
of money which we propose to pay out of
the revenue. For elementary schools,
50,000 ; roads, 96,039 ; and public
works, 45,421. There are also several
large sums to be provided for by loan,
amounting together to 242,812. These
arise from some difficulty in the pre-
paration of the line of railway and in
the survey; the sum proposed to be
expended on new \\m-k.s, ami mi .-i

of railways was 78,049, and on account
of telegraph branches and proposed ex-
tensions, 69,580. There is a sum for
harbours and rivers navigation, and also
one for the renewal of the Circular Quay,
a very unpleasant subject, but there is no
alternative. The Government have found
the Quay in an impassable state, giving
way almost under the footsteps of the
people, so that they have been obliged to
resume a portion of the Quay and place
a sum on the Estimates for the work.
Then there is a sum of 26,892 for im-
provements to the Wollongong Harbour
and 30,000 for improvements to the
Kiama Harbour. These are, no doubt,
large sums, but I think the time has
ai-rived when persons residing on the coast
should have some fair share of the public
money. As they are called on to con-
tribute their quota to railways, which they
never see, and from which they derive no
immediate benefit, I think it only fair
they should have these sums from the
public funds for carrying out works which
are so much required by them. I hope,
however, if the money is expended on
these improvements, that the inhabitants
of the Wollongong and Kiama districts
will not object to pay a small tonnage duty.
There is also a sum of 4,000 for re-
moving obstructions to the navigation of
the Moruya River, 2,500 for the con-
struction of a wharf at Eden, and 7,000
for the improvement of the navigation
of the Rivera Crookhaven, Murray, and
Murrumbidgee. These are the chief de-
tails of the sum of 242,812 for public
works, which it is proposed to raise by
loan. On the other side, in regard to
the revenue, the committee will see that the
Customs duties for 1859 will be 596,475,
and that for 1860 I estimate them at
621,000. The Customs revenue has for
several yeai's past been steadily increasing :
in 1855 the amount was 421,000; in
1856, 471,000 ; in 1857, 533,000 ; in
1858, 557,000; in 1859, 611,000;
and in 1860 I estimate it will reach
621,000. Now, I must say I am rather
partial to the revenue derived from the
Customs. I think it is the most con-
venient and least annoying to pay, for
there is now half a million flowing quietly
into the treasury, which I am sure the
contributors are not aware of. The articles
fr.'iu which this revenue is derived, are,
with one or two exceptions, unobjection-
able ;is objects of taxation, and I certainly

MR. \VEEKES.

[1859.]

should be very loth to part with any of
them, because in all questions respecting
taxes we must not lose sight of the
expense of collecting. Although the Cus-
toms' revenue amounts to half a million,
it is collected in this colony at less than
four per cent. We may turn in vain for
any large amount of taxes to be collected
at so small a per centage as that ; I must
say, therefore, I would regard with some
fear the substitution of any other mode of
taxation for that of the Customs. Let the
Customs come in aid of anything else, but I
certainly object to the sentiment expressed
by an hon. Member the other night that it
would be a good thing if the whole of the
Customs' revemie were abolished. In my
opinion it would be utterly impracticable to
levy a personal tax that would meet the
appi-oval of the people, and be collected
at a reasonable expense to the colony.
It would in effect, be doing on a large
scale, what is sometimes done in Sydney
on a small one, that is, putting a bailiff in
every man's house, which would be a most
disagreeable mode of proceeding, and one
that the Government would not like to
adopt. " I estimate that the gold duty will
produce 47,050, as against 43,823 for
the previous year. There have been re-
presentations from various quarters res-
pecting the abolition of this duty, and the
Government have given them every con-
sideration. The Government, as is well
known by their previous votes, are opposed
to the gold duty, but I believe I am not
in a position to say that they can see their
way in the present state of the revenue to
take it off. I come to that determina-
tion with considerable reluctance, but I
am obliged to say so. The financial affairs
of the country, flourishing as they are, have
large claims on them. I cannot therefore
hold out any' prospect of the duty being
immediately abolished, but I shall be very
glad to see the state of the finances such
as will permit us to abolish it at an early
date.

MR. KOTTON : May I ask the hon.
Member to make his promised explanation
with regai-d to the duty on tea and sugar.

MR. WEEKES continued : If, when I
get to the end of my Budget, I have left
anything out the hon. Member can remind
me. I estimate the Mint receipts for 1860
at 17,000, against 15,588 for 1859;
and although this is a slight increase on
last year it is not so much as was received
in 1858. I may mention that the gold

coin issued from the Mint in 1855 was
over 512,000, and in 1858 it was about
1,343,000. There will be one addition
to the charge against the Mint which will
presently take place. The Savings' Bank
lent 40,000 to the Government for Mint
purposes, so that persons bringing their
gold and requiring the money at once might
get it without any delay. This was a great
convenience to all parties, and hitherto the
Savings' Bank lent that sum free of charge ;
but I suppose, induced by the Government
getting such a large rate of interest from
the Banks for their deposits, the Trustees
of that institution have taken the hint,
and now require the Government to give
them two-and-a-half per cent, on the
40,000 borrowed for the use of the Mint.
Now, I think we ought, if we can, to try
to reimburse ourselves. We propose to do
it thus : The escort hitherto has taken all
the notes of the various Banks up the
country for nothing. I think it is only a
fair thing to charge the small sum of one
quarter per cent., or five shillings per
100, for the safe delivery of their notes.

MR. WILSON: I thought it was
understood that the gold duty was to
include all charges.

MR. WEEKES This will be only a
charge upon the Banks for the accommo-
dation afforded them by the Government
in taking their notes free. As we have to
pay for the use of this money it is only
reasonable we should get this small sum
for the accommodation we afford. I will
now take the land revenue : In 1857 it
amounted to 276,572; in 1858, 405,000;
and for 1859 I estimate it at 498,962. I
estimate the amount for 1860 at 552,000.
Whilst I am on this subject I may as
well state the total amount received under
the Assessment Act during one year. In
1858, which was one clear year, there was
received 87,859. There is, then, nothing
particular to note till we come to the rail way
tolls, which for 1860 I have estimated at
80,000. I estimate they will produce
62,830 during the present year, and
I confidently anticipate that this sum
will be realised. I will now read a few
statistics to the committee relative to the
progress of our railways. The gross
receipts for 1857 on the Southern line
were 38,935; for 1858, 50,822; and
for the first six months of 1859, 26,253,
being a gradual increase from year to year.
The net receipts of the Southern line,
after paying all the working expenses, and

[1859.]

MR. WEEKES.

(in proportion to its length) half the
expenses of the head office were for 1857,
10,548 ; for 1858, 18,478 ; and for the
first six months of 1859, 20,082, which
also shows a progressive increase. The
proportion which the expenditure bears
to the receipts was, in 1857, 72 -9 per
cent., in 1858, 63 '5 per cent., and for the
six months of 1859, 614 per cent. thus
showing a gradual diminution of ex-
penditure from year to year. I shall
now advert to the traffic : On the
Southern line, in 1857, it amounted to
19,288 tons and 329,527 passengers; in
1858, 26,388 tons and 344,752 passengers,
and for the first six months of 1859, 14,775
tons and 172,608 passengers which is
also a progressive increase. On the North-
ern line, which has not as yet developed
itself so much as the Southern, the gross
receipts for nine months of 1857 (the time
it was open for traffic) were 4,451 ; for
1858, 11,470; and for the first six
months of 1859, 5,770. The net receipts
of the Northern line, after paying all ex-
penses of working, and (in proportion to
its length) half the expenses of the head
office, have hitherto been nothing. That
line, therefore, contributes nothing at
present towards the payment of interest
on the capital. This has arisen in a great
measure from the keen competition of the
Hunter River steamers, which deliver
goods at Morpeth for the same charge as
that made at Newcastle. Besides this,
goods are carted cheaper from Morpeth to
.M nit land than they can be conveyed from
Newcastle to Maitland by the train, hence
the inducement to use the line from New-
castle is done away with. The traffic
during the nine months the line was open
in 1857 amounted to 1,559 tons and 32,393
passengers ; in 1858 to 6,997 tons and
69,389 passengers ; and in the first six
months of 1859, 5,001 tons and 45,069
passengers ; so that the committee will see
that, though struggling with difficulties,
this line is progressing. When it extends
up the country sufficiently far to induce
people to forward their wool to New-
castle, where, it is expected, ships will
load direct for England, we may look
for increased returns. I estimate the
returns from the electric telegraphs at
15,000. The expected increase from this
source will arise from new lines now in
progress, which in the beginning of 1860
will be in full operation. A few statistics
connected with the Telegraph department

may interest the committee : In the first
six months of 1858 the messages sent
were 1,172, and the receipts 233 11s. 9d. ;
in the second six months the messages
were 7,969, and the receipts 1,699 8s. ;
in the first six months of 1859 the
messages were 17,509, and the receipts
3,488 14s. lid. The total value of the
messages transmitted during the first six
months of 1859 was 3,876 9s. lid. The
receipts in cash were, however, only 3,488
14s. lid. ; the difference is accounted for
in this way : Up to the middle of the year
the Government had not been accustomed
to pay anything for public telegrams, but
a sum was now put upon the Estimates for
the payment of all such messages. Of
the 3,488 14s. lid., the sum of 3,394
11s. 4d. is for the intercolonial line. The
capital invested on that line up to the
30th June last, was 23,550 15s. 8d.
The expenditure was 1,469 16s. 3d., and
the rate of interest after paying working
expenses was 16 '4 per cent, per annum.
The total length of all lines opened is 410
miles, capital invested 25,067 3s. 6d.,
expenditure 1,775 16s. 3d., and the rate
of interest 13 '6 per cent, per annum.
This statement is a satisfactory proof of
the progress of the lines already estab-
lished. I take credit for a sum of
20,800 for interest on city debentures,
because I have charged myself with the
whole interest payable by the Government,
including that 011 the city debt. There is
one other sum with which I will trouble the
committee, not on account of the amount
but on account of the very considerable
degree of interest attaching to the subject.
It will be seen that under the head of
miscellaneous I take credit for a sum of
180 as the produce of the first clip from
the alpacas. I see Mr. Hay laughing at
the smallness of the amount, but I would
remind him that our present large wool
interests had a beginning also. (Mr. HAY :
I was not laughing at that.) I look on this
small beginning with pleasure, and trust it
may lead to the establishment of an impor-
tant trade. The superintendent states that
we shall have next year 600 Ibs. of pure
alpaca, 500 Ibs. of mixed alpaca and llama,
and 700 Ibs. of llama wool, making in all
1,800 Ibs., at 2s. per Ib. The flock is in
perfect health, and seems to take to the
natural grasses of this country, " as tho' to
the manner born." As I have now got
through the Estimates, I have brought
mvself down to the estimated credit bal-

MR. WEEKES.

[1859.]

ance of 100,982. It has always been
the intention of the Government, when-
ever the state of the revenue warranted
us in doing so, to turn our attention to the
repeal of the tea and sugar duties.
The Government are prepared to do
so on the present occasion, but I think the
partial repeal of duties of this kind would
afford no relief at all; taking off a
portion is merely a deception on the class
you desire to benefit. Wherever possible,
the entire duty should be taken off, unless
the revenue derived is of such magnitude
that its abolition entirely would be
seriously felt. I have stated that it is the
intention of the Government gradually to
repeal the duties on tea and sugar, and it
is necessary they should be repealed gra-
dually, for several reasons one of which
is, that merchants, storekeepers, and others
who have laid in stocks of these articles
on the faith that the present duties would
be maintained, at all events for some time
to come, would have a right to complain
if the Government depreciated the value
of such property by a sudden abandonment
of the duty. It has not been thought too
strong a phrase to call such a step as this
a robbery, which I really think it would
be. Another reason why the tax ought to
be reduced gradually is, that it is desirable
to do away, as far as possible, with all in-
ducement to keep the articles in bond
until the duties expire. If there is to
be a great and a sudden reduction in the
duty on any article it will always be
found that stocks of that article will
gradually accumulate in bond that parties
will go on from hand to mouth, paying
duty on only just so much as is neces-
sary for immediate consumption, in order
to save the duty at the close of the
period. Our object, then, is to make
this reduction gradual, so that it shall not
be worth a trader's while to retain stocks
in bond. Acting on this view of the ques-
tion, we pi-opose the following stages or
terms of reduction ; that the first stage or
term in tea should begin on the 31st March,
1860, and that, from that date to the 30th
September, 1860, the duty on tea should
be 2d. ; that from the 30th September,
1860, to the end of the year, it should be
Id., and that at the end of the year the
duty on tea should cease altogether. That
is our proposal with regard to the tea ;
then as to sugar, we propose that the
same dates or terms should be employed ;
that from the 31st March, 1860, to the

30th September, 1860, the duty on refined
sugar should be reduced to 5s., on raw
sugar to 3s. 4d., and on molasses to
2s. 3d. ; that from the 30th September,
1860, to the end of the year, the duties on
refined sugar shoiild be 3s. 4d., on raw
sugar Is. 8d., and on molasses Is. ; and
that after the end of the year the duty on
sugar should cease and determine. Then
of course I must regulate the drawback on
these commodities step by step, falling as
the duties fall. In taking off the duties
on sugar I am on the other hand about
to raise the duty on Colonial made
spirits in a corresponding degree. The
difference of duty now between the Colonial
made and imported spirits is 7d. per
gallon ; and the reason for this difference
at the present time is obvious, since the
Colonial spirit-makers now pay duty on the
sugar from which their rum is made. If
therefore the Colonial and imported spirits
were now to pay the same duty, the Colonial
manufacturers would in fact be paying
a higher duty than the importers. But
they are now relieved to the extent of the
duty on sugar. This being the case, it follows
that if we reduce the duty on sugar from
which Colonial spirits are manufactured,
we should raise the duty on Colonial
spirits, the rise taking effect at the terms
or stages of the reduction on sugar ; so
that, from the 31st March, 1860, to the
30th September, 1860, the duty on Colonial
spirits will be 6s. 7d., instead of 6s. 5d.
per gallon. For the next stage from the
30th September to the end of the year it
will be raised to 6s. lOd. ; after that time
the duty would be the same as that on
imported spirits namely, 7s. per gallon.
Thus, all the duties on tea and sugar will
end on the 31st December, 1860 that is,
if the reductions I propose are agreed to
by the committee. The resolutions which
I intend to propose I now beg to lay before
the committee ; but I do not wish to take
any opinion on them this evening. Be-
sides the resolutions which refer to the tea
and sugar duties there are others for
raising money by loan for railways, electric
telegraphs, and public works, as well as to
pay off debentures falling due in 1860. I
do not expect that the House, which has
already had a very long discussion on the
tea and sugar duties, will think it neces-
sary to go at full length a second time
into the subject If, therefore, the com-
mittee is prepared to deal with this
matter at once, I shall be quite satisfied to

[1859.]

MR. WEEKES.

go on with the resolutions ; otherwise,
however, I shall merely lay them on the
table, and bring them forward on some
future occasion. This then is the state-
ment of the affairs of the country, which
I was so desirous of laying before the
committee ; and I think that hon. Mem-
bers will agree with me that the statement
I made in commencing this address is
not exaggerated, and that our financial
position will be found to be highly
satisfactory. The committee will see also
that the Estimates of expenditure have
been framed in as economical a spirit as
the requirements of the Public Service
would permit. I am desirous that these
resolutions should be printed for the con-
venience of the committee before they are
taken into consideration ; and as such
a course has been suggested to me, I am
willing to meet the wishes of hon.
Members. The following are the reso-
lutions :

That in lieu of the duties of customs now
chargeable on tea imported into this
colony, the following duties shall be
charged that is to say, upon every
pound of tea, from and after 31st March,
1860, to 30th September, 1860, inclusive,
2d. From and after 30th September,
1860, to 31st December, 1860, inclusive,
Id. After which date the duties on tea
shall cease and determine.

That in lieu of the duties of customs now
chargeable on sugars and molasses im-
ported into this colony, the following
duties shall be charged that is to say,
upon every cwt. of sugars and molasses,
from and after 31st March, 1860, to 30th
September, 1860, inclusive : On refined
sugars, 5s. ; raw sugars, 3s. 4d. ; molasses,
2s. 3d. From and after 30th September,
1860, to 31st December, 1860, inclusive :
On refined sugars, 3s. 4d. ; raw sugars,
Is. 8d. ; molasses, Is. Id. After which
date the duties on sugars and molasses
shall cease and determine.

That, in lieu of the drawbacks no\v allowed
upon the exportation of refined sugar
made in this colony, the following rates
shall be allowed that is to say, from and
after 31st March, 1860, to 30th Septem-
ber, 1860, inclusive, upon refined sugar
having been duly clarified and thoroughly
G

dried in the stove, and being of a uniform
whiteness throughout, at the rate of for
every hundred weight, 5s. ; upon refined
sugar known as bastard sugar, at the
rate of for every hundred weight, 3s. 4d.
From and after 30th September, 1860, to
31st December, 1860, inclusive, upon
refined sugar having been duly clarified
and thoroughly dried in the stove, and
being of a uniform whiteness throughout,
at the rate of for every hundred weight,
3s. 4d. ; upon refined sugar known as
bastard sugar, at the rate of for every
hundred weight, Is. 8d. After which
date the drawbacks allowed on the expor-
tation of refined sugar made in this
colony shall cease and determine.

That, in lieu of the duties now payable upon
spirits distilled within the colony, the
following duties shall be payable that is
to say, upon every gallon of spirits made
or distilled from sugar, from and after
31st March, 1860, to 30th September,
1860, inclusive, 6s. 7d. ; from and after
30th September, 1860, to 31st December,
1860, inclusive, 6s. lOd. After which
date the duties payable on every gallon of
spirits made or distilled from sugar within
the colony shall be seven shillings.

That a sum not exceeding 88,370 DC raised
by the sale of Government debentures, to
be expended during the year 1860, in the
construction of railways, viz. , for valua-
tion of land, works in progress, trial sur-
veys, and new works, as set forth and
specified in pages 71 and 72 of the Esti-
mates of Expenditure for that year.

That a sum not exceeding 154,442 be raised
by the sale of Government debentures, to
be expended on certain public works, in
the year 1860, as set forth and specified
in the Estimates of Expenditure, under
head No. 7 : "Electric telegraph branch
to be provided by loan," page 74 ; and
"Harbours and river navigation public
works to be provided for by loan,"
page 80.

That a sum not exceeding 28,507 be raised
by the sale of Government debentures, to
be expended on certain public works in
the year 1859, as set forth and specified
in the further Supplementary Estimate of
Expenditure for the present year, under
the head, No. 6, " Public works to be
provided for by loan," page 7.

That the sum of 365,600 be raised by the
sale of Government debentures, to pay off
a like amount of Government debentures
to fall due in the year 1860.

THE HONORABLE jSAUL

(Now SAUL SAMUEL, ESQUIRE, C.M.G.)

fHlf

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SAUL SAMUEL, made

8th December, 1859.

[From the Sydney Morning Herald of QtJi
December, 1859.]

LEGISLATIVE ASSEMBLY.

Tliursday, 8 December, 1859.

FINANCIAL STATEMENT.

ME. SAMUEL, in moving that the sum
of 80,784 4s. 9d. be granted out of the
Consolidated Fund of New South "Wales,
to meet the supply granted to Her
Majesty, spoke as follows : I take, Mr.
Piddington, the earliest opportunity that
the forms of the House will permit to
state to the Committee the estimated ex-
penditure for the year 1860, and the
manner in which I propose to provide
ways and means to meet it. I feel that I
labour under some disadvantage in so
soon following the honorable Member for
West Maitland, who recently made a
similar statement to the Committee ; but
I trust that when I have concluded I may
be so fortunate as to have made my state-
ment in as clear and lucid a manner as
did that honorable gentleman. It is only
two short months since the honorable
gentleman made that statement, and it is
therefore unnecessary that I should take
up the time of the Committee in travelling
over precisely the same ground as my

Eredecessor then travelled over. The
onorable gentleman on that occasion
informed the house of the state of the
commerce of the country, and of many
other matters which it is hardly necessary
that I should now refer to, as they must
be fresh in the memory of honorable
Members. I shall endeavour to confine
my observations to-night as closely as
possible to the matter immediately before
us I mean the estimated revenue and
expenditure for the coming year. I regret
that the statement I have to submit to the
House does not exhibit so large a surplus
as that which was shown by the honorable
gentleman opposite, but I shall endeavour
briefly to point out how the difference has
arisen. It will no doubt be still in the
recollection of honorable Members that
ir

in the statement of the honorable gentle-
man he estimated his surplus in round
numbers at 101,000 ; my surplus is only
16,359 8s. 9d. This difference has been
occasioned by several causes, the most
important of which is the separation of
the new colony of Queensland ; and I
regret to state that after deducting the
estimated expenditure from the estimated
revenue a balance is left in favour of
that Colony of 33,463, which is to that
extent a loss to our revenue. If honor-
able Members will refer to statement
No. 7 A they will find a detailed estimate
of the revenue that would have been
derivable from the District of Moreton
Bay (now the Colony of Queensland) in
1860, the amount of which I have had to
deduct from the estimated revenue of this
Colony. The amount of the probable
revenue of Queensland for the ensuing
year is 133,107, while the expenditure,
as extracted from the Estimates of the
late Government, is 99,644, leaving the
balance I have just stated. I may as
well state here that, in consequence of
that separation it has been necessary to
re-frame the Estimates, more for the
convenience of dealing with them than
for any other cause, because the whole of
the items relating to Moreton Bay are
mixed up with other items, and it would
have been inconvenient to have dealt
with them in that form. That is the
principal cause why these Estimates have
been reprinted ; but it has also been done
in order to balance them with those of the
honorable gentleman opposite. In another
statement non. Members will find an esti-
mate of the whole revenue derivable
from the colony, as it stood before the
separation of Queensland, and this state-
ment I may at once say is precisely similar
to that of the honorable gentleman oppo-
site. Although the amounts are exactly
the same, I cannot be accused of having
borrowed his figures, because the same
sources from which he derived his in-
formation, namely, from the operations
of previous years, and the heads of the
various departments, were those which

ME. SAMUEL.

[1859.]

were open to me. For instance, I
applied to my honorable friend the
Minister for Lands to furnish me with a
statement of what would probably be the
land revenue for the ensuing year upon
which he put himself in communication
with the Acting Survey or- General, with
whom I have also been in communication
myself, and the result was that I
received an estimate (based upon the
existing land law) precisely the same as that
furnished to my predecessor. I cannot,
therefore, be charged with borrowing the
honorable Member's figures any more
than with borrowing his speech. I make
this statement to show that I have
endeavoured to ascertain whether the
estimated revenue of my predecessor was
to be relied upon, and I have no hesitation
in saying that I believe it to be a fair and
just estimate of the sums likely to be
derived, in 1860, from the various
sources of our income. As I before stated,
the surplus brought down by the hon-
orable gentleman was 101,000. from
which, deducting the deficiency occasioned
by the separation of Queensland, the
balance will be 67,519. I have now to
account for the difference between that
sum and the balance that I have brought
down, viz. : 16,359 8s. 9d.; and if honor-
able Members will bear with me for a short
time, I will endeavour to give them the
figures as nearly as I can, and shall after-
wards be happy to give them any further
details that may be desired. The hon-
orable gentleman's balance was 100,982.
To that I have added 8,000 as a
further saving on an appropriation for
steam postal service via, Panama, after
reserving 2,000 thereon for any ex-
penses that are likely to arise. Then
there is a difference of 15,943 17s. Id.
between the further Supplementary Esti-
mate for 1859 of my honorable prede-
cessor and the amount passed by the
Assembly. This sum added to the
8,000 makes a reduction of expendi-
ture to the amount of 23,943 17s. Id.
This would have increased his surplus to
124,925 17s. 7d., from which I deduct
33,463, the excess of revenue over
expenditure, consequent upon the with-
drawal of the Queensland items. We have,
however, an excess of additions over de-
ductions in my honorable predecessor's
estimates for 1860 of 48,511, and I will
explain how this addition occurs : The
ordinary way would have been to have

had the sum brought down by an addi-
tional or a S upplementary Estimate, but the
later period at which our Estimates were
prepared has enabled us to include some
of these amounts ; others would have been
thus brought down by the late Ministry.
Then there is one amount which I have
transferred from the Loan Account to
the General Revenue Account that of
3,000 for a deodorising apparatus, which
I thought we were not justified in put-
ting down to the Loan Account, and have
therefore transferred it to the General
Eevenue Account. There is also an addi-
tional Supplementary Estimate for 1859 of
14,587 8s. 10d., which has been brought
down and laid on the Table of
the House. That amount includes
the sum. of 7,500, again submitted as
compensation to Mrs. Want. I now come
to an entirely new item in this colony
that is a sum of 12,005, which I propose
to set aside as an investment to meet de-
bentures, which we shall necessarily have
to issue. I am anxious to make a few
observations to the Committee on this
subject, but before doing so it will be
better, perhaps, that I should explain
some of the most important new items on
the Estimates, and show how the additions
and deductions have occurred. In the
first place the Government have felt it
their duty to place 50,000 upon the
Estimates for increased gaol and work-
house accommodation in those parts of
the country where Courts of Quarter
Sessions are held ; and I may state, for
the information of honorable Members,
that, where there is not adequate accom-
modation of that kind at present, the
operation of these Courts has been modi-
fied so as to prevent the inconvenience
which was felt on that account. This is
one of the largest items the Government
has put on the Estimates. Another
item added is one which was left as a
legacy from the former Government,
namely 500 as a pension to Colonel
Barney. It appears that an engagement
was entered into with Colonel Barney to
leave his office on condition that he would
receive a pension of 500 a-year. This
amount was, I believe, accidentally omitted
from the Estimates of the late Ministry,
but, seeing that the Government was
pledged to carry out this engagement,
that sum has been put upon the present
Estimates. The next item of import-
ance I come to is 600 as a salary for

[1859.]

ME. SAMUEL.

a police magistrate for the city of Syd-
ney. As this matter was so fully dis-
cussed a day or two ago it is not neces-
sary to delay the House now by any addi-
tional arguments in its favour. There
is one item of 10,000 which the Govern-
ment has taken off ; this was intended to
provide for the new education scheme of
the late Ministry, but as the present
Government do not intend to interfere
with the existing systems of education
until the question can be dealt with in a
proper manner, the amount has been with-
drawn. The sum I have referred to as a
balance of the deductions and additions
namely, 16,359 8s. 9d. is arrived at in
this way : deductions from the expendi-
ture, 108,566 8s. lOd. ; additions to the
expenditure, 124,925 17s. 7d. ; thus
leaving the above-stated balance of addi-
tions in excess of reductions. Now, I
will go back to the item of 12,000, to
be made an annual charge upon the Con-
solidated Revenue Fund, for the purpose
of paying off at maturity the debentures
which we shall be compelled to issue dur-
ing the present year. These debentures
are intended to provide for Public Works
(of course subject to a vote of the
House) to the extent of 200,000, and to
pay off debentures falling due in 1860 to
the amount of 365,600. Hon. Members
will not deny that the system which re-
quires debentures to be paid off by the
issue of others is a bad one, being in fact
nothing more than renewing our bills.
It is the last resource of individuals to
borrow money in order to meet their
liabilities, as it only results in getting
them further into debt. I can hardly
conceive that there is a difference in our
case, when having to meet engagements
at a certain time, we make no provision
for doing so. As I think the principle of
borrowing without some provision for re-
payment is unsound, I propose to invest
this 12,000, the interest on which should
be set aside to meet the proposed loan.
An annual sum of 12,000 would, at the
current rate of interest, pay off the
loan in twenty -six years ; and the de-
bentures having a currency of thirty years
would aflbrd ample time to pay off the
amount. If therefore we set aside 2 per
cent, of the gross amount of the liability
we are about to incur, and upon that obtain
an interest of 5 per cent, for thirty years we
would gradually extinguish it. I hope
therefore hon. Members will take this into

consideration. I am aware that there is a
great objection to sinking funds ; but we
are not open here to the same objection in
this respect as they are in the mother
country. We have no war taxation, and
our loans are principally for public works,
which are reproductive. I feel, too, that if
we make an engagement for a certain period
we ought, at the same time, to make pro-
vision to meet that engagement. I know
that sinking funds are objected to on the
ground that they are liable to be used for
other than the originally intended pur-
poses. This however is rather an argu-
ment in their favour, as the money
which would be constantly accumulating,
could in the event of any extraordinary
necessity arising be placed at the com-
mand of the Treasurer, and thus obviate
the necessity for borrowing that which he
otherwise could not raise without much
delay and inconvenience. It is proposed
that Government Debentures should be
purchased to the amount of 12,000, re-
tained in the Treasury, the interest regu-
larly taken into account, and that interest
reinvested. I think the question a simple
one, and without a practical difficulty
still I am open to conviction ; and if any
hon. Member can show that the propo-
sition is objectionable I am not so wedded
to the scheme as not to be prepared to
give way. I have no hesitation in express-
ing my belief that such a scheme, if carried
out would raise the value of our securities
in the mother country. There are 365,000
worth of debentures falling due next
year, and we are now at the end of 1859.
Imagine what would have been our posi-
tion now if we were subject to the same
fluctuation in the money market that we
were a few years ago, when our deben-
tures would not go off at any price. I
ask the House to consider my proposition
well, and say whether it is not our
bouuden duty to make provision for our
engagements. Now I come to another
very important question : Hon. Members
will see that our surplus is very small
indeed. Such a surplus as that we have
to show, I regard, I regret to say, almost
as a deficit, and I hope, when dealing
with the Estimates, honorable Members
will try to make as large a reduction in
the general expenditure as will be con-
sistent with the efficiency of the Public
Service, and to that extent we shall be
prepared to go with them. It is not our
intention to interfere with the present

ME. SAMUEL.

[L859.]

taxation of the country. I am fully alive
to the necessity for its revision, and sen-
sible that it requires great improvement.
I am also prepared to go with those gen-
tlemen who desire the repeal of the tea
and sugar duties, if it can be shown how
we can provide an unobjectionable sub-
stitute. I am of opinion, too, that the
gold duties should be abolished, but this
would involve a loss of revenue which I
do not see my way clear to make up, and
I am not willing to come down to the
House with a revenue insufficient for
carrying out the improvements of the
country; for if it is to make any progress
at all, the people must be prepared for an
increase of taxation. Still, I am desirous
of seeing taxation placed where it can
best be borne, that is, upon property. It
is not fair, however, to expect that ques-
tions of such magnitude and importance
could be decided during the one short
month we have been in office. We should
have been working in the dark, and guilty
of a dereliction of duty to the country.
We did attempt to go through the Esti-
mates, with the object of making reduc-
tions, but on all hands we were met by
impossibilities ; and, having had so brief
an opportunity for carrying this out, we
could not rashly strike our pen through
items without having given them the con-
sideration they deserved. This could
not be expected. (Mr. JONES : It was
expected.) Then such an expectation
was unreasonable ; and I would rather
resign my office this night than under-
take such a duty. I have already
come to the conclusion that I am not
in a bed of roses, and rather than be
badgered by hon. gentlemen opposite, I
would at once give up my position as
Minister were it not that I feel my duty
to the country requires that I should re-
.tain it. Their conduct may in their own
minds be perfectly justifiable, and I give
them credit for thinking so ; but they
may be mistaken, and we are at issue,
though they may consider themselves
right on every important question. I
can say this, however, that, as far as I
have gone with this statement, I am in-
debted to hon. Members for the patient
hearing they have given me, and that
there has been no want of courtesy on
the part of any hon. gentleman in the
House. I do not mean to go over the
ground again with reference to the loss
the revenue would sustain, by the repeal

of the tea and sugar duties. I have
no doubt the hon. gentleman opposite
thought he was right in proposing that
repeal. (Mr. ROBERTSON : It was the
Premier who proposed it.) However
that may be, I am dealing with the hon.
gentleman opposite, who proposed to
sweep away 150,000 of revenue by
taking off these duties, and I will show
that he was not justified in doing this
unless he provided a substitute from some
unobjectionable source. He would re-
duce the revenue by the withdrawal of
ihese duties, at the same time congratu-
lating the country upon the flourishing
statement of its finances, as made by the
late Colonial Secretary in his exhibition
of a large credit balance, while the separa-
tion of Moreton Bay swept off that, and
left no surplus at all. I do not want to
make the position of the country one jot
more serious than what it is, for I think
its resources, aided by systematic reduc-
tions, will meet all our requirements, as
well as provide for any emergency that
may arise ; but to secure this we will
certainly require a wise and discreet
treatment of our finances. If our reduc-
tions are to be made wisely they must be
made deliberately and guardedly. The
late hon. Premier told us that the separa-
tion of Moreton Bay would make no
difference in our revenue. I speak sub-
ject to correction, but that was, I think,
the statement he made. But it has
made a difference, and one that would
increase every year. (Mr. IEVING : You
have not made any allowance for what is
voted for Moreton Bay.) If the hon.
Member had listened to me he would have
found that I did make that allowance. I
think I went fully into the question, but
if I did not succeed in making it clear to
hon. Members I much regret it. I will
now draw my observations to a close. I
have not gone, perhaps, so fully into the
details of the list of figures as I might
have done, but I had no wish to tire the
House by a reiteration of the figures which
the hon. Member (Mr. Weekes) went
into so fully only two months ago ; but if
hon. Members wish me to go into the
statement again I have the information
before me, and will give it to the House.
In concluding I have again to thank the
committee for the patient hearing they
have given me. I now beg to move the
resolution which I have read to the
House.

NEW SOUTH WALES,

THE FINANCIAL STATEMENT of the HONORABLE ELIAS CARPENTER
WEEKES, made 31st January, 1861.

'[From the Sydney 'Morning Herald of 1st
February, 1861.]

LEGISLATIVE ASSEMBLY.

Thursday, 31 January, 1861.

FINANCIAL STATEMENT.

MR. WEEKES, in rising to propose
certain resolutions, said : Mr. Wisdom, I
am desirous of taking advantage of this
opportunity of submitting to the Com-
mittee the financial condition of the
colony. In a previous Parliament I had
the honor of making a statement of the
affairs of the colony at that period ; and
the statement I have now to make is
based upon nearly the same set of figures,
with the exception that I shall now be
able in many cases to state the actual in-
stead of the estimated sums. To ' many
hon. Members, therefore, much of what I
am about to say will almost seem like a
" twice-told tale." It will be necessary,
however, that I should briefly go through
most of the points to which I alluded
when I laid the budget of 1861 before
the late Assembly. I am particularly
desirous of doing this at the earliest
possible time because, as the committee "
are well aware, there have been no lack
of gloomy forebodings as to our real
position. If we were to trust the state-
ments we hear in some quarters, we must
believe that we are really almost in a
state of insolvency ; but I think I shall
be able to show the committee before I
sit down that, so far from that being the
case, the financial affairs of this country
are in a sound anil healthy condition, and
that the anticipations which have been
made respecting our affairs, and the

degree to which our credit will be shaken
when these affairs become known, will
be found to be utterly groundless. I
shall be able to show the estimation in
which the capitalists of the world hold
this colony. That I think, is one of the
best tests we can apply. But before I
proceed further, I will just refer to the
revenue and receipts of the colony of
New South Wales, from 1851 to 1860.
The total revenue and receipts for 1851
were, in round numbers, 400,000; in
1852, 532,000 ; in 1853, 820,000 ; in
1854, 993,000 ; in 1855, 1,002,000 ; in
1856, 1,101,000 ; in 1857, 1,156,000;
in 1858, 1,367,000 ; in 1859, 1,510,000 ;
and in 1860, 1,317,000. Now, sir, the
Committee must bear in mind that the
revenue of the last year 1,317,968 is
the revenue of this colony after having
been deprived of an entire province. It
is the revenue of the colony exclusive of
Queensland. I think the Committee will
see that that is a state which may be con-
sidered highly favourable, and I have no "
doubt that whoever may have the task of
submitting the Estimates for another year
to the House will be able to show that
we have retrieved altogether the loss we
temporarily suffered by the deprivation
of Queensland. It will perhaps be in-
teresting to the Committee that I should
here say a word respecting our public
debt, which they will find from the Ways
and Means is about 3,819,730 that is,
that debentures to that amount have been
sent from the colony. The whole of them,
however, have not yet been placed in
circulation. Some 500,000 or 600,000
are still remaining on hand and are to be
disposed of from time to time by the
Oriental Bank. The way in which our

ME. WEEKES.

[1861.]

debentures have hitherto been disposed
of, and the high value the capitalists of
England appear to attach to them must
be verp gratifying. In 1858-9 (without
troubling the committee with details) the
debentures ranged from 97J to 103.
813,000 (debentures) have been sold,
and realised 816,778 12s. 6d. In the
year 1860, which has just terminated, the
debentures sold by the Oriental Bank,
London (so far as we have advices)
were 37,100 at 98 ; 122,100 at 99 ;
104,800 af 99f ; 66,600 at par. ;
71,500 at 100^; 81,900 at 100^;
16,000 at lOOf; 55,700 at 101 ; and
5,200 at 102. I think that when we
find our 5 per cent, debentures bearing
this excellent price in the market of
England it must be a convincing proof
not only that English capitalists have the
greatest confidence in the vast resources
of this colony, but also in the wisdom and
prudence of its legislation. Because,
Sir, I am quite satisfied that if capitalists
saw that we were prone to rash, hasty,
and intemperate legislation whatever
regard they might have for the natural
riches of the country they would hesi-
tate before they embarked in any invest-
ment connected with the Colony. There-
fore, I think confidence in our financial
condition and resources goes hand in
hand with confidence in our legislation.
I will now proceed to a statement of the
accounts current of revenue and expen-
diture. The only matter I am desirous
of calling attention to in the account of
1859 is that the figures have been already
adopted they being the actual amounts.
There is an item in that account of
177,025 6s. lid. called "savings on
votes of Parliament." I am desirous now
of drawing the particular attention of the
Committee to this item, because I wish
it to be thoroughly investigated. I
desire that the Committee may have their
minds disabused of the imputations which
have been cast upon these accounts, that
they were simulated and not to be
depended upon. I think I shall be able
to show to the satisfaction of the Com-
mittee that this item is a legitimate one,
and that it is proper it should be stated
to the House and deducted from the
expenditure. And to show the Committee
that this is no novelty that the present
Government have discovered in dealing
with the accounts, I may state that ever

since Kesponsible Government has been
introduced, every Minister who has dealt
with the finances of the country has felt
it his duty, in order to lay a correct and
clear statement before the Assembly, to
point out sums either saved or not re-
quired. On August 21st 1857, Mr.
Donaldson submitted his Budget of Ways
and Means to the House, and I have
copied the remarks made by that honor-
able gentleman in allusion to this par-
ticular class of items. In Committee of
"Ways and Means, Mr. Donaldson took
credit for 30,000 which he described in
this way :

"Amount of appropriations for 1857 was
1,103,940 15s. lid. I have the satisfaction of
informing honorable Members, however, that of
this last amount the Government have not been
under the necessity of appropriating some
30,000 ; and this may be said to have been
saved to the country. The saving here named
has arisen in this way."

In the savings to which I am now refer-
ring, there is an item of this character to
which Mr. Donaldson is now about to
allude :

" The amount for interest on debentures was
estimated at 130,000, but the interest account
has been much less than was anticipated ; and
under this head alone something like 20,000
have been saved. Further than that, a sum of
10,000 had been saved out of the votes passed
by the House, but not appropriated. Of this
last sum nearly one-half consisted of votes for
pensions to the Judges, none of which has been
required."

I think "the House will see that the items
he includes in that 30,000 are of neces-
sity saved. They were sums voted for
that current year. In the Estimates for
that year 130,000 was put down as
interest on debentures, but the deben-
tures issued in that year were so much
smaller in amount than was anticipated
that the whole of that 130,000 was not
required. They saved 20,000 011 in-
terest alone, and is that to be continued
as an apparent charge to that year, and
so accumulate year after year ? Is it
not an honest and candid way to come
down to the House and say in carrying
out your views we have saved 20,000 on
this item, which we have put down to
relieve the revenue side of the account ?
We do not attempt to use the money we
derive from savings for any other purpose
than that which the House directs.
There was a time in the good old days
when these savings which we now

[1861.]

Mn. WEEKES.

come down and place at the disposal of
the House were used by the Government
for works which had not been sanctioned
by Parliament. On a committee of
inquiry being held in reference to those
matters it was found that many thousands
of pounds out of the savings on other
votes had been used for works which had
never been sanctioned. No one can
deny that that was a most improper and
unjustifiable mode of using the public
money. But it is very different in this
case. We come down and say you in-
structed us to carry out certain works in
a certain mode, and placed certain sums
at our disposal for that purpose. We
gave instructions to carry out those
works, and by careful spending, by
economical contracts, by watching and
controlling the expenditure of the public
money, we find we are able to save out
of those works sometimes a large sum
and sometimes a small sum ; but what-
ever those sums may have been they have
accumulated, and would only burden that
side of the account if they were not dis-
posed of in the way I have submitted
them to the House, because they could
never be spent. The works for which
the various amounts had been voted were
completed, and the savings were now
placed at the disposal of the House. I
nold in my hand a statement of the par-
ticulars of the amount of savings on
votes of Parliament in continuation of
those shown in the account current for
the year 1858, prepared by the Auditor-
Greneral, and I will enumerate some of the
items. One prominent item is 50,000 for
steam communication via Panama. That
sum was placed on the Estimates for the ser-
vice of the year 1859, and had the Panama
route been established it would have been
used, but the line had not been opened.
Were we therefore to let the account be
charged with 50,000 for that year, and
50,000 for the current year ? Ought we
not rather to come down and say that the
50,000 for 18GO has not been required ?
From a variety of causes savings must ac-
crue from almost every department ; and
the savings of a department in any one
year cannot be applied to the service of that
department in the coming year, because a
fresh vote is taken from year to year.
What then are we to do with the savings,
except come down to the House and say
that we have effected those savings, and

by removing them from the expenditure
side relieve to that extent the revenue
side of the account. There was a largo
sum appropriated for paying the Colonial
allowance to the military and naval forces
for 1860 ; but those forces for the most
part have been away from the Colony
during the last twelve months, and there-
fore they could have no possible claim to
that allowance. The greater part of it is
consequently saved to the Colony as the
troops have not been here to earn it.
They have been engaged in other services,
and are not entitled to it. Surely, then,
it is a proper course to deduct that from
the expenditure side and relieve the re-
venue to the same extent. The Commit-
tee will see by running through the
various items, that the savings have been
made under various heads ; even in the
schedules, particularly that in which the
pensions are appropriated, large sums are
not required, and in Mr. Donaldson's
time none at all, because there was no
judge on the pension list in those days.
Under these circumstances I trust the
Committee will admit that this is a per-
fectly legitimate way of dealing with
these items, for unless they are to remain
on the expenditure account, with no effect
whatever, since we are not able to use
these amounts in another year, I contend
that we are perfectly justified in using
them to relieve the revenue of the present
year. I am quite free to confess, Sir,
that the estimate which was framed of
the revenue for 1860 has not been realised,
but I think before I sit down I shall be
able to give a satisfactory elucidation of
the falling off the temporary falling off,
as I believe it to be. The original estimate,
submitted in October, 1859, of the revenue
of 1860 amounted to 1,665,339. Sub-
sequently, however, the separation of
Queensland occurred, and my predecessor
in office, Mr. Samuel, estimated the
amount to be deducted on account of that
separation at 133,107, leaving a net
estimated revenue of 1,522,232. The
actual revenue received, however, has been
1,317,968, being an increase in items
estimated of 49,968, and a decrease
upon other items of 254,233, making a
net decrease on the Estimate of 204,265.
The first item of decrease is in the Customs
Department, and this my predecessor
otimated to be, from the withdrawal of
Queensland, 35,000. In making this

MB. WEEKES.

[1861.]

estimate there were at the time very little
data to go on, and the result has shown
that the amount has been much under-
rated, for by a return which I have obtained
from the Collector of Customs of Queens-
land I find that the Customs revenue of
that colony for 1860 amounted to 58,000,
instead of 35,000. Now, if credit had
been taken for the larger amount in-
stead of the smaller, it would have re-
duced the difference between the actual
and the estimated amount of revenue to
some 5,000 or 6,000 only. I am
willing to admit that the Land revenue
for 1860 has exhibited a very serious
falling off, amounting to no less a sum
than 164,361 ; but I am in a position
to throw a little light on the cause of that
deficiency : "When the Forster Govern-
ment were in power, they, for some
reason no doubt a very good one per-
mitted the land sales to come almost to a
dead stop ; and the consequence was that
when the present Ministry entered upon
office, the close of the first quarter of
1860 showed a great falling off, the
amount received being only 20,327, as
against 72,128 received in the first
quarter of 1859 ; thereby showing a defi-
ciency of 51,800 in this one quarter
only. In the quarter ending 30th June,
the second quarter in which this Ministry
was in power, the land sales amounted to
39,185, as against 64,278, showing a
further falling off of 25,092. In the
quarter ending 30th September, 36,466
were received, whilst in the correspond-
ing quarter of 1859, 55,205 ; thus show-
ing another deficiency of 18,739; and
in the quarter ending 31st December,
1860, 59,327 were received for land
sales, as against 61,015 received in the
last quarter of 1859, thus showing a de-
crease of only 1,678 ; so that the revenue
from sales of land was, at the close of the
year, fast overtaking the amount at which
it had been estimated ; and I have no
hesitation in saying that had this Govern-
ment been in office so as to have started
with the land sales from the commence-
ment of the year instead of at the close of
the first quarter, we should have abso-
lutely overtaken the amount of the pre-
ceding year, as the proceeds of land sales
for the month that has just expired were
18,000, or nearly as much as was re-
ceived altogether in the first quarter of
1860. At the same time the Customs

revenue for the first month of 1861 has
amounted to 49,448, whilst in the first
month of 1860 it reached only 40,553,
showing an 'increase of 8,000 on the
month. Now, with this in view, I think
it may be fairly considered that the
revenue on almost every point is improv-
ing. If the Committee will now turn to
the Ways and Means, they will find
that I commence the year 1860 with a
balance of 148,056 from the preceding
year. The actual revenue and receipts
collected during the year amounted to
1,310,052; the amount due by the
Sydney Municipal Council for interest
on debentures was 49,812 ; and the
loans authorized to be raised for public
works, and to pay off debentures, to
681,837 ; making together a total of
2,189,757. On the other hand, we have
to set against this the amount of the Appro-
priation Act for 1860, 1,143,931 ; special
appropriations of 276,833 ; provided by
constitutional and Colonial Acts, 58,350,
amountinginalltol,479,114. From that,
however, I deduct the entire sum appro-
driated for the establishment of the Pan-
ama steam postal route, 50,000, as not
being required by reason of the route not
having yt been established. This reduces
thecharge to 1,429,114 ; to this are added
the amount of 681,837, for public works,
whose cost is to be covered by loans, and the
Supplementary Estimate for 1860, which
the House passed the other night, amount-
ing to 56,834. These chai-ges which
amount to 2,167,786 13s. 5d., deducted
from the credit side of the account, leave a
.balance in favour of the colony, at the close
of 1860, of 21,971. With that balance I
commence the year 1861, and the Com--
mittee will find that the Estimates-in-
chief for the year, now on the table of
the House, amount to 1,173,177; to
which are to be added special appropria-
tions amounting to 226,500, and appro-
priations under the Constitutional and
Colonial Acts of 58,350, making toge-
ther 1,458,027. There are also certain
additional charges, as per memorandum
accompanying the Estimates, amounting
to 6,480 ; charges proposed to be covered
by loan for public works 138,784. These
charges together amount to 1,603,291 2s.
lOd. On the other side we have, first, the
balance of 21,971 5s. 8d. from 1860; then
the estimated revenue as stated in the
Ways and Means, of 1,519,844, and the

[1861.]

ME. WEEKES.

amount proposed to be raised by loan for
public works of 138,784, making in all a
total of 1,680,599. Deducting therefrom
the estimated expenditure there remains an
estimated balance at the close of 1861
of 77,309. The expenditure under the
head of General Services contains several
large items. One of these is the sum of
18,000 for the purpose of endowing
municipalities, being an increase of 8,000
upon the amount voted last year for the
same service. I will read to the Com-
mittee an account which has been drawn
up, and which shows in a very fair way
the progress that municipal institutions
have made in this colony. The amount
of endowments paid by the Government
to these municipalities from their first
institution up to the end of December,
1860, has been 8,386, in the following
sums : Waverley, 370 ; Grafton, 288 ;
Wollongong, 789 ; Newcastle, 1,407 ;
Kiama, 1,255; Shellharbor, 376 ; Jland-
wick, 337 ; Eedfern, 738 ; Illawarra,
304; Goulburn, 948; Glebe, 855;
Albury,450; and Orange, 234. This, I
conceive, must be a most gratifying
account to hon. Members showing as it
does that municipal institutions are taking
fast root in the country, that applications
for their establishment are daily increas-
ing, and that the time will shortly come
when every important place in the coun-
try will have its separate municipality.
There is also a sum of 10,000 for the Vol-
unteerForce, and the principle on which
this sum is proposed to be expended will
be submitted to the Committee of Supply
in a schedule prepared for the purpose.
By that schedule it will be seen that the
sum, though tolerably large, will be ex-
hausted when the Government complete
the assistance they intend to give to this
corps. If the movement continues addi-
tional expense may be entailed, and as
the Volunteer Force may now be looked
upon as an institution of the country, I
have only to hope that it may progress
and be as permanent as it now promises
to be. There is also a sum of 8,000 for
the Destitute Children's Asylum, placed
on the Estimates by the wish of the
House, though with respect to this service
some question may arise as to the manner
in which the Government ought to exer-
cise a supervision over an establishment
to which they give such a large sum as a
subsidy. It has been thought that some

safeguard ought to be provided for the
proper expenditure of the public money
by what was in reality a private and not
a Government institution, established
almost entirely by private contributions,
and more particularly by the handsome
bequest of the late Dr. Cuthill. The
question for the Government to consider
now is how far they ought to claim super-
vision over an establishment of this kind
to which they were called upon to give
so largely. The Benevolent Asylum of
Sydney is also down in the Estimates for
the large sum of 10,712 ; and this is
placed there in consideration of public
subscriptions to the amount of 1,000
only. Thus the main weight of supporting
this institution falls upon the public trea-
sury. I have here a memorandum showing
how the aid received by the Benevolent
Asylum from the Government has gra-
dually crept up from the year 1851. In
that year the amount given by the Govern-
ment was 2,500; in 1852 it was 3,225;
in 1853 it was 4,225 ; in 1854, 3,981 ;
in 1855, 5,547; in 1856, 8,573; in
1857, 4,936 ; in 1858, 4,936 ; in 1859,
9,427 ; and in 1860, 10,881. The sums
of late years, it will be observed, have
become very large ; but the object of the
institution is such as to render it impera-
tive on the Government to support it, and
at any inconvenience to step forward and
supply the amounts needed. An institu-
tion of this kind must be kept up at all
times and at any cost, as it is evidently
the duty of the Government to take care
of the people and to prevent absolute
starvation. At the same time, I conceive
the Government are also called upon to
see that the institution is kept in a proper
state of efficiency and propriety. There
are next 10,000 for taking the census,
and this will have to be done by the 31st
March, a Bill for the purpose having
already passed the Upper Chamber.
There is also an increase of 4,000 under
the head of District Courts, arising from
the re-arrangement of some of the dis-
tricts, with the view of appointing two
additional Judges one for the Hunter
and the other for the South-western
District. It has been proved that on
account of the present enormous size of
the districts the Courts cannot be worked
efficiently or with advantage to the public.
One of the districts (Port Macquarie) it
is almost impossible to reach under some

ME. WEEKES.

[1861.]

circumstances. There was a necessity
recently to send one of the Judges
there specially -by steamer, because the
surf on the bar was of such a character as
to render it unsafe to attempt to get there
in a small boat from the steamer when
crossing the bar. In one of the trips
that the Judge made, the pilot boat was
capsized, and one of the men drowned.
I think the House will admit that the
Judges should not be called upon to place
their lives in jeopardy by crossing this bar
once every two months. We have not
been neglectful with regard to that im-
portant matter the roads of the colony.
The estimates for works of this kind
amount to 170,000, including bridges ;
and there is the additional item of
59,000 for public buildings. For these
two services there is put down a sum of
230,000. Then we have another item
of 27,600, the amount of debentures
falling due this year, which we propose
to pay out of revenue. Only 1,000 of
debentures will be due the following
year ; and the next would fall due in
1866, and I hope that provision in the
meantime will be made from year to year,
so that when that period arrives we may
be able to pay off the 300,000 out of re-
venue, as is now proposed. There is an
increase of expenditure in the printing
office to the extent of 3,000, which is
accounted for by the very heavy work
undertaken in reprinting the Colonial
Statutes. It is surprising to see how the
expense of this department has increased
of late years. In 1851 the working ex-
penses amounted only to 2,500 ; in 1852
to 3,800; 1853, to 7,000; 1854, to
7,900; 1855, to 9,800; 1856, to
11,000 ; 1857, to 13,000 ; 1858-59-60,
to 15,000. This shows the enormous
amount of work now thrown upon the
printing establishment. The expenses
for this year are estimated at about
3,500 more than those of last year,
which will make up the amount to
18,500. There is a small increase in
the Customs Department. This is mainly
accounted for by the appointment of two
officers stationed respectively at Albury
and Moama. We have already given
notice of our intention to introduce
a Bill to establish inland bonded ware-
houses, and we intend to establish
bonded warehouses at Albury and Moama,
and perhaps one at another point in that

part of the Colony. We will also estab-
lish these warehouses in the larger towns
of the interior, such as Goulburn,
Bathurst, Tass, and Maitland ; in fact,
wherever we are satisfied there will be
a sufficient amount of business to pay
for the appointment of the necessary
officers, as we believe it will be a
great advantage to the trading com-
munity of the townships in the interior.
We find that the British Government,
who in the last session of Parliament
passed a similar measure, have now begun
to appreciate the advantage. Besides
the Customs establishments on the sea
coast, they decided by a late Act upon
establishing inland bonded . warehouses,
and I do not see why, with judicious and
proper regulations, this advantage should
not be given here to traders in country
towns, as well as to traders in the capital.
There is also a small increase in the Mint,
arising chiefly from the purchase of fresh
machinery. There is a considerable addi-
tion to the charge of the Post Office, and
I am desirous of stating to the Committee
how this has arisen: I have had a
statement prepared showing the revenue
and expenditure -of this department for
the past, few years. In England the
Post Office is a source of revenue to the
Government ; but here the Post Office-
has, with the exception of one year, been
a very heavy charge to the colony. In

1851 the revenue was 18,000, and
the expenditure 16,000; 1852, re-
venue 18,000, expenditure, 25,000;
1853, revenue 20,000, expenditure
34,000 ; 1854, revenue 24,000, expen-
diture 52,000 ; 1855, revenue 24,900,
expenditure 60,000 ; 1856, revenue
29,000, expenditure 58,800; 1857,
revenue 35,700, expenditure 63,000;
1858, revenue 39,900, expenditure
69,000 ; 1859, revenue 44,800, expen-
diture 71,000 ; 1860, revenue 45,000,
expenditure 74,000 this estimate in-
cluding Queensland. The expenditure
for the present year will be about
80,000. The number of post offices
has been largely increased of late.
In 1851 the number was 101 ; 131 in

1852 ; 143 in 1853 ; 154 in 1854 ; 155 in
1855 ; 177 in 1856 ; 199 in 1857 ; 213 in
1858 ; 253 in 1859 ; 306 in 1860. Now
the Government feel that they are only
carrying out their duty in promoting the
extension of postal communication and

[1861.]

ME. WEEKES.

its advantages as far as they possibly can.
It is a test of the advancement and
settlement of the country, and by spread-
ing its benefits they look to the diffusion
of population over the interior. The
previous extensions show a satisfactory
result ; and the Government, with the
same object in view, have recently made
large additions to the number of the
country postmasters, thus throwing great
facilities in the way of the people in the
interior. It was found that even in 1860
the Post Office regulations were carried
out as regards distances in an almost
arbitrary manner. For instance, the
daily mails were sent only to Yass on the
south, 180 miles ; to Bathurst on the
west, 120 miles ; and to Singleton (land
carriage only) on the north, 50 miles.
Now, the Government thought that this
should be reduced to something like
system, and that the best way of doing this
was by establishing a main trunk line of
daily communication to the three boun-
daries of the Colony, and in accordance with
that view they extended in 1861 the daily
postal communication to Albury, 375 miles ;
to Orange, 142 miles ; and to Armidale,
245 miles. By first arranging these grand
trunk lines we can branch off right and
left, and thus supply the smaller and less
important localities. This, however, lias
tended to increase the expenditure of the
department, which I trust the House will
consider the Government are amply justi-
fied in proposing. Of the public works,
the cost of which is to be raised by loan,
there are for railway extensions, 48,269 ;
extension of electric telegraph to the
eastern boundary of South Australia, via
Moulamein, Balranald, Euston, and
\Vei it worth, 25,000 ; extension of elec-
tric telegraph from Goulburn to Braid-
wood, 4,000 ; new wharf, Woolloomooloo
Bay, 15,265 ; additions to Museum,
10,000; works at Clarence and Rich-
mond Rivers (resolution of Assembly),
20,000; works at Moruya River, 3,000;
wharf at Newcastle, 5,000; steam cranes,
Newcastle, 3,250; northern breakwater,
Newcastle, 5,000 making a total of
13^,784. Having gone through the
principal items of the estimates of expen-
diture, I . will now go over some of the
items of revenue, passing over the Customs
Department for the moment. The Com-
mittee will find that the Government have
fulfilled the intention they expressed to

the House, that they would not continue
the gold duty, and therefore we have not
estimated anything under that head.
Although we have taken off this gold
duty, we think the miners have no right
to expect that the Government will bring
down their gold for nothing, as now, not-
withstanding. It would be injurious
to the Mint to impose any considerable
sum as an escort charge. The Govern-
ment propose to put a charge of 2d. per
ounce upon all gold to be coined, that is
2d. as opposed to 8d. an ounce when the
gold is not to be coined. No doubt this
will prore an inducement for miners to
send their gold through the Mint. I
conceive that the miners have no right to
complain of the usage they have received ;
much has been done by the Legislature
for the mining interest, perhaps more
than for any other. The Government
have fostered the interest of mining, be-
lieving it to he an important one, by all
the means that lay in their power. The
probable revenue from land I put down
at 450,000. This is a large sum, but I
have every confidence that this result will
be realized even before the Land Bill of
my honorable colleague is passed, and
much more certainly will it be realized
thereafter. The postage returns have
increased to about 50,000, and the
establishment, being put into good work-
ing order, will, no doubt, produce the
amount estimated. We have put down
1,200 as the returns to be expected
from the Glebe Island ferry. I mention
this item because of the principle here
introduced into works of this character
that is, endeavouring to make them pay
the interest upon their cost. This amo unt
will pay interest upon the outlay when
the bridge is built. The work is now
undertaken, and a toll will be levied
wherewith to pay interest upon the money
borrowed to carry it out. Keeping this
principle of reproductiveness in view,
there is, perhaps, no limit to which public
works cannot be safely carried in this
Colony. The expenditure must always
be justified if the works are self-support-
ing. The abattoirs, I may say, are a suc-
cessful speculation. The rent they are at
present leased at is large, and there is no
doubt that in future it will be greatly in-
creased ; the returns are now between
7 and 8 per cent, upon the outlay
(purchase of land, building, &c). This is

MB. "WEEKES.

[1861.]

another instance of the success of works
whose value is guaranteed by their pro-
ductiveness when tolls are imposed. A
few of the statistics connected with the
Mint may not be uninteresting to the
Committee : In 185T the revenue was
10,810, the expenditure 14,180 ; in
1858, revenue .18,148, expenditure
11,628 ; 1859, revenue 18,963, expen-
diture 13,377 ; 1860, revenue 21,629,
expenditure 13,294 ; leaving in last year
a clear balance of about 9,000. During
the same periods the gold received was,
in 1857, 223,215 ozs. (value, 879,181) ;

1858, 342,540 ozs. (value, 1,332,034) ;

1859, 358,127 ozs. (value, 1,380,402) ;

1860, 470,464 ozs. (value, 1,823,637).
Last year the Mint coined 1,573,500
sovereigns and 156,000 half-sovereigns.
The railway receipts did not realise what
we expected of them ; for the present
year I have estimated them at 70,000
against the 58,000 they realised in 1860.
This decrease I think may be attributed
to the great reduction that took place in
the tolls in the early part of 1860. There
has no been that increase of traffic on
the railways which the promoters of that
reduction felt themselves justified in anti-
cipating. Whether it is a prudent step
to reduce the tolls beyond a certain point
is a matter for consideration ; the tolls
are now, perhaps, placed too low. I think
we ought to see that the railways return
a fair and reasonable rate when we con-
sider the immense amount of money that
has been sunk in their construction, and
the public should, I think, be content to
pay a fair rate for travelling upon them . I
nave before me some statistics connected
with the cost and the revenue of the rail-
ways, which I will read to the Committee.
The total expenditure upon the construc-
tion of railways to the 31st December,
1860, was 1,721,005 18s. The expendi-
ture upon lines open for traffic to the
same date was, on the Great Southern
line, 34 miles, 1,024,708 Os. 4d. ; on the
Great Northern line, 26^ miles, 526,328
17s. lid. ; and on the Great Western
line, 8 miles, 169,968 19s. 9d. Since
the first of July last the first section of
the Great Western line, 8 miles, has been
opened, and the northern line to Loch-
invar, 6| miles, making, in all, on the
Northern line, 26| miles. The gross
receipts during 1858 on the Great
Southern Railway were 50,119 ; in 1859

they were 49,712; and in 1860 they
were 43,706. The expenditure upon the
same line in 1858 was 34,342 ; in 1859,
34,296 ; and in 1860, 36,367. The net
receipts upon that line were, in 1858,
15,777 ; in 1859, 15,427 ; and in 1860,
7,339. The number of passengers car-
ried on the same line in 1858 was 344,572 ;
in 1859, 331,681 ; and- in 1860, 365,284 ;
and the amount of goods carried was, in

1858, 26,388 tons; in 1859, 31,006 tons,
and in 1860, 35,283 tons. On the Great
Northern Railway the gross receipts were,
in 1858, 11,457 ; in 1859, 12,062, and
in 1860, 13,176. The expenditure on
that line had been, in 1858, 9,042 ; in

1859, 11,625, and in 1860, 11,200 ; and
the net receipts were in 1858, 2,433 ;
in 1859, 437, and in 1860, 1,976. On
the same line there were carried in 1858,
6,997 tons of goods, and 69,389 pas-
sengers ; in 1859, 12,174 tons, and 94,196
passengers ; and in 1860, 14,810 tons, and
147,826 passengers. On the Great
Western line, since its opening in last
July, the receipts have been 4,857, the
expenditure 3,136, and the net receipts
1,721 ; the number of tons carried hav-
ing been 1,402, and the number of pas-
sengers, 38,829. I have estimated the
receipts of this year from the electric
telegraphs at 18,000, and I think this
estimate will be amply justified by the
result. I am glad to say that this is one
of our profitable institutions, paying a
handsome return on the outlay, and which
it will, no doubt, continue to pay. The
receipts from the electric telegraphs up
to the end of December last were as fol-
lows : In the year 1858, 9,141 ; in 1859,
36,867; and in 1860, 53,026. The
expenditure on the telegraphs during
those years was in 1859, 4,646 ; and in

1860, 8,380. The total expenditure on
telegraphic works to the 31st December,
1860, was 48,798. The revenue, from
the 1st January to the 31st December,
1860, was 12,128, which, after deducting
8,380 for working expenses, left 3,748,
giving a net revenue at the rate of 7f
per cent. [An hon. Member : " For the
whole of the lines ?"] Yes, for the
whole ; one line feeds another, so that
you must look at the working of the tele-
graphic system as a whole before you can
tell whether one line is profitable and
another unprofitable. [Mr. PAEKES :
" That hardly applies to the South Head

[1861.]

ME. WEEKES.

line."] The South Head line was estab-
lished for a peculiar purpose, more, per-
haps, with a view of saving life ; but
whether that particular line pays or not,
I think in the interests of humanity it
ought to be maintained. We might get
important intelligence at the dead of
night, when there was no other means of
getting news, by which we might save a
shipload of valuable lives. The following
telegraph lines are in progress : From
Gundagai to Deniliquin, 220 miles, which
is completed from Tarcutta to Wagga
"Wagga ; from Orange to Mudgee, 97
miles, which is completed from Bathurst
to Sofala ; and from Maitland to the
boundary of Queensland 400 miles, the
first section of which is completed to
Singleton, and the second completed from
Murrurundi to Armidale. The total num-
ber of miles open is about 831. The
number of messages transmitted for money
orders since the 1st of July, 1860, was
382, and the amount received was 2,941.
That is, perhaps, a satisfactory result of
the use of the electric telegraph station
as a money order office. It was used ex-
tensively when Kiandra was first opened
as a gold-field, and I have no doubt that
in its further operation it will be found
extremely useful to the colony. I have a
return before me showing the practical
progress of the coal mines in this Colony.
In 1850 we exported S4,000 tons of coal, of
the value of 65,730, and in 1860 our
exports of that produce amounted to
233,877 tons, being of the value of
183,761. If the Committee will now
turn to the Customs item on the revenue
side, I will state the arrangements which
the Government propose to make with
regard to the revenue. It is the inten-
tion of the Government to take off by
three stages during the present year, the
duty on tea, by two gradations ; they
intend to reduce the duty on tea so that
it shall terminate entirely at the close of
the present year that on and after the
31st March next to the 30th of Sep-
tember, the duty on tea will be 2d. per
lb., and that it will be Id. per Ib. from
the 1st of October to the end of the
year, when it will cease altogether. These
steps are taken, as honorable Members
will see, in order to protect those who
have laid in stocks of tea, and have just
paid the duty to the Government, and
who would suffer if the tax were too sud-

denly altered. A similar period was
always given where taxes were going to
be abolished. It has always been the
desire of the Government to take off
this tax whenever they could see their
way to do so, but I am not able on this
occasion to deal with the sugar question,
and I am confining myself to the repeal
of the duty on tea only. That will
occasion a loss during the present year of
about 24,000, and I anticipate that by
the reduction I am now proposing, the
revenue from tea will be 21,000 instead
of 45,000, which would accrue were the
tax not taken off. I purpose to substi-
tute for that tax an equalization of the
spirit duties. At the present time brandy
and gin pay 10s. a gallon duty as well as
liqueurs, cordials, and strong wines, while
whiskey, rum, and perfumed spirits pay
7s. a gallon. Now I think few will deny
that if we take off the duty on tea, by
equalizing the duties on spirits, in order
to enable us to do that, we should make
a good exchange. We shall by that means
assimilate our tariff in a great degree to
that of the neighbouring Colony of
Victoria. Although I do not attach the
vast importance to that result which some
persons do, yet I do attach to it some
importance ; and this alteration may
possibly be a step in the direction of one
uniform tariff" throughout the Colonies.
I must say that I am not very sanguine
of a matter of that kind being carried
out ; still it is one step which would
enable us to negotiate the matter, should
we ever have the opportunity. I do not
see why the duties on whiskey and ruin
should be at a lower rate than those on
brandy and gin ; and as the equalizing
the duties on whiskey and rum with those
on brandy and gin will enable the duty
on tea to be taken off, I hope the Com-
mittee will support the resolution I am
about to submit. Of course the same
duty will be placed upon Colonial distil-
lation, and the same allowance which
the distillers now get will be retained,
which is 7d. a gallon upon spirits dis-
tilled from imported sugar. There is
at present a differential duty of 7d.
in favour of the Colonial distillers
that is, they now pay for what they
manufacture a duty of 6s. 5d. a igallon,
instead of 7s., as they have to pay a duty of
7d. on the amount of sugar requisite to
produce a gallon of spirits. The differ-

ME. WEEKES.

[1861.]

ential duty will therefore be retained, and
the duty will be 9s. 5d. a gallon, instead
of 6s. 5d. It will be necessary when the
Bill is introduced, in order to give effect
to this resolution, to have the ordinary
clause inserted to protect parties who
mav have made contracts for the delivery
of "spirits at the present prices. There
is always a clause introduced into such
measures for enabling the purchaser and
the seller to arrange for the increased
duty, so that no man can say that the
Government have injured him by an
increase of the duty when he was bound
to deliver a large quantity of spirits at
the lower rate. Having made that state-
ment, it will be necessary that I should
ask the Committee to come to a vote on
this resolution to-night. It is the practice
at Home when the House of Commons,
by a resolution in Committee, fixes any
scale of taxes relative to the Customs,
that the alteration takes effect from that
moment ; and the practice is absolutely
necessary unless you close the Custom
House while the proposition is being
debated. Unless you do that you will be
defeating the very end you are contemp-
lating ; because everybody who holds
those articles in bond, knowing that the
Government are about to put on an
additional tax of 3s. a gallon would take
every gallon of rum and whiskey out of the
bonded stores, and the Government would
thus lose a large portion of the money
they expected to gain by the alteration.
It follows therefore that the resolutions
should take effect from the very moment
that they are agreed to. If the Com-
mittee pass the resolutions to-night, when
the Custom-house opens to-morrow the
duties will be equalized. It is for that
reason that I beg the Committee to give
me this consideration, and to vote in
favour of these propositions to-night. The
Bills perfecting the resolutions will be
subsequently brought in, but unless the
Government are defeated in their scheme

the resolutions must take effect from
to-night. The propositions that I shall
move are as follows :

That it is the opinion of this Committee that,
in lieu of the duties now payable under the Act
19 Vic. No. 14, on the several descriptions of
imported spirits there shall be levied duties, on
spirits or strong waters of any strength not
exceeding the strength of proof, by Sykes'
hydrometer, and so in proportion for any
strength any greater or less strength than the
strength of proof, at the following rates for
every gallon, that is to say, brandy, gin, whiskey,
rum, and all other spirits, ten shillings. On
spirits, cordials, liqueurs, or strong waters,
sweetened or mixed with any article, so that
the strength thereof cannot be ascertained by
Sykes' hydrometer, for every gallon, ten
shillings. On perfumed spirits, for every gallon,
ten shillings. On wine containing more than
25 per cent, of alcohol of a specific gravity of
'825, at the temperature of 60 degrees of
Fahrenheit's thermometer, for every gallon in
proportion to strength, ten shillings.

That the duties on spirits made or distilled in
the Colony from imported sugar shall be, for
every gallon, nine shillings and five pence.

That the duties on spirits, when made or
distilled from grain or other material not subject
to duty, shall be, for every gallon, ten shillings.

That in lieu of the duties of customs now
chargeable on tea imported into this Colony the
following duties shall be charged, that is to
say : Upon every pound of tea from and after
31st March, 1861, to 30th September, 1861,
inclusive, two pence ; from and after 30th Sep-
tember, 1861, to 31st December, 1861, inclusive,
one penny ; after which date the duties on tea
shall cease and determine.

These Sir, are the propositions which I
have to make to the House, and I hope I
have satisfied the Committee that the con-
dition of the Colony, as far as its financial
affairs are concerned, is a sound and
healthy one. Of course we are subject
to those periodical reverses which invari-
ably attend every trading community.
We find them prevailing to a great extent
even in England at the present time, but
I think there are plain signs of the
country recovering from the temporary
state of depression under which it has
been labouring. I now beg to move the
resolutions I have given notice of.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE ELIAS CARPENTER
WEEKES, made 24th October, 1861.

[JFVom the Sydney Morning Herald of 25th
October, 1861.]

LEGISLATIVE ASSEMBLY.

Thursday, 24- October, 1861.

FINANCIAL STATEMENT.

ME. WEEKES moved, "That in order
to meet the supply granted to Her
Majesty, a sum not exceeding 2,520 be
granted to Her Majesty out of the Con-
solidated Eevenue of New South Wales."
He said: In making this resolution I
shall avail myself of the opportunity it
affords me of submitting to the Committee
the financial position of the country. In
doing so I shall endeavour to trespass no
longer on the time of hon. Members than
is absolutely necessary to make myself
clearly understood with regard to the
details I shall have to submit. Before,,
however, submitting these details for
consideration, I am desirous of refer-
ring to a subject that has been dis-
cussed in the leading journal of the
Colony subsequent to the prorogation of
last Session not that I think a Minister
of the Crown is bound to take notice of
every matter that he may see com-
mented on in the public prints, but
because it is a matter of much import-
ance, involving, as it does, a doubt as
to the correctness of the public accounts
previously submitted to this Assembly.
I therefore believe it to be my duty to
clear the matter up, and to submit to the
Committee such a statement as will show
that the public accounts have been kept
correctly. I should hope that no honor-
able Member would ever believe that
any Minister of the Crown would have

the audacity to present to this House
what he knew to be fictitious accounts,
with the view of deceiving the represen-
tatives of the people. I do not think
that hon. Members will believe that such
a thing could be done. Though I feel
this, yet in a matter of so much import-
ance I have deetaed it desirable to have
a statement prepared, in order to afford
to hon. Members every facility for deter-
mining for themselves the real position
of the accounts of the country up to the
latest period. No doubt it is a very
difficult thing for hon. Members to follow
out a series of accounts current, where
they are changing continually from pro-
posed to actual expenditure, and from
estimated to actual income, and to so
examine them as to arrive at a proper
and a just conclusion. Therefore, to assist
the Committee, and to enable hon.
Members the better to follow me in my
statement, I have prepared an account
current of the revenue and expenditure
of the Colony, from the 1st January, 1858,
to the 31st December, 1860. The Com-
mittee will find in paper No. 1 of the
accounts of Ways and Means that I start
on the 1st January, 1858, with a deficit
of 95,000. Then for 1858-9-60 are
shown the various sums appropriated
annually, under the Appropriation Acts,
the special appropriations under the Con-
stitution Act, the Supplementary and
Additional Estimates, and the authorized
Loans being the total estimated charges
on the revenue for those three years
which gave at the end of last year a
general total of 6,236,421 11s. 3d. Now,
that sum does not represent the actual
expenditure of the country during those
three years, but only the estimated expen-

MR. WEEKES.

[1861.]

diture. It is an expenditure that cannot
be exceeded, but it is one that the
Government are bound to diminish as
much as they possibly can. There are
many items which from their very nature
cannot be spent, for the simple reason
that the services were not found to be
required ; and hon. Members will thus
see that I have deducted, under the head
of savings on votes, and votes not
required, the sum of 424,662 10s. 2d.
from the total I have just named, and
that this leaves 5,811,759 Is. Id. as the
balance, being the actual expenditure
during the three years mentioned. These
savings I am desirous of explaining fully
to the House, because many parties
in commenting on the accounts have
called these savings a mysterious fund,
from which a Minister may dip at
pleasure and create a balance to suit his
purpose. Hon. Members will see that I
have three several lists of savings, all of
which have been used during previous
Sessions. One of them, showing how the
savings have been effected, has already
been printed, and the two others I
intend to lay on the Table of the House
this evening, and move that they also be
printed, although they are all of the same
character as those which have already
appeared. They are either savings on
votes which have not been required, from
the work for which they were voted not
having been executed, or they are savings
on amounts voted, the whole of which
has not been expended. As an example
I may instance the two sums of 50,000
which appear in the two latter accounts.
In each year the amount of 50,000 has
been appropriated for the Panama Steam
Postal route, the expenditure being
authorized by a special Act of Parliament,
in which the Government are directed to
raise that sum for three years in order to
establish that Service. The vote for two
years has of course not been required, as
the line has not yet been established.
They consequently form a large portion
of the savings, and the remainder of the
424,000 is formed from various other
matters in the different departments of
the Government. In the working expenses
of the railway department there was saved
in 1858 12,787, and in another year
there was a saving in the same branch of
130,000. Then, again, 130,000 were
voted for the payment of interest on

debentures, whilst only 109,000 were
required ; consequently a savingof 20,821
was effected there. Savings are thus
effected in a variety of ways, and they
arise necessarily from year to year, a list
of which the Auditor General prepares
for the information of the Government.
In addition to the savings on votes
where the work is not executed or
the amount expended in full, there are
balances accruing for money not spent in
the year for which it had been voted.
The rule of the Government is that where
a sum is voted in one year, and not
expended within the twelve months sub-
sequently, the amount must revert to the
revenue ; and if the work is subsequently
found to be necessary the sum must
be voted again. At all events the
revenue for that particular year is
relieved of the charge of the work to the
extent of the amount voted. Where the
work is not carried out in the year fol-
lowing that in which the sum for it is
voted, the amount is then written off and
the account closed. In this respect the
Auditor General has been guided for some
years past by a rule to that effect passed
by the Executive Council. Thus, at
the expiration of the twelve months the
vote is considered to have lapsed, so that
these savings are formed not only from
the balances on sums not expended,
but also from votes for public works and
buildings which have not been used
for two years. If after that period the
work is found to be required, then as I said
before, this House has to be applied to
for a fresh vote. It may be, and it is
sometimes the case, that claims on votes
will rise up after the lapse of years, and
accounts will come in for work done long
before for which no claim had previously
been made, and which had been lost sight
of. These, of course, cannot be paid when
the accounts are finally closed. When
this happens to be the case the Auditor
General reports the matter to the Govern-
ment, who then come down to the House
and obtains fresh votes to cover such
demands. I shall shortly have to bring
before the House an additional estimate to
cover certain items of this character. The
Committee must see that this-is the most
legitimate way of dealing with these
accounts combining them under one
head, and carrying them forward year by
year. This being done, it is obvious that

[1861.]

MB. WEEKES.

these savings become a credit, since what-
ever tends to relieve one side of an
account must to the same extent add to
the other side ; and this is the way in
which the Government have used them. To
show that this is not an original idea on
the part of the Government, or any vio-
lation of the ordinary practice of other
Governments, I shall show that it is the
invariable practice of the Government of
England whenever a financial statement
is to be made, or on the Budget being
laid before the House of Commons, to
refer to these balances. There is scarcely
an occasion of that kind when allusion
is not made to the unexpended balances
of the various appropriations, and credit
not taken for the amount saved. They
are thus alluded to in the leading London
journal :

Supplementary Estimates. These unwelcome
claims form a sufficient reason for requiring a
Budget always to show a surplus. Estimates
have j ust been presented for 53,430 for the war
with Russia, it being found that the sum surren-
dered to the Exchequer as " savings" out of the
war vote was too large ; and also for 17,983 for
excess of expenditure last year beyond the vote
for the non-effective charges of the revenue
departments.

Now the practice which obtains at Home
is different from our own. There all
the revenue collected is paid into the
Exchequer, whence it is drawn out by
warrant of the Lords of the Treasury
under the sanction of a Royal order. The
Treasury draws from the Exchequer the
whole amount of the vote, and hands it
over to the Paymaster. The saving then
arises in tin's way, that they receive the
whole of the vote in cash ; and if they
receive 100,000, whilst only 90,000
are expended, the balance 10,000 is
declared to be a saving, and goes in the
next year in aid of the Ways and Means.
In the evidence given by Lord Monteagle,
Comptroller of the Exchequer, before the
Select Committee on Public Moneys, as
to the way in which these balances are
dealt with in England, he clearly demon-
strates the impossibility of keeping the
accounts in any other way. He says :

The Treasury frequently declare certain amounts
to be savings. They communicate with me ;
I also communicate with them, showing unissued
balances, and if they think fit they declare those
unissued balances as savings. *** 1 have reported
the amount of accumulative balances to sue*
Boards of Treasury, and they have made those
balances savings, thus making them future Ways
and Means. p. civ. I consider sonic provision

is necessary for the repayment of unexhausted votes
into the Exchequer. I have on various occasions
reported them, and the Treasury have been ready
to declare them savings, which I think is the
constitutional mode of proceeding. p. iii.

He then passes on to several accounts of
the savings he had handed over to the
Treasury, and instances a sum of 25,000
as saved on the decease of the Queen
Dowager, who died before the last quarter
had begun, leaving a sum unappropriated
to that extent. The report continues,
(page 29) :-

It is the recommendation of the Exchequer
Commissioners that after a year and a half these
votes should all be reconsidered, and the sums
unissued should be made savings, and the account
closed.

Reverting to the accounts again it will be
seen that there is left, as already stated, a
charge upon the revenue of 5,811,759 Is.
Id. ; and against that on the other side I
place the actual amount of the revenue
of 1858, 1859, and 1860, as well as the
amount due by the Sydney Municipal
Council for interest on debentures to
December 31st, 1860, secured by Act on
the entire revenues of the city. These
produce the amount of 5,855,046 3s. 5d.,
which gives a balance on the 31st Decem-
ber, 1860, of 73,287 2s. 4d. The sum of
49,8 12. (amount due by Sydney Municipal
Council) will to a great extent be sub-
mitted to the Committee in the Supple-
mentary Estimates. It was decided by a
vote of the House that we should repay
to the City Corporation the amount
appropriated* as compensation for land
resumed for water purposes ; and
although I was charged with inserting as
an asset what might be considered a bad
debt, I was quite justified in doing so,
because all we pay for interest in con-
nection with these debentures is a first
charge upon all the revenues of the city.
The Government are in a position to
recover, if they think proper, by enforcing
payment of the whole sum they may be
called upon to advance for interest on
debentures for which the City Corporation
is liable. It is therefore a perfectly
good debt, which the Corporation ought
to pay, as the amount was paid by the
Government to protect their credit. The
Government have taken it as an asset,
and the Corporation will have to pay
the amount, in part, out of the 43,261
14s. 6d. set down in the Supplementary
Estimates as compensation for land

ME. WEEKES.

[1861.]

resumed at Botany in connection with
the water supply. " The mode of paying
the Corporation will be by giving them
credit on account; at all events it will
restore that much to the Treasury. I
take it that the House having once
ordered the Government to follow this
course, we are justified in carrying out
that mode of treating the matter. If the
House however, decide otherwise, well and
good. This explanation brings me down
to the end of 1860, with a balance of
73,287 2s. 4d. In No. 2 account of
Ways and Means, the only alteration is
an additional supplementary estimate of
21,355 10s. 10d., which, with the previous
supplementary estimate, of 56,834 9s. 8d.
makes the total amount of supplementary
appropriations 78,190 Os. 6d. There is
an alteration also in the last item, viz. :
savings on votes of Parliament, 122,670
17s. 6d., which stood as only 50,000 before.
Then on the 1st January, 1861, we have
a balance of 73,287 2s. 4d. The
Supplementary Estimates for 1861, as
submitted to the House, amount to
178,224, of which we charge upon re-
venue 94,962 13s. 6d., and 83,261 14s.
6d. on the loan account. The Supple-
mentary Estimate is a very large one, and
I will just mention a few of the principal
items : The Committee will see that there
is an increased sum put down for pensions.
The Government believe that the House
did not intend to single out any particular
lady to be the recipient of a pension, and
not to award pensions to others having
equal if not stronger claims for considera-
tion ; and in order to give the House an
opportunity of expressing an opinion upon
the matter they placed these several sums
on the Estimates for consideration. Then
there is a sum of 2,500 to provide half
forage for 100 horses at 20 each, and
5 each towards shoeing, wear and tear
of horse trappings, &c., for 100 members
of the mounted rifles, in accordance with
a resolution of the Assembly. To meet
the expenses of Volunteer Corps there is
a further sum of 3,859 Is. 4d. ; to meet
the expenses of taking the census a
further sum of 3,000; to cover the
expenses of the first military expedition
to Lambing Flat Gold Fields, a further
sum of 1,500 ; to meet the expenses of
the second expedition, a sum of 7,500 ;
to make provision for the adequate repre-
sentation of the Colony at the Exhibition

of the Industry of all Nations in London,
a further sum of 4,000. Then there is
a sum. of 10,000, deficiency in the
amount voted to meet the expense of
emigration from the United Kingdom in
1860. There having been no funds to
meet the expenses of the passages of
emigrants in whose favour deposits had
been made in the Colony, the Government
have been obliged to place upon the
Estimates this large sum. The other
items are principally for public works and
buildings except the items (to be raised
by loan) of 30,000 for railways, 10,000
for additions and alterations to workshops
and stations, and 43,261 14s. 6d. as
compensation to the Sydney Municipal
Council for land resumed under the
Water Supply Act. It has been made a
charge against the Government that they
were not sufficiently energetic in pressing
on the public works of the Colony. Now,
I think I can bring forward a statement
to show that we are not open to that
charge. The total of the sums actually
expended on roads and public works,
exclusive of railways, from the 1st
January, 1860, to the 30th June, 1861,
amounts to 403,054. The Government
then cannot be charged with remissness
in pushing forward these works, as the
works authorized but not contracted for
are very few indeed. On the other hand,
the actual revenue to the 30th September,
1861, reaches the sum of 1,042,932 ;
and the estimated revenue and receipts
from the 1st of October to the 31st
of December, 1861, is put down at
462,840 making the revenue amount
for the year to 1,505,772, which, to-
gether with the 168,535, authorized to
be raised by loan for public works and
voluntary and assisted immigration, and
83,261 14s. 6d., in Supplementary Esti-
mate, proposed to be raised by loan,
results in an estimated balance on the
31st December, 1861, of 2,390 13s. 5d.
During the current year we have paid
out of revenue a sum of 27,000 for
debentures falling due in 1861, which to
that extent reduces the public debt.
With respect to the estimated revenue
for the three months, from the 1st of
October to the 31st of December, I have
every reason to believe that the amount
will be realized. I had better, however,
I think, refer here to the nine months
past to show how the revenue stands

[1861.]

ME. WEEKES.

under its several heads. The increase in
1861, as compared with the corresponding
quarters of 1860 is for March quarter,
29,662 3s. 6d. ; June, 6,988 13s. lOd. ;
September, 14,722 5s. 8d. ; the total
increase for the nine months, as compared
Avith the corresponding nine months of
1860, is 51,373 3s. The principal
increases are : Customs, 24,000 ; gold
duties, miners' rights, &c.. 4,300 ; land
revenue, 36,290; postage, 700; licenses
(publicans,' auctioneers,' &c.), 3,020 ;
rent (tolls, ferries, abattoirs, c.),
1,370 ; railway tolls, 11,812 ; electric
telegraph, 3,660. The decreases have
arisen on spirits distilled in the Colony,
Mint receipts, pilotage, and interest
on bank deposits. The reduction on
the last item is, I think, a very
gratifying circumstance, showing, as it
does, that the Government have been
using the money for public works instead
of allowing it to lie idle in the banks.
For the last three months of this year I
have estimated the Customs revenue at
the same rate as the previous three-
quarters of the year that is, the same
proportionate advance of revenue. I
have dealt in the same way with my
estimate of gold duty. The estimated
land revenue may appear a large sum,
but as there are two or three large items
included therein I will call the attention
of the Committee to them. First, I shall
have the benefit of a large amount for
pre-emptive rights, some 40,000 or
50,000 ; then I expect a very large sum
from the sale of lands supposed to con-
tain coal ; there are also the payments
to be expected under the new Land
Bill. I can assure hon. Members that
before I could get to the Treasury the
day following that onwhich the assent was
given to the Land Acts there were several
parties there wanting to pay in money
under these Acts. I have no doubt that
long before the Treasury was opened that
morning there were many persons anxious
to take up land under some of the clauses
of the Lands Alienation Act. Although
I was not quite clear as to the nature of
the receipt which should be given for the
money tendered, I gave a receipt for it,
and put it into the suspense account until
a Ic^al opinion was obtained. My esti-
mate of 462,840, I have no doubt, will
be realized. That carries us down to
the 31st December, Ib61, with a balance,

as already stated, of 2,390 13s. 5d.
In No. 4 of the accounts current the
Committee will see that the general ser-
vices are placed at 1,225,234, the special
appropriations at 247,500, and the sum
to be provided by the Constitutional and
Colonial Acts at 59,400 making a total
of 1,532,134. On the other side the
estimated revenue for 1862 is 1,579,739,
and the amount proposed to be raised by
loan, 2,072,184 the same as on the
other side of the account. No doubt
1,532,000 for the expenses of the
Government of this Colony is a large
sum. I admit it is a large sum, but we
must not forget that the Government
here has to take charge of works and
perform duties which, I think, no other
Government undertakes, and which, pro-
perly, perhaps,- does not belong to a
Government. When you find that the
Government, from the force of circum-
stances, are compelled to engage in
gigantic railway and telegraph works
when you see that they have large gold-
fields and Crown lands to manage
it must be admitted that more devolves
upon the Government of a colony like
this than you will find in any other
country. If railways were taken up here,
as at home, by private enterprise, and
telegraphs were constructed by private
enterprise and if we had no Crown
lands or gold-fields, with the necessary
staff of officials the expenditure would
of course be materially diminished. It
is not fair, therefore, to say that the
Government of this Colony costs, in
comparison with other countries, an
unusual sum, without taking also into
consideration its peculiar position and
requirements. But the expenditure of
this country, taken in comparison with
the population, is not increasing, as I
shall be able to show the Committee.
I have a statement here, which was
prepared two or three years ago, showing
the expenditure of the Colony per head of
population for a number 01 years past.
In 1851 it was 2 4s. Id. ; in 1852,
2 17s. 7d. ; in 1853, 35s.4d. ; in 1854,
4 9s. 3d. ; in 1855, 4 ; in 1856,
3 15s. lid. ; in 1857, 3 10s. 8d. ; and
in 1858, 3 10s. 9d. In 1858, when the
expenditure per head was 3 10s. 9d.,
the total sum appropriated, exclusive of
loans, was 1,365,317. The charges on
the Consolidated Keveuue, which I pro-

ME. WEEKES.

[1861.]

pose now, is 1,532,000. That is no more
than the increase of population would
justify, and I think the ratio has not
increased at all. The total sum appro-
priated for 1859 was 1,589,210, for
1860 1,557,303, and up to the 30th
September, 1861 (including the proposed
Supplementary Estimate), 1,576,667.
The Estimates proposed for 1862 amount
to 1,532,134. I therefore think the
Committee will see that although the
expenditure is large it really is not in-
creasing beyond what it was some few
years ago in proportion to the population.
In fact I have no doubt if the calculation
were made it would be found to have
diminished. The debt of the Colony is
set down at 3,919,730, but this sum
includes debentures to the amount of
552,000 in the hands of the Oriental
Bank in London, of the sale of which
we have not yet had advices. I am com-
pelled, however, to treat these debentures
as debt, because they have left the
Treasury. The sales of which we have,
had advices since the statement I last
laid before the Committee are to. this
effect : We have sold in London,
149,900, at an average of 99 16s. 5d. ;
and in the Colony, 140,000, at an
average of 98 16s. 6d., which, apparently,
is rather an advantage on the sale in
London. I say apparently, because there
is a charge of three-quarters per cent, to
come off. But at the same time, when
the Committee consider that we have to
forward large sums of money to England
there is a considerable advantage in
selling debentures in the London market.
We save the premium of exchange.
Among the principal items of the pro-
posed expenditure for 1862 there is a
sum of 18,000 for endowing municipali-
ties. It may perhaps be interesting to
the Committee if I state the amount of
endowments paid to the various muni-
cipalities : lledfern, 1,283 ; Waverley,
726; Shellharbour, 534; Newcastle,
1,646; Eandwick, 569; Illawarra,
1,367 ; WoUongong, 616 ; Kiama,
1,549; Graf ton, 174; Goulburn, 990 ;
Glebe, 1,620 ; Albury, 845 ; Orange,
265 ; Shoalhaven, 175 ; Balmain,
993; Paddington, 439; Woollahra,
605 ; Waterloo, 188 ; Mudgee, 590 ;
Cudgegong, 307. For the first half-
year ot 1861 (this money is paid in two
half-yearly instalments) there is a

considerable reduction arising from the
different municipalities having raised a
smaller sum, the Government paying only
pound for pound on the amount raised.
The sum total for the year 1860 was
15,490, but for the first half of 1861 it
was only 6,350. They had not been
able to apply the screw so tight in the
various Municipalities during the first
half of the present year. For education
the sum of 60,000 is put down, which
is 10,000 more than last year, and I
believe a larger sum than has ever been
voted for the purposes of education. For
the police the sum of 173,000 is placed
on the Estimates, which shows an increase
of some 15,000 or 20,000. This
estimate will be submitted to the Com-
mittee at the proper time, and is intended
to carry out in part that new system of
police which I believe the Chief Secretary
is about to recommend for your considera-
tion. The Volunteers have 20,000
placed to their credit, instead of 10,000
as last year. This increase has been
rendered necessary by the applications
for enrolment which have come in from
all parts of the country. For the
Benevolent Asylum there is put down
the sum of 12,500. This service is
increased very much, the sum contributed
in 1851 having been only 2,500. The
next item is 108,923 for the Post Office.
There is an increase of about 5,000
under the head of inland mails. I will
read to the Committee certain matters
connected with this department which
may not be uninteresting : In 1856 the
number of post offices in this Colony
was 177 ; in 1857, 198 ; in 1858, 221 ;
in 1859, 252 ; in 1860, 289 ; and at the
present time there are about 320. The
extent of postal lines was, in 1856, 6,332
miles ; it was, in 1860, notwithstanding
Queensland was separated, 8,231 miles.
The total revenue was, in 1856, 29,458 ;
in 1857, 35,715; in 1858, 39,953;
in 1859, 43,678; in 1860, 45,612.
The expenditure for 1856 was 58,879 ;
for 1857, 63,865 ; for 1858, 69,507 ;
for 1859, 71,370 ; and for 1860, 71,390.
As we all know, the Post Office has long
ceased to be a source of revenue to the
country. The Post Office of England is
an important source of revenue to the
Government, but we can scarcely hope
for it here, where we have to carry the
mails over such a large extent of territory?

[1861.]

ME. WEEKES.

and where the population is so sparse.
The cost of conveyance of mails was, in
185G, 4-2,855; in 1857, 41,324; in
1858, 45,463 ; in 1859, 47,604 ; and in
1860, 47,084. Taking the revenue of
the two years 1856 and 1860, there is an
increase of 16,000, and there is an
increase in the expenditure (taking these
two years) of 12,000. The difference
between the increase of the expendi-
ture over the increased revenue is there-
fore 3,600. The cost of conveyance
of mails in 1856 in excess of revenue,
was 13,379 (the cost of the convey-
ance of mails alone more than absorbs
the revenue of the Post Office), but
in 1860 it was only 1,472. There
are 157 distinct mail contracts. The
average cost per mile has been by rail-
way, 11 10s ; by coach, 12 16s. ; and by
horse, 3 7s. 6d. the general average
cost per mile being 5 8s. Id. The
letters posted in 1860 numbered 3,800,000,
and the newspapers 3,250,000. The sums
I have stated have no reference to steam
postal contracts now in operation. There
is also a sum of 4,250 for the establish-
ment of a Naval Brigade. This is not to
be regarded in the light of a Yolunteer
Corps, but more in the light of a Eeserve
Force for manning the batteries round
the harbour, and is intended to give some
small encotiragement to the enrolment of
watermen and others connected with the
harbour, so that they may be under some
system of control, and thus be able on
the shortest notice to man the batteries.
Then there is a sum of 3,000 for the
purchase of pilot vessels, as it is intended
to alter the present system of pilotage.
A change has long been urged on the
Government, first by the Pilot Board, and
secondly by a Select Committee of the
Legislative Assembly, and as it has been
strongly recommended, and has received
the support of naval men generally, the
Government feel bound to give it a trial.
The allegation is that the present system is
a very dimgerous one, and that ships seldom
receive a pilot on board until they are in
danger. The captaius also complain of
the way in which the pilots board their
ships. It is proposed to have two pilot
Is of seventy or eighty tons ; the
crow of each to be composed of a master,
a mate and four men, and these vessels
are to go out to sea eight or ten miles in
order to put the pilot on board vessels

bound for this port, as now done at Port
Phillip. The only doubt I have had in
regard to this scheme is whether in
certain circumstances the pilot-boat will
be able to maintainher position outside the
Heads. Some persons hold to the opinion
that in a strong north-easterly wind
the vessel must be swept in and will be
unable to hold her position ; still the
evidence generally is in favour of adopting
the course I propose. Besides, it is advo-
cated by the Pilot Board, who are unani-
mous on the point ; if anything I think it
will be a saving in the expense of the
establishment, which will not be increased
beyond the 3,000 required for the pilot
boats. There is a sum of 1,500, the
continuation of a similar vote of last year,
for coast surveys. The Admiralty agents
have determined that there should be a
thorough and complete survey of the
whole coast of the Australian continent,
and they have made arrangements for
dispatching naval officers to the several
Colonies to have the whole coast surveyed
in a scientific manner, which it has never
yet had. There is a sum of 160,000 for
roads, 130,000 for public works and
buildings, and 3,000 for a general
cemetery, so that the cost of this
service for which the Government were
accused of being about to expend the
large sum of 150,000 had melted down
to 3,000. Again, there is a sum of
20,000 for charitable allowances, juvenile
reformatories, and grants in aid of public
institutions. There is 5,000 for the
completion of the Sydney University,
and 50,000 for assisting immigration.
The Immigration Department was nearly
swept away when the vote was struck
off; but now that immigration is revived
the staff must be revived also. There is
a sum of 800 put on the Estimates for
the salary of the superintendent of
alpacas, Mr. Ledger. This is an increase
of 300, and is intended to be some slight
compensation to this gentleman for his
services to the Colony. The proposed
railway extensions amount to 1,706,384,
and I trust the Committee will suspend
their judgment on this item until they
hear the explanation of the Minister
for Works and the general views of the
Government on the question, which I
think will be received favourably by the
House. With regard to the roads, there
is a sum of 100,000 for metalling and

.ME. WEEKES.

[1861.]

ballasting the three main roads ; for a
bridge over the river at Bargo, 3,000 ;
bridge over the Hunter at West Maitland,
6,000 ; bridge and approaches over the
Murrumbidgee, 21,000 ; bridge over the
river at Deniliquin, 8,000 ; bridge over
river at Moama, 10,000; bridge over
river at Nanima, 5,000; bridge over
Namoi, at Narrabri, 4,000. For public
works there is a sum of 10,000 for the
erection of police barracks at Sydney and
in country districts, and 10,000 for the
erection of a building for the District
Court of Sydney. Everybody must agree
that this is a great necessity, for the
present building is more like a den than
anything else ; and looking at it only in
a sanitary point, we ought to erect
another building. For the improvement
of accommodation in gaols and other
penal establishments there is a sum of
20,000. "With regard to harbour and
river navigation, there is a sum of 5,000
for improvements to the Moruya Uiver ;
the extension of wharf accommodation at
Newcastle, 5,000 ; purchase of steam
cranes,3,400 ; towards the construction
of the northern breakwater, Newcastle,
5,000; pier at Shellharbour, 5,000;
stone dyke at Bullock Island, Newcastle,
1,000 ; dyke, Shoalhaven Eiver, 1,000 ;
wharf at Ulladulla, 2,500; construc-
tion of breakwater and pier at Bellambi,
10,000. These sums together make
a total of 2,155,445 14s. 6d., which
is the amount I propose to be charged
to loans in the Estimates now before
the House. I have estimated the
revenue for 1862, as per statement of
Ways and Means, at 1,579,739 ; and I
will now state to the Committee the total
revenue of the Colony from the year
1851 to 1861, and also the sums received
from the Customs and Land, which are
the two principal items of revenue, in
order to prove that the revenue has
steadily increased during that period.
The Customs revenue for 1851 amounted
to 153,451 ; 1852, 217,021 ; 1853,
354,938; 1854, 405,721; 1855,421,735;
1856, 471,401 ; 1857, 533,104 ; 1858,
557,298; 1859, 611,375; 1860,555,104.
In this year there is a decrease, but this
is owing to the separation of Queens-
land, and consequently the revenue fell
to 555,104. But in 1861 the actual
Customs revenue received up to 30th
September was 429,462 ; and the esti-

mated revenue to the 31st December,
158,684. So that I have no doubt that
this year's Customs revenue will realise a
total of 588,146 ; and for 1862, 612,700.
Thus showing that in the space of two
years the Customs revenue will have
recovered to what it was before the sepa-
ration of Queensland. I think it is very
satisfactory to find that this will be the
case, when we consider that an entire
province has been taken away from us^
that in the space of two years we will
have entirely recovered so important a
revenue as that of the Customs, and that
it will in fact exceed the amount received
before the separation of Queensland.
Now with regard to the land revenue,
there is a somewhat similar result. In
1851 the land revenue was 110,079 ;
1852, 96,694; 1853, 259,261; 1854,
374,650 ; 1855, 321,502 ; 1856,
298,159; 1857,273,883; 1858, 402,472;
1859, 477,892. Then the separation of
Queensland took place, and the land
revenue fell to 312,869. Up to the
30th September, 1861, the actual land
revenue was 273,037, and estimated
revenue to 31st December, 179,311 ;
total for 1861, 422,348 ; and in 1862 I
estimate the land revenue at 475,580,
which I have no doubt will be realised ;
thus bringing 4t up to within a frac-
tion of the amount it was before the
separation of Queensland. This is very
satisfactory, although no doubt it is very
difficult to frame a correct estimate of
the land revenue. It depends on con-
siderations different from all other
revenues, and therefore is very difficult
to estimate. For myself I shall be glad
to see the day when all the public lands
have become private lands. The total
revenue of the Colony for the year 1851
was 401,697; 1852, 532,718; 1853,
820,439 ; 1854, 993,986 ; 1855,
1,002,636 ; 1856, 1,101,876 ; 1857,
1,156,966 ; 1858, 1,367,422 1859,
1,511,965 ; in 1860 when the separation
of Queensland took place it fell to
1,310,052 ; and for 1861 I estimate it
at 1,505,772 : and for 1862 I take the
estimated revenue at 1,579,739, so that
it will be an increase in the revenue we
received only two years ago before the
separation of Queensland. I have esti-
mated the Customs revenue, not at an
increase of 6 per cent., which is the aver-
age increase for the year, but at 4 per

[1861.]

ME. WEEKES.

cent., which I think is a moderate calcu-
lation. That our Customs revenue is
steadily increasing is very satisfactory,
but we must not forget that, although
the revenue is increasing as a whole, the
irregular trade over the Murray causes a
loss which it is very difficult to com-
pute, but I have no doubt that the
Customs suffer thereby to the extent of
40,000. From spirits distilled in the
Colony I expect to realize 40,500. The
Government do not feel justified in
abolishing the duty on gold, the un-
settled condition of the gold field having
led to special charges of late in these
localities. Besides that, the refusal of the
Committee the other night to support the
intention of the Government to increase
the miners' rights, and the decision of
the Committee to reduce the business
licenses, will create a loss of 3,000 or
4,000. These things taken altogether
have satisfied the Government that they
would not be justified under the present
circumstances in proposing this Session
the abolition of the gold duty. I estimate
the Mint receipts at 24,000. There is
a falling ofE in the Mint receipts this year,
and this might lead to the impression
that the production of gold was falling
off also, but this is not case, as could be
proved from the following figures : The
gold received into the Mint in 1857 was
223,215 ozs. ; in 1858, 342,540 ozs. ;
in 1859, 358,127 ozs. ; in 1860, 470,464
ozs. ; and to 30th September, 1861,
345,545 ozs. The number of importa-
tion s in 1857 was 1,802 ; in 1860, 5,008,
or 96 weekly. The quantity of gold
received into the Mint from its estab-
lishin ent to the 30th September, 1861,
was 2,196,974 ounces, value 8,575,582 ;
total amount coined in the same period,
7,939,750. Now, with reference to the
gold produced in New South Wales, the
quantity imported into the Mint for
the nine months ending 30th September,
1860, was 280,140 ozs. ; paid duty at
Customs, 19,859 ozs. ; total, 299,999 ozs.
To the 30th September, 1861, the quantity
imported into the Mint was 297,763 ozs. ;
paid duty at Customs, 41,199 ozs. ; total,
338,962 ozs. Therefore there was an
excess in the quantity of gold produced
in 1861 of 38,963 ozs., which shows that
although the Mint receipts were less in
1861 than in 1860, the yield of gold
in New South Wales had increased.

The difference arose from this that in
1860 there were very large receipts of
Victorian gold which came to the Mint
to be coined, the quantity being nearly
double that received in 1861, thus
accounting for the deficiency in the Mint
receipts for coining, though at the same
time gold, the produce of New South
Wales, had very largely increased. I
estimate that the land revenue of 1862
will be 475,580, and this, I think, will
be found to be a very moderate estimate.
I have no doubt but that this sum will
be exceeded, because next year we shall
get the benefit of a year and a half's rent
being for the last half-year of 1861, and
the whole of the year 1862. That is how
the revenue will swell out under this head.
We shall be entitled to one whole year's
rent, and then to six months' rent in
addition. I estimate that licenses will
produce 72,410, and though we shall
lose 4,000 by the fees for night
licenses granted to publicans, yet the
billiard licenses, and the increase in the
number of general licenses will more
than cover the deficiency. I anticipate
receiving 4,500 this year from the Glebe
Island Abattoir. The total sum expended
in the construction of this abattoir has
been 60,000, so that if my estimate is
realised, of which I have no doubt, the
institution will give a return at the rate
of 7^ per cent, on the outlay. From
railway tolls I expect to receive 80,000,
being an increase of 9,000 upon the
amount received last year under this
head, and one which I fully expect to see
realised. Perhaps it might not be out of
place here to quote a few statistics to
show the progress that the railway traffic
is making. On the Great Southern line
344,000 passengers and 26,000 tons of
goods were carried in 1858 ; in 1859
there were 331,000 passengers and 31,000
tons of goods ; in 1860 there were 365,000
passengers and 35,000 tons of goods ;
and in the first six months of 1861,
there were 184,000 passengers and 19,000
tons of goods. During 1858 the receipts
were 50,119 and the expenditure
34,342, leaving .the net receipts at
15,777 ; in 1859 the receipts were
49,712, the expenditure 34,296, and
net receipts 15,427 ; in 1860 the receipts
were 43,706, the expenditure 36,397,
and the net receipts only 7,339. This
falling off is accounted for by the fact

ME. WEEKES.

[1861.]

that in January, 1860, the fares and rates
were very considerably reduced by order
of the Governor and Executive Council.
The reduction continued in force until
the 1st May, 1861, when the goods rates
were again raised, but as the return only
comes up to the end of June last, this
rise has hardly had a perceptible effect
upon the amount received for the first
nix months of 1861. The amount of re-
ceipts for that period was 21,750, the
expenditure 19,103, and the net receipts
2,643. It would be seen by the result
of this experiment that the Government
had been greatly disappointed in their
expectations that by lowering the rates
charged on goods sent by railway they
would increase the quantity forwarded.
On the Great Northern line the number
of passengers was, in 1858, 69,389 ; in

1859, 94,196 ; in 1860, 147,826 ; and for
the first half of 1861, 85,843. The
quantity of goods sent was, in 1858, 6,997
tons ; in 1859, 12,014 tons ; in 1860,
14,810 tons ; and in the first six months
of 1861 it reached the large sum of
28,489 tons, being a most extraordinary
and rapid increase in the goods traffic.
The traffic on this line has therefore
exceeded that upon the Great Southern
line during the same period. The receipts
upon the Great Northern line were, in
1858, 11,475; in 1859, 12,062; in

1860, 13,176 ; and in the first half of

1861, 8,570. The expenditure during
the same period has been 9,042,
11,625, 11,200, and 7,442 ; and the
net receipts 2,433, 437, 1,976, and
1,128. The remarks I have already
made as to the reduction in the rates apply
to this equally with the other lines. On
the Great Western line the number of
passengers carried from the 1st July to
31st December, 1860, was 38,839 ; the
goods carried were 1,402 tons ; the receipts
4,857 ; the expenditure, 3,136 ; and
the net receipts, 1,721. For the first
half of 1861 the number of passen-
gers was 41,181 ; the tons of goods
carried, 1,735 ; the receipts, 5,093 ; the
expenditure, 2,775 ; and the net receipts,
2,318. Coming now to the Electric
Telegraphs, I have set down the amount
as likely to be received from this source
at 20,000. To show the sums that the

various extensions have realised, I will
quoteafewstatisticsrelatingto this branch
of the .Service, as I have already done
upon that of railways. The total amount
expended on 1,846 miles of telegraph to
30th June, 1861, has been 83,676;
whilst the cost of lines in operation up to
the same date has been 50,593. In
1858 the number of messages sent by
the lines was 9,141 ; the cash receipts,
1,932 ; and the working expenses,
2,264. In 1859 the number of messages
was 36,867 ; the cash receipts, 7,827 ;
and the working expenses, 4,294. In
1860 the number of messages was
52,000 ; the cash receipts were 12,133 ;
and the working expenses, 8,380. For
the first six months of 1861 the number
of messages was 33,006 ; the cash receipts
were 7,234 ; and the working expenses
5,674. Now, these amounts show a
return on the capital expended of 13| per
cent, for 1859 ; of 7| per cent, for 1860 ;
and of 6 per cent, for the first half of
1861 ; thus showing clearly that as we
extend the lines into the interior the
profit we derive will proportionately
decrease. Under the head of miscella-
neous receipts I estimate that I shall
receive 28,146 ; and in this there will be
a considerable falling off from last year,
mainly arising from the smaller amount
we expect to receive as interest upon
bank deposits. Under this head 10,000
only is estimated for 1862, whilst during
the present year 20,668 are set down.
I have now, Sir, to the best of my ability,
endeavoured to lay before the Committee
a statement of the financial condition of
the country, taken from a fair estimate of
the revenue and expenditure of the
coming year. I have, as I conceive, taken
no exaggerated view of our position, and
I think I may safely say that our prospects
for the coming year are very encouraging.
Our revenue, in all its material features,
has been steadily increasing year by year,
whilst our expenditure has not been
increasing beyond the ratio of our increas-
ing population. In the coming year I
look to derive great advantage from the
settlement of the country by a prosperous
and happy population, and from other
benefits that our new land laws will con-
fer upon the people at large.

THE FINANCIAL STATEMENT of the HONORABLE ELLAS CARPENTER
WEEKES, made 7th August, 1862.

[From the Sydney Morning Herald of StJi
August, 1862.]

LEGISLATIVE ASSEMBLY.

Thursday, 7 August, 1862.

FINANCIAL STATEMENT.

MR. WEEKES said : I now beg to move
that a sum of 1,457 be granted out of
the Consolidated Kevenue Fund for the
service of the year 1863. Sir, I propose,
according to the usual practice, to avail
myself of this opportunity of submitting
a statement of the public accounts of the
country, and of its financial condition
generally. This, Sir, is naturally a dry
subject, but I trust nevertheless that I
shall be favoured with the indulgence of
the Committee while I proceed to lay
such information as I can before them
respecting the position of the Colony.
And I think, Sir, that without taking an
unfair or exaggerated view of matters, I
shall be able to satisfy Honorable Mem-
bers that in all essential and material
respects it is rapidly and steadily pro-
gressing. It is generally considered, Sir,
that this is the most convenient period
for the House to be in session, this par-
ticular period of the year being most
suitable to Honorable Members and to the
public convenience generally. But, Sir,
it has this effect and I think a change
must be made by the time the next
financial statement is presented it inter-
feres to some extent with the preparation
of the accounts. An alteration, in fact,
will have to he made in the termination of
the financial year. On the present occa-

sion, owing to the change I have alluded to,
I shall have to review our position by the
accounts for the past half-year and esti-
mate the revenue to the close of the year,
which has still five months to run. To
obviate this in future, it will be necessary
that the financial year should close here
on the 31st March, as at home, where
within a few days of that date the
statement of accounts is presented. It is
necessary on such occasions that the
Minister should be in a position to review
the whole of the past year before sub-
mitting the Estimates for the future, and
I think for this reason it would be
desirable to follow the course I have
suggested. Sir, the Committee will do
me the favour to turn to No. 2 account
in the printed statement of Ways and
Means which I have laid upon the table.
I shall not dwell long on that account as
it contains very slight alterations and is
already familiar to the House. I want
simply to call attention to the fact that I
have availed myself of the unexpended
balances on votes of Parliament, or
" savings," as they are generally termed,
to the amount of 68,236 12s. 4d., which
diminishes the charge on the Consolidated
Eevenue Fund to that extent. It is not
necessary that I should enter at any length
into this part of the subject ; the amount
is simply unexpended balances on services
that have been performed. I now lay a
list of these savings on the table, in con-
formity with the usual practice. With
this alteration in No. 2 account that is
the one for 1861 it will be seen we have
a balance at the end of that year of
11,539 5s. 9d. In the next table, No. 3,
it will be seen that the charges on the

MR. WEEKES.

[1862.]

Consolidated Eevenue Fund for the
current year are as follows : Amount of
Appropriation Act for 1862, 1,226,155
8s. 10d.; special appropriations, 247,500;
provided by Constitutional and Colonial
Acts, 59,400 ; total, 1,533,055 8s. lOd.
The loans authorized to be raised for
public works and other purposes are
1,699,109, and there is likewise a sup-
plementary estimate for 1862, consisting
of 158,082 5s. 6d. chargeable on the
revenue, and 11,000 to be raised by loan,
making a total of 169,082 5s. 6d. These
constitute the total estimated expendi-
ture for 1862. On the other side we
have 11,539 5s. 9d. balance brought
from the account of 1861 ; revenue and
receipts actually collected to 30th June,
1862, 758,265 ; estimated revenue and
receipts from 1st July to 31st De-
cember, 954,616, making a total for
the year of 1,712,881, and leaving an
estimated balance at the end of 1862
of 33,282 11s. 5d. I had better, I think,
Sir, continue the statement of accounts
to the year 1863, and then go back to my
explanation. The proposed charges on the
Consolidated Eevenue Fund for 1863 are
as follow: General services, 1,393,795 ;
special appropriations, 310,503 ; pro-
vided by Constitutional and Colonial Acts,
59,400 ; making a total, exclusive of
charges proposed to be raised by loan of
1,763,698. By turning back to !S T o. 3
statement it will be seen that the charges
against the Consolidated Eevenue Fund
in 1862 amounted to 1,533,055 8s. 10d.,
the expenditure authorized to be provided
for by loans, to 1,699,109, and the sup-
plementary estimate for the same year to
the large sum of 169,082 5s. 6d. With
the permission of the Committee I will
briefly notice some of the principal
charges under that head : There is a sum
of 2,646 11s. 7d. for gaols. Several
additional gaols have been established in
various country districts, and this amount
is to cover the salaries and charges in con-
nection with the same. There is also a
sum of 2,616 6s. lOd. under the head
of charitable allowances. This expendi-
ture has been rendered necessary by the
applications that have been made on
account of various hospitals that are
being established at Graf ton, Kiandra,
Burrangong, and other places. The
estimate also includes a sum of 2,000,
the cost of erecting an additional story

or new wing to the Earn! wick Orphan
Asylum. A recommendation has been
made to the Government that while other
public works are being proceeded with it
would be only right to make this asylum
as complete as possible, and the Govern-
ment have complied by placing the amount
on the Supplementary Estimates. There
is also 300, further expenses connected
with taking the census of 1861, and 500
for the maintenance of the military at
Lambing Flat. The estimate also includes
1.300, paid as law expenses in the case
of Berry v. Graham and others. It is
only necessary at present to say that
inasmuch as these defendants became
involved through the action of the
Government, and by acting on a Pro-
clamation subsequently shown to be
illegal, the Government felt they were
bound to protect them in the matter.
The Supreme Court held that the Pro-
clamation was illegal, as it was not com-
petent to include a town and rural dis-
trict within one municipality ; and as the
defendants had only been acting under
the terms of the Proclamation, the
Government thought it was their duty to
compensate them for the expenses they
were put to. There is an increase of
2,100 in the working expenses of the
Mint, arising from the increased demand
made on that establishment. There is a
small increase in the Post Office for two
additional mail guards, one to the north
and one to the west, and for additional
country postmasters. There is a sum of
4,000 to cover the cost of six ten-inch
guns and the necessary ammunition.
They have cost about 400 a-piece, with
their carriages complete. I may add here
that the Government have applied to the
home authorities for a battery of heavy
Armstrong guns with travelling carriages,
which will enable us to move them to any
point at which their services may be re-
quired. There is then a small sum for
increased wages to compositors in the
Government Printing Office ; and then a
new item, namely, interest to the Savings'
Bank. This arises on a loan by the .Sav-
ings' Bank to the Government to enable
them to work the Mint bullion account.
Parties who deposit gold-dust at the Mint
very often require cash for it immediately ;
for this accommodation they are charged a
small sum of about per cent, by the
Government. To eimble the Government

[1862.]

MB. WEEKKS.

to do this it was necessary that the
blaster of the Mint should have funds
upon which to draw, and therefore the
Mint bullion account was established.
The Savings' Bank advanced 60,000 for
the purpose. There is next 8,039 to
meet balances of votes claimed, particu-
lars of which I now lay on the table.
These are sums that have been written off
by the Auditor General, being unclaimed
balances of appropriations that have been
closed in his books; and sums that I have
in previous years included in the amount
of unexpended balances or savings. This
is a case that is likely to arise very fre-
quently. After an account has been
closed for three, four, or even five years,
demands sometimes come in upon it.
As the account has been closed the
Government have no alternative but to
put the amount upon the Estimates again
and bring it before Parliament. This is
the practice that has always been followed
elsewhere, and is, in fact, the only one
that can be adopted under the circum-
stances. There are then two sums of
5,000 for additional commission to land
agents, and for fees to licensed surveyors ;
and a small increase under the head of
gold-fields. Th^re is a sum of 2,099 for
rations supplied to Chinese during the
Burrangong riots. It is well known that
the Chinese were off the Burrangong
gold-fields during those riots. They took
refuge at a squattage on the road to Tass,
where they were absolutely starving until
the owner of the squattage undertook to
supply them with sufficient food to keep
them from starving. They were kept
there in this way for some time, but no
longer than was absolutely necessary, and
the cost of the rations supplied to them
was 2,099. There is next a sum of
4,240 for compensation to Chinese for
losses sustained by them during the Bur-
rangong riots. This has been found to be
a most tedious and most difficult matter
to settle. There were no less than ],568
claims made, and of these 706 were ad-
mitted. The amount claimed was
40,623 Os. 9d., whilst the amount ad-
mitted as proved out of this was 4,240.
Then there is the very large sum of
60,000 to be expended on the roads of
the colony 12,000 on each of the three
main roads, and 21- ,000 on the subor-
dinate roads. This the Government con-
sidered necessary in order to take pre-

cautions against the coming winter by
putting the roads in a passable state.
There are several sums for the erection
of bridges, for keeping open the naviga-
tion of the Murrumbidgee, and for tele-
graph stations ; and 11,000 for altera-
tions in public buildings. These are the
principal items that- stand on the Supple-
mentary Estimates, making, with the
other amounts I have mentioned,
3,134,529 5s. 9d. And now, to look at
the other side of the account : The re-
venue and receipts actually collected to
30th June, 1862, amounted to 758,265.
And here it may not be uninteresting to
give a sketch of the actual receipts of the
revenue in every year since 1856, during
the whole of which period the tariff has
been unaltered. In 1856 the revenue
amounted to 1,101,876, the amount
collected by the Customs being 471,401 ;
in 1857 the revenue was 1,156,966, the
Customs being 533,104 ; in 1858 the
revenue was 1,367,421, of which the
Customs was 557,298 ; in 1859 the re-
venue was 1,511,965, of which the Cus-
toms was 611,875 ; that was the vear
in which Queensland was separated from
the colony ; in 1860 the revenue reached
1,310,052, of which the Customs was
555,104 ; in 1861 the revenue was
1,427,165, of which the Customs was
585,312 ; and in 1862 I estimate that
the revenue will reach 1,712,881, and
that of this the Customs will furnish
648,000. Should this amount be rea-
lised we shall then have altogether made
up the loss of revenue we suffered on
the separation of Queensland ; and this
must be a very gratifying fact to hon.
Members, seeing that it has been accom-
plished in so short a period. The actual
revenue received during the six months
ended 30th June last shows an increase
of 140,313 over the revenue of the cor-
responding six months of 1861. I have
estimated for the remaining six months
of 1862 that 954,616 will be received,
and I am persuaded that my estimate will
be borne out by the result. Having based
my calculations upon the amount actu-
ally received during the first six months,
I have no doubt that my expectations
will be realised. There is an item
amongst the receipts that is a novel one,
being the small sum of 20 received from
t\so Chinese immigrants on landing in this
colony. I do not refer to this item with

MH. WEEKES.

[1862.]

any satisfaction, because in so far as my
views are concerned I intended when I
voted for the imposition of this tax to
prohibit them from coming here at all.
I mention the matter merely on account
of its novelty, but I would have been
more gratified had nothing whatever
been received. But these two Chinese
have landed here and paid, or rather
the captain of the vessel paid for
them. I do not, in my estimate for the
last six months of the year, include the
sum that may possibly be recovered from
the 282 Chinamen who have passed into
this colony across our northern frontier.
What success will attend the lenity that
has been shown them I do not know.
Possibly at the end of the two months
that have been allowed them they
may pay ; but still I felt it to be
only prudent not to attach too much
value to that, and therefore inserted
nothing in the return. This, then, brings
me down to the end of 1862, with a
balance of 33,282 11s. 5d. For the
year 1863 I estimate the general services
at 1,393,795 ; the special appropriations
at 310,503 ; which, with the sums set
apart by the Constitutional and Colonial
Acts, make a total charge on the revenue
of 1,763,698, shewing an increase on
the total charge of the revenue as com-
pared with 1862, of 230,643. This in-
crease does not arise, except to a very
inconsiderable extent, from any increase
in any of the departments. It consists
principally of the large amount of 40,000
additionalinterest ondebentures; 20,000
for municipalities; the large sum of
80,000 formerly taken out of loans, but
this year charged to revenue ; 40,000
more set down for roads ; 3,000 for the
navigation of the Darling ; 27,000 ad-
ditional expenditure on railways ; and
of various other items of increase
which make up this apparently large ex-
cess over the present year. The author-
ized debt of the colony at the present
moment is in round numbers, 5,888,000
including the amount of debentures
authorized to be issued; but as yet
the Government have only returns of de-
bentures actually issued, to the amount
of something over 3,000,000, although
there remains a considerable amount
in the hands of the Oriental Bank
for sale. The debt actually outstanding
is 3,700,000. There is an increase in

the sums put down for municipal endow-
ments. I am not sure that the whole
sum of 20,000 will be required, as
there has not been any rapid extension
of these institutions since the year before
last. The sum claimed in the year 1860
by municipal institutions, and paid as en-
dowment to twenty corporations, was
15,490 14s. lid. In 1861 the sum of
15,331 9s. 8d. was paid as endowment
to twenty-one municipalities, showing
that, the same amount of rates was levied
in the respective municipalities one year
after another, and ranging from 2,000,
as in the case of Newcastle, down to
161, as in the case of Hunter's Hill. I
do not think hon. Members will re-
gard with anything but pleasure the
amount set down for our Volunteers. I
think the country is indebted to those
gentlemen who have so praiseworthily
exerted themselves in creating such an
institution amongst us. It has reason to
be highly gratified with the excellent state
of military discipline to which the force
has been brought, and that the time, ex-
pense, and trouble, which have been de-
voted by the members of the force, have
resulted in the production of a body of
men not inferior to any bred up to milit-
ary life among the Imperial troops. The
present strength of the Volunteer Force
is 65 officers, 13 medical officers, 192 non-
commissioned officers, and 1,774 members,
making a total of 2,044. The artillery
companies number 320 members, the.
mounted rifles 39, the foot rifles 1,685.
Artillery companies have been formed at
Sydney and Newcastle, mounted rifles at
Sydney, and rifle companies at Sydney,
Penrith, Parramatta, Maitlaud and
Morpeth, "West Maitland, Newcastle,
Hawkesbury, and Grrafton. There is an
apparent increase in the charge for police
in the year 1863 of about 45,000. I say
apparent, because it will be seen by an
explanation I shall make that it is not an
absolute increase. There is a deficiency
in the vote for 1861 of 17,625, which is
not fairly chargeable to 1863 as an in-
crease of the cost of the establishment.
The increase of the establishment consists
principally in a small reinforcement sent
to the gold-fields at a cost of 1,800.
There are 41 new police stations in
different parts of the country, which
have been established in consequence of
the repeated applications pressed upon

[1862.]

ME. WEEKES.

the Government from all parts of the
colony. A charge of 9,000 is made
to provide a mounted guard for the es-
cort. This will only provide for a tort-
nightly service, but it is to be hoped that
some arrangement may be made whereby
the provision may be increased and a
weekly one substituted. The committee
will see that there is no increase, but
rather a diminution in the charge for gaols
and penal establishment. Although the
number of gaols has been increased, ar-
rangeinents have been made by which
the estimate is brought below that of
last year. A saving will be effected by
the re-establishment of the military guard
at Cockatoo, as the troc-ps now returning
from Lambing Flat will resume that
duty. Two sums of 30,000 are placed
upon the Estimates for education, being
similar in amount to the votes of last
yea r. The Government consider that until
Parliament decides upon the adoption of
some one system of education it is only
fair to give the same amount to each of
the two systems at present in operation.
In I860, under the Denominational sys-
tem, there were 264 schools, and 13,377
scholars ; in 1861, 278 schools and 16,572
scholars. Under the National system, in
1860, there were 144 schools, and 9,256
scholars ; in 1861, 178 schools and 11,400
scholars ; up to the 30th June, 1862, 192
schools and 12,455 scholars. Each system
thus shows a considerable increase in the
number of schools and scholars. There
is a small sum of 1,000 as an increase in
the Post Office department, arising from
the appointment of country postmasters.
There is a sum of 5,000 placed upon the
Estimates as a recognition of the services
of the Eev. "NV. B. Clarke. The Govern-
ment considered that what had already
been given to that gentleman was but an
inadequate compensation for the many
services he has rendered, and deem that
it will be but a fair reward if the sum
proposed should be voted for him. There
is a sum of 80,000 for assisted immigra-
tion, to be appropriated entirely out of
revenue. Last year the amount provided
for this service was taken as a loan
vote. "While Parliament requires that
some system of immigration shall be
kept up, I think it most desirable
that that system should be assisted
immigration. I do not know any system
that operates so well in reference to

the vested interests of the country ;
it also brings into action the best
feelings of our nature. The efforts
made by servants, labourers, and the
operative classes generally to bring out
their friends, was one of the most grati-
fying traits that could be imagined in the
disposition of those who had adopted
homes in this country. There is a sum
of 109,650 for the roads of the Colony,
and I think it would not be uninteresting
to show the amount spent on the roads and
bridges of the Colony for some few years
past. I find that during the five years pre-
ceding Besponsible Government the sum
of 197,742 was expended out of revenue
upon roads and bridges. Since the in-
auguration of Responsible Government
up to the present time a sum of
1,069,078 has been spent out of revenue
for the same services. A sum of 69,450
is proposed for works and public buildings
in 1863 ; and I may mention that during a
period of ten years the sum of 884,180
has been spent on works and public build-
ings altogether, irrespective of loans.
There is a sum of 3,000 for facilitating
the navigation of the Darling River, andfor
railway lines the sum proposed is 29,957,
16,000 being put down for laying an
additional line from Newcastle to the
AVallsend junction (four and a half miles)
with the Great Northern Railway. The
railway traffic has increased so enormously
that one line is found quite inadequate to
meet present requirements, and the pro-
position for this additional line is sub-
mitted to the H6use in the hope that it
will more than pay its cost. Several
companies have expressed their intention
of forming junctions with it. when com-
pleted, and from a statement I will read
1 think it will be seen how desirable it is
to encourage the formation not only of
lines for the use of the coal trade but
railways generally. Among the public
works to be provided for by loan the sum
of 15,000 is set down for the extension
of wharf accommodation at Newcastle ;
30,000 towards the improvement of the
Clarence River breakwater; 5,000 for
the construction of a northern breakwater,
Newcastle ; 20,000 for the construction
of a second steam-dredge, punts and tug,
for Newcastle ; and 10,000 towards the
construction of wharf and coal shoots at
Morpeth. Most of these are required by
the rapid development of the coal trade.

ME. WEEKES.

[1862.]

The amounts to be raised by loan for ser-
vices connected with the Department of
Public Works are for railways, 29,957 ;
harbours and rivers navigation 114,232;
for roads, 12,000; public works and
buildings, 155,000 (including 100,000
towards the erection of new Houses of
Parliament) ; and for electric telegraphs,
295,882. Turning to the opposite side
of the account it will be observed that
I have estimated the Mint receipts for
1863 at 42,000, which sum I think
I am justified in anticipating by the
returns of the present year, the receipts
for 1862 showing a total of 87,521.
In the year 1861 there were 5,156 impor-
tations into the Mint ; up to June 30th,
1862, 2,836, or 109 weekly. The total
quantity of gold received into the Mint
since its establishment up to the 30th
June, 1862, is 2,731,340 ounces, valued at
10,656,376 ; and the total amount coined
during the same period is 9,925,750. I
have estimated that the land revenue will
produce 496,800, and I have every
confidence that that estimate will be
realised. I have a return here which
will show that, at all events, the pas-
toral interests of the Colony are
making rapid strides, and that the areas
of land under lease or license beyond
the settled districts are approximately
greater than prior to the separation of
Queensland. At the date of separation,
the quantity of land under lease beyond
the settled districts, exclusive of Queens-
land, was 68,738,266 acres. We lost by
the separation of that Colony 23,693,040
acres, which were then in occupation.
The total area in occupation at the time
of the separation (including the portions
separated) was therefore 92,431,306. On
the 30th June, 1862, the total area of land
in occupation beyond the settled districts
had risen from 68,738,266 acres in 1859
to 81,417,286 acres, showing an increase
of about twelve millions of acres since
the separation of Queensland. This
increase has taken place in the following
districts : Albert, 510,540 acres ; Bligh,
620,800 acres ; Clarence, 4,000 acres ;
Gwydir (New South Wales portion),
286,040 acres ; Lachlan, 5.221,680 acres ;
Liverpool Plains, 252,000 acres ; Darling
and Lower Darling, 1,288,960 acres ;
Murrumbidgee, 263,080 acres ; Warrego,
3,137,540 acres. The last-mentioned
district is a country that was not

opened up at the time Queensland was
separated from this Colony. There
were then no squattages in the Warrego
district. In the Wellington district
the increase since the separation of
Queensland has been 1,100,380 acres.
It will thus be seen that within three
vears the country has become settlsd
to the extent of nearly thirteen millions
of acres, in addition to the area under
lease or license in this Colony when
Queensland was separated. I will now
read a few returns showing the operation
of what are called the "free selection"
clauses in the new Land Bill. Under the
13th clause the number of purchasers up
to 30th June, 1862, was 2,622. Under the
22nd section the number of purchasers
to the same date was 384. Under the 13th
section there have been selected 227,247
acres ; and under the 22nd section, 23,545
acres. The amount realised under the
13th section has been 58,091, and the
amount realised under the 22nd section
5,886. The total number of purchasers
is thus 3,006 ; the total area selected
250,792 acres ; the total amount realised
63,977 ; the balance to be paid being
186,815. In the settled districts there
have been selected 177,469 acres ; in the
intermediate district, 39,966 acres ; and
in the unsettled, 33,357 acres, making a
total of 250,792. Under mineral leases
applied for under the 22nd clause of
the " Crown Lands Occupation Act of
1861," 9,963 acres have been taken up.
The amount of the annual rent is
2,490 ; of these lands 7,903 acres are
near Newcastle, 80 at Maitland, 1,280 in
Cumberland (these are for coal), 20 are
near Wallabadah, 320 near Moruya, 200
Moruya silver mine, 80 at Ashburnham,
and 80 at Bathurst. These latter are
neither for gold nor coal. The purchases
for mineral purposes under the 19th sec-
tion of the Crown Lands Alienation Act
have been 1,357 acres for 2,714, the de-
posits paid being 678 10s. 1,307 acres
at Lake Macquarie, and 50 acres at War-
atah, near Newcastle. I have estimated
the revenue to be derived from postage
in ] 863 at 56,000. I do not think that
is an unreasonable estimate, considering
the present postal arrangements. The
number of post offices in 1860 was 289,
and the length of the postal lines 8,200
miles ; 186 L the number of post offices
was 340, and the length of the postal

[1862.]

MR. WEEKES.

lines 9,340 miles ; up to the 30th June,
1SG2, the number of post offices was '!">'>.
and the length of the postal lines 10,800
miles. This shows that every opportunity
has been taken for extending, as far as
possible, throughout the country, the ad-
vantages of postal communication, and I
must say that I attend to applications
from some of those country districts more
readily than to applications from districts
nearer to centres of population. People
are placed at immense disadvantage who
have to go fifty or a hundred miles to a
post office ; therefore, whenever reason-
able grounds are shown I seldom refuse
an application. I do not agree with
those who say that because a line does
not pay it ought to be abandoned. In
some of these distant parts almost the
only representative of Government they
see is the postman. They know very little
of public matters but through him, and
this, I think, is one of the few things to
which they are entitled when they can
show anything like a reasonable claim.
It is the intention of the Government to
establish official postmasters at the fol-
lowing towns: Albury, Armidale, Bath-
urst, East Maitland, Goulburn, Mudgee,
Newcastle, Parramatta, Penrith, Single-
ton, Tamworth, "West Maitland, Windsor,
Wollongong, Yass, and Deniliquin. This
is with a view to the establishment of the
money order system. It was found im-
possible to establish that system while
the Postmasters conducted their business
in part of their own stores. I have, how-
ever, thought it only right that those who
have been for years engaged as postmas-
ters should have the refusal of these new
appointments, provided they complied
with the conditions of the Government
that they should be neither directly nor
indirectly connected with business of any
kind, and that they should have the post
office detached from any place of busi-
ness. There have been great complaints,
especially in some of the larger towns,
as well as much jealousy because the
post offices are kept in stores and
other places of business. There has also
been a good deal of ill-feeling among
other parries in a similar line of business.
We have therefore taken advantage of
the establishment of the money order
system to appoint these official postmas-
ters. The expense will not be great.
The difference will not exceed 500 or

600. In the larger towns the salaries
and the commission on the sale of stamps
received by the present postmasters were
together equal to and in some instances
above what it is now intended to pay
these official postmasters. The sum
allowed in the majority of cases will be
about 200 a year. I have estimated the
railway tolls for 1863 at 132,000, and I
have no doubt that that sum will be real-
ised. The manner in which the railways
have progressed is highly encouraging.
In 1861 the Great Northern Eailway car-
ried 171,691 passengers, and in the first
six mouths of the present year 91,760.
In 1861 it carried 59,640 tons of goods,
and 70,555 in the first six months of 1862.
Its receipts in 1861 were 19,305, and in
the first half of the present year 14,506.
The net receipts in 1861 were 3,168,
but the net receipts during the first half
of the present year were 4,876. The
Great Southern line carried 346,343
passengers in 1861, and 173,959 in the
first half of 1862. The number of tons
carried was 36,738 in 186 L, as against
2 1,016 during the first six months of 1862.
The receipts for the year 1861 were
44,845 as against 27,123 in the first
half of 1862. The net receipts were
5,649 in 1861, as against 6,921 in the
first six months of 1862. The number of
passengers carried on the Great Western
line was 77,537 in 1861, and 44,135 in
the first half of 1862. The carriage of
goods was 5,365 tons in 1861, and 3,392
tons in the first half of 1862. The re-
ceipts for 1861 were 10,810, and 8,650
for the first half of the present year ; the
net receipts being 5,287 for 1861, and
5,293 for the first half of the present
year. The total number of passengers
carried on all the lines in 1861 was
51)5.571, as compared with 309,854 for
the first half of the present year. This
number is exclusive of the season ticket-
holders. The number of tons of goods
carried on all the lines in 1861 was
101,743, against 94.963 for the first half
of the present year. The net receipts
from the railways in 1861 amounted to
14,204, but during the first half of the
present v-ar the net receipts amounted
to 17,720. The total expenditure in
1861 on the lines of railway now opened
amounted to C 1,489,006, and the net
revenue for 1861 was 14,204 ; that gave
for the year something under 1 per cent.

MB. WEEKES.

[1862.]

In 1862 the total sum expended up to
the 30th of June on the lines that have
been opened for traffic was 1,705,492,
and the net revenue has been 17,770,
being at the rate of 2 Is. 6d. per cent,
for the year. That is, I think, a most
satisfactory state of things, when we
consider that these extensions are so
partially carried out, some of the termini
being in the bush, and without any
convenient means for passengers and
traffic reaching the stations. I consider
this rapid increase in the remunerative
returns of the railway a most encourag-
ing feature ; it leads us to expect
that as these lines progress through the
country they will pay every farthing of
the interest of the money that has
been expended on them. The profit on
the railways in 1862 was nearly double
that in 1861. I think that that result
cannot fail to be generally satisfactory,
especially when it is considered that the
railways have not yet struck any of the
great lines of traffic. I should mention
that, in stating what has been the net
revenue from the railways, there has been
included in the expenditure everything
that ought to be chargeable as such. [ME.
SAMUEL : Is interest charged ?] No,
I believe not. The expenditure comprises
the cost of the locomotive power, the
repairing of the engines, the carriages,
and the waggons, the maintenance of
wav, the repairs to tunnels and viaducts ;
and all the goods and general charges,
and about half of the expense of the
general establishment. All these items
were included before the net results were
brought out. T estimate that in 1863
the revenue from electric telegraphs will
amount to 30,000, and that the revenue
for 1862 from that source will amount
to 24,500. The receipts from the
telegraphs amounted, during the first
half of 1862 to nearly 12,000. I have
no doubt that the sum mentioned will
be received. The total amount expended
on 2,100 miles of telegraph, up to .the
30th of June, 1862, has been 114,675,
of which 102,150 was the cost of the
lines now in operation. In 1858 the
messages sent by telegraph numbered
9,141 ; in 1859, 36,867 ; in 1860, 52,000
in 1861, 74,204 ; and up to the 30th of
June, 1862, 48,554. The receipts from
these messages amounted in 1858 to
1,932 ; in 1859 to 7,827 ; in 1860 to

12,133 ; in 1861 to 16,542 ; and up to
the 30th of June, 1862, to 11,747.
Deducting from the above sums the
working expenses of the establishment a
return is shown for 1859 of 13| per cent. ;
for 1860 of 1\ per cent. ; for 1861 of 7
per cent., and for the first half of 1862 of
6 per cent. I must say that I am much
gratified by these results, because there
was a general apprehension that as the
telegraph lines extended over long tracts
of country where there are not many large
towns, the profits they yielded would be
seriously diminished. Of course there
has been some diminution in the receipts,
as at the outset the telegraph only ex-
tended between Sydney and Melbourne
where there was a very large business done.
But I think there is reason to expect
that as the telegraph is further developed
it will pay the interest on the loans that
have to be raised for its extension. With
regard to the gold duty I have always
been of opinion that that tax was an unjust
one. But without regard to that tax I
have always held the opinion that the
gold miner paid an inadequate sum,
(10s. a-year license fee), for the liberty
of digging for gold on the public land's
of the Colony. And I maintain that
the gold-digger does not pay a fair
equivalent for the privilege of taking what
is the property of the public. We do not
allow the grass on the public lands, which
renews itself every year, to be consumed
without a larger contribution to the re-
venue than is produced by the gold. If
we look at the history of the charge on
the gold-miners since the commencement
of the gold diggings we shall find that
when gold was first discovered they were
charged 30s. a month, or 10 per
cent., as a royalty. In two or three
years afterwards the charge went down to
10s. a month, or 3 per cent., as a royalty ;
and subsequently the gold duty was es-
tablished, and the miner's right was
reduced to 10s. per annum. I think that
10s. per annum is altogether an inadequate
sum, and not a fair equivalent for the right
to go on the public lands and dig for gold.
As we are holding the lands in trust for
the public we ought to see that the miner
pays a fair amount for that privilege.
I will read an extract from a newspaper
showing how many of the miners leave
the colony after obtaining large quantities
of gold. The following extract is from

[1862.]'

MR. WEEKES.

the Sydney Morning Herald of June 2 1st,
18G2 :

With regard to the quantity of gold received
from the Lachlan gold-fields, we are informed
that one bank during the months of April and
Mav have issued drafts on London to the amount
of GO,000. It would therefore appear that
most of the successful diggers are taking their
gains avray out of the colony. We may mention
that those who have been successful have got as
much as -1,000 each, and in very few instances
less than 1,500 each, and those sums have been
realized in less tlian four months. The number
of party working together generally consists of
four. Those who have purchased drafts of the
Banks, have been Scotch, Irish, Greeks, Swedes,
and English, but the latter are the most numerous.
A few natives of the colony have also been among
the lucky ones. Most of these men are going
home satisfied with their adventures, but a few
are coming out again.

Now, I do not want to see immigrants of
that character men who, by some lucky
chance, get enriched out of the public
lands, for which they have not paid a fair
equivalent. Then, if they do not pay a
fair equivalent for the right to go on the
public lands and dig for gold, in what
shape should we place the charge ? I do
not think it is a fair way to put it that
they should be charged for seeking for
gold ; but the charge might fairly be made
on their obtaining it, in the way that the
gold duty is at present levied. Therefore,
I would make a mere nominal charge for
seeking for the gold ; but I would levy a
charge on obtaining it. And, as I think
that half-a-crown is too high a charge, I
shall propose considering it in the shape
of a royally that from and after the
1st of January next the duty 011 the
export of gold shall be 2s. an ounce up to
the 31st of March next, and that it shall
be Is. Gd. an ounce from and after that
date. That will, I think, be a fair equi-
valent for the right of going on the public
land and obtaining the gold. There is
am tther matter to which I wish to call the
attention of the Committee, and which I
think is of the very highest importance :
Tt is the question respecting the collec-
tion of dutiable goods coming across
the Murray. I think that it has arrived
at a state when it can no longer be
neglected that is, if we propose to raise
our revenue by Customs at all. His
1'xtH llency the Governor called our at-
tention to it in hi* Speech at the open-
ing of the session informing OB that an
application had been made from an ad-
joining colony for the construction of a

uniform tariff, with a view to an equal and
fair division of the duties received
amongst all the colonies concerned. If,
years ago, it was of importance for this
colony to remonstrate against Victoria
supplying the southern parts of this terri-
tory with dutiable goods which did nob
contribute to our revenue, it has now be-
come a matter of much more serious com-
plaint, when we find that the whole of the .
principal gold-fields in the southern parts
of the colony are now supplied from Mel-
bourne when we find that this mode of
supply to those localities is not only the
settled policy of the people of Victoria,
but that of the Government of that
colony as well. Their present policy in
carrying out their railroad system has
been to strike the Murray at Echuca, and
by eo doing to place themselves inaposition
of commercial superiority as regards this
colony. When the Murray line is com-
pleted it will enable the merchants of
Melbourne to introduce dutiable goods
into New South Wales within twelve
hours after they have been despatched
from Melbourne. And that railway will
be completed as far as Echuca in the
course of two years. That is the object
of the Victorian Government. The carry-
ing out of that line will have the effect of
giving Victoria a water carriage of 8,000
miles. It will give Victoria a water
carriage of 8,000 miles, it is true, but it
will be water carriage through rivers of
the colony of IS"ew South Wales. The
object of the Victorian Kailways, is to
tap as it were, the rivers of this colony
and render them available for this traffic
one however which will be to the mani-
fest injury of our revenue. To show that
this is the view taken by the people of
Victoria, I shall invite hon. Members'
attention to advertisements appearing in
the Victorian papers. In the Argus news,
paper (Melbourne) are to be found such
advertisements as the following :

Murray, Darling, and Murrumbidgee Kiver
Steamers. Murray and Jackson's Line. The
new steamer Fort Bourke will leave Goolwa about
July 1st, for Fort Bourke, on the Darling. All
orders for freight, the purchase of flour, station
supplies, &c., forwarded to the agent will be at-
tended to. Jon>f HALFEY, 104, Bourke-street
We.-t.

Murray, Darling, and Murrumbidgee. Cadcll
Line. The steamer Gundagai will leave Goolwa
about 10th proximo. Arrangements made for
forwarding on application to D. Dewar, 106,

MB. WEEKES.

[1862.]

Bourke-street West. N.B. From delay in com-
pletion of Sandhurst Railway, the proposed
Echuca route is rendered impracticable for the
present.

This is all done with a view to promote
the conveyance of dutiable goods from
Melbourne across our southern frontiers,
and it shows the immediate necessity
for one uniform system of duties for all
the Australian colonies. It is also the
policy of the Government of Victoria, as
well as that of the people of that colony,
to take as much as they can get. I do
not deny that a large proportion of the
trade of the southern parts of this colony
will not be likely to fall indeed must fall
into the hands of the people of Victoria.
Their position as regards the southern
parts of this colony is such that it will
naturally give them such an advantage.
I also say that they are quite right in
seeking to get what they can, but I say
let them not do so at the expense of the
revenue of this colony. A member of the
Victorian Legislature Mr. Hood, the
member for Belfast at the opening of
the line to Kyneton, in April, 1862, is
reported in the Argus of the 10th of May
last, to have expressed himself as follows,
in proposing the toast of the Executive
Council :

If the rail ways were to be successful in developing
the resources of the colony, it would be for the Exe-
cutive Council to carry out the original intention
of the undertaking, and bring the navigable rivers
of the country into communication with the rail-
ways. There were between 7,000 and 8,000 miles
of navigable rivers centralising on Echuca, and no
one would object to the railway being extended to
that place as soon as possible.
In the same newspaper the Argus on
the 10th of May last was the follow-
ing:

The Government of New South Wales is
placed in a perplexing position with relation to
the Customs' duties which it would fain levy upon
taxable commodities crossing its frontier. It is
found impraticable to collect them, and the
neighbouring colony is unwilling to forego them.
Even if it could establish a little army of revenue
officers on the Murray, and maintain a vigilant
supervision of merchandise crossing the river
from the Victorian side, smuggling would spring
up, and goods would be " run" with impunity.
And the same thing would happen on its northern
frontier, where the districts lying more conti-
guous to the ports of Queensland than to those
of New South Wales, would naturally draw their
supplies from the former colony, and would
endeavour, if possible, to evade payment of a
double duty, or to contribute to the support of
two Governments. So far as Victoria is con-
cerned it undoubtedly commands, and must

eventually monopolise the trade of an immense
tract of country which nominally belongs to New
South Wales, but is commercially a part of our own
colony. When the railway is completed to Eclmca
settlers on the Murrumbidgee, the Darling, and
the Edward will be able to receive their stores
from and send down their wool to Melbourne
more expeditiously and economically than settlers
will be able to do in some of the more remote
districts of Victoria. As it is, the southerly and
south-westerly portions of New South Wales are
less distant from Melbourne than from Sydney,
and a considerable trade has arisen in consequence
between this city and the squatters and others
who occupy the country on the other side of the
Murray. This is not only displeasing to the mer-
chants of Sydney, but iinsatisfactory to those
who administer the public finances. But if the
transriverine settlers prefer to buy in the nearest
and cheapest market, and that market happens to
be our own, we really cannot prevent it, and do
not think that our neighbours will be acting in a
very paternal spirit towards their fellow-colonists
if they resort to any illegitimate expedients for
obstructing the natural course of events. It is
perfectly certain that, if they could succeed in ex-
cluding merchandise received through Victoria
from the Murrumbidgee district, its inhabitants
would find the cost of every imported commodity
they consume immensely enhanced by the diffi-
culties and expense of transport via Sydney.
Four years will elapse before the railway now in
progress is completed from that city to Goulburn,
and when that is accomplished an arduous
journey through a difficult country must be en-
countered before reaching Gundagai, the outpost,
as it were, of that extensive district which lies
between the rivers Murrumbidgeo and the
Murray ; so that, as the Sydney Morning Herald
observes, "the Victorians have the vantage
ground at present in commanding the trade of
our interior, and are likely to continue to com-
mand it, greatly to the improvement of their
railway dividend. Even our western gold-fields,"
the same authority goes on to remark, "seem
open to invasion in the rear, for the level
nature of the country offers great facilities to
travellers from the Murray to the Lachlan."
Those gold-fields are not merely " open to in-
vasion ; " the invasion has actually occurred, since
we learn from an article in the Border Post,
which we lately republished, that " dray loads
upon dray loads of grog, tobacco, e., are daily
crossing the border at Albury en route for Lamb-
ing Flat and the Lachlan ; and although Vic-
toria cannot expect to command the whole trade
of these distant diggings, she is yet securing, as
tradesmen's circulars say, 'a fair share of patron-
age.' " This is not altogether the reward of
superior enterprise, but the result of geographical
position ; and the advantages thus acquired will
be necessarily strengthened and extended in pro-
portion as we push forward our trunk line of
railway in the direction of the Murray, the com-
pletion of which will be tantamount to the annex-
ation (in all but a political sense) of the Murrum-
bidgee, if not of the Laehlan district, to Victoria.
Such a prospect, involving, as it docs, a consider-
able loss of Customs revenue to the neighbouring
colony, is viewed with considerable disapprobation,

[1862.]

ME. WEEKES.

not to say uneasiness, by the Government of New
South Wales ; and it points strongly to the
necessity of some federal action being taken for
the establishment of a uniform intercolonial
tariff.

I think that this shows that there is
every determination on the part of the
people of the southern colony to take
advantage of their geographical position
in this respect and that it is time that
something should be done. The proposi-
tion which has been made by the New
South Wales Government in regard to
this matter has been agreed to by the
Government of Victoria, and also, as I
believe, agreed to by the Government of
Queensland. The proposition which has
been made is this : That there shall be a
mutual conference between the three
Governments for the settlement of an
intercolonial tariff. At the present there
is some b'ttle difference between the
tariffs of the three colonies, but it does
not amount to much ; and I therefore
think it a very favourable time for such
a mutual settlement to be made. The
tariffs of New South Wales and Queens-
land are identical and between the tariffs
of New South Wales and Victoria the
difference is but very trifling three
shillings less upon rum, or something
of that sort. I think, therefore, that if
we can manage to assimilate our tariffs,
without doing any injury to any one of
the colonies, it will be one of the most
onward steps that has been taken since
the colonies were established. The con-
ference I allude to may not have this
result, but it will at any rate pave the
way for its accomplishment, so that the
desired end will be attained at no distant
period. I have no doubt that if the
various colonies determine to meet on
this important subject, that much benefit
Avill result, as the conference will pave the
way for a proper adjustment of the ques-
tion. What is the position of these colo-
nies now ? Do they not, in so far as
financial policy is concerned, present a

spectacle of ridicule to the whole world ?
Each with a different tajiff, seeking to
protect itself against the other, it was
not surprising that their position should
excite ridicule abroad. I hope, Sir, the
time is not distant when this anomalous
state of things will cease ; that we shall
sweep away all these obstacles to our
mutual advancement, all these provisions
for border customs, and by assimilating
our tariffs be enabled to enter into some
mutual arrangement under which each
colony will receive that proportion of
revenue to which it is entitled. It is with
this opinion, and considering the near
approach of the proposed conference, that
I feel I should not be justified in pro-
posing any alteration of our tariff at the
present time. It would be trifling and
displaying insincerity if, while professing a
desire for uniformity of tariff on the one
hand, we took on the other a step that
would tend to make the existing difference
still wider. It would, in my opinion, be
folly to widen at such a time the
difference between the tariffs. I hope
that in avoiding this I am assisting to lay
the foundation of a settlement of this
important question, and that the intended
conference will have the effect that I
have stated. I think we are this much
nearer to a settlement, that we have the
expression of one common feeling in
favour of a uniform tariff. At any rate
we should do nothing that might have the
effect of delaying a settlement that ap-
pears probable, and which must, I am
satisfied, prove beneficial to all the colo-
nies alike. I have now, Sir, to thank hon.
Members for the patience with which I
have been favoured while dealing with
what must be regarded as a very dry sub-
ject. A financial statement involving no
new taxes and proposing no alteration of
tariff must, I feel persuaded, be deemed
dry and uninteresting, and I have there-
fore the greater reason to feel obliged to
hon. gentlemen for the indulgence which
they have extended to me on this occasion.

* X -*>, o .-.-.-.-.-.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE THOMAS WAEE
SMAIIT, made 3rd September, 1863.

[From the Kydney Morning Herald of 4.th
'September, 1863.]

LEGISLATIVE ASSEMBLY.

Thursday, 3 September, 1863.

FINANCIAL STATEMENT.

MR. SMAET said : I beg leave to move
that towards making good the supply
granted to Her Majesty, the sum of 1,458
be voted from the Consolidated Eevenue
Fund of New South Wales. In moving
this resolution, I must say, and I do so with
much regret, that I cannot congratulate
the committee and the country upon the
state of our finances. On reference to page
four of the Ways and Means, hon. Mem-
bers will perceive that there is an esti-
mated deficiency on the 31st of December,
1863, of 439,471 14s. 9d., instead of, as
my predecessor contemplated, a surplus
of 55,274 lls. 5d. I may say, without
hesitation, that this is a state of affairs
I very much regret to bring forward, and
the committee will see that I am placed
in a very unpleasant position with regard
to the finances of next year. For this
state of affairs I take no responsibility.
All that I can admit is that the account
now submitted to the House furnishes a
faithful statement of the finances of the
country. Upon my entering office, the
first thing that engrossed my attention
was the financial statement to be made
to the House. I lost no time in putting
an officer of the department in motion to
prepare this statement, with which 1 \vns
ready at an early period of the session.
I was in a position, if circumstances had
not prevented it, to bring down my \V;i\ s

and Means, and Estimates of expenditure
within three weeks after Parliament assem-
bled. From the account prepared up to
the 31st December, 1864, hon. Members
will see that there is a gross estimated
deficiency of 653,811 14s. 9d. From
that I propose to take 439,471 14s. 9d.,
the estimated deficiency at the end of
1863, leaving a sum of 214,340 to be
dealt with separately as for next year.
I will, as briefly and as clearly as I can,
first explain the causes of the estimated
deficiency at the end of 1863 : The most
important of these is that my predecessor
has always looked forward to a better
state of things than the results justified ;
he looked for an increase of revenue from
sources whence it was not likely to rise,
and thus allowed himself to be led into
error in the Ways and Means of last year.
Beginning with 1862, 1 may mention that
the revenue estimated by my predecessor
was 1 ,712,881, whil st the amount actually
received during that year was 1,568,308,
showing a deficiency in the actual as com-
pared with the estimated receipts of
144,573. For the first half of the year
1863 the revenue received is 801,870,
and it is estimated that for the other half
we shall receive the sum of 829,447,
making a total of 1,631,317 for the year,
as against 1,785,690, estimated bymypre-
decessor, thereby showing a total estimated
deficiency of 154,373. This, added to
the deficiency of 1862, will make a gross
deficiency of 298,946. To account for
these deficiencies I have statements to
show where they have arisen. For the
year 1862 there are some few items in .
e MVSS of the Estimates, but there are de-
ficiencies uiuU-i 1 the following heads: Cus-
toms, ;3J),:il>o ; Colonial spirits, 4,048 ;

ME. SMAET.

[1863.]

gold, 10,740; Mint receipts, 4,714; land
revenue, 58,441 ; fees of office, 3,520 ;
fines and forfeitures, 871 ; electric tele-

raph receipts, 1,159 ; pilotage, harbour
ues, and fees, 51 ; tonnage dues (New-
castle), 85 ; interest on city debentures,
21,743 ; miscellaneous receipts, 6,293 ;
Bishopthorpe estate, 200 making a
gross deficiency in that year of 151,190.
From this I have to deduct an excess of
actual over-estimated revenue amounting
to 6,617, which is made up of 1,388
for postage, 1,363 for licenses, 904 for
rents (exclusive of land) ; 1,777 railway
receipts ; 1,145 immigration remittances ;
40 Chinese rates. This sum of 6,617
deducted from the gross deficiency leaves
a sum of 144,573 as the actual deficiency
in the revenue for 1862. I now come to
the year 1863. The estimate for the last
half of this year is calculated only as
far as we are able to do it according to
the receipts of the past year and those of
the first half of the current year. For
*the year 1863 the estimated deficiencies
are as follows : on customs, 27,853. It
has been said that an enormous sum has
been paid as customs duties on account
of an anticipated alteration of the tariff ;
but according to the Collector's state-
ment, the whole amount received in
that way was but 40,000, of which
10,000 have been repaid in draw-
backs. Besides, the revenue has fallen off
since then in consequence of this tem-
porary "rush," as it was called, and I
question very much whether the revenue
for the whole year will be any greater
than if no such rush had taken place.
The estimated deficiency in the land re-
venue of this year is 124,895, and in the
gold revenue 28,128; Mint receipts,
19,574 ; fees of office, 4,228 ; rents (ex-
clusive of land), 1,467 ; pilotage, harbour
dues, and fees, 468 ; tonnage dues
(Newcastle), 80 ; miscellaneous receipts,
2,669 making a total gross deficiency of
209,362. I may mention in justice to
my colleague the Colonial Secretary, that
he differs with me as to this estimate ; but
being desirous to have a surplus rather
than a deficiency, I confess that I have
made the estimate as high as I can whilst
for 1864 I have taken the very lowest esti-
mate. Against the estimated deficiencies
of 1863 there are some estimated excesses ;
these are for duty on refined sugar,
17,500; postage, 972; money orders

commission, 502 ; licenses, 1,780 ; fines
and forfeitures, 2,158 ; electric telegraph
receipts, 3,146; immigration remit-
tances, 1,504 ; interest on city deben-
tures, 21,742; Chinese rates, 100;
and Bishopthorpe estate, 400 making a
total excess of 54,989, which deducted
from the gross deficiency leaves a net
estimated deficiency of 154,373. No
doubt the deficiency in the account for
1863 has been much increased by charges
that ought to have been made years ago,
by charges that ought to have been placed
on the Supplementary Estimates of 1861
and 1862. The Supplementary Estimates
have been in the hands of hon. Members
for some time, and no doubt have been care-
fully considered. I have had them pre-
pared in such a way as to show against what
year the different amounts ought fairly to be
charged and I find that of the total amount
of the Supplementary Estimates no less a
a sum than 160,777 should have been
charged upon 1862 or previous years, but
as it was not, I have brought it forward
against the account of this year. I shall
not go through all the details of the Sup-
plementary Estimates, but only refer to a
few of the principal items contained in it.
For the Police the sum of 32,199, will
be required chiefly owing to a deficiency
in the votes of 1862 for the Police and
the gold escorts. For the Registrar
General's department an additional sum
of 4,615 is rendered necessary for the pur-
pose of carrying out the provisions of the
Real Property Act ; for National and
Denominational Schools, 10,000 an
amount already expended ; for Asylums
for the Infirm and Destitute, in addition
to the amount already voted, 2,765 ; for
charitable allowances, 12,101 ; for seed
wheat and oats distributed, 13,500 ; for
distilleries and refineries, in order to carry
out the provisions of the new Act, 652 ;
for the Post Office, an additional sum of
7,995, required chiefly for an increase
of country postmasters in 1862 and 1863,
and a deficiency in the provision made
for the steam postal service of 1859. For
the Money Order Department, a new
service, 4,459 will be required. Of this
amount 2,000 is for a loan to the de-
partment, already in course of repay-
ment, so that the actual charge on the
revenue will only be 2,459. We then
have for stores 70,684. This large item
is almost entirely composed of the actual

[1863.]

ME. SMAET.

and estimated cost of warlike stores,
purchased, or ordered to be purchased, in
England for the service of the colony, and
to the increased consumption of stores by
the police. In this item is also included
the sum of 17,000 to be paid for Arm-
strong guns ordered from England. These
may not arrive during the presentyear and,
if not, that amount will not have to be paid
out of this year's revenue. Having how-
ever been ordered and sent for, provision
must of course be made for them on the
Estimates. There is also a sum of 4,000
for revolvers and carbines to arrive. Then
we have for Telegraphic Messages,
5,920 ; for gold, &c., lost by robbery
of Government escort in June., 1862,
13,490 ; and for Survey of Lands,
20,050. This last item consists of a
deficiency in votes for commission on land
sales, &c., for 1862, of fees to Licensed
Surveyors for 1861-2, and of an increase
in the staff of the department rendered
necessary by the increased work thrown
upon it. For the Gold-fields, 3,064 are
required. Of this amount 1,500 are
required to meet unforseen expenses at
the gold-fields for 1863, inadvertently
omitted in the General Estimates by
the Lands Department. For roads other
than main roads, 13,996 are required ;
a portion of this sum has already been
paid under the authority of the Executive
Council. For Miscellaneous Services
there is a sum of 19,017, chiefly for
expenses incurred under the Cattle
Disease Prevention Act. For works and
buildings, some of which are already in
progress, 46,414 are required and for
roads and bridges, 6,439 ; for electric tele-
graphs, 1,819, and for miscellaneous,
services, 1,971; the principal of which
are the preliminary expenses of the late
Morpeth Kailway Company, and the
payment, in accordance with a resolution
of the Assembly, of Mr. Lenehaii's claim
for furniture supplied to Government
House. These are the principal items
of the Supplementary Estimates, which
amount in the aggregate to 332,175, and
which with the amount to be raised by loan,
bring the total up to 353,854. Though
the Estimates have been made up as
carefully as could be, i think it right to
mention that I shall, if I have the
honour to retain my position, have to
come down to the House, before the year
is out, with a further Supplementary

Estimate for this year, for, notwithstand-
ing this present large Supplementary
Estimate, the sums contained in it will not
be sufficient for the service of 1863, as we
are already without funds for carrying
out several important works. Already
13,000 have been paid in anticipation
of this further Supplementary Estimate.
Altogether we shall require 50,000 or
60,000 more. Exclusive however of
that further Estimate there will be a
sum of 439,471, or, in round numbers,
450,000, unprovided for at the end of
this year. I intend to propose to the
House to provide for this sum by loan
by debentures payable in five years
if it should be necessary to issue them.
I do not see how I can carry on the
financial affairs of the Government if
I have not the power of doing this, unless
by using the trust moneys now in our
hands, and that I would rather not do.
All I ask is that this sum shall be provided
for that I shall have power to raise it by
loan if I require to do so. Possibly I may
not require to use the power. The pre-
sent is a fruitful month for revenue, being
the one in which the assessment portion
of the land revenue comes in. But I think
that I ought to be placed in an indepen-
dent position one that would enable me
to pay off the charge at once if necessary.
I do not see any better way of doing this
than by the issue of debentures. In going
through the Estimates it appears that
there have been what are termed savings
a term which, I think, has been very
properly applied. The Auditor General
certified in 1863 to a sum of 112,630
having been saved upon the votes taken
in 1861 and 1862. It is clear to me that
there will be a saving to that amount, and
I happen to know that there will also be
a further saving on the votes of 1862,
as well as considerable savings on those
of the present year. With these savings,
which are principally effected upon pub-
lic works and buildings, the probability
is that I shall not require these deben-
tures ; but, nevertheless, I shall ask the
House to give me the authority to issue
them, in the event of my requiring to
use them. I ask the money only to clear
off this deficit, but I would never consent
to borrow money to pay current expendi-
ture. Before I dispose of this branch of
the subject, I may say that there is an
item which I am entitled to take into

100

ME. SMAET.

[1863.]

account, although I have not done so. It
is the sum o/ 353,683, being the amount
of the balances due by conditional pur-
chasers of land, on account of their selec-
tions. As the money will be due next
year, I am entitled to take credit for it.
It will be a disgrace to any Government,
no matter what it may be, if they do not
get it. If I remain in my present posi-
tion I will leave no stone unturned until
I do get it. I do not expect, of course,
that it will be all paid next year, but I
think we may depend upon receiving
40,000 or 50,000 from persons who
are anxious to get titles for their land, and
who would be willing to pay even now if they
were allowed. Although the amount will
be paid off year by year, still I am entitled
to take the whole sum into account.
[Mr. EOTTON: There are plenty who
will pay now if you let them.] So I say.
[An honorable Member : " They are not
bound to pay at the end of the three
years."] No ; but then they will be charge-
able with interest. If they voluntarily
come forward and offer the money I can
and will take it. [Mr. LEARY : " But I
understood you to say that you would com-
pel them to pay."] What I meant to say
was that I would insist upon the terms
of the conditional purchase being carried
out. I now invite the attention of hon.
Members to No. 3 of the Ways and Means.
It will be seen that the estimated charges
on the Revenue for 1861 amount to
1,905,490, whilst the revenue is esti-
mated at only 1,691,150, showing an
estimated deficit on the year of 214,340.
Whether the House will sanction the
proposed expenditure is not for me to
say ; but, as I find it on the Estimates,
it is my duty to provide for it.
I will now go through a few of the
items that make up this large increase
in the Estimates for 1864. In the first
place we have an increase of 1,000 for
the Naval Brigade, 2,500 having been
voted last year, whilst 3,500 are required
this year. Then we have an addition of
8,029 for extension of gaols under the
District Courts Act ; for the Eegistrar
General, 4,720, to carry out the provi-
sions of the Eeal Property Act, and for
National and Denominational Schools,
10,000. For the asylums for infirm
people there will be required an increase
of 2,000 ; for charitable allowances,
2,400 ; and for the Customs an addition

of 2,239 is rendered necessary princi-
pally by an increase in the business of the
department. There will also be a sum. of
775 required for carrying out the provi-
sions of the Act recently passed in refer-
ence to Colonial distilleries. While upon
that item, I may mention that we are
losing at the present time about 1,200
a-year, independent of the losses sustained
by the revenue, in consequence of the
passing of that Act. We should have
been in the receipt of 1,200 a-year more
from the distilleries, but for a defect in
the Act. As it will be necessary for the
House to authorize us to receive that
money, I propose to bring in a Bill
for the purpose as soon as I possibly
can. There will be required for the Post
Office, in addition to the present expen-
diture, the sum of 6,172 ; for the
Money Order Department, 2,400 ; for
the Colonial Stores, 11,613 ; for miscel-
laneous services, 4,500 ; and for the
survey of lands, 11,036 an increase
rendered necessary by the appointment
of the Deputy Surveyor General, the
Inspector of Land Offices, an increase
in the number of draughtsmen and
clerks, and an increase in the pro-
posed vote for licensed surveyors. For
the Occupation of Lands an increase of
1,050 will be required, owing to the pro-
posed appointment of a chief clerk and ac-
countant. There will be required an increase
of 1,535, owing to the appointment of
two examiners and three inspectors. For
railways, an increase of 6,585 will be
required principally for the working
expenses of the Windsor and Kichinoud
lines. For Public AVorks. in connection
with the improvement of harbours and
rivers navigation, an increase of 5,800
will be required; for roads and bridges,
5,675 ; and for other public works,
23,165. Under the head of special
appropriations 40,000 additional will be
required for payment of interest on
debentures, and 5,000 for drawbacks.
This latter item will be required princi-
pally in consequence of the large quanti-
ties of tea and sugar that were taken out
of bond in May and June last during the
excitement in reference to the expected
alteration in the tariff, which have since
been shipped to other ports. These items
make together a sum of 154,689, that
being the total increase in the Estimates
for 1864 as compared with those for

[1863.]

MR. SMART.

101

1863. Against that side of the account I
may mention that the estimated revenue
for 1864 a very low estimate being taken
is 1,691,150, against 1,631,317 for
this year. I believe that estimate to be
a very low one, and that it will be con-
siderably exceeded. There can be no
doubt that the revenue has been steadily
increasing for several years past, as I
will show by figures. In the year 1855
the revenue amounted to 1,002,636 ; in
1856 it was 1,101,876; in 1857,
1,156,966; in 1858, 1,368,390; in
1859, 1,511,961 ; in 1860 (when Queens-
land was separated from this Colony),
1,309,891 ; in 1861, 1,432,406; and in
1862, 1,611,570. I think these figures
afford a certain indication of the pros-
perity of the Colony. Well, I estimate that
there will be an accumulated deficiency at
the end of 1864 of 653,811 14s. 9d. I
have given the matter much considera-
tion, and I see no other way in which
that deficiency can be provided for than
by borrowing money to cover the amount
estimated to be deficient at the close of
1803, which I am prepared to recom-
mend ; and by increasing the taxation to
meet the estimated deficiency in the re-
venue for 1864. I will now mention the
items on which I propose to increase the
taxation. First of all, I may say that
the Post Office has been quite a drag
upon the revenue, which ought not to be
the case. I do not think it a proper
principle that the expense of the Post
Office should be borne by the general
revenue. This year that department will
be carried on at a cost to the country of
54,000. Two years ago a Board was
appointed to inquire into the working
of the Post Office department, and I,
as a member of that Board, agreed to
recommend to the Government that an
increased postage should be placed upon
letters, and also a tax upon the postage
of newspapers. And I am now quite
prepared to brave any unpopularity that
might be incurred from recommending Ihe
tax on the postage of newspapers. My
colleagues, however, do not concur in that
recommendation. There are no doubt
many objections to the proposal, but I
confess 1 do not see the soundness of
them. If we are to carry newspapers a
distance of four or five hundred miles into
the interior, I do not set.' why we should
not charge for doing so. My advice has,

however, been overruled by my colleagues,
and I do not therefore intend to propose
any charge on the postage of newspapers.
I confess, nevertheless, that my opinion
remains unshaken, and I should like to see
the charge imposed. I propose, however,
to increase the postage on town letters
from Id. to 2d., and on inland letters from
2d. to 4d. I may mention that, in the sister
colony of Victoria, where there are rail-
ways for a length of 120 miles in different
directions, the postage rates are the same
as those I now propose. At the same time
I may say this that I would not raise
the present rates if the Post Office paid
its own expenses. Then I propose to tax
bills of exchange, inland and foreign, and
promissory notes, not payable to bearer,
on-deinand, at the following rates : For
50 and under, Is. ; exceeding 50 and
not exceeding 75, Is. 6d. ; exceeding
75, and not exceeding 100, 2s. ; and
for every additional 100, and any
fractional part of 100, 2s. [Mr. PID-
DINGTON : What is the estimated amount
of tax to be raised on bank notes ?]
The amount is 14,000. The next
tax I propose to make is on promis-
sory-notes payable to the bearer on
demand, issued by any bank or banking
company, at the rate of, for every 100
of the average amount as certified under
4: Tic. No. 13, 25s. ; and on drafts, cheques,
or orders for the payment of any sum of
money to the bearer on demand, Is. The
additional taxation on postages would,
according to the number of letters now
posted, realize 40,000 a year ; but
allowing for a falling off in the number
in consequence of the higher rate, the
amount has been estimated at 25,000.
The additional postage and the taxes on
bills of exchange can be collected without
any additional expense ; and the taxes on
promissory-notes I propose to be made
payable every quarter as the bank retur: s
are sent in to the Government. I be-
lieve that Custom-house duties are the
most reasonable duties that can be im-
posed. They fall upon all alike, and are
easy of collection. And one reason why I
propose additional Customs duties is that
they can be collected without incurring
additional expense. The articles upon
which T propose to place additional duties
are those which may fairly pay increased
taxation without in any way affecting
the comfort of the poorer classes. I

102

ME. SMAET.

[1863.]

propose that boots and shoes shall
pay a duty of 6s. per dozen pair ;
candles of all descriptions, Id. per Ib. ;
playing cards, 21s. per dozen packs ;
carpets, 3d. per yard ; and carriages
with four wheels, 5 each, and with two
wheels, 2 10s. each. I am quite pre-
pared to admit the difficulty there is with
regard to this item, owing to the immense
difference in the value of imported
carriages. The next item is cement, on
which I propose to place a tax of 2s. per
barrel ; on confections and preserves I
propose to put a tax of 2d. per Ib. ; on
corks 3d. per Ib. ; on dried fruits, nuts,
and almonds, 10s. per cwt. ; on hops,
20s. per cwt. ; on malt, 6d. per bushel ;
and on musical instruments the follow-
ing taxes : Grand pianofortes, 5 each
upright or square, 2 10s. each ; har-
moniums, 10s. each stop ; concertinas,
accordeons, and flutinas, 2s. 6d. each ; and
brass instruments, 9s. per Ib. I propose
also the following taxes : On oils, 3d. per
gallon ; on plate gold, 20s. per dozen ; on
plate silver, Is. per dozen ; on pickles, pre-
served in vinegar, 3d. per Ib. ; on rice, 5
per ton ; and on salt, 20s. per ion. It is
nonsense to say, as some have <!<>ne, that
the tax on salt will be a burden upon the
poor man, for I do not thinlc, under
ordinary circumstances, he will have to
pay more on account of this duty than
three-halfpence per year. It does not
amount to half a farthing a pound. The
next item of duty I intend to propose
is Is. per ton on the registration of ships.
That is an expensive item; but as it is
necessary that clerks should be in attend-
ance to measure ships, I think it only
proper that such a charge should be
made. The next items are silks and
satins, on which I propose to levy a
duty of 5s. per Ib. I also propose to put
a duty of a halfpenny per Ib. on soap ; 5s.
per gallon upon varnish containing any
quantity of spirit ; 5s. each upon gold
and 2s. 6d. upon silver watches, and 2s. 6d.
upon clocks. I also propose to place a
duty upon timber of Is. per load of fifty
cubic feet, and upon vinegar 6d. per gallon.
These are the several items I propose to
introduce to the House as the new tariff.
There are, however, two or three items
of the existing tariff that I also propose
to increase. I propose to increase the
Customs duties on ale, porter, and beer
from Id. in wood, and 2d. in bottle, to 3d.

per gallon. I propose to increase the duty
on coffee and chicory from 2d. to 3d. per
Ib., and to increase the duty on wine from
2s. to 3s. per gallon. These are the only
items in the existing tariff with which
I propose, to interfere. In addition to
these items, I intend to impose a duty of
10s. on every entry of goods shipped for
drawback a small charge which will do
little more than cover the expense. Then
there is another item of 1,500 for suf-
ferance wharfs. This is a matter, how-
ever, which has been anticipated by the
Bill now before the House. The total
amount which I estimate will be raised
by these additional duties is 238,800.
Well, these are the items from which I
propose to raise revenue to meet the
estimated deficiency in the revenue of
next year. I will now call the atten-
tion of hon. Members to the revenue
which has been derived from the Customs
during the last three years, to show
that it has been gradually increasing.
In 1862 the revenue was 609,373 ; for
1863 it wiU be 644,147 ; and it is esti-
mated that in 1864 it will amount to
621,000. There is also a sum of 45,000
as the estimated duty on refined sugar and
molasses. The duty on spirits distilled in
the colony was in 1862, 35,643 ; in 1863
it will be 40,000. In some of the items
of revenue there has been a decrease. The
Mint receipts were in 1862, 32,807 ; in
1863 they will be 22,426 ; and the sum
of 24,000 is set down for 1864. The
gold revenue in 1862 was 87,890 ; for
1863 it will be only 50,072 ; but it is
estimated that the revenue in 1864 will
amount to 51,100. The land revenue in
1862 was 416,770 ; for 1863 it will pro-
bably be 371,095 ; and it is estimated
that the receipts in 1864 will amount to
431,700. The postages in 1862 amounted
to 56,305 ; for 1863 they will be 56,972 ;
and it is estimated that in 1864 they will
amount to 62,000. The money orders
commission in 1862 amounted to 502,
and it is estimated for 1863 at 1,070.
That is a large increase, and I have no
doubt that as the system is extended it
will be considerably augmented ; but
whether the establishment will be a pay-
ing one I am not prepared to say. I have
some doubt of it but it is worth a trial.
The licenses in 1862 amounted to 74,003;
for 1863 they will be 76,910 ; and they
are estimated at 80,910 for 1864. The

[1863.]

MB. SMAET.

103

fees of office in 1862 were 24,631 ; for
1863 they will be 24,132, and they are
estimated at 26,970 for 1864. The rents,
exclusive of land, were in 1862,- 22,676 ;
for 1863 they will be 22,341, and they
are estimated at 23,028 for 1864. The
railway receipts in 1862 were 97,029 ;
for 1863 they will be 137,185 ; and they
are estimated at 142,000 for 1864. The
electric telegraph receipts were, in 1862,
23,440 ; for 1863 they will be 33,146 ;
and it is estimated that in 1864 they will
amount to 35,000. I have great satis-
faction in informing the committee that
the progress of the telegraph depart-
ment is very encouraging, and I have
a report before me in reference to tlrat
department, which, with the permission
of the committee, I will presently read.
The immigration remittances were, in
1862, 21,145; for 1863 they will be
26,504 ; and it is estimated that they
will amount to 30,000 in 1864. The
pilotage rates and harbour dues amounted,
in 1862, to 14,339 ; for 1863 they will
be 15,032 ; and for 1864 they are esti-
mated at 15,000. The interest on city
debentures for 1862 was 10,000; the
revenue from this source for 18(53 will
be 42,664, and for 1864 it is estimated
at 20,872. The miscellaneous receipts
in 1862 were 34,299 ; 38,331 is the
amount set down for the present year,
and the estimated revenue from this
source for 1864 is 31,520. The total
revenue of 1862 was 1,568,308 ; the
total revenue of 1863 will be 1,631,317;
and the estimated revenue for 1864 is
1,691,150. It will thus be seen that on
the whole there has been a gradual in-
crease in the revenue during the last
three or four years. I will now read the
report to which I referred a short time
ago, relating to electric telegraphs. It is
from Mr. Cracknell, the superintendent,
and was prepared at my request. It
says : " Telegraphic extension has made
a vigorous advance, the colony now pos-
sessing 2,174 miles of lines, having 2,539
miles of wire, which may be divided as
follows: Southern lines, 921 miles of
lino, 1,289 miles of wire ; Western lines,
533 miles of line ; 533 miles of wire ;
Northern lines, 717 miles of line, 717
miles of wire. Total, 2,174 miles of
line ; 2,539 miles of wire, which will
be further increased to the extent of
2,800 miles by the end of the pre-

sent year. The extensive progress here
shown, and the fact that it is only five
years since telegraphic communication
commenced in New South Wales, prove
that the spirit of enterprise has not been
absent in this important matter, while
the financial results show that telegraphs
have been fully appreciated by the public.
The financial features of the telegraph
exhibit an encouraging improvement,
which augurs well for further progress ;
and when the works now in course of
construction are completed a further in-
crease in the revenue of the department
may be expected. The following shows
the business done on the lines during the
last three years : 1860, messages, 53,951 ;
receipts, 12,136 13s. 2d. 1861, mes-
sages, 74,224; receipts, 16,542 8s. 9d.
1862, messages, 104,660; receipts,25,513
9s. 8d. The financial results of the
business of these three years were as fol-
lows: In 1860 the expenditure on lines
open for traffic was 48,454, the gross
revenue 12,136, the working expenses
9,408, the .profits 2,728, or 5| per
cent. In 1861 the expenditure on lines
open for traffic was 60,615, the gross
revenue 16,542, the working expenses
12,915, the profits 3,626, or 6 per
cent. In 1862 the expenditure on lines
open for traffic was 116,234, the gross
revenue 25,513, the working expenses
16,780, and the profits 8,733, or 7f
per cent." This would still leave a con-
siderable profit even if we were to deduct
the Government messages, which do not
cost more than three or four thousand
pounds a year. The report continues :
" These results may be considered the
more satisfactory considering that many of
the stations, which are necessary for the
maintenance of the through lines, return
little or no revenue, and that several of
the late extensions have not yet had suf-
ficient time to develop themselves, it
being always found that branch lines pay
better after the first year from their
opening. The results alsd afford indirect,
but valuable, assurance that whenever it
may seem desirable to take action in the
establishment of the Anglo- Australian
telegraph, that inestimable boon may, as
a remunerative undertaking, be secured
without fear of enlarging the public
burthens." I will no^i refer to another
document in order to show our position
in the monetary world, and the value of

104

ME. SMART.

[1863.]

our securities in the London market. Our
debentures have steadily increased from 96
in 1862 to 99|, 99f , 100, and 102 in 1863,
and now 103 and 104 can be obtained.
This, it will be admitted is satisfactory.
I have several other returns which 1
might read, but I will not trouble the
House with them. I have not the

eloquence of my predecessors in office,
but I have endeavoured to deal with this
matter in a practical way. I hope I have
satisfied the House ; if so, I am gratified ;
if not I am sorry, as I have done my best.
It only remains for me now to move the
resolution already read to the Committee.

*e. ib -. <t -. te - * -- <t -. e "-f-

zjtfgte:

THE H

ONORABLE GEOFFREY

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEOFFREY EAGAR,
made 2nd December 3 1863.

\_From the Sydney Morning Herald of 3rd
'December, 1863.]

LEGISLATIVE ASSEMBLY.

Wednesday, 2 December, 1863.

FINANCIAL STATEMENT.

ME. EAGAK said : Mr. Wisdom, iu
submitting, according to custom, the
financial statement of "Ways and Means
to this Committee, I feel that I stand in
a position of greater responsibility than
any of my predecessors, for the reason
that not alone have I to declare the
financial policy of the Government to
which I belong, but I have to occupy the
delicate and invidious position of arbiter
between the late Government with their
differences iu regard to the alleged defi-
ciency on the one side, and this Committee
and the Country on the other a position,
I beg leave to say, that has not been occu-
pied by any preceding finance Minister.
The House will recollect that in the early
part of September the hon. gentleman who
preceded me in the difficult position which
I occupy brought forward his "Ways and
Means a public document which was laid
upon the Table of the House. He esti-
mated that at the end of 1863 there would
be a deficiency of 439,471, and that at
the end of 1864 there would be a defi-
ciency of 653,811. These figures were
startling enough, but they did not occa-
sion great surprise, because the public
were prepared on the announcement of
the policy of the late Government to find
something of that kind, though not a defi-
ciency to that extent. In the course of
the ensuing financial discussion in Com-
mittee of Ways and Means, the position
Q

assumed by the late Minister and his pre-
sumed authentic figures was sought to be
controverted by the late Premier and the
Minister for Lands. They took up
different positions and different grounds
of contradiction. The Hon. Member (Mr.
Cowper) endeavoured to explain away the
deficiency by taking it for granted that the
Treasurer had a right to take into account
those mysterious items called savings ;
these he said the Treasurer had a right to
claim credit for. Of these so-called savings
there was said to be a present sum of
100,000, and a prospective amount of
200,000. He also stated that there was a
possible land revenue beyond their esti-
mate, and he brought forward other figures,
altogether reducing the deficiency as stated
by the late Treasurer to the extent of
600,000. The Hon. Member then en-
larged upon the condition of the Country,
upon the soundness of its business, and
the magnitude of its resources matters
that no one had brought in question. He
took occasion to statethe amount of money
expended upon public works, education,
and other useful things, which he said had
been done without a single item in the
way of fresh taxation. He also urged
that, in the face of these facts, the House
would be right to exonerate the then
Treasurer from the misfortune of his pre-
vious statement, and to regard it as a fact
that there was no deficiency at all. The
late Secretary for Lands followed the same
suit on the question. He enlarged upon
the fact of a constantly increasing land
revenue, and intimated that the one great
defect in the Treasurer's statement was
that he under-estimated the land revenue
for the remainder of 1863 and for the
year 186-1. Having laid that flattering
unction to his soul, he brought it forward

106

MB. EAGAK.

[1863.]

to show why the alleged deficiency had no
tangible or bodily existence. I must do
the late Treasurer the justice to admit
that, in the first instance, he made (as far
as he knew the condition of the public
finances) a reasonable, fair, and straight-
forward statement ; but I must blame
him, having deliberately put his name to
figures, for abandoning them. I blame
him for making a specific statement with-
out the requisite previous inquiry, and
subsequently modifying the fatal error
into which he had run. He followed in
the suit of the Chief Secretary and Minister
for Lands, and on the 24th of September
adopted the apology they had furnished,
no doubt feeling that he left the comfort-
able impression upon the Committee that
the fact of a deficiency existing was
completely explained away. It must
now be evident that no such result
was produced upon the minds of the
Committee. The artful pleading of the
late Chief Secretary, the bluster and
romancing of the Minister for Lands,
and the special pleading of the Treasurer
himself, did not produce the contemplated
effect upon the Committee of Ways and
Means, and the appearance of myself and
colleagues on these benches is about
the best evidence I- can adduce on that
point. The late Attorney- General
blamed the House for giving way to the
too frequent calls of country Members
for expenditure on local public works.
Seeing this antagonism and confusion
among Ministers, the House lost confi-
dence in the Treasurer's figures. It was
amid this confusion of figures, erroneous
statements, and errors of judgment, that
the present Ministry took oifice, and it is
clearly my first duty to lay before this
Committee a correct statement of the
public finances as they will stand at the
close of the year. I have adopted an
unusual course, which, however, I hope
will meet with the approval of the Com-
mittee. I have discarded the conven-
tional form of previous Ways and Means.
I have divided them into two Parts. Part
I makes up the public accounts to 31st
December instant, and shows clearly the
estimated deficit at the close of the
present year. Part II exhibits the esti-
mated revenue and probable expenditure
for next year, showing a large deficiency,
for which, however, we are not responsible.
The accounts, embraced in Part I, differ

from all preceding statements laid before
Committee of Way sand Means in this par-
ticular, that while preceding Treasurers
dealt in estimated figures, these are real
and ascertained figures, brought together
with the authority of the Auditor General.
Tin's document shows the exact state of
revenue (as nearly as can be ascertained) at
the close of the present year. The House
will see that on the 31st December. 1863,
there is a balance of estimated deficiency of
expenditure over and above the estimated
revenue -to the extent of 534,539 8s.
6d. I have dealt with the affairs of the
Country as if I were dealing with the
estate of a firm in embarrassed circum-
stances. Those who know my previous
career will admit, at all events, that I am
qualified in that point of view to go into
the accounts. The firm or co-partnery
whose embarrassed estate I have been
called upon to manage I may be permitted
to call Cowper & Co. That firm alleged
that they had successfully managed public
affairs ; but suddenly the creditors (the
Country), as represented in the Assembly,
began to be suspicious that all was not
right, and looking into the state of affairs
their suspicions seem to be well founded.
The new set of co-partners have per-
formed the task of investigating the con-
dition of the estate, and of putting a
right, just, and true statement before you
the creditors. It is in this plain, business-
like -way that I have dealt with the affairs
of the Country ; and I have commenced
iny account on the 1st November, 1863.
The first paper I shall refer to is the
account current of the Consolidated
Eevenue Fund in relation to the charges
thereon, from the 1st November to the
31st December, 1863 ; and I will now
state the reasons for taking this date of
the 1st November. We took office on the
16th October. In paying public money
for public purposes, the various public-
officers send in monthly accounts to the
Treasurer and the Auditor General of all
the cheques drawn by them for the service
of their departments during the month.
By fixing the date I determined upon a
time at which the whole expenditure of
the Country, in so far as it had gone,
could be posted up. I could not fix the
later date of the 1st December, because
I expected to have made this statement-
last week, and should have done so had
not the business of the House been

[1863.]

ME. EAGAR.

107

delayed by the Hon. the Premier not being
able to take hk seat, awaiting the returu
of the writ. And now, what is the first
item of this account ? I will first state
briefly that in the mode by which I have
dealt with these figures, I have altogether
discarded all estimated balances, and have
dealt only with actual and ascertained
figures. I desired to put it this way. I
take the 1st November, and I say what
are our actual liabilities, and what is our
cash in hand on that day. And first what
is our position with regard to the cash
in hand ? So far from having revenue
in our coffers wherewith to meet the cur-
rent expenditure of the Country at that
date, the revenue account was over-
drawn 33,110 3s. But the Committee
will pardon me if for a short time I
retrace my steps. Whilst proposing to
deal with the affairs of the Country in
the same way as I would have done
with an insolvent estate, I wished to do
so in such a way that it should not
be said that, from personal feeling or
from party bias, I had made the amount
of deficiency more than it really was. In
order to put it out of the power of every
individual, either in the House or out of
it, to say that I had made the balance
more or less than it should be, I sought
the valuable assistance of the Auditor
General that gentleman upon whom Mr.
Cowper so recently passed a very high
eulogium. In this I am very happy to
concur with him, because, in my opinion,
there is no more painstaking or truthful
officer in the service of the Country. This
is the reason why the return is so bulky.
I applied to the Auditor General, and
from him I obtained these figures, taken
from the books of his office. So that
in dealing with this mass of figures,
the- Committee will understand that,
\\hilst the collocation is mine, the details
hare been suppliedby the Auditor General.
1 make this statement in order to prevent
Hon. Members from getting up and saying
that, from personal or party motives, I
had presented figures to the House froin
any other than an authorized source.
Instead, then, of being able to tell the
Committee that, on the 1st November, I
had 50,000, or 5,000, or even 1,000
in hand, I am in the sorry position of
having to state that our account is over-
drawn ; and for a confirmation of this I
to the document marked A, being a

statement of the balances at the credit
of the Treasurer on the 31st October,
1863. This has been furnished in iny
department, and bears the signature of
the Accountant, Mr. Wells. From this
it will be seen that the aggregate available
balance in the Bank of New South Wales
on that day was 186,294 9s. Id. The
balances are set out under the different
heads of Consolidated Revenue, Loans
Fund, Assessment on Sheep, Church and
School Fund, and Lodgments, the overdraft
on the Consolidated Revenue Account
being shown to be 33,116 3s. At the
bottom is a certificate from the Secretary
of the Bank of New South Wales, showing
the available cash balance of the Govern-
ment on the 31st October to be 186,399
11s. 6d. The slight difference between the
two amounts is caused by the non-pre-
sentation on the day they were given of
cheques drawn by the Treasury on the last
day of October. So that a more complete
and satisfactory document, in so far as the
actual cash balance is concerned, could
not be put before any business men, I
have taken then as the first item on the
debtor side of my balance-sheet the over-
drawn Bank account of 33,116 3s., but
something more will have to be added to
this, and forms the next item on the debtor
side. This is the amount of cheques drawn
by public officers on the Bank of New
South Wales up to 31st October, 1863,
not presented for payment at that date,
estimated at 18,088 3s. lOd. So that if
these cheques had been presented before
the 31st October, our overdraft on the
1st November would have been 51,204
6s. lOd. With reference to this important
subject, I desire to give the House all the
information in my power. Up to the 14th
August last, the kind of accounts kept in
the Treasury at all events the state of the
balances laid daily before the Treasurer
showed on the face of them no clue
to the actual state of the Consolidated
Revenue balances. Much to his credit,
my predecessor, soon after coming into
office, altered the form of this statement,
in such a way as to show the balances to
the credit of each account. Taking then
the 14th August, the day on which the
change was made, as a starting point, I
will give the weekly returns of the balances
to the credit of Revenue proper. On the
14th August there was a balance to the
credit of Revenue of 47,026. On the 31st

108

MR. EAGAE,

[1863.]

October, there began to be an overdraft
to the extent of 33,116 ; and to explain
how this arose, I may state, that in the
course of our operations as a Grove rnment,
we have to make considerable payments
in London, such as interest on debentures,
immigration expenses, and advances to the
Agents of the Colony to enable them to
make purchases, on account of the Govern-
ment. We had to pay 366,071 on that
date, having engagements to that extent
that required to be met. Credits are already
opened with the Oriental Bank in Lon-
don, by means of the debentures entrusted
to them to sell, and as we have always a
large amount of funds there awaiting
transmission, we find it a saving and a
convenience to meet our engagements in
England by temporary advances from the
Loans Account, and it was in consequence
of having to refund advances of this kind
that we first got an overdraft. I think it
right here to make a statement in regard
to Loans in relation to Eevenue. The idea
has gone abroad that the Consolidated
Revenue was largely indebted to the Loans
Account, and I must say that I was myself
until lately under the impression that the
Loans Account had been very largely used
to eke out an insufficient revenue. I am
happy to be able to state that the Loans
Account is untouched. The accounts
up to the end of 1862 have been laid before
the House by the Auditor General fully
authenticated. And now I have to say
that we have paid all that was due to Loans
Accotmts up to the 1st November last, so
that whatever may have been the impres-
sion on the public mind, I hope it will now
be removed. On that date, then, 74,000
was transferred from the credit of the
Consolidated Eevenue to the Loans Ac-
count to meet the balance due for advances
to meet these English payments made
temporarily out of that account. The
overdraft continued each week increasing
in amount until at the end of last month
it amounted to 67,287 ; so that in
fact the Government has been compelled
to use the mixed fund of Loans and
Lodgments Accounts to cover the cur-
rent expenditure of the Country. This
evil has originated in the practice of
keeping all the money of the Government
in one account. It originated in 1859,
when the Government entered into a con-
iract with the Bank of New South "VVale.s
for lodging all their money there. There

all was kept in one common account. As
a consequence of this, until the alteration
was made by my predecessor, it was
never known what portion of the total
amount in the Bank was Eevenue and
what portion other accounts ; and, as a
matter of practice, this mixed fund, until
the time of my predecessor, was that which
the Government paid with to meet current
expenses. Such a state of things was not
to be tolerated, as it is easy to see the
difficulties that any Government would
very soon be led into if it were to be per-
sisted in. I come now to the third item
of my account the amount of payments
from the Consolidated Eevenue Fund,
prior to the 31st October, 1863, now want-
ing the authority of Parliament for the ex-
penditure (say) for the service of the year
1860 and previous years, as per Auditor
General's statement marked B, 3,623 2s. ;
for the service of the year 1861, as per
ditto, marked C, 3,089 13s. 3d.; for
the year 1862, as per ditto, marked D,
146,723 19s. 8d. ; for the year 1863,
up to 31st October, as per ditto, marked
E, 79,866 3s. 4d. ; making together a
total of 233,302 18s. 3d. Now I do
not pretend to say that any part or
even the whole of this expenditure
was not justified by public exigency. I
should be very sorry, with my present
imperfect knowledge of all details, to
allege any but proper motives to my
predecessors in office ; but the fact is
here, that a large expenditure has been
made without the authority of Parliament,
and to an extent that must have had the
effect of very dangerously disturbing the
success of previous financial arrangements.
It was a disturbing element that must have
had the result of throwing out the calcu-
lations of all my predecessors, and which
would assuredly have thrown me out in
mine, if it had not been at once dealt with.
The reason I have brought it into account
is this: I have placed it on both sides of the
account, because themoneyhavingbeeu ex-
pended, the amount will not affect the bal-
ance. If it had not been spent before the
31st October, I should have had to place it
on the debit side only ; but now I enter it
here on both sides solely for the purpose
of showing the fact that such an expendi-
ture has been made, and of getting the
authorization of Parliament for the ex-
penditure. As between the Parliament
and the books of the Auditor General

[1863.]

MR. EAGAE.

109

this sum appears as an unauthorized
expenditure, and I introduce it into my
account current in order that the House
may be in a position to see exactly how
the case stands, and may, if it should be
thought proper, include that sum in a
vote for the legalization of such an
expenditure. The money is spent and
gone, and I therefore think that would be
the best mode of proceeding in reference
thereto. It is a sum irrespective of that
Supplementary Estimate which the Go-
vernment, with which I am connected, will
require to carry on the Government for the
remainder of the year. I now come to
item No. 4 the amount of Supple-
mentary Estimate for the remainder of
the year 1S63, comprehending from 31st
October of the said year all sums (as far
as can be ascertained) required to carry
out Services previously contracted for or
actually commenced, or considered to be
necessary for the Public Service. This
our estimated expenditure required for
the service of the unexpired portion of
the current year is marked F, and
amounts to the sum of 178,271 9s. 6d.
It contains the money which we require
to carry on the Government for the
months of November and December this
year. I take leave to observe that this
Supplementary Estimate differs from that
brought forward by my predecessor, the
Hon. Mr. Smart, in this that in the Hon.
Member's Supplementary Estimate autho-
rized and unauthorized expenditures were
so muddled up together that it could not
be gathered therefrom what was and what
was not duly authorized. I now come, in
the account current which 1 have laid
before the House, to an item, marked No.
5, such as I venture to state has never
before been known in the annals of any
Country possessed of responsible govern-
ment. This item showed the amount of out-
standing liabilities at 31st October, 1863,
under the Appropriation Acts and the
Schedule reserves under the Constitution
Act, requiring pro vi sion to be made for them
as per statements certified by the Auditor
General. The amounts in reduction of
these liabilities during the years 1860,
1861, 1862, and 1863 are what have been
usually termed " Savings on appropria-
tions," and the Auditor-General has certi-
fied to me that for the year 1863, and for
previous years, there are uncompleted Ser-
vices that is to say, appropriations ordered

by Parliament and not carried out up to
this date. He certifies to me that these
savings are reductions on appropriations
of Parliament, which will now be no Iqnger
required. Thus, for the year 1860 and
previous years as per detailed statement
marked G the outstanding liabilities
were 85,249 2s. 5d., of which the amount
in reduction was certified by the Auditor
General, as per statement marked N, to
be 57,508 19s. 7d. ; leaving 27,740 2s.
lOd. still to be provided for. The out-
standing liabilities for the year 1861 as
per detailed statement marked H were
106,692 10s. 2d., of which the amount in
reduction was certified by the Auditor
General to be, as per statement marked O,
79,649 10s. 10d., leaving the sum of
27,042 19s. 4d. still to be provided for.
For the year 1862, as per statement marked
I, the outstanding liabilities were 177,390
6s. 10d., of which the amount in reduction
was certified, as shown in the detailed
statement marked P, to be 119,556 18s.
8d., leaving still to be provided for the
sum of 57,833 8s. 2d. For the year
1863, up to the 31st October, the out-
standing liabilities of the Government
were, as shown in statement marked J,
576,970. 9s., of which the amount in
reduction of estimate, as per statement
marked Q, was 82,493 Is. 5d., leaving
494,477 7s. 7d. to be provided for the
current year. Thus it would be seen that
after deducting estimated savings to the
amount of 339,208 10s. 6d., the out-~
standing liabilities of the Government up
to the present date, amounted to the sum
of 607,093 17s. lid. In reading these
items to the House, it will be observed that
what I term a reduction on what has been
appropriations, is by the Auditor General
styled "savings." This has been the mode
of thus distinguishing these sums since
a resolution arrived at by the Executive
Council on the subject. So that we thus
arrive at a very important fact, that these
amounts in reduction of appropriations
are not, and never were, tangible sums,
but only amounts written off by the
Auditor General (when estimated to be
no longer required) in accordance with a
Minute of the Executive. The House
will see what is the course of proceeding
adopted by the Auditor General in regard
to these accounts. The Auditor General
opens a separate account in his books as
soon as any auin is appropriated for any

110

MR. EAG-AK.

[1863.]

specific purpose by Parliament, and by
that means the Auditor General is always
in a position to say what is the exact
amount expended for every particular
appropriation. This was also done under
the authority of a Minute of the Execu-
tive Council. It is on the authority of
this Minute that the Auditor General has
acted, and thus we have now the large
sum of 607,093 17s. lid. for outstanding
liabilities, to be provided for in our Esti-
mate of Ways and Means for the coming
year. We ought to look upon these so-
called " savings " as being, instead of
savings, nothing more than so many
evidences of deficiencies of revenue.
Every year a certain revenue was esti-
mated for but was not got in, and the
amount expended short of that authorized
to be expended had been called savings.
These "savings" were a mere acknow-
ledgment on the part of the Government
that the revenue did not enable them to
carry out the appropriations which had
been voted.

MR. COWPEB : The Hon. Member is in
error; there was the Panama vote the
vote for the Postal Service.

ME. EAGAE : That was a special case.

MB. COWPEE : There were a dozen other
similar cases.

MR. EAGAE : It will be for the Hon.
Member to show that there were a dozen
such cases. I trust I shall not be in-
terrupted by the Hon. Member ; he will
have an opportunity of setting me right
afterwards if it is in his power to do so. I
challenge the Hon. Member to show that
the Panama vote was not an exceptional
case. 1 speak from figures, and know more
about the financial state of the Country
than the Hon. Member who lately sat at
the head of the Treasury benches. The
sixth item in my statement respecting the
Consolidated Revenue Fund, in relation
to the charges thereon, is the amount of
immigration remittances received during
the years 1861 and 1862. These were
obviously improperly credited to the Con-
solidated Revenue Fund, and required to
be refunded to the Loan Account, in
the terms of the Auditor General's state-
ment marked K. The amount thus im-
properly placed in the fund of the revenue
was 31,238 8s. 6d. The moneys paid
under the Immigration Remittance Regu-

lations into the hands of the Govern-
ment to facilitate the immigration of
persons into this Country is not a matter
of revenue at all, but a species of trust
money for the due performance of a
specific purpose. The Auditor General
represented to my predecessor that it was
advisable to have these moneys carried to
the Loans Account, butno notice was taken
of his suggestion until my assumption of
office, soon after which I signed the requi-
site warrant for the transfer. I have
also directed a further sum of 22,021 .
to be taken out of Consolidated Revenue
and placed in a Lodgment Account. This
is the amount of immigration remittances
received during the year 1863. which has
also been improperly credited to the
Consolidated Revenue Fund. No. 8 of
my account is 19,539 7s. 2d., of which a
proper explanation will be given at the
proper time. This makes the entire debit
1,142,671 8s. 2d. I now come to tliu
credit side of the account, which does not-
present anything like a satisfactory state
of affairs. On the 1st November the
whole of the consolidated revenue in the
Treasury was 107 4s. lid. On the same
date the cash balance of Consolidated
Revenue in the Australian Joint Stock
Bank was 119 17s. 7d. The next item
I treat as a re-credit to Consolidated
Revenue Fund. It consists of payments
made from the Consolidated Revenue Fund
prior to the 31st October, 1863, without
the authority of Parliament. It is
233,302 18s. 3d. I "have placed this on
both sides of the account, for the purpose
of affording the Committee an opportunity
of condoning this erroneous expenditure.
I come now to item 12, which is 279, 120,
the estimated amount of consolidated
revenue receivable from November 1
to December 31, 1863. I have dealt
with this revenue in a particular way.
I placed the matter in. the hands of
the Auditor General, as an officer
disinterested, and this estimate is
given under his hand. From this amount
I deduct seven-eight per cent, for refunds
and charges on collection on the basis of
the rate of 1862, amounting to 2,444
18s. 6d. ; which will leave the sum of
276,975 Is. 6d. "NY hen my late prede-
cessor laid his statement before the Com-
mittee he took the ascertained revenue
for the six months ending the 30th June,
and made an estimate for the six months

L1868.J

. EAGA1?.

ending 31st December. My statement
approaches a nearer accuracy, because I
have the actual collection of revenue up
to the 1 31st October, and have only to
make an estimate for the months of
November and December, which two
months of course do not leave so large a
margin for mistake. I am, in fact, in a
position to state to the House the revenue
- for the month of November, so that in
reality T may be said to have to estimate
only the- probable income for December.
The amount of the revenue for November,

1862, was 101,085 ; while for 1863 it was
only 97,288, about 4,000 less than last
year. I sent to the Collector of Customs
to know what were the daily average
receipts of revenue of November this year,
as compared with the revenue of Novem-
ber last year. That officer wrote inform-
ing me that the daily average i-eeeipts in
1S62 were 2,050, and that the daily
average now was 1,630 showing a daily
decrease of 420. My estimate was
made three weeks ago, before I had this
information, and therefore ifc is probably
rather over than under the mark. I
come now to the items 13 and 14. 13
states, "Amounts recoverable from 'Loans
Account ' for advances out of Consoli-
dated Revenue to the Commissioner for
Railways, during the years 1860, 1861,
and 1862, 14,651 15s. 2d. ; and 14,"
" Amount recoverable from Loans Store
Advance Account, for advances out of
Consolidated Revenue, for the purchase
of railway stores during the years 1859,
1860, and 1861, 43,663 9s. 9d." Item
15 is 19,769 5s. 4d., recoverable from
the New Zealand Government for ad-
vances out of Consolidated Revenue.
These advances were made for the pur-
chase of warlike stores and a steamer. 1
also place on the credit side the amount
of 19,530 7s. 2d., to be raised b} r loan.
These items show, on the 31st December.

1863, a deficiency in revenue to cover
expenditure of 534,539 8s. 6d. A>-
suming that the Auditor General's figures
are right, I pledge my position as a
Minister of the Crown, I 'pledge my
reputation as a person known to be con-
versant with accounts, and I pledge my
character as an honest man, that this
is a truthful statement of the deficit. It
may be said by lion, gentlemen opposite,
in their graver moments, that this large
amount of outstanding liabilities may lv

reduced before the year is out, by a
further application of the doctrine of
li savings." The Auditor General having
reported to me that the outstanding
liabilities were 607 ; 093, I put it to him
pointedly " is there any possibility of
reducing the amount below that r" and
he has authorized me to say that it is
possible that before the close of the
year a further sum of 100,000 may
be dealt with which will reduce the
deficit by that amount. I would caution
the House, however, against assuming
that the deficit is likely to be reduced
beyond the 100,000 stated by the
Auditor General, because the salaries
alone of the public departments for
the two mouths will amount to about
200,000, and we must also take into
account the large sums for police the
maintenance of roads, the working of the
railway, and other matters. The result
of my investigation is that at the end of
the year there will be a deficit of 534,539.
Our revenue for November and December
will be little more than sufficient to pay
the overdrawn account of the Bank of
New South Wales and to provide for the
Supplementary Estimates, leaving us not
a shilling to pay salaries. I do not desire
to suggest any reflections either as to the
causes which have produced this state of
things or as to the consequences which
must eventually follow. But the incoming
Government is placed in a position of
extreme difficulty and extreme unpopu-
larity. Without any fault on our side, it
becomes our duty to do that most un-
popular of all things which statesmen are
required to do, and that is to put their
hands into the breeches pocket of the
public to call upon the public to con-
1 ribute, when the Country can ill afford it,
half a million of new taxes. Seeing that
we are placed in this position by no fault
of ours seeing that there is an undoubted
deficiency which, for the honor of the
Country, must be met by new taxes we
ought not to treat this as a party question.
I hope the Committee will deal with it in
a patriotic spirit, and that if 1 place before
them a fair and reasonable policy they will
meet ua candidly and give their verdict,
" aye " or " no." I now invite the
attention of the Committee to Part II
of the Estimate of Ways and Mean.-,
which has reference to the proposed ex-
penditure of 1864. The Committee will

112

MB. EAGAE.

[1863.1

see that my estimated deficit at the close
of 1864 is 904,866, about fifty per cent,
more than was estimated by my prede-
cessor. This account No. 2 is the Con-
solidated Eevenue Fund of New South
"Wales, showing the proposed expenditure
in relation to the probable income for
1864. I start on the 1st January with a
debit balance of 534,539 8s. 6d. I then
add the proposed expenditure for 1864,
viz. : for general services, 1,525,557 ;
special appropriations, 341,500 ; and
for services provided for by Constitu-
tional and Colonial Acts, 59,400
making a total of 1,926,457. There
is also an amount of expenditure
proposed to be covered by loan of
451,127, making an entire debit of
2,912,123 8s. 6d. I am quite prepared to
admit that the deficiency, however true,
is startling. I am also willing to admit
that in proposing to deal with this or any
deficiency, a Finance Minister should
have regard to two considerations. He
has, as it were, a choice of two proposi-
tions either to meet the deficiency by
reducing the expenditure, or increasing
the taxation. I say these two courses
are open, because the idea of borrowing
the money to meet the deficiency is
entirely out of the question. Therefore
we are forced on the two expedients I
have alluded to either to reduce the
public expenditure, or increase the public
income by taxation. I need scarcely say
that as regards ourselves, who have only
been six or seven weeks in office, it could
not be expected that we could sufficiently
master all the details of the public
departments so as to say how far they
could be cut down. Not only have we
been in office only six or seven weeks,
but, as the Committee know, a great
portion of the time has been taken up in
a way not contemplated by us, and which
by removing two of my colleagues from
town prevented them from remaining and
assisting in forming the Estimates. I
mention these things to show that it would
be most unreasonable for the Committee
to expect from men who had only been six
weeks in office, that they should be pre-
pared to say the public departments could
be placed on a satisfactory footing by
being cut down. I say, therefore,
unhesitatingly, that we are forced to
abandon the first proposition, and we are
forced to increase our income by taxation.

And it is to the increase of our income
that I direct the attention of the Com-
mittee. I may say, in general terms,
that as far as we can judge, we believe
the Estimates of Expenditure for the
year 1864 will be required to carry on
efficiently the Public Service. I have
already said that these Estimates were
of necessity framed on the Estimates
of our predecessors. And in point of
fact there is not any material difference
so far as the amount chargeable on
revenue is concerned (I will speak of
loans presently), and the amount pro-
posed to be spent by the late Govern-
ment. There are some differences, how-
ever, to which I should like to direct the
attention of the Committee. The Esti-
mates of my predecessor for the year 1864
amount to 1,905,490. Our Estimates
amount to 1,926,457, making an apparent
excess of 21,000. I say an apparent
excess, because we have brought in new
Services, while the late Government had
in reserve a Supplementary Estimate of
60,000 ; so that if you take into account
the 60,000 Supplementary Estimate and
deduct the 20,000, it will show, as regards
our demand, that we are 40,000 less than
the late Government. But there are
special cases in which we propose reduc-
tions. I allude, first of all, to the cost of
advertising ; and it will be seen that the
Government advertising has grown from
small degrees to very alarming propor-
tions. I desire to say nothing offensive
to the late Government, who have paid
the extreme penalty of their faults in
changing from this side to that side. I
desire to say nothing unhandsome of them,
but I cannot help suggesting to the House
what a convenient subsidy this advertising
might be made with regard to the country
Press. T don't say they have been so sub-
sidized. In 1861 the Government adver-
tising amounted to 6,283. In 1862,
9,711, and in the Estimates for the
present year, 12,000 was put dow r n for
advertising and commission on land saless
but the commission on land sales is only a
trifling part of the sum. At all events the
fact was that, for the year 1863, 12,000
was voted for advertising and commis-
sion on land sales ; advertising being the
bulk of the amount. And the amount
actually required for this year for adver-
tising is 13,500, So that we have not
only exhausted this sum of 12,000, but

[1863.]

MR. EAGAR.

113

we are required to place a further sum of
1,500 on the Estimates for advertising.
I say that this advertising has risen up to
the intolerable large sum of 13,500, and
the total payments for the years 1 have
mentioned amount to over 30,000, mid
this at a time when we have got a Govern-
ment Printing Establishment that costs
17,000 annually. So that if we regard
it as a matter of economy, it would be
much more economical for the Country
(supposing political objects were not to be
gained) that a copy of the Government
Gazette should be .sent to almost every
place in the country. That is one of the
inductions to be made in the Estimates,
and 6,000, instead of 12,000, is put
down for advertisements and commis-
sion on land sales, and on that sum there
will be a saving, if it can be possibly
managed. In comparing the Estimates
of my predecessor and the present Esti-
mates, to show the apparent excess of
21,000, I will state to the Committee
some of the most important items of
increase and decrease. We have been
obliged, in the present circumstances of the
Country, to increase the Police Estimate
17,000. I think this will be admitted to
be a necessary expenditure. We have also
been obliged to increase the amount put
down for Charitable Allowances 2,100.
But we have diminished the expenses of
the Customs 1,800, and the Post Office
1,850 ; we have diminished advertising
6,000, and the Inspector of Land Offices
700, and the management of Alpacas
300. We have increased the amount
for the Botanic Gardens 1,030, and the
Government Domain 983 ; and we have
also an increase under the head of
Miscellaneous items of 1.030 ; and it is
in view of these increases and decreases
that we have arrived at this point, that
there is a net increase so far as we arc
concerned of 21,000. I have now to take
up another part of our Estimates, as pre-
pared by the preceding Government
1 allude to the Loans Account of my
predecessor. In his Estimates for the
year 1864 he proposed fresh loans to
the amount of 1,044,970 ; but we pro-
pose loans only to the amount of 451,127,
which in fact makes a difference in favour
of loans proposed by us of 593,843.
What we have done is this, we have cut
out from the Estimates of the late
Government the branch lines for the

Northern districts, 290,000 ; Railway
to Mudgee, 250,000 ; and Railway to
Bathurst, 210,000. We have in fact
declined to ask at present for any of
these sums, amounting to 750,000, for
railway extension, because we have the
power, under existing Loans Acts, to raise
1,200,000, and we" have still authority
to raise that enormous sum of money.
I have the figures before me, and having
access to all the materials and figures,
I say this Government declines to borrow
a farther sum of 750,000. because we
have the power to raise over 1,137,420
to carry on existing works, which will
furnish us quite sufficient money to be
spent within the next twelve months.
We therefore think it undesirable to ask
this House for fresh loans in the present
state Of our finances, and before we show
to the British capitalists who buy our
debentures that we are ready to meet
further loans by imposing new taxes.
Now I have only to say with regard to
loans for the present year that we pro-
pose to borrow only to the amount of
451,127. This sum may appear large
when contrasted with the remark I just
made that we deprecated taking up any
large loans under existing circumstances,
and before we showed the British people
that we were prepared to submit to new
taxes. But I ask it under the following
circumstances : A part of the proposed
loan consists of 201,018, which was
taken by the late Government from the
amount voted for the Goulburn line of
680,000, in order to carry on extensions
for which that money was not voted.
I thought it right in making an estimate of
tin's kind to be furnished with authentic
figures by the Secretary for Works, and
I find that, under the authority of an
Executive Minute, a sum of 201,000
had been spent in the years 1858 to 1860
for certain new works for which the loans
voted were not sufficient, and the money
had therefore been taken from the vote
for the Goulburn Railway. It is not
for me to blame the late Government in
this matter, but the Goulburn people
might do so. All that it is my intention
to do is to assign a reason why I ask for
this loan. The facts are these, that in
1858 a uuinber of sums amounting to
712,000 for various services were taken,
and as a matter of convenience the
Executive decided to treat them as one

114

MB. EAGAR.

[1863.J

sum. The extension ro Mer.augle was to
cost 656,000, but it cost 10,000 move
that is, 10,000 more than the House
has any idea of. The extension to Picton
was to cost 778.COO, but it was exceeded
by 106,000, and so in the same manner
the extensions toPenrith and to Singleton,
the workshops on the Northern "Railway,
and the extension of the Northern Bail-
way, so that, excuse it how they may, the
fact is incontrovertible that the late
Government expended upwards of
200.000 of which the Parliament knows
nothing, besides which there were 10,000
or 50,000 yet to be granted in order to
complete the works, and for which we
shall require a loan. The Government
feel satisfied, as far as they can judge,
that their Estimates will actually cover
the expenditure. With our newness to
the affairs of Government the Committee
will no't expect that wo should be able to
show any very large reduction in the
working expenses of the Government.
It now becomes my duty to speak of
new taxes, and in the first place I will
speak of our present tariff. As a commer-
cial man I saw there would be great danger
in upsetting the present tariff, which
has answered admirably. The present
Customs duties were fixed in 1855. The
tariff was in fact introduced by Mr. Deas-
Thomson in 1852, and enlarged by Mr.
Mercwether in 1855. I need scarcely say
that this tariff has proved highly satisfac-
tory ; it has been progressive and elastic,
and has shown itself to be an eminently
desirable tariff, as will appear when I read
the following figxires. In 1856 the
Customs gave us 471.000; in 1857.
538,000 ; in 1858, 557,000 ; in 1859,
611,000 ; in 1860, when the separation
of Queensland took place, 555,000. In
1861 the Customs produced 585,000,
and in 1862, 609,000. So that in seven
years our Customs have produced us
4,000,000 of money. Now what I pro-
pose to do is only to alter this tariff in one
or two points where it is capable of altera-
tion. I might be asked why I do not
double the duty on tea, or sugar, or coffee,
or beer, but to double the duty does not
of necessity double the revenue because
it would lessen the consumption. My
proposition is to take the present
tariff, slightly modified, as a basis ; and
[ propose to supplement that by some
forme of direct and some indirect taxation,

and this I propose to do in such a form as
to provide to a great extent for the deficit
of 1864. I think all reasonable men will
agree with me that the time has arrived
when some forms of direct taxation should
be imposed, and I desire to impose it in
such a shape as will not be oppressive.
For instance, I would not impose an
income tax. In a new country nothing
fluctuates so much as income there is no
stability in income. In England it is
entirely different, where the annual in-
come has been known for successive years.
The NationalDebt of England is only what
could be spared from the commercial
profits of England. So much of it as is
owned by the British people is that which
they have been enabled to take from their
income and lend to the Government. For
these reasons, therefore, I am not disposed
to tax incomes. I am opposed also to
the property tax, for analogous reasons.
In all new countries the land, although it
maybe occupied to a considerable extent,
yields but a small return. The present
burden upon the land that has been
alienated from the Crown is the burden
of municipal taxation, which provides for
the sanitary necessities of the people living
thereon, and I would not increase it in any
other direction. What I am about to pro-
pose is not a new idea, in fact I do not
claim originality for any of my ideas. It
has been my endeavour to place before
you in a succinct manner the matters
affecting the welfare of this Country. The
proposal that I have to make has often
been before the Country, and never
was there a time when taxation was
so necessary as now. What I propose
then is stamp duties upon bills of
exchange, transfers of property, and
Bank notes, but I exclude all minor
transactions, so as not to harass the
Country by making it imperative that
there should be a stamp upon every re-
ceipt, or every cheque upon a Bank.
All orders payable upon demand and
all Post Office Orders I make free of
taxes of this kind. If we can introduce
successfully a Stamp Act, we must take
those larger transactions of commerce, and
not the small bills of exchange. I have
put my scheme in the shape of a resolu-
tion, which I will now submit to Hon.
Members. I may state that it is esti-
mated that from this Stamp Act the
revenue would derive the sum of 55,000,

[1863.]

MR. EA(J,\R.

I. ! ->

This is certainly only an estimate, but T
believe we should get it. It is a business
moreover which "will im-rea.se, and it will
be collected at a cost of '2\ per cent.
My first proposition is to stamp bills of
exchange at Is. for every 100. This is
the rate charged in England, and in Tas-
mania also. It is half the rate proposed
by Mr. Weekes on a former occasion, nnd
off MY. Smart on a late occasion. 1 will
refer to this paper (the resolution) and
point out the difference in my proposal
and that of those hon. gentlemen. Mr.
Vv'eekes, on the 18th October, 1860. laid
before the Committee a prop< -i:in lotax
bills of exchange 2s. per cent. I think
it more desirable to tax them Is. percent.
the rate recently enacted in Tasmania,
and which prevails in England. The
Committee v\ill also notice that foreign
bills of exchange are placed upon the
same footing as inland bills of the same
amount and tenor each bill in a set of
three being charged one-third of the duty
payable on the whole. The next proposi-
tion of the Schedule is the imposition of
a stamp tax of one per cent, on all con-
\eyances and transfers of real and per-
sonal property. Any conveyance or
transfer of property, where it shall vest
absolutely in the purchaser, or any person
on his or her behalf, is liable to a tax of
one per cent. Mr. AVeekes' proposal was
10s. per cent. one-half of the duty that
[ propose. But the circumstances are
different : there was not then a contem-
plated deficit of nearly a million of money.
Another item in the Schedule is with
regard to liens on wool and crops, on
which it is proposed to place 5s. per cent.
Then I propose to place 10s. per cent,
upon all mortgages, and two per cent,
upon Bank notes. From the imposition
of these stamp duties 1 expect to make a
certain income (as far as 1 can judge) of
C"), I < '0. 1 will now take the opportunity
of stating to the Committee that I shall
be enabled, if my proposition be granted,
to manage the department necessary for
collecting these duties at a cost of 1,300
a-ycar 1,000 for salaries and 300 for
dies. I propose to have the biiffl
conducted at the New Registry Office,
where the services of some of the
clerks may be made available. If the
business should increase to any great
extent, of course the number of officers
be increased in proportion. At

starting 1 e\pe<-t in obtain a iv\.
of 55,000, at a cost of -1,:K)0 in
leciii^ 1 ; Appeared to me that in i ;
these rates of .stamp duty we should make
no distinction between real and persona!
estate. I think the true principle upon
which to graduate taxes of this kind is in
have regard to the currency to place- a
small tax upon transactions that occur
frequently, a moderate tax upon transac-
tions that occur once a year or so ; upon
transactions of rare occurrence I would
place the highest rate. Tpon 1 his principle
I place the lowest duty on liens on wool
and crops, namely, 5s. per cent. ; on mort-
gages on land, cattle, or sheep (which
generally have a currency of from three
to five years), I propose to place a duty
of 10s. per cent. ; and in case of real
estate, on mortgage or conveyance {-A< a
man might not mortgage or part with his
property more than once in his lifetime),
I make the tax highest in degree, namely,
1 per cent. The reason why I subject
sales of real property to the highest rate
is because the Legislature has relieved the
owners from heavy charges in case of con-
\ eyauce, in consideration of which great
advantage they are bound, on fair princi-
ples of justice, to submit to the moderate
tax I propose. I do not propose to stamp
grants from the Crown, or certificates of
title under the Ecal Property Act. It is
the duty of a State, as the sole owner of
the land, to place it at the earliest oppor-
tunity in the hands of the people, ao that
it may be available for profitable use and
employment. I therefore exempt from
stamp tax all grants from the Crown. My
reason for not subjecting certificate
title to tax is that the present law not
only imposes upon every person who
brings his title under the 1'eal I'ro
Act the possibility of a heavy charge for
preliminary inquiry into outstanding
claims, but also the necessity el
rateable contribution towards an insurance
fund which forms a guarantee against
future claims. Therefore 1 do notcl
a stamp duty upon titles when the pro-
perty is first brought under the Act.
After that the charge will be 10 percent,
for every conveyance or im i Mr.

Pr nut S'.TOX : Do you intend to tax joint
stock shares ?] I was not in favour of
an income tax. hut 1 am not unfavour
to a kind of income tax upon persons
having shares in public Companies : and

116

MB. EAGAK.

[1863.]

looking to the large profits made by them,
I think shares of this kind a very legiti-
mate object of taxation. [Mr. PIDDING-
TON : Do you treat squatters in the same
way ?] As far as the squatters are con-
cerned, I charge them more than was pro-
posed by Mr. Weekes or by Mr. Smart.
Mr. "Weekes placed the burthen and
incidence of his stamp tax upon commerce,
to a certain extent freeing land and stock.
So did Mr. Smart. Mine is the converse
policy to hamper as little as possible
exchange operations. The land passes
away terminably, and the bill of exchange
which goes from hand to hand should be
taxed in a much lighter degree. M/.
"Weekes proposed for bills of exchange
2s. per cent., Mr. Smart also proposed 2s.
per cent. For conveyance of freehold
and leasehold estate Mr. "Weekes pro-
posed 10s. per cent. ; I proposed 20s. per
cent. On mortgages on cattle and stock
Mr. "Weekes proposed 5s. per cent. ; I
propose 10s. per cent. That shows an
indication on my part to place the burthen
as equally as I can on the shoulders of
the various classes of the people. My
predecessor in office, Mr. "Weekes, pro-
posed a fee upon all receipts and orders.
The same was proposed by Mr. Smart ;
but I exclude both from my scheme. Mr.
Weekes proposed 10s. per cent, upon
Bank notes ; Mr. Smart proposed 2 per
cent, and I do so also because I conceive
that not only are the Banks well able to
bear this charge, but also because they
are the largest representatives of money
value in the Colony, who are the most
placed in danger in the event of insur-
rection, or foreign invasion, and therefore
most need Government protection. On
this account they were bound to pay
their share to the cost of Government.
I am glad to find by the receipt of papers
from Tasmania, that I am justified in this
proposal, since Tasmania? in the Stamp
Act of the 15th October, 1863, has placed
a duty of 2 per cent, per annum upon
the value of notes issued by the respective
Banks. With regard to bills of exchange,
the charge in Tasmania is Is. per cent.
In England it is the same. So that
acting upon the best of my knowledge I
have in this proposition stated what I
conceived would be only a fair rate, and
I find my ideas borne out by what a
sister Colony has done. But upon this
resolution I shall, of course, have to take

the decision of the Committee. I might
say that the advantages of a Stamp Act
are innumerable. It forms a large, a
permanent, and an always increasing
revenue ; for the taxation will increase
with the increase of the commerce of the
Country. It is with the English example
before me, showing how large a taxation
may be got by a cheap means, that I
venture to recommend it. I come now
to my second proposal the equalization
of the spirit duties. The Committee is
aware that by the present scale of duties
brandy pays 10s. a gallon duty, whilst
rum and all other spirits pay only 7s. per
gallon, constituting a differential duty,
the reasons for adopting which I am at a
loss to discover. It is 1 a custom that has
grown up in the Colony and nothing more,
and has no reason whatever to recom-
mend it. This proposition to equalize
the spirit duties has been before several
Treasurers. By Mr. Weekes it was
regarded with favour ; and also, I believe,
by Mr. Samuel. I propose, then, an
equalization of the spirit duties and an
adjustment on the duties on wine, with
an imposition of a modified duty upon
samshoo, a Chinese wine or spirituous
distillation from rice, which now pays a
duty of 10s. a gallon. It is not a pala-
table drink, and with this heavy duty on
it, the Chinese will not take it, so that it
now remains in the Bonded Stores,
bringing in no revenue. There is an
example for this equalization of the
spirit duties of so high and distinguished
a character that I must quote it. A
proposition for the equalization of the
spirit duties was made at the Inter-
colonial Conference, and was there unani-
mously agreed to. Mr. Cowper, Mr.
Smart, and Mr. Weekes were there pre-
sent as the representatives of this Colony,
and they there agreed that all imported
spirits should pay a duty of 10s. a gallon ;
so that, in so far as the weight and autho-
rity of these gentlemen are concerned, I
may reasonably claim them for this scheme.
But I will go even further than this, and
state that in 1860 the British Parliament
carried a proposition to a similar effect,
whilst the opinions of that eminent finan-
cier, Mr. Gladstone, in making his financial
statement embodying this proposal, were
very clearly and unanswerably in favour
of the equalization. I will take it on the
ground laid down by that eminent man

[1863.]

MH. EAGAE.

117

in bis speech upon that occasion, that
duties on spirits ought not to be so high
as to admit of profitable adulteration or
of illicit distillation. As to adulteration,
T will tell the Committee that the present
differential duty causes a very large
adulteration of brandy. And as to illicit
distillation, I do not require to use any
arguments to show that this will not be
induced, because as a matter of fact South
Australia, Tasmania, and Victoria have
each equalized their duties, and we hear
nothing from them of illicit distillation,
although the duty is 10s. per gallon, the
same as I propose here. We have then
the experience of these Colonies to show
that 10s. per gallon duty is the happy
medium that is high enough to furnish
us with revenue, but low enough to
prevent illicit distillation. In South
.Australia the duty is 10s. a gallon, in
Victoria 10s., and in Tasmania 12s. [Mr.
D ART ALL : What is the duty on sugar in
Victoria?] Three shillings a hundred-
weight. Here it is 5s. per cwt., in Queens-
land 5s. per cwt., in South Australia 3s.,
and in Tasmania, where it has been
recently altered, Os. We have, then, the
evidence of the other Colonies to show
that with a 10s. duty there is no fear of
illicit distillation ; and, as to adulteration,
I have already said that under the differ-
ential duties a large adulteration was now
going on in brandy. [Mr. PIDDINGTON :
Will the duty on colonial rum be also
raised v] It will. There will be the
same duty on colonial as on imported rum,
!mt the sugar used in making it will be
duty free. The duty on colonial rum is
now 7s. per gallon, the same as on the
imported article, and if my proposition
be adopted it will be 10s. per gallon, the
same as foreign rum. 1 was about to
stale the reasons why this change should
take place in order to prevent adultera-
tion. Soon after my taking office my
attention was called to the fact that large
quantities of silent or neutral spirits have
for some years past been introduced into
this Colony. In 1860, 54,000 gallons
were imported ; in 1861, 14,000 gallons ;
in 1862, 135,000 gallons ; and during the
first six months of 1863, 85,000 gallons,
being at the rate of 170,000 gallons for
the year. This neutral or silent spirit is
very strong, averaging from 50 to 60 per
cent, over proof, and as it comes in at the
same duty as rum, it is very largely used, as

I am informed.in the adulteration of brandy.
On the statement of persons on whom lean
rely on the statement of the Collector
of Customs there is at present in bond
several thousand gallons of silent spirit
on which the revenue under the present
tariff suffers a very considerable loss
not less than 6,000, but, by the alteration
in the tariff I now propose to make, this
will be effectually remedied. I have now,
as I think, shown that, on the example of
Great Britain and that of the other
British Colonies, there have always been
serious losses to the revenue which might
be easily obviated by such a revision of
the tariff as I have now the honor to
propose. It will perhaps be said that in
taxing rum I am imposing a tax on the
poor man's drink, and a cry may be raised
upon that assumption. I hope, however, I
shall be able to show that the interests of
the poor man are not disregarded in my
tariff, and that it will be favourable to
him in what will be more to his real
benefit than the consumption of rum or
any other ardent spirit. I have left ale
and colonial wine without any increase of
duty, and in this the interest of the poor
man has been substantially remembered.
If it is said that in taxing rum I tax the
poor man's drink ; I reply that spirits are
more highly taxed in other Colonies, and
there is no reason why they should not
be taxed here, although I admit that 1
dislike the idea of raising any revenue
upon the consumption of spirits. The
estimate of revenue that I shall get from
the duty I propose to lay upon rum is
60,000. I now come in my tariff to
the articles of port, sherry, and such other
wines as contain a high percentage of
alcohol. I propose then to raise a revenue
by levying a duty on all wines containing
15 per cent, of alcohol of three shillings
per gallon. And I also propose to reduce
the duty to one shilling and six-pence per
gallon on all wines containing less than
15 per cent, of alcohol. I also propose
to reduce the duty on samshoo, a spiri-
tuous compound manufactured from rice
by the Chinese, and consumed by Chinese
only. The present duty on this article
is such as at present to prevent it from
being taken out of bond at all. We have
not less than 6,000 gallons of samshoo
left in bond through the present high
duty demanded thcreou. 1 propose to
reduce the duty on this article to 5s. per

MR. EAGAK.

[1863.]

gallon. From this source I shall obtain
1,500. This leaves me to cast about
for 115,000, and I am bound to look
to the propriety and the policy of im-
posing a duty on imports as a means of
iwenue. I "say advisedly as a means
of revenue. Various projects have been
suggested to me for supplying the defi-
i-ii-ncy which exists in. the revenue, by
friends who have considered the sub-
ject, but though I have heard them all, 1
have finished by taking my own course.
M v friends have made various suggestions
to me on this head, but I believe they
may be all comprised under the head of
proposals for establishing package duties.
A more clumsy means of taxation than
the raising of a revenue by the imposi-
tion of a package duty has never been
devised. The package duty is a mode
of getting a revenue by a bastard use of
the ad valorem process. If we take two
importations of equal size and weight but-
of different value, the force of the objec-
tion which I make to the adoption of
such a system is made very strikingly
apparent. The great father of package
duties, the Right Hon. Mr. Gladstone,
had recently abandoned that system in
the Mother Country, and therefore, those
who swear by that right hon. statesman
ought to be prepared to give up what he
had found untenable. Mr. Gladstone has
given up the package duties from a con-
viction that such duties could not be
levied in a fair and satisfactory manner.
[Mr. Eagar quoted from a British news-
paper reporting a speech of Mr. Glad-
stone, in which he confessed that he
abandoned package duties. He then pro-
ceeded.] In introducing the package
duties into England, it appeared that it
had been found necessary to adopt a
regulation by which a penny charge had
been made on every five shillings worth
of certain articles the rates at which it
was estimated differing materially in HCV-
oral different articles. This had been done
under the printed Customs Regulations,
which had been in force at home. [Mr.
Eagar here referred to some printed
Regulations, wherein it was shown that on
157 different articles charged with the
one penny on every five shillings' worth,
that duty had been estimated for at 157
different rates. He then proceeded.]
It is to objections of the same character
that any proposed package duty here

would be liable. After all, the great
merit of a tariff consists in its simplicity.
The simplest tariff is always the best ;
but then I hope the Committee will not
confound simplicity with fewness of
art ides taxed. For example, our own.
tariff, although it contains but fifteen or
twenty articles, is not a simple tariff, be-
cause the rates vary, and the calculations
made by persons dealing with the Custom-
house are numerous. The simplicity I
contend for is more uniformity of rate
than fewness of articles subjected to tax-
ation. In order to obtain 400,000 out
of goods taxed, I recommend to the Com-
mittee to return to the principle of ad
valorem duties which prevailed here prior
to 1852. It has been said that it led to
the commission of numerous frauds ; but
it must be remembered that those frauds
arose from special circumstances, and our
staff of Custom-house officers was not
then of so high a character as it is at the
present time ; for I am happy to say that
it has much improved of late years. The
main objection to an ad valorem duty is
that it would be a temptation to evade
the duty by making a false declaration
equivalent to perjury, and under those
special circumstances au ad valorem duty
is described as an " immoral " tax as a
tax which is a temptation to demoralisa-
tion. There are others who object to it
on the ground that there is a great in-
ducement to fraud by the corruption of
Custom-house officers. In other respects
the duty is admitted to be most fair and
equitable. As to the duty being equitable,
I beg to submit some remarks which
appeared in the Sydney Morning Herald.
The writer in this paper, which is con-
fessedly one of weight in this city, says :
" There is only one objection to ad val-
orem duties, but that one objection is con-
clusive. They are equitable, and as un-
oppressive as any indirect tax can be ;
but they act as a temptation to dishonesty
that experience shows is too much for
ordinary commercial morality." On this
ground of the " immoral " character of ad
valorem duties, I desire to meet those who
take that view both inside and outside
the House. This ground of objection has
all along been taken against the Income
Tax in England, but with what success
may be seen from the fact that the Income
Tax still prevails. On the ISth April,
1853, the question before the House of

1863.!

MB. EAG-AK.

Commons was the re-enactment of the
Income Tax (then expiring) for a term
of seven years on a descending scale.
Mr. Gladstone objected to the tax, first.
because self-assessment led to grievous
frauds on the revenue, and second, be-
cause of the teudencey to immorality
which he feared was essentially inherent
in the nature of the operation. He took
precisely the same objection to the In-
come Tax which conscientious person-
are said to take to ad valorem duties.
But notwithstanding the powerful address
of Mr. Gladstone on that occasion the
Bill was carried, and the Income Tax was
prolonged, the immorality notwithstand-
ing. I desire the Committee now to come
on to 1860, and see how the proposition
was dealt with then. The final rate was
five-pence, and Gladstone stated in the year
1853 that at the end of seven years the tax
should cease. I should like to read his
words to the Committee, because Honor-
able Members would see that the force of
circumstances overpowered the determi-
nation of the Chancellor of the Exchequer.
1 may remark that Mr. Gladstone, in
advocating the continuance of the In-
come Tax from the year 1853 to I860,
pointed out the great value this tax had
been to Great Britain in times of great
difficulty, and in all emergencies it had
been a splendid stand-by and a ready
mode of getting a large income, morality
notwithstanding ; and in the course of
his remarks recommending the continu-
ance for seven years, he promised in 1860
to cancel the Income Tax. "Well, when
the year 1860 came, what was the con-
duct of Mr. Gladstone ? Why. he found
the financial difficulty was such that he
was obliged to ask for a re-imposition
of the Income Tax, Avhich ceased at five-
pence, and which he proposed to reintro-
duce at ten-pence in the pound. Xow.
what were the remarks of Mr. Disraeli
on this proposal being made ? He taunted
Mr. Gladstone with his former statement
and his former promise. His remarks
went to show that the Chancellor of the
Exchequer was re-enacting in a more
oppressive form the tax which lie had
promised should cease. Now. L wish to
show the Committee that I am arguing
from principle. It was evident that in
the British House of Commons questions
of finance are treated not as questions
of morals but of revenue ; and it was

not as a question of morals but
question of revenue that 1 brin..
the proposal of ,^1 valorem duties to-night.
The British people accepted a tax which
was objectionable,
of the State requ'red if. And i
to accept the ad ralorcm duties U
the circumstances of tlie Count)".
quire it, and bee.; ce is no other

means of raiding JJJ'JO.UOO to
deficiency I have referred to. 1
come to the details of mv ad
scheme. I propose to divide the iin.
of the Country into three clashes. On
the first class I propose an ad vaton-m
duty of 10s. per cent., and 6s. on the
second class ; on articles not included in
the free list I propose an ad valorem duty
of 5s. per cent. 1 shall come to the de-
tails of these particular ",tlv.
It may be asked by lion. Members if I in-
tend to make any difference in the <!ul \
on some description of goods imported
from the Mother Country and the neigh-
bouring Colonies. 1 say 1 cannot do so,
because by the Constitution Act differen-
tial duties are prohibited by the 43rd
clause of the Constitution Act ; eo that if
I were inclined to make a difference in
favour of articles from the neighbouring
Colonies I could not do so. 1 now come
to the third class, which 1 will take iirst
of all the free class, which is taken from
the five li>i of South Australia. The
present tariff of South Australia iui[
on all articles not included in the free
list a duty of 5 per cent. ; but our m
sities being greater, I am obliged to i
the tax to 10 per cent, on certain an
articlesofgeneralcousuiiipvionJiiMii
and articles most of which are manufac-
tured in the Colony. 1 do this only for
the sake of revenue, but if it answers my
protective friends also. I am satisfied.
My free list is as follows : animal**
(living): baggage of passengers; l>.
(printed) ; coin and bullion : cotton
(raw); llax, hemp, and fibre; Hour, D
and bread; gold in its natural state; grain
of all kinds ; guano and manures : hides
and skins, dried and salted : military and
naval stores; am ttH Belted) ; pl;t
. and shrubs; roots (esculent) ; .-.
specimens of natural hi>iory; talhm ,
wool. It will be seen therefore that 1 start
\\ith this principle that all the necessaries
of life should be free, M tar as 1 u:u
cerned. 1 do not piopo.se to i:

120

MB. EAGAB.

[1863.]

meal, and bread, grain of all kinds, or
salt. I leave animals free, and gold in its
natural state. I have left raw cotton and
wool free, because we receive large quan-
tities of these articles from Queensland
for shipment to Great Britain. I leave
flax, hemp, and fibre free, becaiise not
being produced in the Country, yet they
are the means of encouraging our local
manufactures. I also leave books, hides,
ores unsmelted, plants, trees, and shrubs,
roots, and specimens of natural history,
and tallow free. These then constitute
my free list, and I now come to the list
of articles on which I propose a tax of 10
per cent. Touching articles of general
consumption, I will give this illustration:
I am using a pocket handkerchief ; my
lady friends tell me it is lawn, and that
it cost 2s., so that 10 per cent, on 2s. will
not affect me, and does not touch my
pocket materially. But a poor man can
get a pocket handkerchief which will
answer all the purposes for 6d., and 10
per cent, on that sum will not be felt by
him. So that my proposal to tax such
articles as apparel, honey, drapery, will
include articles of general use, and ranging
in price. Thus 10 per cent., while it taxes
the consumer of light goods, will hardly
be felt by those who purchase goods of a
lower cost, although all persons will to a
certain extent, contribute to the revenue.
The following are the articles on which I
propose to impose a duty of 10 per cent.
Apparel andslops ; arms and ammunition ;
baskets, toys, and fancy goods ; blankets
and counterpanes ; blacking ; boats and
oars ; boots and shoes ; brass and copper
manufactures of ; bricks ; butter and
cheese ; candles ; canvas ; carpeting,
rugs, matting, floor-cloth and oil-cloth ;
carriages and carriage materials ; carts,
drays, and waggons ; coals ; confectionery
and preserves ; cotton manufactures, or
any mixture thereof ; cutlery, hardware,
and grindery ; china-ware and porcelain ;
earthenware ; earthenware pipes and
tiles ; fireworks ; fish preserved, salted
and dried ; fruits of all kinds ; furniture,
bedding, and cabinetware ; galvanized iron
and manufactures thereof; hats, caps, and
bonnets ; hosiery, gloves, haberdashery,
and millinery ; instruments musical,
surgical, and scientific ; iron and steel,
and manufactures thereof ; jewellery and
personal ornaments ; lead manufactures
of; leather and manufactures thereof;

linen-drapery, and manufactures of linen,
or any mixture thereof; matches ;
machinery ; marble ; metal (yellow) and
nails ; oil of all kinds ; oilmen's stores
pepper, spices, pickles, and sauces ; per-
fumery ; pictures and paintings ; pipes
(tobacco) plate and plated ware ; pottery ;
provisions salted and preserved meats ;
saddlery and harness ; ship chandlery ;
silks and silk manufactures, or anymixture
thereof; soap ; timber log, hewn, sawn,
and split ; tinware, turpentine and
varnish ; watches and clocks ; wood
manufactures of; woollen manufactures
or any mixture thereof. Those articles
of import on which I propose to fix an
ad valorem duty of 10 per cent, will, I
expect, bring in a revenue of 350,000.
and the articles on which I propose a duty
of 5 per cent., 50,000 making together
a total of 400,000. I now come to the
proposition to place a penny postage on
newspapers inland, and I think in doing
so I show more courage than my pre-
decessor, who, although he advocated this
measure, refrained from making the pro-
posal. I find that two-and-a-half million
newspapers were posted for country
delivery in 1862, which at Id. each would
give me an income of 10,000. I think
newspapers have gone far too long a time
postage free, and the financial necessities
of the Country will not now admit of it.
I don't desire a revenue from the Post
Office, I only wish to make it self-sup-
porting, although in England the Post
Office affords a revenue of 1,500,000.
All I desire however, is that the Post
Office should be self-supporting, and
that newspapers should not be delivered
at the cost of the State. I have strong
reasons for saying that the Post Office
should pay its expenses, as during the
past few years the loss on this estab-
lishment has been paid out of the
general revenue. In 1860 there was a
loss of 29,000 upon the Post Office ; in
1861, 30,000 ; in 1862, 29,000 ; and in
1863, 33,000. Now, in the face of
this enormous deficiency, I think that
newspapers should not go free. News-
paper proprietors should find some
other means of carriage than the Post
Office, but if they still continue to use
the Office, they should be made to pay
for the carriage. Victoria sets us a
wise example in this respect, as she
has had a postage upon newspapers for

[1863.]

ME. EAGAR.

121

a considerable time past. It may be said
by some, that a tax upon the carriage of
newspapers would be a tax upon know-
ledge, but I say that in State necessities
knowledge must be taxed as well as other
commodities. We pay a tax, in postage,
upon the carriage of books a far more
substantial form of knowledge than news-
papers ; and if we pay for the postage
of books, why should we not pay for the
postage of newspapers ? I have the more
confidence in submitting this proposition
because the Board of Inquiry into the
working of the Post Office consisting of
Messrs. Montefiore, Watt, Smart, Knox,
and King after taking a vast amount of
evidence, contained in 120 pages, recom-
mended in their report that newspapers
should pay a penny postage, which, they
believed, would give a revenue of 10,000,
and so instead of increasing the postage
on letters I have determined to put it on
newspapers. I propose to raise therefore,
by direct taxation, 55,000 ; by indirect
taxation, 81,500 ; by ad valorem duties,
400,000, and by postage on newspapers,
10,000, making a total of 546,500,
which will still leave a deficiency of
357 500 to be met. Towards this it is
believed that 100,000 may accrue from
the outstanding liabilities, which will leave
a deficit of 257,500. In coming to this
deficiency I have to submit the project of
a loan, which is necessary for two reasons.
First to cover the overdraft at the Bank,
and second to anticipate the revenue
which can only come through the con-
sumption of articles. If I take the
revenue for November and December to
cover the overdraft at the Bank, we shall
have nothing with which to begin the new
year. I therefore propose a deficiency
loan (which will involve an entirely
new principle), as it would be utterly
useless for me to apply to the Banks
under existing circumstances. We know
that the commercial community is already
too much crippled, and if I apply to the
Banks for a loan of 250,000, there would
be a panic in Sydney. Before proposing
this loan I invite the attention of Hon.
Members to our Public Debt, which
amounts to upwards of 6,000,000, of
which 5,143,130 was issued in deben-
tures. Now this demands the serious
attention of the Committee, not only from
its magnitude, but from the erroneous
principle on which it was contracted.

Nearly the whole of it was contracted on
the principle of terminating at some time.
Now the great fault that our financiers
have fallen into is in making the debt
terminable from the beginning. We
have a terminable debt unaccompanied
with any means of redemption. The
great bulk of our debt is terminable
the only interminable part being about
200,000. With this debt then we
commence thus gloomily our tenure of
office, and by us or by our successors
the matter must be dealt with. Between
the present time and 1876 we have to
pay off the sum of 2,240,266 above the
ordinary expenditure of the Government.
I cannot believe that, under ordinary
circumstances, the House would consent
to a loan to cover this large amount.
The proposition which I make is to fund
the Public Debt, as it is in England. (Mr.
PIDDINGTON : The debentures can always
be renewed.) When the Hon. Member
becomes Finance Minister he can pursue
that policy, but I cannot make any such
proposition. I am prepared to show that,
by making the debt a permanent stock,
we should make it universally popular.
And by making this fund a permanent
one, without the principal ever being
called for, we need only make arrange-
ments for paying off the interest. The
Committee must see the great and impor-
tant distinction between paying off
6,000,000 and paying the interest only.
It would be absolute ruin to the Country
to abstract from the general revenue
sufficient to pay off this enormous debt.
If my scheme is assented to, the whole of
the Australian Colonies will speedily
adopt it also. If you have a permanent
debt, simple in its character and easy in
its operation, it will afford the oppor-
tunity to every man and woman in the
community of buying permanent stock.
Into the consolidated stock thus created
would fall the debentures maturing
between 1865 and 1876, to the amount
of 1,435,800. This, with the deficiency
to which I have adverted, would amount
to 1,685,000. The Country would be
relieved of the immense pressure and the
enormous and ruinous taxation neces-
sary to meet that large principal sum.
Having provided for the taxation of
the Country to the extent of 500,000,
I propose to issue Treasury Bills for
twelve months, bearing interest at the

122

ME. EAGAE.

[1863.]

rate of 4d. per day per cent. equivalent
to about 6 per cent, per annum. The
terms on which I propose to issue these
will be on the basis of the Act, 21 Vic.
cap. 5, passed on the 18th of December,
1857. That Act was passed at the time
that Mr. Eichard Jones was Treasurer. He
had great difficulty in finding money for
the carrying out of the public works of
the Country. The debentures then raised
were not easily saleable either here or in
London ; and being obliged to cast about
for some mode of raising money, he was
obliged to do so by means of that Act.
It eo happened, however, for various
reasons, that the Act became inoperative ;
the Government were unable to sell their
Treasury Bills ; but about that time our
debentures again became saleable and as
a consequence the Act fell into disuse.
I propose, then, to take that Act as the
basis of my operations. Touching this
proposed deficiency loan, I may say that
if the proposed taxes for 1864 should yield
more than I anticipate. I would not re-
quire the whole amount, and would not
therefore use it all ; I only propose to use
as much as is necessary. I shall, however,
assume that such an Act will be required,
and I will give notice for bringing in
the necessary Bill. I have now to lay
before the Committee my views as to the
mode of managing the rate of interest
upon the six per cent. Treasury Bills.
Economists are all agreed that the Public
Debt should be taken at a comparatively
low rate of interest. This may appear
to be a paradox, but I shall show the
Committee conclusive reasons why it
should be accepted as a safe principle of
finance. I will read you what M'Culloch
says on that point, and I shall then make
a colonial application of the English
principle. The management in England
was of this kind that on the creation of
new loans, instead of taking them up at
a rate of interest approximating to the
value of money at the time, the same rate
of interest was given, but the 100 old
stock was changed into 150 new stock
that is instead of exchanging 100 for
100 and increasing the rate of interest
according to the current value of money,
a new loan was submitted at a large
premium to the holders of the old stock ;
and in this extravagant way the Public
Debt of Great Britain was largely and
improvidently increased. M'Culloch

an undoubted authority on the point
after showing the shameful system by
which the debt of Great Britain had
been largely and improvidently raised to
its present enormous amount, goes on to
show the true principle on which loans
should be raised. He says :

During the reigns of William III. and Anne, the
interest stipulated for loans was very various. But
in the reign of George II. a different practice was
adopted. Instead of varying the interest upon
the loan according to the state of the money
market at the time, the rate of interest was grad-
ually fixed at three or three and a half per cent. ;
the necessary variation heing made in the princi-
pal funded. Thus, suppose Government were
anxious to borrow, that they preferred borrowing
in a 3 per cent, stock, and that they could not
negotiate a loan for less than 4 per sent. ; they
effected their object by giving the lender, in re-
turn for every 100 advanced, 150 3 per cent,
stock ; that is, they bound the Country to pay
him or his assignees 4 10s. a year in all time to
come, or, otherwise, to extinguish the debt by a
payment of 150. In consequence of the pre-
valence of this practice, the principal of the debt
now existing amounts to nearly two-fifths more
than the sum actually advanced by the lenders.

Some advantages are, however, derivable, or
supposed to be derivable, from this system. It-
renders the management of the debt and its trans-
fer more simple and commodious than it would
have been had it consisted of a great number of
funds bearing different rates of interest ; and it
is contended that the greater field for specula-
tion afforded to the dealers in stocks bearing a
low rate of interest has enabled Government to
borrow, by funding additional capitals, for a con-
siderable less payment on account of interest than
would have been necessary had no such increase
of capital been made.

In point of fact, however, these advantages are
but inconsiderable, while the disadvantages in-
separable from the practice of funding a large
amount of stock at a low rate of interest are
great and lasting. During war, especially if any
considerable portion of its expenditure be de-
frayed by means of loans, the rate of interest
uniformly rises, and is usually much higher than
during peace. If, therefore, loans were funded
in stocks, bearing a rate of interest equivalent to
the market rate when they happen to be con-
tracted for, the charge on their account might be
reduced soon after the return of peace, according
to the fall in the rate of interest ; whereas when
loans are funded in stocks bearing a low rate of
interest, with a corresponding increase of capital,
it becomes impossible to take advantage of the
fall of interest at the return . of peace, and the
country is burthened with the war interest in all
time to come !

Now, as to the application of this prin-
ciple to colonial matters. We have, it is
true, no war expenditure ; and so far the
case referred to does not apply here. But

[1863.]

MB. EAGAE.

we have evidences of unbounded national
wealth, with a present comparative de-
ficiency of money. We have enormous
powers or means of developing our
national resources, which are without
limit, though we have but comparatively
little money capital with which to develop
them. We must offer, then, in our con-
solidated stocks inducements to home and
foreign capitalists : that is to say, we
must offer for loan purposes a rate of
interest approximating something to the
interest ruling for money at the time ;
and then as the natural wealth of the
country is developed, and as money be-
comes more plentiful we can convert the
stock at a low rate of interest. So that
our enormous natural advantages place
us in the same favourable condition in
respect to lowering the interest on the
funded debt that a return from war to
peace places the people of Great Britain.
We have this enormous advantage for
which we cannot be too thankful that a
state of peaceful industry and the natural
resources of the Country may do for us
what a change from war to peace does for
the parent Country. Now as regards this
matter of the conversion of interest, it
is right to state to the House the mode
in which funded debts are convertible.
In England it is at the option of the
Government whenever the funded debt
reaches par, to pay it off or to convert
it into stock at a lower rate of interest.
So that, supposing a loan had been
funded by Great Britain at 5 per cent,
interest, and the loan rose to par (which
at 5 per cent, it could readily do in
Great Britain), it is in the power of
the Government to come in and say
"We will pay you off ; here is your money.
Are you willing to take it ? if not, we
will offer you a new loan at 4 per cent."
The holder of the 5 per cent, stock being
anxious not to part with so good a debtor,
would naturally say to the Government
" We will take your 4-| per cent, stock";
and it is in this way that loans which
were at first taken at a comparatively
high rate of interest are gradually brought
down to a low rate. The great objection
to the consolidated three and a half per
cent, stock is this that being at a low
rate of interest it never rises to par. [Mr.
PIDDINGTON : The three per cent, stock has
sometimes risen to par.] It has only done
so twice in the course of a great number of

years. At all events the thing is very un-
usual, and the reason why there is no con-
version of the three percents. is that being so
rarely at par, the Government have never
been able to take them up. With us the
case would be different. Our five per
cent, debentures are now at a premium ; if
they were issued at six per cent, they
would be at a still higher premium ; BO
that future financiers would nave to make
arrangements that when our stocks fell
they would be convertible. Commencing
by a six per cent, rate it would be open
to the Government of the Country, as our
resources become developed, upon the
value of money dropping one per cent, to
propose a conversion to a lower rate of
interest, and the Country would gain
immensely by the arrangement in the long
run. According to our present system,
we throw upon posterity the whole burden
of our enormous local improvements,
which, in itself, is unfair. The inter-
minable principle gets rid of that difficulty;
the burden is cast upon no particular
period. Under the present system we
do not do justice to posterity, upon which
we cast the whole burden of the Public
Debt. I think the principle I have
enunciated is a fair one, and ought to
meet with the concurrence of the Com-
mittee. I would also call the attention
of the Committee to the fact that a
funded debt has an important influence
in the maintenance of law and order.
There cannot be a question that the
National Debt, more than any other
institution in England, has kept that great
Country together during the last century,
while every other nation has undergone
revolutions of the most disastrous char-
acter not excepting the model republic
of the United States of North America.
But Great Britain has held together,
mainly, I consider, from this reason
that a funded debt has created a relation
between the people and the Government,
which could be created in no other way.
A very large number of the British people
are interested in the British funds ; they
are thus interested in the stability of the
Government, and are bound to the
Government of the Country by the
strongest bonds. From analogous rea-
sons we may infer that the same results
will occur here. Every man, woman, and
child, might with the greatest facility
place their savings ID the funded stocks of

124

ME. EAGAK.

[1863.]

the Country ; the very maidservant might
in that way obtain the rate of interest
she now obtains at the Savings' Bank.
So that on social grounds there is not a
doubt that the funded debt in this Country
would present a very strong security for
public order a very strong element of
union between the people and the Govern-
ment. With respect to the management
of the funded stock, it could, I think, be
managed by one of the Banks appointed
by the Government or the House, and at
a very moderate cost. A simple form of
transfer could be used, so that the people
might buy in and sell out readily without
trouble. If the House grant me the
proposed loan, with power to issue it at
six per cent, interest, all the Savings' Bank
money could be taken up, and I shall
be able to invest the trust moneys at
present lent to the Government, so as to
give interest to parties concerned. I
allude particularly to the moneys be-
longing to insolvent estates, which are
now placed in the Bank of New South
"Wales ; the Government get five per cent,
interest for the use of those moneys, and
not a shilling of this goes to those who
are beneficially interested. So that
under the system I propose, these and
other moneys might be earning at the
rate of six per cent, interest. I have no
doubt that some arrangement might be
made with the Banks, by which the whole
250,000 could be taken up for banking
purposes. "With respect to the proposi-
tion of my hon. friend Mr. Samuel, for
putting aside two per cent, annually as a
sinking fund, I am not as a financier
favourable to it. So long as it was a
matter of comparison as to whether we
should have a terminable debt without
any means to pay it off, or such a debt
with some means of redemption, I was
willing to look favourably on my hon.
friend's propositions; but as compared
with the funding of the debt there can be
in my mind no sort of comparison. A
sinking fund has been tried in England ;
up to a certain point it was operative ;
but it so happened that when a large sum
of money had been collected, it was used
for State purposes ; and a sinking fund
must always be open to that objection.
Since 1829, the practice in England had
been to take the cash surpluses and to
apply them to the reduction of the
National Debt. As a matter of fact,

during the last forty years, no less than
fifty millions of the Public Debt had been
cancelled by using surplus revenue for
that purpose. It may be said that I have
under-estimated the revenue, particularly
the land revenue, and that I have not
counted upon the money expected from
free selection. The estimate I now put
forward for 1864 was prepared for me by
the Auditor- General, and is calculated
upon the safest basis namely, by taking
the average of years. Between the
estimate of Mr. Samuel and my own
there is a difference of 127,000. The
late Treasurer included in his estimate
the immigration remittances and pro-
ceeds from the Bishopthorpe Estate,
which I have struck out. There is also a
difference in estimated Customs duties, in
proceeds from land sales, licenses, railway
receipts, and interest on city debentures.
The late Minister for Lands has said that
the land revenue has always been under-
estimated by the Treasurer ; and the Hon.
Member's mode of showing that there
would be no deficiency at the end of 1863
was to the effect that the free selectors'
money had not been taken into account.
For many years the land revenue has
fallen short of the estimates. In 1861
the actual revenue fell short of the esti-
mated revenue by 71,000 ; in 1862, the
deficiency of actual under estimated
revenue was 58,000 ; in 1863, the defi-
ciency in the actual as compared with the
estimated revenue, may safely be put
down at 71,000. [Mr. EOBEETSON :
"Wait for the return at the end of the
year.] I rely upon the figures of the
Auditor-General. The free selectors'
money I cannot take into account, be-
cause there is nothing due before 1855.
When land is sold under conditional pur-
chase by law it requires continuous resi-
dence by the purchaser or by his alienees
for a term of three years. But the law
goes beyond that, for at the end of
three years, if the conditional purchaser
be not able to pay the balance of the
purchase money, by paying 5 per cent,
interest, it becomes a permanent debt.
Thus I can expect nothing in 1864
from the conditional purchaser, unless
the House consents to relax the present
law, by allowing the Treasurer to receive
from free selectors what they are now
perchance prepared to pay. I would
recommend the Hon. Member opposite, if

[1863.]

MR. EAGAK.

125

he again comes into office, to modify the
provisions of the Act in this respect ; I
should be sorry to touch it, although I
hold that the Hon. Member might well
consider whether, for the interest of the
public and free selectors, the stringency
of the law as regards the payment of the
balance of purchase money ought not to be
relaxed to relieve them from the pressure
of circumstances through which, rather
than from any tendency to dishonesty,
they may be unable to meet their engage-
ments. I now submit my scheme to the
fair, candid, and impartial consideration
of Hon. Members, and say do not treat
this as a party question ; for whether we
stand or fall, whether the Country is to
be governed by gentlemen opposite or by
ourselves, the fact is made patent,
cannot be ignored, and will be spread by
the Press far and wide to-morrow, that
we are in a position of unprecedented
financial difficulty. Whoever governs, the
first necessity derolving upon the Com-
mittee is to make provision for the large
deficiency. "We are in this position we
must in the first place tax ourselves to live
as a Government and nation, and next tax
ourselves to pay our debts. We must
show the great English people at a distance
that in times of emergency we are like
them, willing to submit to great sacrifices
to save the public credit and preserve the
national character. I make the appeal
without party results in view, and with no
fear of party consequences. Whether I
survive my financial project, or should
not be permitted by the Committee to
carry it out, I feel that born, educated,
and having all my dearest associations in
the Country, my first object should be
and is to care for the national honor, to
have a regard to the national faith, and
to maintain to the best of my ability the
national credit. Office to me is a matter
of perfect indifference ; it is on patriotic
and unselfish grounds that I now appeal
to the Committee, and I trust that I have
not made my appeal in vain. I propose
to take the decision of the Committee on
the first resolution, which relates to the
equalization of the duty on spirits, and is
as follows : " That towards raising the
supply gi-anted to Her Majesty, there
shall be charged in lieu of the duties on
spirits and wines imposed by the Act 19
Victoria, No. 14, the import duties fol-
lowing, namely, on spirits or strong

waters of all kinds not being sweetened
or mixed (so that the degree of strength
-cannot be ascertained by the hydrometer)
of the strength of proof and in proportion
for any greater or less strength, 10s. the
gallon ; on spirits or strong waters,
sweetened, mixed, or perfumed, cordials,
liqueurs, and all mixed liquids, under
whatever name, containing a greater
portion than thirty per centum of alcohol,
10s. the liquid gallon ; on samshoo and
other spirituous mixtures containing not
more than thirty per centum of alcohol,
5s. the liquid gallon ; on wine containing
more than fifteen and not more than
twenty-five per centum of alcohol, 3s. the
liquid gallon ; on wine containing not more
than fifteen per centum of alcohol, ls.6d.
the liquid gallon."

ME. DALGLEISH : How did the subject
get wind ?

- ME. EAGAE : I can only say that I was
bound, in order to obtain information,
to consult some gentlemen, but as few as
I could, and up to last night nobody
seemed aware of the scheme, since it had
not even got into the newspapers.

ME. GAEEETT : I heard it yesterday.

ME. EAGAB : I do not know how that
could be. At all events, there was no
attempt to rush the Custom House until
this afternoon. But as the scheme haa
got wind, I must impress on the Committee
the necessity for a decision to-night, either
affirmatively or negatively.

ME. DALGLEISH: What amount was
taken out ?

ME. EAGAE : Duty was paid to the
amount of 2,500 by one firm, and the
Collector stopped some dozen others.

ME. EGAN : What firm ?

ME. EAGAE : I do not think it desir-
able to mention names ; but any gentle-
man requiring to know it might learn it
by inquiry at the Custom House.

ME. DALGLEISH inquired whether it
was intended to charge duty upon white
spirit imported for manufacturing pur-
poses.

ME. SAMUEL asked if the Treasurer
could not adopt the plan of exacting the
high duty from merchants on the responsi-
bility of the Government, in order that
the 'debate might be adjourned. They
had heard a long and able speech,
embodying highly important principles of
taxation that were entirely new to the

126

MB. EAGAJR,

[1863.]

House. He was desirous of approaching
the question in no party spirit, but wished
to see the House deal with it as the Hon.
Treasurer had asked, the more particularly
under the present circumstances of the
Country. But after the long address they
had heard, it was impossible that the
House could go fully into the subject at
once, and hon. Members could not go into
one part of the scheme without taking
the other with it. He therefore proposed
the adjournment of the debate till to-
morrow.

ME. LUCAS supported the proposal
to adjourn, recommending that the higher
duties should be collected until the
cheme was decided on.

ME. EAGAR was aware of the diffi-
culty hon. Members must labour under
and would consent to the adjournment
on the understanding that the duties
were to be collected to-morrow.

After some further remarks from Hon.
Members,

ME. ALLEN asked if it was intended
to collect^ the ad valorem duties ?

ME. EAGAE said it was.

ME. ALLEX : It was impossible. How
could it be done ?

ME. EAGAE : In the usual way : by
declaration of value.

ME. SAMUEL wished to know whether
it was intended to collect the duties on all
the articles which had been mentioned ?

ME. EAGAE said that he had been
anxious to have the whole five resolutions
passed that night, if the House had
thought proper to take that course. He
had only suggested, however, that it was
desirable to collect the duties on rum and
other spirits at the Custom-house, for
the reasons he had stated.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE THOMS.S WARE
SMART, made 29th March, 1865.

[From the Sydney Morning Herald of 30fh
March, 1SG5.]

LEGISLATIVE ASSEMBLY.

Wednesday, 29 March, 1865.

FINANCIAL STATEMENT.

ME. SMAET (whose remarks were
frequently inaudible in the gallery) said :
MB. AEKOLD, the statement I am about
to submit to the committee this afternoon
has, I am sure, been looked forward to
with more interest and anxiety by hon.
Members and the country generally than
has been exhibited in regard to any finan-
cial statement for many years past. A
variety of causes has led to this feeling,
including, no doubt, the large demands
upon the public purse, the state of the
revenue which falls far short of the expen-
diture, and the necessity of the Govern-
ment to resort to additional taxation.
The task before me, I am well aware, is
a very formidable one. However imper-
fectly I may perform it, I do not shrink
from the duty of placing the committee
in possession of all the difficulties to be
encountered. I assure hon. Members my
desire is to give them the fullest informa-
tion upon every topic coming within the
range of my department, and I trust the
statement I shall make will be sufficiently
plain, comprehensible, and replete to
enable them to support the Government in
performing their onerous duties with as
little difficulty as possible. My principal
care on entering office was to remove the
impression which obtained currency after
the former Cow per administration relin-
quished power, that it left the Treasury

in a bankrupt state. In and out of the
House this was promulgated, and was even
published by the public prints throughout
the country. Now when the Cowper
Government left office, the cash balances
amounted to 375,691 8s. lid., distri-
buted as follows : Bank of New South
Wales, 222,793 10s. 9d. ; Joint Stock
Bank, 123 2s. 7d. ; Oriental Bank
(Sydney), 110,000 ; Oriental Bank
(London), 42,650 17s. 4d. ; Treasury
chest, 123 18s. 3d. At the same time
the unsold debentures amounted to
1,149,500, and the credits outstanding
in London to 147,160 19s. 3d. I would
ask then whether when the Cowper Gov-
ernment left office the country was in a
bankrupt state ? When this Government
took office the revenue account was over-
drawn to the amount of 481,851 14s. 4d.
The overdraft was thus particularized :
Bank New South Wales, 94,379 5s. 8d. ;
Oriental Bank (London), 86,416 17s. 9d. ;
Suspense Account, 17,079 16s. 7d. ;
Civil Service Superannuation Fund,
2,139 Is. 2d. ; Scab in Sheep Fund and
Church and School Fund 30,416 10s. 9d. ;
Lodgments (No. 2), 63,082 12s. 8d. ;
Cheques, not presented, 2,676 8s. 5d.
These made an overdraft on the Consoli-
dated Fund of 296,190 13s. Oriental
Bank Corporation (London), 172,252 6s.
lid., less the above mentioned overdraft
on the Consolidated Eevenue Fund of
86,416 17s. 9d. ; Bank of New South
Wales, advance on Treasury Bills (due
29th March, 1865), 100,000. These
sums, minus the cash in Treasury chest,
(174 7s. 10d.), made a total overdraft,
as before stated, of 481,851 11s. 4d.
There were then unsold debentures ; Orion -
tal Bank (London), 561,000; unsold

128

MB. SMART.

[1865.]

debentures, Bank of New South Wales
(London), 155,800 ; unsold Treasury
Bills, 228,800; these three sums amount-
ing to 945,600. The credits outstanding
were OrientalBank (London), 278,665;
Bank of New South "Wales (London),
24,688; total, 303,353. A large amount
of money must go by next mail to meet
our liabilities in London, whilst at the
present time I have the greatest difficulty
in providing for current demands in the
Colony. I question whether, if it had
not been for the indulgence of two of the
banks I would not be justified in saying
that the Government would almost have had
to " shut the doors." The Bank of New
South Wales have made considerable ad-
vances. They had done all they could do to
assist the Government, and much assistance
had also been received from the Oriental
Bank. I do not see my way clear to pro-
vide the means for payingthose debentures
now falling due. Nothing, however, shall
be wanting on my part to secure an ad-
justment of the finances, but still I can-
not do impossibilities. But if the Treasury
was bankrupt when I left office, I will
leave it to hon. Members to say what its
state must be now. I do not say that
it is bankrupt even now. So far from
saying that, I deny that it is so. By
management on the part of the Govern-
ment, and with the support of this House,
and the assistance of the banks, I have no
fear but that the finances of the country
will, in a very short time, be placed on
a sound footing. The statement I have
now made needs no verification, because
it is borne out by papers on the table of
the House, so that I need not go farther
into the matter. This large overdraft
with the banks is not a thing of yesterday.
It has not come upon us on a sudden,
but has been gradually growing up
since the first month of 1864. During
this year the greater portion of the Trust
Funds held by the late Government were
absorbed by them in order to meet their
temporary difficulties. I have taken out
the balances due upon the several accounts
in each month, and without going into
the whole figures I will merely give the
result of each month. On January 18th,
1864, the Consolidated Eevenue account,
as per the books of the Treasury, was
debited with an overdraft of 7,929 Is. ;
on February 15th, with 22,651 18s. 3d. ;
on March 14th, 82,934 15s. 4d. ; on

April 18th, 110,276 9s. 7d. ; on May
16th, 65,636 Os. 6d. ; and on June
13th, 232,055 14s. 6d. On July 18th,
there was a cash balance in favour of the
Consolidated Eevenue of 7,821 19s. Sd.
This was owing to a sum of 100,000
received on sale of debentures, together
with the amount received for publicans'
licenses at the end of June. On August
15th, however, there was again an over-
draft of 165,656 8s. Id. ; on September
19th, of 180,897 16s. lid. ; on October
17th, of 171,605 16s. 9d. ; on Novem-
ber 14th, of 292,709 14s. ; on December
12th, of 294,144 10s. 9d. ; 011 January
16th, 1865, of 244,092 16s. 3d. ; and
on February 13th, of 278,608 17s. 10J.
This is the latest date to which I have
had the overdraft made up, but I fear that
any later account will not be an im-
provement on those that have gone before.
The principal cause of this overdraft was
the sending into the market the Treasury
bills that were authorised to be issued
last year, which made our debentures
unsaleable. By last advices, received by
the January mail, our debentures had gone
down to 92, this being the extreme limit,
and even at that low rate only 20,000
were taken up. The bank was anxious
to sell in order to get back the money it
had advanced, but the Government had
no desire to sacrifice their debentures by
selling at the price quoted. Owing so
large a sum to the bank, the Government
was in no position to dictate on the
matter. The amount due must be covered,
and the only -way to do it, that I
can see, is to make some sacrifice. In
connection with this subject I will
have to trouble the House with a few
statements in reference to the remarks
made by me in 1863. It will be in
the recollection of hou. Members, then
in the House, that my successor in office
had almost repudiated my balances, and
to a great extent remodelled the accounts.
Being satisfied that my account was true
and faithful, I was naturally indignant at
having it impugned. I knew that the
account was as faithful a one as could be
produced in the office, and consequently
in December, 1863, I wrote to the
Treasury to ask the Under Secretary to
reconcile, if he could, the difference
between Mr. Eagar's statement and my
own. To that letter I got no answer;
and, therefore, on resuming office, I called

[1S65.]

MJJ. SMAET.

129

attention to this subject, aud in answer
had place;! in my hands a statement
from the Auditor General reconciling
the difference between my statement
and Mr. Eagar's to within 8 18s. 4d.
It would no doubt be as satisfactory to
hoii. Members as it was to me to find this
confirmation of the statement of accounts
I submitted to tlie House in 1S!.'>:3. Hi
thus disposed of the differences between
myself and the late Treasurer, I invite the.
attention of the Committee to statements
Xos. 1 and 2, now on the table. No. 1
purports to be an account of the issue of
Treasury Bills in payment of authorized
services for 1803, and previous year-:,
under the authority of the Act 27 Vic. No.
8. I may mention to new Members of the
1 [ouse that these are the old deficiencies,
which were authorized to be covered by
the issue of Treasury Bills. The late
Government got an Act authorizing them
to raise 1-00,000 by Treasury bills to
cover a deficiency to that extent said
to exist at the end of 1SG3, but from
various causes they were unable to
realise more than 172,000 of that
amount. These bills were to have been
sold here, but not being taken up,
th. v were afterwards very imprudently
forced upon the English market at a
time when our debentures were really
looked upon as a first-class security ;
no sales being made under 99 or 100.
When sent to England they were most
unadvisedly put into the market without
referring them, as was usual, to the
Stock Exchange Committee. The result
was that when these bills, bearing G
per cent, interest, were offered for sale
with our debentures that bore 5 per
cent, only, they were, to use a Stock
Exchange phrase, immediately blown
upon, and none of them would sell. But
this was not the only result ; for our
credit was atfected by the alarm of some
persons on .seeing a n'ew scx-urity bearing
6 per cent, interest forced on the market.
The consequence of this was that our
debentures fell to 92', whilst those of
Victoria, previously at in 1 ,., rose to 1'
Not only did our debentures fall in
value, but then? was even a difficult y
in disposing of them at that rate. I am
satisfied that this fall and this difficulty
of sale has been caused entirely by the
imprudent way in which these bills were
sent to London, the result of which is,

that the Government is in this position
that they cannot sell their debentures
eit'.ier here or in London. Before I
close this part of the case I may 8ay
that I intend to ask the Committee to
authorize the issue of debentures to c
tha amount of deficiency in the sum
authorized to be borrowed ury

Bills. I do not intend to detain the
House by going into particulars of
this account, as hon. Members will
see from tli3 balance-sheet that the
amount of the deficiency to be met is
399,700. The details of the various
amounts were given under the different
headings and statements appended. In
No. 2 account current of the Consolidated
Kevenue Fund of New South Wales for
1861 it will be seen that there is an
estimated deficiency for last year of
412,910. There is on the credit sido
of this account an amount of 125,000
for appropriations of 1 nated as

not likely to be required ; but as it is
impossible to say that the whole of this
amount will not be wanted, I will
ask for an additional sum to cover any
further amount that may be required.
The cause of the deficiency has been
very clearly stated in the accounts and is
precisely similar to that which brought
about the deficit in 1862-3, when his
present colleagues were then in office.
Mr. Eagar no doubt estimated for a larger
revenue than had been received; but in
estimating there was always a difficulty
when the revenue and expenditure were
brought too closely together, for the ex-
penditure was sure to take place, whilst it
was not always certain that the revenue
would be received. The cause of the
deficiency was also very forcibly explained
in His Excellency's Speech opening this
Parliament, and therein attributed to the
mischief caused by the floods. I appeal
to hon. Members to say whether the
calamities of 1^>1 were so much greater
than those of the two previous years
whether the misfortunes which had
befallen the Cnlony in IM*2 and
were not quite as serious as those of
last year. If t!u- lion, gentleman, my
iimn iliate predecessor had frankly ad-
mitted that such was \. lie would
onlv have done simple justice to those who
had held oilice before him. There was no
doubt that my hon. friend Mr. \V< i
whom I succeeded, when 1 first took oilice,

130

MR. SMAET.

[1865.]

had not, in his Estimates for 1862 and
1863, anticipated that there would be the
failures in the crops which did take place
and which were the cause of nearly the
whole of the aggregate deficiency for
those years. I deny that the officers of the
Government departments were overpaid
hy the Cowper Government, and that
such over payment had, in any degree,
been the cause of our financial difficulties.
I will go even further than that and
say that I believe the Government
departments were conducted with as
much economy as private establishments
of similar magnitude could be. Hon.
Members would see that the total es-
timated deficiency for the year 1864
was 412,910 4s. lid. I propose there-
fore to ask for 850,000 to cover the de-
ficiencies of 1864 and previous years. I
intended to have asked for a larger sum,
but I think the amount I have men-
tioned will prove sufficient, as the
Treasury Bills would be likely to come
in. If the House is prepared to grant
me the Loan I ask for I will be able
to wipe off the deficiencies of 1864 and
previous years, and not have them again
brought before the House. This would,
of course, be with the understanding
that the Treasury Bills outstanding
would be paid off and cancelled as they
came in. I will now proceed to call the
attention of the committee to the proba-
ble expenditure of 1865. These Estimates
have been prepared with the utmost
possible regard to economy, consistent
with the necessary efficiency of the
Public Service. Many officers in the
Public Service had been promised increases
of salary, but they have very properly
agreed to postpone their claims until
next year. Some of these increases
of salary were promised by the late
Government, and were no more than the
officers were, under ordinary circum-
stances, fully entitled to claim. It
would be found in the Estimates, as pre-
pared by the present Government for
this year, that there was when it was
considered how much more we are about
to do in point of fact, a considerable
reduction upon the Estimates of the
previous Government. Hon. Members,
if they took the trouble to go through
the Estimates, would see that various
reductions had been effected in the
expenditure of several departments of

the service, and these reductions could,
it was believed, be effected without im-
pairing- the efficiency of the service. The
increased items of expenditure for 1865
amounted to 88,241, and I will tell
the House what these several items are.
The first was in the estimate for the
administration of justice, for which the
proposed increase of expenditure was
1,883. The next was an increase on
account of the Post Office, in which the
expenditure was still, I regret to say,
considerably in excess of the revenue ;
the expenditure being 116,168, and the
revenue 72,000 leaving a deficiency of
44,168. The increased estimated ex-
penditure for the Post Office for inland
mails and country postmasters was
4,000. The increase on account of
telegraphic messages and postage was
4,500. The additional expenditure for
stores was estimated at 7,500. For
interest on debentures the increase was
20,000 ; interest on Treasury Bills,
16,458 ; and on the public account,
10,000. The additional amount required
under the heads of revenue returned and
charges on collection I have put down at
11,000 ; and the additional expenditure
for endowments to municipalities at
2,500 ; making an increase on 1864, of
77,841. Besides this, there was an esti-
mated additional expenditure of 7,000
for increased military allowances of
2,000 for theVoluuteers and 1,400 for
the Naval Brigade. This brought the
estimated additional expenditure for 1865
up to 88,241. As compared with the last
Estimates there was, it would be observed
a reduction in the department of the
Chief Secretary of not less than 15,000.
A greater reduction than that could not
be made, and, indeed, I may say that
there would have to be an increase next
year, or efficient public officers could not
be expected to remain in the service. It
was not to be expected that they would if
they could get better pay elsewhere. I
now propose to show the Committee in
what way I intend to provide for the ex-
penditure of 1865. In the papers sub-
mitted hon. Members will find an account
headed " ]S r o. 8, Consolidated Eevenue
Fund," showing the estimated revenue and
expenditure for the year 1865. From that
they would see that I expect to receive
in 1865 a revenue of 1,954,798 a very
much larger estimate than that of last year.

[1865.]

ME. SMAET.

131

The first large increase that I expect
to receive was in the Department of the
Customs, on which alone I hope to
receive 611,000, as against 538,446.
I had this estimate prepared by the
Customs Department, and I believe it
will eventually be found to be far below
what will actually be realised. I am
assured by two or three of the sub-collec-
tors that the Border Duties alone will
amount to 100,000 but for the present
I am content to put them down at 50,000.
In the course of two or three weeks a
delegation may be expected to arrive
from the Victorian Government, with
a view to effect some equitable ar-
rangement as regards the collection of
the Border Duties. We trust that
such will be the case, as it will doubt-
less enable us to collect these duties
at a less outlay. The next item which
showed a considerable increase was duty
on refined sugar and molasses, in which
there is the very large increase of
9,100 or 25,000, as against 15,900
in 1864. In the item of duty on spirits
distilled in the Colony there is also a
like increase, the estimate being 25,000
as against 10,085 for last year. I have
no doubt whatever that this expectation
will be fully realised, and in proof of
this I desire to state that the Chief
Inspector of Distilleries has informed
me that up to the 30th March last he
had received 13,646. The next item
on the AVays and Means was the land
revenue, from which we expect to
receive 630,433, as against 307,125
in 1864. This large estimate includes
89,333 for balances of conditional
purchases, 8,900 for interest, and
320,000 for rent and assessment on
pastoral runs. I have been assured by
the Secretary for Lands that he fully
expects to realise 240,000 for the new
assessments which he proposes. There
are other items of increase but they
are not so important as those I have
mentioned. It is the intention of the
Government to propose certain stamp
duties. This was, no doubt, a new source
of revenue in this colony, but it has been
adopted after very careful consideration
by myself and my colleagues, and I
believe the various duties proposed can
be met without much inconvenience to
those who will have to pay them, while
the result will be beneficial to the colony

at large. Hon. Members will see, from
the papers distributed, that on any a-n -c-
ment, or any minute or memorandum of
an agreement, where the matter thereof
shall be of the value of 5 or upwards,
whether the same only be evidence of a
contract or obligatory on the parties,
from its being a written instrument,
together with every schedule, receipt, or
other matter put or indorsed thereon or
annexed thereto, we propose to impose a
duty of 2s. 6d., provided always that
where divers letters shall be offered in
evidence to prove any agreement between
the parties who may have written such
letters, it shall be sufficient if any of such
letters are stamped with a duty of 5s.
From this source I expect to receive 5,000.
We propose to levy on each inland bill of
exchange or promissory-note, for the pay-
ment to the bearer, to order or on demand,
of any sum of money not exceeding 50,
a duty of Is.; not exceeding 100, 2s. ; and
where the same shall exceed 100, then for
every 50 and also for any fractional part
of 50, Is. ; on foreign bill of exchange
or promissory-note drawn in but payable
out of the Colony of New South Wales:
If drawn singly or otherwise than in a
set of two or more the same duty as on
an inland bill of the amount and tenor.
If drawn in sets of two or more, for
every bill of each set where the sum pay-
able thereby shall not exceed 50, ML;
where it shall exceed 50 and not
exceed 100, 8d.; and where the same
shall exceed 100 then, for every 50,
and also any fractional part of 50, 4d.
Exemption from the foregoing duties on
bills of exchange and promissory-notes,
but not from any other duty to which the
same be liable: All promissory -notes
for the payment of money on demand
issued by any bank or banking company
of New South Wales. Bills of exchange,
draft, or order drawn or indorsed out of
the Colony for payment of money on
demand the same duty as on an inland
bill of the same amount and tenor. All
bills, drafts, or orders for the payment by
any bank or banking company of any
sum of money though not made payable
to the bearer or to order, and whether
delivered to the payee or not, and all
writings or demands entitling any person
to the payment by any bank or banking
company of any sum of money, whether
the person to whom payment was to be

132

MB. SMAET.

[1865.]

namc.1 shall bo named or designated
therein or not, or whether the same
shall be delivered to him or not, shall
respectively be deemed to be bills, drafts,
or orders "for the payment of money,
chargeable with stamp duty, as it' the
same had been made payable to bearer or
to order. From all instruments which
might be brought under this category we
expect to realise 25,000. On each
bill of lading of or for any goods, mer-
chandise, or effects to be exported or
carried coastwise, we propose to charge
2s. 6d., which it is estimated will yield
1,000. On a conveyance of any kind
or description whatsoever upon the sale
of any property, in respect of the princi-
pal or only writing whereby the property
sold shall* be conveyed to or vested in
the purchaser, or any other person or per-
sons by his direction (except transfers
expressly provided for by this Act), where
the purchase or consideration money
therein or thereupon expressed shall not
exceed 50, we propose to charge 5s. ;
whero the same shall exceed 50 and not
exceed 100, 10s.; and then for every
100, and every fractional part of
100, 10s. ; on any deed or instrument
of any kind whatever, not otherwise
charged in this schedule, 1. Prom
this we expect to raise 15,000. I
propose to make the following ex-
exemptions from the preceding duties on
deeds or instruments not otherwise
charged in this schedule : All instru-
ments relating to the service of appren-
tices, clerks, or servants ; all bonds
given as security for the payment of any
definite and certain sum of money ; all
agreements or contracts for the charter of
any ship or vessel ; all mortgages of real
estate, and all mortgages given by way of
bill of sale or otherwise of live stock,
goods, chattels, and effects, and personal
estate generally ; and all preferable liens
under the Act 11 Victoria, No. 4. The
next item was that on any draft or order
for the payment of any sum of money to
the bearer, or to order on demand, a duty
of Id. should be payable, and from this
source we expect to realise 7,500.
Upon any lease or agreement for a lease,
or any written document for the tenancy
or occupancy of any lands, tenements, or
hereditaments, the following are the
duties chargeable in respect of the yearly
rent Where the rent shall not exceed

50, 5s. ; where it should exceed 50 and
not exceed 100, 10s. ; above 100, and
for every fractional part of 100, 10s.
On the lease of any lands, tenements or
hereditaments, granted in consideration
of a sum of money by way of prem um,
and also of a yearly rent amounting to
20 and upwards, it is proposed that both
the ad valorem duties shall be payuM ;
upon a conveyance according to the con-
sideration therein expressed, and for a
lease in consideration of a rent of the
same amount. On each memorandum of
transfer under the Act 2(5 Aletoria, No.
9, the same duty is to be paid as for a
conveyance for the sale of lands for a like
sum the consideration of such transfer.
This, I think, will realise 5,OOJ. Upon
everv policy of insurance against risk of
loss or damage by fire or other casualty
to any property on land, it is proposed,
for every 100 insured, to impose a
duty of Is., and this will produce
7,500. Upon each policy of insurance
or other instrument whereby an insurance
shall be made upon any ship or vessel,
or upon any goods, merchandise, or other
property on board of any ship or vessel, or
upon the freight thereof, the amount pay-
able will be, for every sum of 100, and
for every fractional part of 100, 2s. Gd.,
and I thereby expect to raise 5,000.
Where any deed or instrument chargeable
with any stamp duty under the Act,
together with any schedule, receipt, or
other matter put or endorsed thereon,
or annexed thereto, shall contain 2,160
words or upwards, then for every 1,080
words over and above the first 1,080 words
there shall be charged the further pro-
gressive duty following : Where such
deed or instrument shall be chargeable
with any ad valorem duty or duties, not
exceeding in the whole the sum of 5s.,
a further progressive duty equal to the
amount of such ad valorem duty or duties,
and in every other case a further pro-
gressive duty of 5s. By this I expect
to realize 2,000. Upon promissory-
notes payable to the bearer on demand,
issued by any bank, or banking company,
at the rate of for every 100 of
the average annual amount in circula-
tion, as certified under 4 Vic., No. 13,
there will be a charge of 2, and the
revenue from which will amount to
18,000. On each receipt or discharge
given for or upon the payment of money,

[1865.]

ME. SMART.

133

the duty will bo Id., and will yield
7,500. For the transfer of any run
or station held under lease, or promise
of lease, from the Crown, or of any
interest therein, where the declared
value of the said run or station or
interest, or the value thereof, assessed
as in the Act provided, shall not
exceed 100, the sum payable will
be 10s. ; and where the value shall
exceed 100, then for every hundred, and
any fractional part of 100, 10s., and
this will probably bring in 10,000. On
the transfer of any share or shares in
the stock and funds of any corporation
company, or society whatever in New
South Wales, upon sale thereof where
the purchase or consideration money
therein expressed shall not exceed 50,
the charge will be 2s. Gd. ; exceeding 50,
and not exceeding 100, 5s. ; and for
every additional 50, or fractional part of
50, 2s. (Sd. The amount which, it is
estimated, will be received from this
source, is 5.000. The duties on pro-
bates of wills r.nd on letters of administra-
tion with a will annexed, where the
effects as sworn to by the executor or
administrator shall be under the value
of 10<\ we propose 1 ; ditto 100
and under 200, 2 ; ditto 200 ditto
300, 1 ; ditto 800 ditto 500, 9 ;
ditto 500 ditto 750, 14 ; ditto 750
ditto 1,000, 20; on every additional
1,000 from 1,000 to 10,000, 15 ;
ditto ditto 10,000 to 50,000, 10;
ditto above 50,000, 5. These I ex-
pecte will realise 7,500. For letters
of administration, without a will annexed,
where the effects as sworn to by the
administrator, the fees payable shall
be Under the value of 100, 1 10s. ;
above the value of 100, and under
200, 3; ditto 200 ditto 300, 6;
ditto 300 ditto 500, 10 ; ditto 500
ditto 750, 15; ditto 750 ditto 1,000,
25 : on everv additional 1,000 from
1,000 to 10,000, 20; ditto ditto
10,000 to 50,000, 15; ditto above
50,000, 10. I anticipate that these
charges will also produce 7,500. The
duties payable on legacies and suc-
'ons to personal estate under any
totamc'Hlary disposition or upon intes-
tacy are shown in the schedule in the
11 of iion. Members, and from
this source we hope to receive 30,000.
The schedule provides that for every

legacy, specific or pecuniary or of any
other description of the amount or value
of 20 or upwards given by any will or
testamentary instrument of any person
either out of his or her personal estate,
or out of or charged upon his or her real
estate, or out of any moneys to arise by
sale, mortgage, or other disposition of
his or her real estate or any part thereof,
and which shall be paid, delivered,
retained, satisfied, or discharged after the
passing of the Act. Also for the clear
residue (when devolving to two or more
persons), of the personal estate of any per-
on who may die after the passing of
the Act (after deducting debts, funeral
expenses, legacies, and other charges first
payable thereout), whether the title to
such residue or any share thereof shall
accrue by virtue of any testamentary
disposition or upon a partial or total
intestacy, where such residue or share
of residue shall be of the amount or
value of 20 or upwards, and where the
same shall be paid, delivered, retained,
sat isfied, or discharged after the passing
of the Act. And also for the clear residue
(when given to one person), and for every
share of the clear residue (when given to
two or more persons) of the moneys to
arise from the sale, mortgage, or other
disposition of any real estate directed to
be sold, mortgaged, or otherwise disposed
of by any testamentary instrument of any
person (after deducting debts, funeral
expenses, legacies, and other charges first
made payable thereout if any), where
such residue, or 'share of residue, shall
amount to 20 or upwards, and where
the same shall be paid, retained, or dis-
charged after the passing of the Act;
where any such legacy or residue, or any
share of such residue, shall have been
given, or have devolved to or for the benefit
of a child of the deceased or any de-
scendant of a child of the deceased, or to
or for the benefit of the father and
mother, or any lineal ancestor of the
deceased, a duty at and after the rate of
one pound per centum on the amount or
value thereof shall be payable ; where
any such legacy or residue, or any share
of such residue, shall have been giu-n
or have devolved to or for the benefit of
a brother or sister of the decc a<ed, cr any

ndant of n brother or sister <>'.
deceased, the duty s!.a!l be at and after
the rate of three pounds per centum on

134

ME. SMAET.

[1865.]

the amount thereof; where any such
legacy or residue, or any share of such
residue, shall have been given or have
devolved to or for the benefit of a brother
or sister of the father or mother of the
deceased, the duty shall be at and after
the rate of five pounds per centum on
the amount or value thereof ; where any
such legacy or residue, or any share of
such residue, shall have been given or
have devolved to or for the benefit of a
brother or sister of a grandfather or
grandmother of the deceased, or any de-
scendant of a brother or sister of a grand-
father or grandmother of the deceased,
the duty shall be at and after the "rate
of 6 per centum on the amount or
value thereof ; and where any such legacy,
or residue, or any share of such residue
shall have been given or have devolved to
or for the benefit of any person in any
other degree of collateral consanguinity
to the deceased than is above described,
or to or for the benefit of any stranger
in blood to the deceased, the duty shall
be at the rate of 10 per centum on the
amount or value thereof. All gifts of
annuities, or by way of annuity, or of any
other partial benefit or interest out of
any such estate or effects as aforesaid,
shall be deemed legacies within the
intent and meaning of the schedule ; and
where any legatee shall take two or
more distinct legacies or benefits under
any will or testamentary instrument,
which shall together be of the amount
or value of 20 each, shall be charged
with duty though each or either are
separately under that amount or value.
Where the successor to real and personal
estate shall be the lineal issue or lineal

ancestor of the predecessor, a duty upon
the value of the succession at the rate of
.1 per. centum shall be imposed ; where
the successor shall be a brother or sister,
or a descendant of a brother or sister of
the predecessor, a duty upon the value of
the succession of 3 per centum shall be
charged ; but where the successor shall
be a brother or sister of the father or
mother, or the descendant of the brother
or sister of the father or mother of the
predecessor, the duty upon the value of
the succession shall be 5 per centum ;
where the successor shall be a brother
or sister of the grandfather or grand-
mother of the predecessor, the duty upon
the value of the succession shall be 6
per centum ; and Avhere the successor
shall be in any other degree of collateral
consanguinity to the predecessor than is
hereinbefore described, or shall be a
stranger in blood to him, the duty upon
the value of the succession shall be at
the rate of 10 per centum. In con-
clusion I hope the committee will assist
the Government in their desire to place
the finances of the country in a better
position than they are now in. I shall
be very happy to explain any matter
regarding which hon. Members may re-
quire further information. I now move,
Sir, that towards making good the supply
granted to Her Majesty for the year
1865, the sum of 10,093 10s. be granted
out of the Consolidated Revenue Fund
of New South "Wales." This is three-
fourths of the sum voted in Committee
of Supply, which is thus reduced on
account of the vote for three months
already taken. It is therefore nine
months Supply.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SAUL SAMUEL,
made Wednesday, 29th November, 1865.

[From the Sydney Morning Herald of 30th
November, 1865.]

LEGISLATIVE ASSEMBLY.

Wednesday, 29 November, 1865.

FINANCIAL STATEMENT.

ME. SAMUEL said: It is not without
some misgiving as to my ability to per-
form satisfactorily the important and oner-
ous duties I have undertaken that I now
proceed to address the House. But,
whatever my shortcomings may be, how-
ever imperfectly I may lay before the
Committee an exposition of the financial
affairs of the Colony, I trust that the
great interests of the country will not
suffer by any deficiency on my part.
Looking at the vast resources of the
country, and relying upon the assistance
and co-operation of hon. members, I have
great hopes that our finances may without
much difficulty, and without imposing any
serious burdens on the people, be placed
on a firm and proper footing. No doubt
some sacrifices will have to be made, but
these will I am sure be cheerfully sub-
mitted to when it is shown that the
necessities of the country demand them.
I regret that I do not possess any of
those powers of embellishment that would
have rendered this statement less tedious
than it is likely to be, but iu the absence
of these, I shall endeavour to be as
brief as possible, consistent with the
important matters that I have to deal
with. Before proceeding to discuss the
finances of the country, I would ask hon.
Members to bear with me whilst I show

the material progress the Colony has
made since 1851, the year of the gold
discovery. I take this year, and com-
pare with it the years 1862-3 and 4,
because 1851 may be said to be the first
year in which the Colony began to
make those rapid strides which it has
since maintained ; and I take the last
three years because they have not been
years of prosperous seasons, and may
therefore be taken as true indications
of the position of the country. In 1851
and before I begin to quote the figures, I
would particularly call the attention of
hon. Members to them, as they bear much
and very materially upon the question
we shall have to discuss, the total
population was 197,168 souls ; in 1862 it
was 367,495 ; in 1863, 378,934 ; in 1864,
392,589. The number of acres under
crop in 1851 was 153,117 ; in 1862 it \vas
302,138 ; in 1863, 307,035 ; and in isi! I,
318,854. Our manufactories, which in
1851 numbered only 140, had increased
in 1862 to 859 ; in 1863 to 1,768 ; and
in 1864 to 2,084. Our live stock showed
a tremendous increase, although within
the period mentioned Queensland, with
all her flocks and herds,has been separated
from this Colony." In 1851 our horse
stock numbered 116,397 ; in 1862 it was
273,389 ; in 1863, 262,554 ; and iu 1864
it was 284,567. Our cattle were, in 1851,
1,375,257 iu number ; and in 1S62 they
were 2,620,383 ; in 1863 they were
2,632,522; and in 1864 they were
1,924,119. Our sheep in 1851 were
7,396,895 in number. In 1862 the num-
ber had fallen off somewhat, being only
6,145,651 ; but in 1863 it was 7,790,969 ;
and in 1864 it was 8,271,520. The shipping

136

MR. SAMUEL.

[1865.]

both inwards and outwards shows a
very large increase. In 1851 the num-
ber of tons entered inwards was 153,002 ;
but in 1862 it was 454,837 ; in 1863 it
was 479,827 ; and iu 1864 it was 607,168.
The number of tons entered outwards was,
in 1851, 139,020 ; and in 1862 it was
457,356 ; in 1863 it was 511,373 ; and in
1864 it was 647,057. I come now to the
imports and exports, which show a most
extraordinary increase within the ten
years. In 1851 the total value of our
imports during the year was 1,563,931 ;
but in 1862 it was 9,334,645 ; in 1863
there was a slight falling off, the amount
being only 8,319,576 ; but in 1864 it
again rose to 10,135,708 ; being nearly
25 per head for every man, woman, and
child in the country. Our exports in 1851
amounted to 1,796,912; but in 1862
they had gone up to 7,102,562 ; in 1863
they fell off as the imports had done, and
amounted to only 6,936,839; and in
1864 they were 9,037,832. Our revenue
has increased somewhat in the same
proportion. In 1851 it amounted to
367,261; in 1862 it had gone up to
1,589,816 ; in 1863 it fell off a little,
having been only 1,533,587; and in 1864
it fell to 1,390*536 ; and though I do not
wish to anticipate any part of the state-
ment I shall have to make hereafter, I
may as well state here that our revenue
for the year 1865 is expected to amount
to 1,747,272. Whilst our population,
our manufactures, our crops, our live
stock, our shipping, our imports and
exports, and our revenue have gone on
increasing, it is also highly satisfactory
to know that our mortgages have de-
creased. On live stock the mortgages
had decreased between 1863 and 1864
to the extent of 386,704. I take it
that there can be no greater evidence
that the country is progressing than these
figures ; and that we have progressed
to a very great extent few will deny.
It is asserted that there is great depres-
sion ; this I admit. It is asserted also
that there is a large number of persons out
of employment. No doubt this also is the
case ; but it is easily accounted for, by the
fact that in 1863 we had a very bad season,
and that the country suffered seriously
from floods. Whole farms and houses
were swept away by inundations ; the loss
to the people was very great indeed, and

the whole industry of the country was
seriously retarded. In 1864 the country
suffered again, partially from floods,
partially from drought; and this year
we have gone through a season of un-
precedented drought, of a kind and
character not known in this country for
many years past. All these together have
had a very serious effect upon the indus-
try of the country, and as a natural con-
sequence that interest on which the
community chiefly depends, and which is
the mainstay of the Colony, has suffered
with the rest. When those engaged
in pastoral pursuits suffered in this way,
and saw ruin staring them in the face,
they took the wise course of reducing
their expenditure, as much as possible, so
as to be able the better to meet the losses
they were likely to incur. Thus many
men were' thrown out of employment
in consequence of squatters and others
reducing their expenditure in anticipation
of what is not now likely to occur, as the
change of season that we have happily
experienced will, to a great extent, relieve
them of all fears for the future. It was
natural that when the pastoral interest was
suffering all other interests should suffer
also. Every depression which this country
is suffering may be traced to this cause,
inasmuch as every interest is more or less
dependant upon the producing interests,
therefore, when they suffer, all others
suffer. I will now proceed to state what
progress we have made, as a community,
up to the present time. We have con-
structed, and have in working order,
145 miles of railway, and we have 165
miles in course of construction, making
together 310 miles. Of the lines opened
we have 81 miles to the south, 54 to
the west, and 30 to the north. We
have 2,584 miles of telegraphic wires
opened, and 425 more in course of con-
struction, making together nearly 3,000
miles. I think when we consider the age
of the Colony, and its population,
we may well say, " This is fully as much
as can* be expected from the number of
people during the period that the Colony
has existed." I venture to say that
no other than the Anglo-Saxon race could
have achieved so much in the same -time.
It may be as well before proceed-
ing further, to show the result of our
railway operations that is the earnings

[1865.]

MR. SAMUEL.

137

of the lines, their working expenses, and
what they yield us beyond the expenses.
I hold in my hand a return in regard to
railways, and, without wishing to be
tedious, I may be pardoned if I detain the
committee for a short time while I show
the progress we have made, and the loss
we are sustaining by our railways.
This return commences with -1855. There
were then only 13^ miles of railway open
in the Colony. The number of passen-
gers carried in 1855 was 98,840, and the
total earnings, 9,248 10s. 3d. ; the total
working expenses, 5,958 13s. 10d., and
the net earnings, 3,289 16s. 5d. The
capital then invested was 515,347, and
the rate of interest 638. It would be
too tedious to go through every year, but I
will lay the return on the table, so that
hon. members may read it for themselves.
I will now jump at once to the years 1864
and 1865. In 1864 there were 142 miles
open ; the number of passengers carried
was 693,174, with 379,661 tons of goods ;
the total earnings being 147,653 12s.
lid. ; the working expenses, 103,714 18s.
3d. ; and the net earnings, 43,938 14s.
8d. The capital invested was 2,631,790
8s. 9d., and the rate of interest 1,669.
For the present year the returns extend
only to 30th September, but an estimate
is made for the remainder of the year.
There are 145 n.iles of railway com-
pleted and open to traffic. The con-
struction expenditure on the 31st De-
cember will amount to 3,576,191 ; the
revenue to 164,342 ; the working ex-
penses to 112,770; and the net revenue
to 51,772, or at the rate of 1 9s. per
cent, on the outlay. The interest on the
capital invested will, at 5 per cent., be
178,809, leaving a loss of 127,037.
I shall deal with the telegraphs in some-
what the same way. Here we have
had a much more glowing picture than
we are entitled to, as the lines of tele-
graph have not yielded so large a per
centage as we have been accustomed to
believe. We have nearly 3,000 miles of
telegraph open and in course of construc-
tion, the expenditure for which will
amount to 172,513 ; the revenue to
29,853 ; the working expenses to
22,517 ; and the net revenue to 7,306
or 4 4s. per cent. The interest on
the cost (172,513) at 5 per cent, is
8,626, leaving a loss of 1,320. I

find we have also expended during the last
ten years, out of revenue, 2,158,495, on
public works, roads, bridges, &c. This
large sum is exclusive of loans, and shows
how heavily the construction of public
works falls upon the central Government.
This subject is, I think, worthy of a great
deal of consideration by hon. Members,
in connection with other matters which I
shall refer to hereafter. I find that
nearly 2,000,000 were sent out of the
country for breadstuff's in four years
namely, from 1861 to 1861, both, included ;
and if we wanted anything to show the
necessity of pushing our lines of railway,
into the interior, this fact alone should be
argument sufficient. I therefore think we
ought to use all the means in our power
to promote this great undertaking. I will
now refer to our public debt ; and I must
say that considering our population it
has assumed gigantic proportions. Our
debt may be said to amount to 8,000,000.
The sums raised by loan, and authorized
to be raised, amount to 8,213,380, the
interest on which is equal to 1 per
head for every man, woman, and child
in the Colony. In most countries this
would be considered a large amount of
taxation, but I do not look upon it with
alarm. With such resources as we have
the debt may soon be got rid of ; at all
events it is a source of satisfaction to
know that it has been incurred for useful
purposes, unlike the public debt of some
countries which had left behind jt ruin
and desolation. For my part I have long
contended that we have been going in the
wrong direction, incurring debt without
making provision for its extinction, a
proceeding which must result in great
sacrifice's by the people. If, however, sac-
rifices are made at once they need not
be necessarily great. I will only point to '
one vast asset which we have, which may
at once stop the mouths of those who
think our public debt out of proportion to
our resources, and that is the 200,000,000
acres of unalienated land in this country
an asset sufficient to meet a debt much
larger than our present one. I think it
may be as well, before proceeding further,
to state as briefly as I can the state of
the public accounts. I shall have to
refer to them again, but I will now just
mention how they really stand. The
document which 1 hold in my hand has

138

MR. SAMUEL.

[1865.]

been laid upon the table already, but I
will again lay it upon the table when
we come to consider the Ways and Means.
The debentures and Treasury bills sold to
;31st October last, as per statement with
Ways and Means for 18G6, page 57,
: amounted to 6,153,830, of which there
were paid off414,200,leavingoutstauding
. on that date, 5,739,130. To this has to
be added the debentures in the hands of
the Oriental Bank Corporation, London,
. as per memorandum at foot of statement
referred to, 1,180,900. In the hands of
the Bank of N^w South Wales, London,
as per same statement, 155,800. In
the hands of the Bank of New South
Wales, Sydney, issued under 27 Victoria,
No. 14, 100,000. Forwarded by the
"Bombay" this month to the Oriental
Bank Corporation, London, 570,000,
issued also under 27 Victoria, No. 14. In
Treasury chest, issue under 18 Vic. No. 35,
23,600. Total, 7,769,430. The deben-
tures still to be issued, are as follows :
18 Victoria, No. 35, Colonial Stores and
Defences, 33,000 ; 19 Victoria, Nos. 38
and 40, Affiliated Colleges, 40,000 ; 29
Victoria, No. 4, deficit of 1864, 150,000 ;
29 Victoria, No. 9, Public Works and Im-
migration, 219,150. These, with balance
of Treasury Bills yet to be issued, viz.,
1,500, would make the whole debt of
the colony 8,213,380. I will now refer
to the postage on newspapers, as I desire
to place before the committee, all the
information which does not bear on matters
relating to the Ways and Means, before I
proceed to their consideration. The
revenue for the nineteen months since the
duty on newspapers came into operation
was 19,000. The number of news-
papers posted in Sydney for nineteen
months previous to the 1st of April, 1864,
was 2,961,000 ; posted in the country,
2,379,256 ; total, 5,340,256. Posted in
Sydney for nineteen months subsequent
to 1st April, 3,694,838; posted in the
country, 1,888,228; total, 5,583,066.
Thus showing au increase of 465,255 since
the Act came into operation. There is an
increase in the number of newspapers
posted in Sydney and a decrease in the
number posted in the country. It was
asserted that there would be a falling off
in the amount received for telegrams, in
consequence of the operation of this Act,
but the falling off is only 87 5s. 9d. I

will now proceed to deal with the balance-
sheets of different years, and I would ask
hon. Members to turn with me to the
balance-sheet marked No. 1, which is
the one for 1863 that memorable year
in which the large deficiency we had
to meet was brought to light. This was
the deficiency which it would be recol-
lected the Government were authorised
to issue 400,000 of Treasury bills to
meet. That deficiency has now been ascer-
tained to amount to 398,849 14s. 5d; and
I may as well explain it to hon. Members,
because I shall have to ask them to follow
me as closely as possible through all the
balance-sheets, in order that I may make
clear to them the true financial position
of the country. In doing this, 1 hope that
I may be fortunate enough to make it so
clear, that they will at once see that all I
have had to state is based upon the figures
which I have placed before them. The
deficiency of 398,849 14s. 5d. is the
amount for which the 400,000 of Trea-
sury bills were asked. These Treasury
bills have all been realised with the excep-
tion of 766 14s. 8d. That is to say,
300,000 have been actually sold, and
100,000 were advanced on, by the
Bank of New South Wales, to the hon.
Member opposite (Mr. Eagar) when he
was Treasurer. They were transmitted
to England for negotiation, but only
24,000 were sold, the Government
being indebted to the Bank for 76,000,
balance of the advance of 100,000.
The unsold Treasury bills are now on
their way from England to the Colony.
I desire to impress on hon. Members
this fact, that the whole of these Treasury
bills, with the exception of 76,000,
have been sold, and that these 76,000
worth of Treasury bills will have to be
retained by the Bank of New South
Wales until the advance is paid. I do
not think it necessary that I should
further refer to this balance-sheet, but
the explanation given was necessary for
the House understanding what I may say
hereafter. I will now ask hon. Members
to turn to balance-sheet No. 2, that is
the one for the year 1864. Hon. Members
will understand that we have dealt with
the year 1863, and that we have swept
away the deficiency for that year by the
issue of Treasury bills, and that we are
now dealing with the balance-sheet for

[1865.]

MR. SAMUEL.

139

1864, which shows an estimated deficiency
of 407,026 7s. lid. Now hon. Members
will perhaps remember that to meet this
deficiency short-dated debentures were
authorized to be issued last year. I would
earnestly call attention to the fact that
not one of these debentures has yet been
sold, and that for the whole of this
deficiency of 407,626 we are at present
indebted to the banks and to the revenue
of the year 1865. As not one penny has
yet been raised on the Debentures
authorized to be issued to meet the de-
ficiency of 1864, hon. Members will
please bear in mind that this is a debt
winch the House will be called upon to
make good. As I do not think it neces-
sary to refer further to this balance-sheet
at present, I would invite the attention
of the Committee to the next balance-
sheet, which is that for the present year,
and which has a little more interest for
us. From this statement it will be seen
that the balance brought down is a
deficiency of 22,313 6s. 7d. Now this
deficiency, if compared with the deficiency
of previous years, is a small one ; but
still it is a matter for regret that we
should at the end of this year, have a defi-
ciency instead of a surplus. I regret,
for the sake of the country, that the
Government were not allowed to carry on,
in the manner they thought best for the
honor of the Colony, and thus been able
to bring down a balance-sheet without
any deficiency. Honorable Members,
however, I regret to say, have stepped in
and prevented it. No matter who had
brought in a scheme of taxation, no
matter what inconvenience it was to the
Colony if, looking at the bad seasons we
had gone through, we had obtained a sur-
plus this year, it would have been of the
utmost importance. But the deficiency
is of an insignificant character, and may
therefore, be regarded as no deficiency at
all; still, it would have been better if I
could have shown a surplus. This small
deficiency, was, however, only brought
about by making savings. And there are
savings which I think, when hon.
Members consider the importance of not
having a deficiency, they will gladly join
me, and .not insist on the expenditure of
the sums treated as such. Although I
refer to these savings, I will not dwell
upon them at any length. There is first

the great saving which honorable Mem-
bers have much reluctance to allow,
namely, the saving on railroads and
bridges, and I say under no other cir-
cumstance would this saving be justi-
fied except under that of pressing
claims with an overdrawn account at
the bank (which I shall have presently
to refer to), and the fact that e very-
Treasurer has been placed in the humiliat-
ing position of going cap in hand to the
banks and asking them to honor our
cheques. In such a state of things as
this, I ask honorable Members to say
whether the saving on the vote for minor
roads, or any saving whatever, was not
justified ? If a man in the ordinary cir-
cumstances of life gets into a position of
difficulty, would he hesitate to make any
sacrifice to preserve his honor and credit?
I am sure, honorable Members will admit,
that no sacrifice would in such a case be too
great, and that that which is right in the
case of a private individual, must also be
right in the case of the State. Such then
has been the position of the Government.
I have no hesitation in saying it, because
I think the House and the country ought
to be made aware of every fact connected
with the great difficulty we have had to
contend with in order that it may be met
in a manly way. There should be no
concealment, and the honor of the country
should in no way be impugned, nor should
those who represent the country be placed,
in the humiliating position in which we
have been. There was one part of the
year the evening of the 30th of the
month that the Treasurer did not know
that he would be able to pay the cheques
of the following month. He was depen-
dent on the overdrawn account ; and the
banks had told him it was already so
largely overdrawn that they were afraid
they could not, without injury to their
customers, give the Government more
credit ; but by good management on the
part of my predecessor the difficulty was
averted. This was a difficulty which had
been impending, and I ask whether it is
desirable that such a state of things
should be perpetuated one moment longer.
I will read a passage of a letter, addressed
to my honorable friend, and ask whether
it is desirable that this kind of thing
should be tolerated. (The letter rea4
was to the effect, that the bank could.

140

MB. SAMUEL.

[1865.]

not provide the funds, of which the Trea-
surer stood in need.) (An HONOEABLE
MEMBEB: "What bank?") The Bank of
New South Wales. (Mr. BTJCHAXAN - :
" You should not have tolerated it.") It is
very easy to say that, and I dare say
some honorable Member will say that the
Government should not have under-
estimated their Ways and Means. But
is this the only Government that
had not estimated their Ways and
Means correctly? Has it not often
happened even with the Chancellor of Ex-
chequer in England? Looking at the
seasons we have had, and when every
person is drawing in his expenditure to
meet the circumstances of the times, is it
not natural that the Government should
be affected also ? If we took away the
20 per cent, increase which was added
to the Customs Duties, and the ordinary
revenue does not come up to that of 1864,
was that attributable to any miscalcula-
tion of my hon. friend? It was due
entirely to a Power far above the power
of this House, and far above that of any
human being, and to such a Power we
must all bow. But these are facts which
I am now telling hon. Members, that
ought not to be concealed from them.
Well, it may be said that reductions ought
to be made in some other quarter, and that
the Government ought to take on them-
selves the responsibility of reducing sala-
ries. But I venture to say that no Govern-
ment, formed of Members of either side
of the House, would undertake such an
invidious task. For years past we have
had frequent changes of Government, but
I have seen no greater disposition in one,
more than another, to make these reduc-
tions. Having referred to the deficiency
for the year 1864, it may be as well to
show hon. Members from what sources
the deficiency has been actually met.
357,408 is the amount already paid, but
407,626 7s. lid. is the estimated amount
of the deficiency for last year, that is,
for 1864. The sum already paid, viz.,
357,408, has been obtained from the
funds borrowed from the following ac-
counts: Treasury Bills, 30,9 48 Is. lid.;
revenue of the year 1865, 98,714 10s.
8d. ; Bank of New South Wales, 83,333
14s.8d. ; Oriental Bank, London, 20,818
14s. 9d. ; Lodgments, 92,238 16s. 4d. ;
Church and School Fund, 19,658 9s. 7d.;

Civil Service Superannuation Fund, 1,429
7s. lOd. ; Scab in Sheep Fund, 10,267
2s. lOd. Total, 357,408 18s. 7d. Be-
fore leaving this part of my subject, I
would like to go a little further and show
a few more difficulties which the Govern-
ment have had to contend with, and
which have been occasioned somewhat by
the management of the hon. Member
opposite (Mr. Eagar) . In making these
remarks, I desire to say that I make them
in no offensive spirit. I cannot avoid,
however, referring to the management of
my hon. friend, but I desire to do it in
the least offensive manner possible. In
the year 1864 the hon. Member very
suddenly, and in a -way I regret to say
I do not altogether approve of, withdrew
the London financial agency from the
Oriental Bank and gave it to the Bank of
New Wales, without any notice whatever.
He commenced on the 12th September,
1864, to take over the agency from the
Oriental Bank, and in the same month
he obtained from the Oriental Bank,
while negotiations were pending for with-
drawing the agency, credits to meet the
payment of interest due by the Government
in England. When I say " credits," it is
necessary I should explain what is meant
by the word. It is the practice of the
Government to obtain letters of credit
from the Oriental Bank in Sydney on
the Oriental Bank in London, to pay their
engagements there. The hon. Member
obtained from the Oriental Bank on the
21st September credits to the amount of
140,000 to pay the interest due in
London on the 1st January, 1865. On
the 7th October he completed his arrange-
ment with the Bank of New South Wales,
and without any other notice, beyond a
communication to that effect, withdrew
the agency from the Oriental Bank. This
will be seen by the correspondence laid
upon the table of the House. Well, when
this arrangement reached the Bank of
New South Wales in England, they de-
clined to carry it out, because they were
not in a position to do so. The hon.
Member had arranged with the Bank of
New South Wales to take over all credits,
pay all advances, and relieve the Oriental
Bank from all our liabilities. But they
were found by the Bank to be much larger
than my hon. friend represented them to
be, ana so they wrote to the Oriental

[1865.]

MR. SAMUEL.

141

Bank declining to take over the agency
with all the liabilities attaching thereto.
In the meantime as the Oriental Bank
was released from all our engagements,
we were left in this position : We had
the Oriental Bank relieved of the Agency,
with a large amount of debentures on
hand, and we had also the Bank of New
South Wales, with a large amount of
debentures and Treasury bills to cover'
advances, declining to carry out this
arrangement. The Oriental Bank were
perfectly free, as they were not our
agents ; but the Government were in this
position, that they had no financial agency
in England on the 30th December, when
the Bank of New South Wales declined
it, and they had no one there to make
arrangements for paying the interest
accruing on the public debt. This was
the state of things brought about by my
hon. friend opposite. I would not refer
to it now did not the interests of the
country require that I should do so,
because it is one of the circumstances
that has in some degree brought us into
our present unfortunate position. Let
us now see what was done. The Oriental
Bank, in the handsomest way imaginable,
stepped forward and undertook to pay
the interest on our debt. They said,
" although we consider ourselves no longer
agents for the Colony, still we will meet
the interest on your debt and protect the
honor of the Colony." Well, they did so,
and thus the honor of the country was
protected. 1 say, therefore, that we are
under great obligation to that Institution
for so protecting our honor and our
credit ; but they did more, they said to
the Bank of New South Wales we must
not be competing together in the sale of
the debentures of the Colony, as the
market is down and the debentures not
very saleable, let us sell the debentures,
and we shall undertake to hand over half
the proceeds to you, and retain the other
half ourselves. We had no agency in
England until September last ; in fact, I
may say we have no financial agency there
at this very moment, and I will tell you
how it is. The Bank of New South Wales
having declined the agency, the Oriental
Bank before again accepting it requested
different terms. As they did not con-
sider themselves our agents, negotiations
were opened afresh with this bank. From

December last up to September no
arrangement was effected with respect to
the financial agency of the Colony, but
then the late Colonial Treasurer succeeded
in effecting one, subject, however, to
the ratification of the Board in England.
In connection with that arrangement a
letter was submitted, to which I shall pre-
sently have to refer, to show hon. Members
the necessity at the present crisis which
is unexampled in our history, and which
I hope will never occur again for some
prompt action. In September last, the
late Colonial Treasurer (Mr. Smart) suc-
ceeded in establishing an agency after long
negotiation. Few men would have gone
so well through what he did during the
last year, for he encountered difficulties
of an almost insuperable character con-
nected with the finances of this country.
At one period, when it was actually neces-
sary to meet pressing engagements in
London, and when he had no means of
getting credit through the banks to meet
them, he carried out negotiations of a
delicate and nice character in the most
able manner. I desire, therefore, to give
him every credit for the ability he showed
under the circumstances. (MR. DIGNAM :
" Why did he not stay where he was
then " ?) Well, I can hardly understand
that any man would stay where he was
if he really could get away. I reply to
that observation because I think it very
pertinent. to the point. Looking to the
difficulties he had to contend with, and
which I have to contend with, no one would
seek the Treasurership as a bed of roses.
I do not wonder that he was glad to get
out of it, and under no. circumstances
could he find a greater relief than in
retiring from such a position. I think it
desirable, in order that the exact financial
position of the country should be under-
stood, that I should show the state of the
public accounts on the 27th of November
two days ago and I would here remark
that they will exhibit a more favourable
state of things during last week than
they have done for some time past.
When hon. Members consider the state of
these accounts looking at the liabilities
of the G-overnmeut and the state of the
bank account they will not be surprised
that the G-overnment should resist all
expenditure that is not of the most
urgent and necessitous character. On

142

MR. SAMUEL.

[1865.]

the 27th of November we were indebted
to the Bank of New South Wales in
Sydney to the amount of 52,466 Is. 3d.
and we were overdrawn with the London
Branch of that Bank, 93,395 2s. Id. ;
and with the Oriental Bank Corporation,
London, 214,469 8s. 4d. making to-
gether an overdraft of 360,330 11s. 8d.
To this must be added interest on deben-
tures and Treasury bills due in London
on the 1st of July last, not yet brought
to account by the Oriental Bank, amount-
ing to 115,716 19s. 6d. thus making
the overdraft in "all, 476,000. Our
other liabilities are these credits opened
with the Oriental Bank Corporation, in-
cluding interest due 1st January, 1866,
345,557 11s. 7d. ; debentures due 1st
January, 1866, 300,000 which is an obli-
gation that must be met at any sacrifice ;
indeed, these are all obligations requiring
immediate attention. Then there are
Treasury bills unsold and returned,
76,000 ; sums due to special accounts
such as trust funds and lodgments,
127,188 17s. 10d. these liabilities ag-
gregate 1,324,794 Os. 7d. Now hon.
Members will recollect that this is an
obligation of immediate liability. No
doubt we have in England debentures to
nearly this amount, and others in transitu
that would make a larger amount. Not-
withstanding this enormous liability, I
regret to tell hon. Members that from
advices last received, we are. informed
that none of our debentures in England
have yet been sold. The debentures now,
by an arrangement on the Stock Ex-
change, and by some management with
the Oriental Bank, will have to be ten-
dered for in one month. "We might put
a limit upon this, but we are really not in
a position to do so. Our debentures
must be sold to meet our liabilities in
England, and they will be offered in all
probability some time next month. I
hope, as far as I have gone, I have suc-
ceeded in making clear to hon. Members
the position of the finances of the country.
There has been laid upon the table of the
House, on the motion of the hon. Member
opposite (Mr. Eagar),a return I do not
know with what object it was asked for,
but perhaps he will show us by and by
showing the progressive weekly balances
at the debit of the Government. Unfortu-
nately there have been no credit balances.

These weekly balances, it will be seen,
are serious amounts, and it is only within
the last six months that they have visibly
decreased. I am happy to say that com-
pared with what they had hitherto been,
they are now brought down to a very small
sum, namely 22,000. I hope that the
receipts at the end of this year, or at the
beginning of next, will annihilate that
overdraft. I now proceed to the most
important part of my duty, namely that
which relates to an exposition of the
estimates of revenue and expenditure for
1866, a duty which I do not approach
without considerable anxiety. I confess
that to me this is a matter of the great-
est solicitude, because great as have been
the difficulties of the past, those of the
future are even greater, and it will depend
much upon the spirit in which the House
meets my propositions whether this diffi-
culty will be alleviated or not. Hon.
Members will see by the account of esti-
mated revenue and expenditure for this
year that it shows a surplus of 47,670
13s. 5d. But before I deal with the Ways
and Means, I would like to say something
about the expenditure. There are some,
though not numerous, changes in the esti-
mates of expenditure (with the details of
which 1 do not wish to weary the House),
the most important being the omission of
the usual vote for minor roads, the reduc-
tion of expenditure for main roads, and an
increased amount for interest on the pub-
lic debt, which is accounted for by the
fact that the debt has increased and is-
increasing still. I will refer, though
shortly, to the item taken off the usual
expenditure for public roads, as I do not
desire to shirk my responsibility in that
matter. I regret that the feeling of the
House appears to be against leaving off
the Estimates the sum for minor roads,
for I believe the policy which dictated its
omission is a sound one. The hon. Mem-
ber for the Hastings is anxious for com-
pulsory municipalities in particular dis-
tricts, and I believe the way to make them
compulsory is to give no grants in aid of
public works and roads except munici-
palities are established there, and then to
aid them only during their infancy or for
such period as aid may be absolutely
necessary, and after that throw them upon
their own resources. I think that is a
far better way of making them compulsory

[1865.]

than making them compulsory by law,
but the House has willed it otherwise.
("No.") Well, I hope it will not, for
I believe that it' the central Government
is ever to be relieved of the expenditure
for local public works throughout the
country, this is the way to effect that
object, and there can be no better time
than the present for a commencement,
because the necessities of the State now
demand retrenchment. Retrenchment, it
may be said, might have been made in
some other direction. In reply to that I
may state, on behalf of the Govern-
ment, that wherever it can be shown
clearly that the expenditure of the
country can be properly reduced they
will go in for retrenchment. I know
from experience, however, that no vacancy
occurs in the Public Service without the
Government being beset with applications
for appointments. (Mr. DRIVER : " That
does not show the necessity for the ap-
pointments.") Hon. Members will bear
me out that many Members of the House
are constant in their applications for the
employment of friends, or to obtain the
creation of offices for them. (Cries of
" name.") (Mr. DIGRAM : " Shut the Go-
vernment backdoors then.") All I say is
this, that this question of retrenchment is
a difficulty which everyone has felt ; we
talk a great deal about it, and have been
talking of it for the last ten or twelve
years. Some time before I took office, I
went very -carefully over the Estimates
with my hou. friend at the head of the
Government, with a view to seeing
whether retrenchment could be effected,
and if so, where it could be best made ;
but we found it very hard to deter-
mine in what that retrenchment should
consist. Since taking office, I have again
made a similar examination of the
Estimates and the same difficulties have
everywhere presented themselves. I have
constantly met with assurances that such
and such a proposed reduction was not
feasible and ought not to take place.
Hon. Members who now sit on the other
side of the House have, I know, expe-
rienced the same difficulties, for I remem-
ber going through the Estimates with the
hon. Member for the Hastings, when that
hon. Member was in office, to see what re-
trenchments could be effected; but al-
though wethencameto the conclusion that

143

some should be made, none did actually
take place. (Mr. FOUSTKR : ''The House
would not allow me to make them.")
Well, perhaps the House will not let
them be made now ; at all events, many
retrenchments that the hon. Member con-
templated were not carried out. I must
now revert to the balance-sheet for 18G6
the account current of estimated re-
venue and expenditure for that year.
Hon. members will see thereby that I
have brought down as already stated an
estimated balance at close of 1866, of
47,670 13s. 5d. I have added to the
charges on the Consolidated Eevenue Fund
20,000, that being the amount which is
likely to be required for the Panama steam
postal service. I believe the estimated
revenue for 1866 namely, 1.966,504
has been fairly given. With the sum of
728,000 proposed to b^ raised by loan,
this will bring- the amount of receipts
up to 2,694,504. I have gone through
the particulars of estimated revenue with
the heads of the different departments,
and have every reason to believe that the
abstract statement of the probable re-
venue attached to this account may be
depended upon. Our estimated surplus
balance of 47,670 13s. 5d. will, however,
not be realized if that proposed expendi-
ture is to take place which the House
contemplated by its vote the other even-
ing in respect to the minor roads. Should
the Government be pressed into such an
expenditure during the ensuing year, the
surplus mentioned would become a de-
ficiency of 49,219. If the House goes
on as it did the other night in the affair of
the Cowra bridge, insisting upon expen-
diture which we did not take into con-
sideration in framing our estimate of
Ways and Means, it will be quite impos-
sible for any finance minister to provide
for the exigencies of the country. I will
now trouble hon. Members to refer to the
details of revenue, as set out on the ."51th
page of the Ways and Means. I do not
think it will bo necessary for me to go
through all the items,but I may oil'er a f.-w
remarks to the House about some of the
most important. The revenue from land has
not. I may observe, come up to the amount
anticipated by the late .Minister for Lands.
The actual and estimated land revenue
for this year, iscr,, is 510,501. It was
estimated originally at 636,433. It will

144

ME. SAMUEL.

[1865.]

not therefore rise so high as anticipated
by about 120,000, but of course no one
can exactly foresee what the revenue
may prove from any particular source.
In the Customs the falling off will
not be so great, being only some
15,000 less than the original Estimate
for this year. Notwithstanding the
falling-off in these two instances, I have,
as already intimated, calculated upon an
estimated balance of 47,670 13s. 5d. at
the end of next year: But in such an
anticipation I have not reckoned upon
having to make such a large expenditure
upon minor roads as was sanctioned the
other evening. I have not treated that
as a vote, and I do not intend to do so
until it is placed on the Estimates. If
such an expenditure is to be provided
for, instead of having a credit balance on
the 31st December, 1866, there will be a
large deficiency. Before going further it
may be as well perhaps that I should give
the Huiise some particulars respecting
conditional purchases from the 1st Jan-
uary, 1862, to the 30th September, 1865.
In 1862 the area taken up by conditional
purchasers was 357,280 acres, the amount
of deposits made 89,320, and the amount
of balances falling due in 1865 246,370.
The amount of such balances paid up to the
30th September last was 28,491, and of
balances on which interest had been paid
90,000 total, 118,494 leaving bal-
ances still due to the amount of 127,876.
In 1863 the area sold was 259,369 acres,
amount of deposits, 64,842, and amount
of balances due in 18(36, 190,000. In

1864 the area sold was 165,516 acres,
amount of deposits 41,404, and amount
of balances due in 1867, 119,500. In

1865 the area sold up to the 30th of
September was 115,552 acres, amount of
deposits 28,888, and amount of balances
due in 1868, 88,700. These together
made a total of 897,817 acres of land sold,
224,454 deposits, and 64i,570 balances.
Of the balances 28,494 have been paid
up ; interest has been paid on 90,000,
and 526,076 remains to be paid as it
falls due. I have not taken this amount
into account in any way. Hon. members
will see that the actual and estimated
revenue from the land for this year is
516,501, and the estimate for 1866,
539,800 the original estimate for this
year having been set down as 636,433.

Hon. members have heard me speak of
Treasury Bills, and short-dated deben-
tures, and of a probable deficiency of
49,298 in 1866. I must, however, tell
the House that this deficiency of 49,298
is not the only one we have to deal
with. "We have 400,000 Treasury bills
falling due on the 1st January, 1868.
They may be considered as due in April
next, because at any time after the 1st of
April, 1866, they may be presented in pay-
ment of revenue, and I am bound to
consider them as an obligation we have to
meet. My hon. friend, the late Colonial
Treasurer, issued short-dated debentures
to be paid off annually. 100,000 of
these debentures fall due on the 31st
December, 1867. So that we have
500,000 to meet within two years, and
another 100,000 in 1868. In a little
more than two years, therefore, there are
sums falling due to the amount of
600,000. As it falls to my lot to pro-
vide for this large sum, it becomes my
painful and unpopular duty to submit in-
creased taxation. I hope hon. Members
will not look upon this question in any
party spirit. It is for them to remember
that they have the honor and credit of
the country to preserve. The Oriental
Bank have not yet ratified the agency
to which I have previously referred, and
I believe that they look to the (jiovern-
ment to make provision for meeting this
deficiency. They wrote a letter on this
subject, which was received a few days
before my entering upon office. To that
letter I gave no reply, beyond a private
communication, in which I assured the
Bank that as far as I was personally con-
cerned I would do all I could to place
our finances in a satisfactory position.
The Bank has behaved well to us, and cer-
tainly should be treated well by us in
return. I think it right that 1 should
read this letter. It is as follows :

Oriental Bank Corporation,

Sydney, 16th October, 1865.

The Honorable the Colonial Treasurer.

Sin, Referring to my letter of 26th ultimo,
I have now to request, in consequence of advices
since received from London, that you will com-
municate to me before the departure of the next
mail -whether the Government in the ensuing
session propose to bring forward such measures
as will meet the expenditure and provide for the
Deficiency Loan, together with such other par-
ticulars connected with the financial position of

[1865.]

MR. SAMUEL.

145

the colony, as may give our Head Office confi-
dence, arid lead them to ratify the terms sub-
mitted in the letter above referred to.

It may perhaps appear to you that the Bank
are moving somewhat out of their position in
asking for this information ; but when it is borne
in mind that a large amount of debentures must be
disposed of within a limited period, to meet your
requirements, and the absence of all confidence in
the financial position of this Colony existing on
the Stock Exchange in London, as evinced by last
advices, I trust it will be seen that it becomes
almost imperative we should be supplied with
information in connexion with the foregoing.

I am, Sir, &c., &c.,
S. MUEEAY, Acting Manager.

Now, although it might appear that the
manager of that institution had gone
somewhat out of the way, yet as the
Bank had made large advances to the
Government, he had a right to be satis-
.fied that we intend to do something that
will give confidence to the public creditor.
And can it be expected that confidence will
be reposed in us by the public creditors if
we go on year after year creating fresh
deficiencies and meeting current expendi-
ture with borrowed money ? I say that
this is not the way to give confidence to
the public creditors ; and that the Bank
Manager was perfectly justified in writing
as he did. And it is not this Bank alone
that calls upon us to settle our financial
difficulties, for the English newspapers
teem with allusions to the subject. The
Times, the Illustrated London News, and
other papers, all notice our position, and
show that we are borrowing money to
meet our current expenditure. Such is
the case ; but the difficulty is one from
which we may extricate ourselves by a little
wise and proper management, and with
some trifling sacrifice. It is not after all a
difficulty of any great magnitude. Looking
at the resources of the country our debt
is as nothing. These paltry deficiency
loans are not alarming if we only take the
proper course to provide for them. It
may be that the measures I am about to
propose for meeting these loans will not
meet the views of some honorable Mem-
berd ; but, be that as it may, I believe
they are the right measures and such as
are likely to realise the object. I hope I
have shown hou. Members clearly the abso-
lute necessity for taxation ; that we have
to provide for retiring Treasury bills, and
short-dated debentures falling due shortly,
and also for the deficiency we are now

creating for 1866, unless some mode of re-
trenchment should be adopted. But I do
notbelieve thatanyhou. Member supposes
that it is possible to retrench sufficiently
to meet engagements to the extent of
600,000 during the next two years. That
amount cannot possibly be made up by re-
trenchment. Holding these views, I have
now to perform the most unpleasant part
of my duty. Knowing that it would be my
duty to propose some increased taxation, I
have considered a variety of schemes. I
am aware that there is a strong feeling
amongst a considerable section of the
community, that we should have recourse
to a property tax, and having thought a
good deal over that, I have arrived at
the conclusion that a property tax is
impracticable. In this country, perhaps
more than any country in the world
(though there are other colonies in the
same position as ourselves), it should be
the policy of the Government to encourage
the acquisition of property. But what
is the value of the property of the country
in private hands taken altogether? As
it has been variously estimated, I find
the greatest possible difficulty in ar-
riving at anything like a satisfac-
tory approximate value, but will for
the sake of argument, over-estimate
it, and put it down at thirty millions
though I consider that far too much.
I believe it is not more than twenty-
millions ; but I will take it at thirty.
Now, taking the annual income of that
property, at 5 per cent., it would give a
sum of 1,500,000. Take, then, 2.V per
cent, upon that income, which would be
a considerable tax, and all that it would
give would be 37,500. That is all that
it would yield as a property tax. (Mr.
BUCHANAN: "That is an income tax.")
By putting a tax of 5 per cent, on property
you would annihilate it in the course of
twenty years ; that is you would tax back
in that period the whole property of
individuals to the State. But those who
talk in this absurd way do not know
what they are talking about. The effect
of such a tax would be to annihilate all
property. But what says Mr. M'Cullocb,
who may be taken as the most eminent
authority on these matters ? lie says:

What object have industrious persons in view?
What is it which inspires them with courage to
undertake, and resolution to overcome, the most

146

MR. SAMUEL.

[1865.]

irksome and labourious tasks ? The hope that
they may be able to realize a fortune in lands,
funds, or mortgages ! But were the State, in its
fancied wisdom, to enact that these sorts of pro-
perty should be exclusively loaded with a heavy
direct tax, it is clear that either the process of
accumulation would be effectually checked, or
which perhaps is the most probable result the
accumulations, when made, would be carried to
foreign countries, where taxes were imposed on
some less partial and oppressive principle. It is
useless to inquire which of these consequences
would be most injurious. It is sufficient to know
that either would be ruinous. If we are to have
a property tax, it must be made to affect all those
who possess property. It is not easy, indeed, fo-
exaggerate the mischievous consequences of such
a tax ; but they would certainly be very inferior
to those that must follow any attempt to 'assess it
exclusively on the property of particular classes.

He goes on still further, and says :
"Direct taxes have been the curse of
every country into which they have been
introduced, and are at once a conse-
quence and a cause of a low and im-
poverished state of society." That is
the opinion of Mr. M'Culloch. Hear
what Sir Eobert Peel says on this
matter:

With respect to a tax upon property, as distin-
guished from a tax upon income, I very much
doubt whether it would promote the interests of
the labouring classes, because it would diminish
the funds at present appropriated to the encour-
agement of industry and the promotion of labour,
and it would ultimately be found that the tax
does not affect the p erson who pays it so much
as the labourer, by diminishing his means of
employment.

Surely these may be considered good
authorities ; surely they are far prefer-
able to the amateur financiers in this
House. Well, I think it must be quite
clear to those who will take the trouble
to think of it, that from the authorities I
have quoted and there are plenty more
a property tax in this country would
be impracticable. I should state that
John Stuart Mill holds precisely the
same views as those I have quoted. But
I hardly think it is necessary that I
should read any more authorities. We
come now to an income tax. I believe
that all those who have thought of this
matter, and who have really taken the
trouble to look into the operation of
the Income Tax in the old country,
will agree that it is most mischievous,
inquisitorial, and unequal, in its appli-
cation. The recent evidence taken before
a select committee of the House of

Commons show* that it does not work
satisfactorily. I hold in my hand a very
good work upon Political Economy, written
by Mr. Fawcett, who has attained some
eminence as a writer on that subject in
the mother country. He says in speak-
ing of an income-tax :

It should, moreover, be borne in mind that the
strongest theoretical argument which can be urged
against the income-tax, is based upon the fact that
it is imposed upon savings. The man who has
10,000 a year, and spends the whole of his in-
come, only puys the tax once ; but the man who
has au equal income, and only spends a portion of
it, pays in the first instance the same amount to the
tax, and is also each year compelleil t pay the tax
upon the income which is d< rived from the in-
vestment of the amount which he has saved from
his annual income. The income-tax, therefore, to
a certain degree, encourages spending, and dis-
courages saving. This, as we have already paid, is
a matter of little consequence in a country like our
own, where the desire to accumulate wealth is so
strong, and consequently the amount of capital
which is annually saved is so vast. But in India
the accumulation of capiial is so vitally important
that, the income tax, because it discourages the
accumulation of capital, is one of frtie worst taxes
that can be imposed in that country. It. tlier> fore
follows that, as far as even England is concerned,
the most serious object ion which can be. urged
against the tax is greatly strengthened if it shouldbe
so graduated that the tax is inci eased in pro-
portion to the amount which an individual saves.

Mr. Mill takes precisely the same ob-
jection. He strongly un;es that tax-
ation should not go upon income but up-
on expenditure, arguing that expenditure
is the best test of a man's ability to pay,
as he regulates his expenditure according
to his circumstances. Mr. Fawcett goes
on to say :

The following well-known instance wns quoted
by Mr. Gladstone in one ol his Budget speeches.
A pa ticular street in London was, duiing a cer-
tain pevio I, closed lor traffic in consequence of im-
provements which were in the c<>ur.-e of b ing car-
ried out. The businessof 1 he vaiio us tradesmen who
1m d in the street was p'ejudiciiilly affected, and
they consequently cl.-iimed compensation. The
amount of compensation which each individual
received was apportioned to the net income which
he derived from his business. All the ti adesmen,
consequently, made a return of their incomes.
Some one thinking that these returns were exces-
sive, had the curiosity to compare them with the
amount of the incomes which these tradesmen
returned for the assessment of the income-tax.
The extraordinary, and it may be added, the
melancholy fact was revealed, that the tradesmen
living in a respectable London street could prac-
tise so much deception that for the purpose of
assessing the i ncome-taxt hey declared their incomes
to be a certain amount, and immediately declared

[1865.]

MR. SAMUEL.

147

that their incomes were double this amount when
pressing th<-ir claims for compensation. It is,
therefore, evi ient that as long as such duplicity is
prevalent, many will evade a part of the income-
tax wlii.-h they an- bound to pay to the Govern-
ment. Hence the tax operates with a certain de-
gree of unfairness, because certain classes of the
community have a chance of evading the tax,
whereas others have not.

The following was Mr. Gladstone's
opinion on the income tax in the year
1SGL : "I must confess that I think
that it is a hard imposition. I should
like very much to be the man who could
abolish the income tax. I do not aban-
don altogether the hope that the time
may come when that can be done with-
out inconvenience." "Well, then, having
considered these two questions whether
it is desirable to have a property
and an income tax, and having, after
mature deliberation, arrived at the
conclusion th;it neither of them is
practicable or desirable in this country,
I determined to frame a scheme em-
baring both direct and indirect taxation,
which, if adopted for a period of two
years, will extricate us from our dif-
ficulties. In proposing this scheme I
may state that there is nothing at all
new in it ; for ii is one that is already in
successful operation in many countries,
one of which is often held up as an
example to us I allude to the United
States. I will at once proceed to state,
that 1 propose to go to the Customs for
a very large amount of revenue. And in
having recourse to the Customs for that
revenue, I shall do so in such a way
as will not fetter the operations of trade,
as will restrict commerce as little as
possible, and as will, I believe, cast no
great additional burdens on the people.
First, I intend to propose to the House
to equalise the duties on spirits. I believe
the principle is admitted that we should
get as much taxation from spirits as pos-
sible with a due regard to the prevention
of illicit distillation ; that is, we should
go to the point at which the raisyig of
the largest amount of revenue, and the
prevention of distillation meet. Nearly
all the colonies have the same duties on
spirits, and 1 have before me a compara-
tive table showing the position of
this Colony with regard to the other
Colonies in respect to their tariffs. In
proposing, therefore, the alteration that

I am about to propose, I am endea-
vouring to assimilate our tariff as nearly
as possible to that of the other colonies,
looking forward, as I do, to the adoption,
at no distant date, of a Customs Union
amongst the different colonies. I believe
that such an assimilation will bo an im-
portant step towards so desirable an
object. Our revenue suffers very seriously
from the low duty chargeable on what is
called white spirit, which is used for adul-
tcratingbrandy. This spirit pays only 7s.
per gallon ; but it is used in adulterating
brandy by the trader who gets all the
extra advantage of the difference of duty
which the State ought to get. Under
these circumstances I can hardly conceive
any objection to this proposition, more
particularly as it has been proposed by
nearly every Government in power. I
propose that rum, whisky, perfumed
and other spirits (excepting brandy
gin, and liqueurs), should be in-
creased from 7s. and 20 per cent, to 10s.
It will be seen by the comparative table of
the tariffs, just laid on the table, that
the same rates exist in Victoria and Queens-
land. I expect to get from this equaliza-
tion of the duties on spirits 30,000.
From whisky, perfumed, and other spirits,
I expect to get 4,710, making a total of
34,710. Then there is wine, which may
surely be considered a luxury, and bear
the maximum tax. I propose to make the
duty on wine 3s. per gallon, instead of 2s.
and 20 per cent. which will be the same
as in Victoria. From this increased duty
I expect to obtain 0,500. I propose to
raise the duty on beer from Id. in wood
and 2d. in bottle and 20 per cent, to Gd.,
the same rate as in Victoria. I do not
propose to repeal the package duty at
present, but if I remain in office I would
allow it to die out, unless some change
should come over the spirit of my dream.
The duty on bottled beer will be 6d.
Thus, in consideration of the packing,
bottled beer would pay a little more than
beer in cask, but as bottled beer is con-
sumed by classes in a better position than
those who drink draught beer, I shall
leave that as it is. From the increased
duty on beer in wood and bottle, I expect
to obtain 25,100. I am also about to
propose a change in the duty on sugar,
but I am not going to touch the poor
man's sugar the low class sugars.

148

ME. SAMUEL.

[1865.]

Mr. "WILSON : Those are the squatters'
sugars.

Mr. SAMUEL : I do not think the
squatters will escape the classification I
am going to propose. [The lion. Trea-
surer here produced a number of samples
of sugar showing the different kinds
included in the five classifications which
in England paid the respective duties of
12s. 10d., Us. 8d., 10s. 6d., 9s. 4d., and
8s. 2d.] I propose three classifications
of sugar in Sydney. First that refined
sugar, which now pays 6s. 8d., should
pay 10s. ; next that unrefined sugar
should pay 7s. 6d., and other sugars 5s.
A Board will be appointed by the Govern-
ment to define the standard, and accord-
ing to the classification by that standard
will be the duty. The principle embodied
in this proposition will, I think, be
admitted to be a correct one, and no one
certainly can charge me with desiring to
oppress* the poor man, because I seek to
make the rich man pay something more.

Mr. PIDDINGTOK : A protective duty
on refined sugar.

Mr. SAMUEL : No ; on all sugar whether
refined in the colony or out of it. There
will be no protection ; my hon. friend
will not catch me at protection.

Mr. PIDDINGTON : It looks very much
like it.

Mr. SAMUEL : If the excise duty is
5s., and the import duty is 5s ?

Mr. PIDDINGTON : There is no discrim-
inating duty.

Mr. SAMUEL : And if no discrimin-
ating duty, there is no protection. My
hon. friend will take care, no doubt, that
the Colonial manufacturer does not bene-
fit. I, too, will take care that there is no
protection if I have anything to do with
it. I expect to get 20,000 from this
alteration in the duty on sugar. I also
propose to increase the duty on opium to
20s., the same as in Victoria. I omitted
to state that I intend to do a little more
for the poor man. I intend to decrease
the duty on treacle. I find that treacle is
much used, particularly in dry seasons,
and I propose to reduce the duty
from 3s. 4d. to 2s. 6d. I do not
think this will decrease the revenue,
because I believe the article will be more
largely consumed. This, however, is a
matter upon which I do not lay much
stress it was suggested to me, and I

adopted the suggestion. From the in-
creased duty on opium I expect to obtain
5,000. Upon tobacco, in leaf, I propose
to increase the duty from Is. to Is. Gd.,
and I expect to obtain from this source
5,000. I also propose to put a duty of
10s. per cwt. upon dried fruits. I find
that 26,000 cwt. of dried fruits were
imported last year, and from this duty I
expect to obtain at least 10,000. I
propose a duty of 2d. per Ib. on hops,
and expect to obtain from it 3,400. I
propose also a duty of 6d. per bushel on
malt, from which I expect to obtain
1,450. Then I want 40s. a ton upon
rice, from which I expect to obtain
13,000. I now come to a proposition
which will no doubt be considered of a
very debatable character, and it is one
which I would not make having regard
to the feeling there is on the question
under any other circumstances than the
pressing necessities of the State. The
necessities of the country, however, de-
mand that we should have money. I
am about, therefore, to propose a double
duty on tea, and I hope this matter
will be discussed with the same feelings
that I have introduced it. The views
I take may be erroneous, but I do not
think they are. I believe the course
I am taking is a correct one. You must
go to a source from which you can get
revenue. I have no doubt we shall be
told that we should go to articles of
luxury for our taxes. But take all the
articles of luxury imported, and see what
you will get. If you want to get at
articles of luxury you must impose an
ad valorem duty ; but if you go to ad
valorem duties you destroy the trade
between these Colonies ; and our inter-
colonial export trade amounts to nearly
4,000,000. Besides that, let hon. Mem-
bers look at the small amount which would
be imposed upon any individual or family
by the increased tax I propose. I expect
to obtain from the increased duty
on tea 44,000. I hope that hon.
Members will look at the state of
the country, and consider well the
necessities of the State. I would
ask if any Chancellor of the Exchequer
ever went down to the British Parliament
and told them the necessities of the State
(whether he asked for an income tax of
Is., or 3s. per Ib. upon tea), without the

[1865.]

MR. SAMUEL.

149

necessities of the State being considered
by the House of Commons of far greater
consequence than any small sacrifice the
people might be called on to make ?

Mr. BUCHANAN : They never consented
to do an injustice.

Mr. WILSON : Why did the hon.
Treasurer not apply the same argument
before ?

Mr. SAMUEL : I have always held this
opinion. I voted for every item in the
tariff proposed by the hon. Member
opposite, excepting those of a pro-
tectionist character. The necessities of
the State do not require protective duties.
Protective duties Avill not give us revenue.
Hon. Members talk of this tax as being
unjust, but let us hear what M'Culloch
says. In his work on taxation he
observes :

Sugar and tea are to be regarded in this country
partly as necessaries and partly as luxuries,
though, perhaps, they belong more to the former
than to the latter class. But supposing the duties
on them to be reasonable in amount, and properly
assessed, they would appear to be, in most
respects, unexceptionable.

In England the duty on tea was Is. 5d. ;
it was then reduced to Is., and more
recently it has been still further reduced
to 6d. Are we not as well able to bear a
duty of Gd. in this country as the people
of England ? (MR. WILSON : No.) The
hon. Member knows well we can. I be-
lieve he is not speaking sincerely. Is it
possible any one can affirm that we can-
not bear this sum as well as people can in
England, where it is now double what it is
here? ("No.") An hon. Member says
no ; but it is impossible that I can answer
all these denials. I therefore affirm again
that the duty on sugar in England is
double what it is here that is to say, on
the sugar principally used by the working
classes. For instance, the sugar upon
which I propose a duty of 5s. Gd. is
charged in England 10s. 6d. (MR. PID-
DINGTON : But how about that on which
you charge 10s. ?) That is refined loaf ;
and surely the hon. Member will not say
that the man who can afford to use refined
loaf sugar cannot afford to pay the same
duty as in England. However, I have now
submitted the whole of my propositions
relating to Customs, and by them I anti-
cipate getting 168,000. Whilst asking
for these duties, I quite admit that the

taxation will fall upon the consumers
throughout the country, as indeed do all
taxes levied through the Custom House.
In support of the views I have now
expounded on the subject of these duties,
I would refer hon. Members to the speech
of Mr. Gait, the Finance Minister of
Canada, who has a wide reputation, and
is, perhaps, one of the most eminent
financiers out of England. When that
gentleman made his financial state-
ment in 1362, he found the country in
much about the same position as 1 now
find this colony to be in. He had very
great difficulties indeed to contend with,
Canada being then in a most embarrassed
position. Mr. Gait had always been a firm
and consistent advocate for protection and
for increased protective duties, and speak-
ing in the way he does, I would particularly
call the attention of hon. Members who
are protectionists to this quotation as
bearing upon the matter with which we
have to do. Mr. G-alt says :

It is not by tampering with or increasing the
duties on a great variety of small articles that we
are likely to secure the object of creating a large
revenue. If our wants are great we must un-
doubtedly approach those articles that enter
largely into the general consumption of the
people. There is no way by which we are BO
sure of obtaining the amount we require. I there-
fore believe it will be necessary, in addition to the
duties on spirits and beer, to apply to the leading
articles of consumption of the whole people, in
order to sustain our revenue and preveut the
great falling off that has already taken place.
Now I believe it will be found that the articles
of tea and sugar are those which are the readiest
in the amount consumed in the country, the most
generally consumed, not very high in price, and
the levying of a duty on which it the easiest and
least objectionable income tax that could be
imposed.

Now I believe it will be found that
Mr. Gait is perfectly correct in these
ideas, and, being a protectionist, the re-
marks came all the more forcibly from
him. He continues :

If it were necessary to apply these taxes per-
sonally, it might be objectionable ; but it must
be' borne in mind that we are precisely in the
position of the people who have to impose war
taxes. We are suffering in many respects the
disadvantages and evils of war, though we are
free from its miseries and horrors.

Now we are in much about the same
position as the people of Canada were
^ at that time. They were not raising

war tax, but they had to provide a

150

MR. SAMUEL.

[1865.]

defence fund for the security of their
frontier: and as we have to provide for
public works, their necessities were much
the same as ours. This then is the way
Mr. Gait spoke of the absolute neces-
sity of levying duties on these articles.
Notwithstanding that he held protec-
tionist principles, he felt that the neces-
sities of the time demanded something
more from him than the mere carrying
out of a principle, so throwing aside his
protectionist doctrines as unsuited to the
time, he proposed these duties. I will
next call the attention of hon. Members
who are protectionists, to another quota-
tion from this speech, only premising that
Canada is a protective country, and that
protectionist principles have reigned ram-
pant there for years :

AB I said before, it is my duty to recommend
additional taxation upon the several leading
articles which enter into general consumption
tea, sugar, coffee, &c. I now have to state that
I think the time has arrived when, taking ad-
Tantage of the new taxation imposed across the
line, we may re-consider the general rate of
Customs duties on manufactured goods imported
into this country ; and I think we may now very
properly endeavour to cheapen them to the general
consumer. If on the one hand I recommend
an increase of certain duties, on the other
recommend a reduction. I think, in fact, that it
is absolutely necessary this reduction should be
made, because I find from the experience of
past years that, as the duty has been augmented,
the consumption has diminished. I may mention
the case of one article as particularly illustrative
of the fact I have mentioned it is tliat of
leather. In that article the importations ran up
from 185,000 dollars in value in 1852, to 514,000
in 1857 the duty having been in the previous
year 14 and in that year 15 per cent. It was
then increased, and now bears a duty of 20 per
cent. so that instead of 514,000 dollars worth
being imported as in 1857, the value of last
year was only 281,000 dollars, and we absolutely
suffered a considerable loss to the revenue. Then,
again, the same is the case with manufactured
goods, such as boots and shoes. In 1852 the im-
portations of these articles reached 230,000
dollars, and, in 1855, 765,000 dollars. The duty
was then increased, and is now 22 per cent. ; and
the importations decreased in the same ratio, till
last year they were only 280,000 dollars. In these
cases, I take it the figures most conclusively
show that not only have we lost in duty, but
have compelled the people to pay a higher price
than before for articles of prime necessity. But it
is not so much to the effect upon the revenue
that I would draw attention as to the fact that
\ve have now an opportunity of selecting the
articles of distributing the revenue and I think
it is desirable to reinvigorate our trade by reducing
the duty on foreign goods.

That was the result of Mr. Gait's ex-
perience in Canada ; and I think we
require, nothing more to shosv the fair-
ness and justice of the proposition I have
now submitted. I was interrupted before
in what I was going to say with reference
to the Customs duties falling upon the
consumer. Whilst I think it right that
every portion of the community should
bear a fair share of the public burdens,
and that every man who has a voice in
the government of the country should
contribute to its taxation, I have no wish
that the burdens should be unequally dis-
tributed. While therefore I put this
increased duty on tea upon those whom
I may for the purpose call the employed,
I put an additional duty upon the rest
of the community, whom for the purpose
I may designate the employers, by im-
posing upon every one in business an
annual license fee. Now this is not an
offensive tax. We must have revenue,
and in order to make all classes of the
community bear their share of the burden,
I propose this. I admit that up to this
time the burden of taxation has been
very unequally distributed, and to remedy
this evil I submit this proposition of an
annual license fee. I do not expect
that hon. Members will be able to arrive
immediately at a judgment upon such a
proposal as this. It has taken me a long
time to mature this scheme, though it did
not originate with me. The idea is not
my own. It was furnished to me, but in
so crude a shape that I had some trouble
in putting it into such a form as would, in.
my opinion, be practicable. I find that I
have omitted a very important item amongst
the changes that I propose to make in
the tariff. Hon. Members will, perhaps,
pardon me for going back to the tariff in
order to deal with it, as the omission, no
doubt, arose from the many interruptions
by which t have been met, and by which
I have been carried away from the
regular sequence of items. I propose to
increase the duty on imported leaf to-
bacco 6d. per Ib. Hitherto it has been
Is. per Ib., whilst manufactured tobacco
paid a duty of 2s. per Ib. Now, I will
show the House the effect that this differ-
ence of duty between imported manufac-
tured and unmanufactured tobacco, has
had. It has been a matter of considera-
tion with me whether I ought not to ask

[1865.]

MR. SAMUEL.

151

the Hoitse to equalize these duties ; and
I think lion. Members will agree with me
when I show them how very materially
the revenue has suffered. The necessity
for this increase may be seen from the
fact that we have List something like
50,000 of revenue by this reduction of
Is. per Ib. on imported leaf tobacco ; and
this has been solely for the benefit of our
manufacturers, whilst consumers have
had an inferior article forced upon them.
In 1859 the duty on imported tobacco
was 91,95G. In I860 it was 89,217.
In 1861 it was 89,364. In 1862 Mr.
Weekes proposed to take Is. per Ib. off
imported leaf tobacco. That year the
duty on leaf tobacco was 3,135, and on
manufactured 70,000. In 1863 the duty
on manufactured tobacco was 65,000,
and on leaf 7,000. In 1864 the duty on
manufactured tobacco fell to 66,418,
whilst on leaf it was 11,650, or iu all
63,048. So that in 1859, with a popula-
tion much less than, in 1864, the tobacco
duty realised 91,000, whilst in 1864 it real-
ised only 68,000, or nearly 40,000 less.
Hon. Members will hardly believe that the
stock of manufactured tobacco in bond at
the present moment would yield a duty to
the Crown of fully 100,000 ; and yet
this large amount of tobacco would in-
evitably be forfeited if the present rate of
protective duty on the leaf were con-
tinued. The differential duty is an enor-
mous protection, and one that ought never
to have been sanctioned. Besides this, it
has operated against the Colonial pro-
ducer, for the C'olonial leaf tobacco has
no chance against the imported leaf with
this very low duty, and is not consequently
placed on a fair footing. At present the
stock of tobacco on hand is l,064,38i Ibs.,
and there is very little being taken out
of bond ; the revenue is consequently
suffering very severely upon this item.
Now I propose to leave the manufacturers
a difference of 6d. between the duty on
leaf and manufactured tobacco ; and had
it not been that I thought it would have
been hard on them to have at once equal-
ized the duty, I would have proposed to
make the duty alike on all imported
tobacco. As this, however, might have
looked like oppression I have taken a
middle course, and proposed an additional
6d. per Ib. only. This will give an addi-
tion of about 5,000 to the revenue as I

estimate it. It will probably be more than
that, but it is impossible to estimate cor-
rectly the duty for the first year, but next
year it will in all probability give an in-
crease of double that amount. The
licenses I have mentioned I propose to
have levied annually. I will now read
to the House a list of the licenses pro-
posed.

Upon every banking company an annual license
of 100, and an additional annual license of 10
for each branch c.-tablishment or banking agency
of such company within the Colony.

Upon every public company, not being a bank-
ing company, and whether incorporated or not,
which shall transact business either (1) at the
chief establishment or head office in the
Colony, in the case of a company established
and managed within the Colony ; or (2) at any
branch office or agency in the Colony, in the
case of a company whose head offices and direc-
torate are not within the Colony, an annual license
of 100, and an additional annual sum of 1 for
every clerk, and of 2s>. 6d. for every other person
in the employment of such company.

Upon every unincorporated company of under-
writers, an annual license of 50, and an ad-
ditional annual sum of 1 for every clerk em-
ployed.

Upon every club and -society which shall retail
spirituous and fermented liquors to its members
or others, an annual license of 30, and an ad-
ditional annual sum of 1 for every person em-
ployed.

Upon every mining company, except such as
shall be established upon co-operative principles,
an annual license of 5, and an additional annual
sum of 1 for every clerk, and of 2s. 6d. for every
serrant or other person employed.

Upon every master or commander of any packet,
boat, or other vessel employed for the carriage or
conveyance of passengers, engaged in the coasting
or intercolonial trade, in which packet, boat, or
vessel wine, beer, spirits, or tobacco, are retailed,
an annual license of 5.

In this Colony, vessels on board of which
spirits are retailed have been exempt from
paying a license, but now I propose to
charge them an annual license fee of 5.
I will now explain what I propose to do
with class B.

That, towards raising the Supply granted to
her Majesty, there shall be charged an annual
license of 5 upon every person practising or
engaged in business as an actuary, architect,
attorney and solicitor, barrister, brewer, broker,
civil engineer, conveyancer, dentist, distiller,
engineer, engine maker, general commission agent,
house agent, ironfounder, land agent, laud sur-
veyor, lessee of a theatre or circus, merchant,
miller, oculist, physic ian, share-broker, stock and
station agent, surgeon, sugar refiner, wholesale
trader, wholesale and retail trader, and an ad-
ditional annual sum of 1 for every pupil, articled

MR. SAMUEL.

[1865.]

clerk, apprentice, and paid clerk, or paid profes-
sional assistant employed. And such annual
license of 5 shall be paid by each and every
partner of a firm, as well as by each several indi-
vidual engaged as a principal in any of the afore-
said professions, trades, or occupations : Provided,
however, that where one person shall be liable
under any two or more of the above denomina-
tions, he shall only be chargeable in respect of one.

I propose to charge a license of 5 to
those who engaged in first-class occupa-
tions, and who are supposed to do a good
business. Then I propose to charge 2
to every employer of labour, and an ad-
ditional sum of 2s. 6d. for every person in
their employment, as follows :

That, towards raising the Supply granted to
her Majesty, there shall be charged annual
licenses of 2, and an additional annual sum
of two shillings and sixpence for every person
in their employment, except such as may be en-
gaged temporarily as shearers, sheep washers,
reapers, or otherwise by the piece, job, or tale
upon all persons engaged in agricultural or pasto-
ral occupations, as squatters, graziers, farmers, or
otherwise. And the provisions with respect to
partners and the limitation of liability to one de-
nomination shall be the same as in the next pre-
ceding resolution (B).

That, towards raising the Supply granted to
her Majesty, there shall be charged annual
licenses of 2, and an additional annual sum
of two shillings and sixpence for every per-
son in their employment upon all persons not
being liable under any denomination in any of the
foregoing resolutions who shall be engaged in any
trade, business, or occupation whatsoever, except
such as shall be liable in respect thereof to pay
some annual license to the Government, the
council of any municipality, or the Corporation
of the City of Sydney.

Then, there will be a number of persons
out of business, who could not be reached
by these resolutions, and I propose to
charge them 1 for every servant they
employ. I do not think it will be con-
sidered a heavy tax, for if a person can
afford to keep servants he can afford to
pay the tax, which I propose as follows :

That, towards raising the Supply granted to
her Majesty, there shall be charged an annual
license of 1, payable for every hired servant
in their employment. Upon all persons not
liable under any denomination in any of the fore-
going resolutions. Exemptions ; Members of the
Civil Service, and all other persons, in receipt of
salaries not exceeding 200 per annum ; officers
and soldiers of her Majesty's army and navy on
active service ; editors of public journals, and'
newspaper reporters ; master mariners, and sea-
faring men ; journeyman artisans, labourers, and
others in receipt of wages paid by an employer ;
midwives ; itinerant fishmongers, musicians, and

vendors of fruit or vegetables ; fishermen ; con-
finees in any gaol, prison, or lunatic asylvm,
during confinement.

It will be seen that those persons who
are receiving salaries not exceeding 200
per annum are exempt; there are certain
other persons exempt. This kind of tax
has been in operation a number of years
in various countries in Europe, including
Florence, Venice, Prussia, Austria, Spain,
Russia, and France. It was introduced
into France in 1791, and in 1803 it
produced 19,000,000 francs. In 1S47 it
produced 48,000,000 francs, and now it
produces an annual revenue of 00,000,000
francs. It was also in operation in t;;e
United States of America upon a similar
scale to that which I nowpropose. Nearly
every person in that country has to pay a tax
direct to the general revenue. I propose
to collect the tax in this way : Every one
shall be bound to pay toe tax to an officer
of the Government, and shall be allowed
three months to pay it in, at the end of
which time they will be waited upon by
the officers, who, ought to know as
nearly as possible those liable to pay the
tax. In default of payment at the
proper time there will be a considerable
penalty inflicted. These are the proposi-
tions which I shall presently submit in
the shape of resolutions ; but before I
do that I desire to say something more
about our debt. It now amounts to
something like 8,000,000, and I think
the time has come when we ought to
make provision for its extinction by a
sinking fund. Nearly every country that
has a public debt, except Yictoria, is
doing this, and I will point out what its
operation would have been if we had
adopted it last session. Last year we
determined upon paying off 100,000 of
debentures every year. If we had issued
debentures as a permanent loan, for fifty
years, and made it compulsory upon the
Government to set aside 100,000 every
year, to be invested by trustees for the
benefit of the public creditor, this
100,000 per annum would, at the end of
ten years, at 5 per cent, interest, amount
to 1,325,326. This sum, invested at the
same rate of interest, would amount in
forty years, to 9,562,840. Thus in fifty
years we could annihilate a much larger
debt than ours. There are two parties
interested in negotiating loans the

[1865.]

MR. SAMUEL.

153

Government who desire to borrow, and the
money-lenders who desire to lend, but
who require to know the terms which
the Government are prepared to offer.
Hitherto we have gone on borrowing
without putting aside any surplus re-
venue to meet our debentures as they
fall due, and hence there is but little
demand for these securities. It may be
1 hat I have not referred to many matters
upon which hon. Members desire infor-
mation, but, if so, I shall be very glad to
give them any further information in my
power. I will now lay upon the table a
statement showing what our position
would be with the proposed additional
taxation. I have to thank hon. Members
for the kind attention they have given '
me ; and I trust they will not consider the

resolutions, about to be submitted, in a
party spirit, but with a view to the interests
of the country. I feel confident that, if
the propositions to be submitted are
adopted, they will have the effect of extri-
cating us from our financial difficulties.
I will conclude in the words of Mr.
Gladstone, used upon a similar occasion
to the present in 1863, which were as
follows : " In proposing such measures
we feel ourselves to be impregnable
against all petty taunts and intemperate
reproaches ; and we commend them with
confidence to the justice, the equity, the
courage, and the wisdom of this House."
AVith these observations I beg to propose
all the resolutions, in order to take the
discussion upon them as a whole.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE CHARLES COWPER,
Colonial Secretary; made 20th December, 1865, on the resigna-
tion of the HONORABLE SAUL SAMUEL, Colonial Treasurer.

[From the Sydney Morning Herahl of 2lst
December, 1865.]

LEGISLATIVE ASSEMBLY.

Wednesday, 2Qth December, 1865.

FINANCIAL STATEMENT.
MR. COWPER said: I shall now proceed
to state to the Committee as clearly and
as briefly as I can the revenue which will
be necessary to meet the requirements of
the Public Service, and after the resolution
which has been already arrived at in Com-
mittee it will perhaps be desirable I should
at once ask the attention of Hon. Mem-
bers to the balances which were brought
forward in the statement of my lion,
friend Mr. Samuel, and the altered state
in which those balances will now appear.
In the statement of the Consolidated
Revenue Fund, No. 4, laid on the table of
the House by my lion, friend, the estimated
surplus there brought down to the 31st
December was, 47,670 13s. 5d. He also
carried that balance into the account of es-
timated revenue and expenditui-e for 1866,
by which he showed the possibility of
having at the end of next year a balance
of 341,784 13s. 5d. But while under
certain circumstances we may assume still
the possibility of a balance of 47,670
13s. 3d. at the end of the present year,
we must take a different estimate of the
subsequent revenue and expenditure in
consequence partly of the vote of this
House to address His Excellency to place
further sums on the Estimates, and

partly in consequence of the refusal of the
Committee to sanction all the proposals of
my lion, friend to raise taxation. I take
the balance of 47,670 13s. 5d., shewn in
the account marked No. 4, and credit it
to the account for 1866. We estimate
the new taxation already passed on the
motion of my hon. friend at about 97,000.
My hon. friend desired to economise as
much as possible, and we also desired to
introduce a system of municipalities. It
was proposed to take off the road votes
for the ensuing year, and the Government
abstained up to a certain time from spend-
ing money upon the minor roads. We shall
therefore have to add to our estimated
expenditure supposing the House insists
on the minor roads being provided for, as
usual 55,918 for roads for the present
year ; and for roads in 1866, 96,968,
'making a total of 152,886. From this,
however, is to be deducted the sum of
50,000, placed 011 the Estimates of 1866
to encourage municipalities, and this would
leave a balance of 102,886 to be pro-
vided for. The first mode in which the
Government propose to meet the present
exigency will be by considering on what
expenditure reductions can be effected.
The House having expn -.-,! a <le.-i<led
opinion in favour of retrenchment the
Government will be encouraged to take
into consideration the various estimates

which have I n prepared, to see how far

a rigid economy can be introduced into
them. I have no doubt we shall meet
wi tli opposition in almost every <|ii:
It will" be a very diHicult task. 1 .-in not

156

MR. COWPEK.

[1865.]

quite sure that the Government them-
selves, after having submitted to a vast
amount of odium, will not be blamed for
the proposal. We cannot, however, shut
our eyes to the fact that for years past the
expenditure in many instances has been
forced upon the Government by the repre-
sentatives of the various constituencies.
My hon. friend (Mr. Samuel) asked for tax-
ation to the extent of 243,160, and the
House gave him out of that about 96,000,
which leaves a considerable deficiency to be
provided for. I hope we shall be able to
make reductions to the extent of 100,000.
It is a difficult thing, however, to see in
what direction that reduction shall take
place. I know there is a general impres-
sion that the police is unnecessarily expen-
sive. No doubt we have to provide for
the protection of life and property over a
vast expanse of country, and have all over
that country persons constantly requiring
the services of the police. In fact, it is
impossible for us to comply with these
demands, and we are constantly offending
persons by refusing their requests on the
ground that to add to the expense of the
police is not palatable to the House when
it comes to vote the money, nor is it
palatable to the country generally ; but I
think hon. members will be hardly pre-
pared to hear that the expense of the
police in New South Wales is less this year
than it was in 1855. While we take a
retrospect of the colony bearing in mind
what it was in 1855 it is well for
Hon. Members to know that the Police
expenditure is less now than in the
year first mentioned. Before the House
prorogued last occasion I caused some
returns to be prepared upon this sub-
ject. These statistics were laid on the
table of the Assembly in June last, and
printed by order of the House. I have
made reference to them, because in con-
sidering this question of expenditure, hon.
Members will have to consider what pros-
pect there is of any promise the Govern-
ment may make on this subject, being
complied . with. I find that the expen-
diture for police in the year 1855 was
168,774, and for the year 1865 I find it
will be 152,325. I mean the police
irrespective of police magistrates, of petty
sessions, and that part of the police
called judicial. These sums represent the

expense of the executive police only. It
shows a reduction between 1855 and 1865
to the extent of 16,449. I would also
draw attention to the fact that, during
the last few years, considerable reductions
have taken place in connection with these
services. The Government felt that if the
bushrangers were put down, or nearly put
down, that economy to some extent might,
be introduced. I therefore find that while
the expenditure voted for 1864 was
172,881, in 1865 it was only 152,325,
being a decrease of 20,556. The sum
proposed for next year is 149,262, being
a further reduction of 3,063, making a
total reduction of 23,619 in the years
1865 and 1866. Not only has there been
a reduction in the police expenditure, but
I would also like to inform the House
that this will not be at the expense of
the peace and security of the interior
during these years. The stations have
increased from 161 in 1855, to 241 in
1865, showing a total increase of 80, and
those stations are scattered all over the
interior. These demands for police have
been made by the residents of those dis-
tricts. I am not prepared to say that
further redu ctions might not be made in some
of the larger depots, which are kept up to
meet the requirements of certain districts.
We reduced the number of men last year
by about a hundred. I have already been
in communication with the Inspector-
General of Police in reference to the
matter. I requested him to direct his at-
tention to the state of the force and to see
where any possible reduction could be
made. As is usually the case he protests
against any reduction ; but I can only say,
that I shall not allow any remonstrance
*>n the part of officers of the Government,
to interfere with such reductions as can
possibly be made with advantage. With
a view to this end, I have had under con-
sideration for some months past the
number of police magistrates and gold
commissioners throughout the colony.
There is a difficulty in dealing with this ques-
tion, because this House has generally
been in favour of the appointment of
police magistrates, and has almost in-
variably supported votes in their favour.
The late Government proposed to increase
the number by seven, and I think salaries
were put upon the Estimates for them.

[1865.]

MR. COWPER.

157

It was proposed to appoint police magis-
trates for Parramatta and Windsor, and
other places, where I do not think they
are at all necessary. To show my own
idea of this matter, I will read a memo-
randum which I addressed to my lion,
colleague the Secretary for Lands, on the
12th July last, relating to this subject. I
desired to confer with him in order to see
whether a police magistrate might not be
dispensed with in one district and a gold
commissioner in another, and whether in
some instances, one officer could not be
appointed to do the work of two or three.
I did not think much of the arrangement
of the hon. Member opposite, who proposed
to charge a portion of the salary to the
gold fund and a portion to the police fund.

Mr. WILSON : I intended to do away
with all the gold commissioners.

Mr. COWPER : I think, in some cases,
they can be done away with, but I am
not familiar with that particular depart-
ment. I am quite satisfied, however,
that between the police and the gold
commissioners a considerable reduction
may be made. This is the memorandum
which I addressed to my hon. friend,
and which was under his consideration
when he left office :

12th July, 1865.
Memorandum.

MY attention has for some time been directed
to the prodigal expenditure which it must be
admitted is going on in respect to police magis-
trates and gold commissioners, more particularly
in the Southern and South-western districts.
And I shall be glad to fall in, so far as I can
possibly do so, with the views of the Secretary
for Lands in respect to such reductions as may
be, after conference, considered expedient.

There are in the districts to which I allude
police magistrates at Gundagai, A. C. S. Rose ;
Tumut, - - Yyner ; Young, J. E. Pearce ;
Forbes, William Farrand. Besides police mag-
istrates at Goulburn and Wagga Wagga.

There are also gold commissioners at Gunda-
gai (or near), G. O'M. Clarke ; Tumut (or
near), R. B. Lynch and Fitzsimons ; Young,
Shadforth ; Forbes, Browne and King.

All these officials do not seem to me to be
necessary. For instance at Forbes, two gold
commissioners and a police magistrate cannot
be required. So at Gundagai, a police magis-
trate and a gold commissioner cannot both be
wanted. Then at Tumut, Adelong, and Tum-
berumba, two gold commissioners and a police
magistrate cannot all be wanted. No doubt,
although there is at present a collapse at the
various gold-fields, there may be a sudden rush
again, but we have now waited a long time for

this possibility, and I think a rearrangement or
redistribution of officials, if not a reduction,
ought to take place.

C.C.

P.S. Similar observations may perhaps ap-
ply to other districts. The whole question re-
quires consideration, especially as the gold-
fields are yielding so little, and crime is now
comparatively put down. C.C.

In consequence of recent discussions, and
my attention having been perpliaps more
distinctly drawn to the matter by the
Hon. Secretary for Lands, I, on the 16th
of this month, caused the following letter
to be addressed to the Auditor General,
Captain M'Lerie, and Mr. M'Lean. Cap-
tain M'Lerie is well acquainted with the
police, and Mr. M'Lean has been for
many years the head of the Gold Depart-
ment. These three gentlemen were to
form a Board, and see how far they could
arrive at some reductions :

Colonial Secretary's Office, Sydney,

16 December, 1865.

Sir, I am directed by the Colonial Secretary
to request that you will have the goodness to
meet the Inspector-General of Police and the
Sheriff, for the purpose of forming a Board to
consider the question raised in the accompanying
minute, which he addressed to the Secretary
for Lands in July last.

2. From the knowledge which you have of
the public service generally which Captain
M'Lerie has of the Police Magistrates, ana Mr.
Harold M'Lean of the Gold Commissioners, the
Colonial Secretary trusts he may be favoured
with such suggestions as- will assist him in
making reductions in the number of gentlemen
employed either as Pob'ce Magistrates or Gold
Commissioners, without at all impairing the effi-
ciency of these departments.

3. If upon a careful consideration of all the
circumstances of the respective districts by re-
distributing the officers throughout them, it
shall be evident that the number of officials can
be reduced, it will rest with the Government to
determine how these gentlemen whom it may be
thought the Government service can best spare,
may be dealt with, and any claims they may
have for other employment or for compensation
be satisfied. I have, &c.,

\V. OWEN.

The Auditor General.

That Board met a few days ago, and I
believe they are all but prepared with
their report I hope in that report to re-
ceive suggestions which will facilitate con-
siderable reductions in this particular
branch of the Public Sen-ice. I know
that many hon. gentlemen are in favour
of the appointment of police magistrates.
I think the hon. member for the Hastings
( Mr. Forster) is one of those, but I have

MR. COWPEB.

[1865.]

long been of opinion that the gentlemen of
the interior ought to do their magisterial
business themselves. Certainly if we are
to continue our present system of police,
with an executive officer in charge, I cannot
think police magistrates are also necessary.
In this direction, therefore, we may hope
for a considerable reduction possibly to
the extent of 20,000. Some hon. mem-
bers think a reduction of 50,000 may be
effected. If this House is deliberately of
opinion that the number of police scat-
tered throughout the colony is greater
than it ought to be (and they have ample
information on the subject in the return
laid on the table), the Government will,
of course, feel themselves to a great ex-
tent relieved from responsibility if the
House consents to make reductions in
particular directions. In conversation
with the Inspector-General this morning,
he alluded to the application for police at
Belubula, on the ground that public-houses
had been established there. The Inspec-
tor-General said that this ought not to be
a sufficient reason that hey ought not
to license public-houses, and then at once
apply for police to look after the drunk-
ards. He said it acted in an improper
way, and I was struck with the remark.
Bathurst and Goulburn, where we have
Circuit Courts, and Deniliquin, where
they are about to be established, all claim
police on this account, but the extent of
territory renders it burdensome to have
police scattered all over the colony, and
the high rate of wages makes it expensive.
If we cannot reduce the rate of pay we
must reduce the numbers. The item of
forage is one causing great expense, and it
is one difficult to deal with. I had a note
the other day from a friend of mine in
the interior, speaking of a chase after the
bushrangers in the district of Bourke. He
complained of the condition of the horses
of the police and the want of fodder ; but
it is impossible to get fodder for horses in
those districts of the interior. It is impos-
sible, in respect to horses, to put the police
on a footing with the bush rangers. Captain
Zouch borrowed five excellent horses from
private individuals, and they, as well as the
police horses, were knocked up. I was
conversing with him about fodder a short
time ago, and he stated plainly that there
was no grass to be found for the horses in

that locality. Under these circumstances
the best horses in the world would soon
be knocked up, and could not possibly
cope with the horses of the bushrangers.
It is generally supposed that a large re-
duction may take place in the Survey
Department. It appears to me that there
is a very large number of clerks in the
Surveyor-General's Department in Sydney,
but then the correspondence is enormous :
I had 110 conception, until I went there, of
the number of letters which pass through
the office in the course of the year. And
'it is a department which the public expect
to be kept up. Much of the work is of a
scientific character, and requires renewal.
Owing to that a good deal of expense is
incurred. At the end of five years the
charts all want renewing. So with regard
to the operation of free selection and the
measurement of numbers of small farms,
there is no doubt great expenses are in-
curred. If the House keeps up free selec-
tion, farms must be measured. I merely
mention this to show the difficulty there
would be in cutting down departments
unless the House is determined to support
the Government in their endeavours to do
it. If the House will determine to sup-
port the Government in making these re-
ductions, the Government will undertake
the work from a sense of duty, knowing
well that they will not be able to carry it
out without considerable dissatisfaction ;
and as to the particular mode of carrying
it out in all its parts, I hope the House
will not consider that I have made up my
mind on the subject. I really have not
had time during the last few days to con-
sider it in all its bearings. I requested
the Auditor-General to take into consi-
deration a scheme which I know finds
favur with hon. members that there
might be a reduction of the salaries of the
public officers. I am quite sure the ex-
pectation of hon. members on this point
will be very much disappointed. I will
read a paper which has been drawn up by
the Auditor-General at my request, show-
ing a scheme of reduction beginning at 1 per
cent, on small salaries, and going upwards
on a graduated scale. This shows that
salaries of 100 and under 200 are re-
ceived by 1,700 officers. The total sum
is 170,000, and a reduction of 1 per
cent, would give a reduction of 1,700.

[1865.]

MR. COWPEK.

159

Salaries of 200 and under 300 are re-
ceived by 331 persons. The total amount
of these salaries is 66,200, and a reduc-
tion of 2 per cent, would be 1,324.
Salaries of 300 and under 400 are re-
ceived by 137 officers. The total amount
is 41,100, and a reduction of 3 per cent,
would be 1,233. Salaries of 400 and
under 500 are received by seventy-nine
officers ; the total amount is 31,600, and
a reduction of 4 per cent, would be 1,264.
Salaries of 500 and under 600 are re-
ceived by seventy-three persons ; the total
amount is 36,500 and a reduction of 5
per cent, would be 1,825. Salaries of
600 and under 700 are received by
thirty-one persons ; the total amount is
18,600, and a reduction of 6 per cent,
would be 1,116. Salaries of 700 and
under 800 are received by fifteen officers ;
the total amount is 10,500, and a reduc-
tion of 7 per cent, would be 735.
Salaries of 800 and under 900 are re-
ceived by ten officers ; the total amount
is 8,000, and a reduction of 8 per cent,
would be 640. Salaries of 1,000
and under 1,100 are received by
fifteen persons ; the total amount is
15,000, and a reduction of 10 per
cent, would be 1,500. Salaries of 1,100
and under 1,200 are received by two
officers ; the total amount is 2,200, and a
reduction of 11 per cent, would be 242.
Salaries of 1,200 and under 1,500 are
received by two persons; the total amount
is 2,400, and a reduction of 12 per cent,
would be 288. Salaries of 1,500 and
under 2,000 are received by five persons.
The total amount is 7,500, and a reduc-
tion of 15 per cent, would be 1,125.
Salaries of 2,000 and under 2,600 were
received by four persons. The total
amount was 8,000, and a reduction of
20 per cent, would be 1,600. There is
one salary of 2,600, and a reduction of
20 per cent. 011 this would be 520.
There was one salary of 7,000, a reduc-
tion of 20 per cent, on which would be
1,400. I may, however, state that
several of these higher salaries are fixed
by Act of Parliament, and I doubt
whether this House can interfere with
them. There were in all 2,409 officers,
receiving salaries amounting to 429,900,
and the total reductions according to this
scale, wliich I think is a very fair one,

would be 16,725. I give this as an
approximation. I have no doubt that a
good deal of distress would arise from
making these reductions upon salaries of
400 a-year and under ; but if we do not
make it on those, and can only make it
on the higher salaries, this scale of reduc-
tion would not give more than 10,000.
Therefore, I think we can hardly expect
a large amount of relief from a system
of reduction by per-centage; the diminu-
tion must c omc in the reduction of the
departments. I can only say that I shall
be quite prepared to act myself with a
firm determination to reduce the expense
of the Public Service in any way in
which it can be reduced consistently with
efficiency. There is another direction in
which, perhaps, we may get some relief.
I was glad to hear this evening an allu-
sion made to the management of our
railways. I have long thought that we
allowed passengers and goods to be con-
veyed at too cheap a rate. Then- is a
difficulty with regard to the traffic,
because we have carriers who will carry,
if possible, goods at such a rate as to
secure the traffic. Some consideration,
therefore, must be had to this fact in
fixing the rate for the conveyance of
goods by rail. I was surprised to hear
from the Traffic Manager the other day
that there had been a reduction of 500
a-week for the last three weeks as com-
pared with the receipts in the corres-
ponding weeks of hist year. It may be
on account of the wool not coming down.
Last year we had 2,000 bales from one
place, and this year we have hardly any.
I think, too, that persons travelling by
rail should pay more than they now do.
The excursion-ticket is, I think, a mis-
take. I think it can be proved by figures
that it does not benefit the railway at
all, because many people postpone their
travelling until the days when excursion
tickets are issued. The subject is one
which well deserves consideration. It
was considered by my honorable friend
who preceded the present holder of the
office of Minister for Works, and it is
now being considered by u.s. We are
under the impression that by raiding tin-
passenger fares we can increase the
income from the Railway Department
about 25,000 a-year, and if we can do

160

MR. COWPEK.

[1865.]

that it will be acknowledged to be a step
in the right direction. We had under
consideration also the subject of raising
the postage on letters. There is an idea
that twopence is too little for carrying a
letter all over this vast territory. We
are losing .40,000 a-year by the Postal
Department. It seems almost unreason-
able that, under these circumstances, we
should carry letters at so low a rate, but
still I should look upon raising the post-
age on letters as rather a retrograde
movement. I would prefer to increase
the tea and sugar duties. There are
persons who favour the idea that we
ought to have a graduated scale varying
according to distance, but if we did this
we should be abolishing here the uniform
rule which is considered in England a
great reform, and I doubt whether the
alteration would pass into law. I draw
attention to these circumstances to show
that if we are to construct railways and
pay 370,000 a-year interest without any
adequate receipts ; if our Postal Depart-
ment involves us in a loss of 40,000
a-year; if we are to carry electric tele-
graphs all over the colony which do not
pay quite so well as we have been led to
suppose ; and if we cannot make any large
reduction in the Public Service, we must
have some additional taxation. We have
made a proposal this year in one direction
which has not met with the favour of the
House. I confess that, after considering
the reductions which may be made, the
next step the Government ought to con-
sider is how property can be made to pay
something more to the State. I wish the
House to understand that I desire reduc-
tion and retrenchment, and then the con-
sideration of a measure with reference to
property : whether it take the shape of an
income tax or a property tax, it ought to
be well considered before we mature the
plan. But having taken these steps to
increase the revenue of the colony so far
as we can, there will still remain a deficit
of considerable amount. I quite agree
with those honorable Members, who think
we ought to raise a sufficient sum to
satisfy the public creditor, that we are not
desirous of repudiating our engagements.
I should be glad to pass a measure this
night, so that the intimation may reach
England by the outgoing mail, that the

Assembly is not amenable to the charge
of desiring to repudiate, but is even
willing to adopt a scheme, of which it
does not altogether approve, rather than
that the public creditor should, for a
moment, entertain the idea that the
securities of the colony are not such as
would justify any capitalist in lending
money upon them. While I am speaking
of our expenditure, I would draw the
attention of the Committee to a document
which has been placed in my hands by
my honorable friend the late Colonial
Treasurer, to show the expense of the
government of this colony as compared
with the cost of government in other
colonies. There is an impression that
we are an expensively governed colony,
but I believe we are most economi-
cally governed. The colony of Victoria,
with a population of 600,000 persons, and
an estimated revenue of 5 3s. 2d. per
head, costs for governing 5 4s. lOd. per
head. New South Wales, with a popula-
tion of 400,000 and a revenue of 4 7s. 4d.
per head, costs for governing 4 8s. Id.
per head. Queensland, with a population
of 50,000, and a revenue of 11 11s. 4d.
per head, costs for governing 10 15s. 9d.
per head ; and South Australia, with a
population of 150,000, and a revenue of
5 18s. per head, costs for governing
5 16s. per head. Having said thus
much by way of explaining what we pro-
pose to do in that direction, I will now
refer to the statement of my hon. friend
as to the requirements we shall have to
provide for. If the House will insist upon
the money voted for minor roads being
expended, and upon the restoration to the
Estimates of a sum of money to be ex-
pended for the same purpose next year,
something additional will be required. I
had conceived the establishment of a sys-
tem of municipalities and road trusts
throughout the colony, to be assisted by a
grant of money according to scale, and
a sum of 50,000 was put upon the
Estimates to meet that proposition. But
if the House insists upon the retention
of all local public works in the hands
of the Government, we shall require
200,000 a year more than was esti-
mated. Now, however unwilling I may
be to adopt that course, I am obliged to
fall back upon ad valorem duties. We

[1865.]

MR. COWPEE.

161

have tried various other modes of raising
money without success, and it rests with
the House to say how far it will assent
to the proposal I now submit, which is
this :

That, towards raising the supply granted to
Her Majesty, there shall be charged on the im-
portation of all goods not liable to duty by any
existing law, or resolutions already passed by
this committee, a duty of five pounds for every
one hundred pounds of the value thereof, the
following articles excepted, which shall be ad-
mitted free of duty, viz. : Animals, living ;
fresh fruits and garden produce ; fresh meat ;

fold-dust, bullion, coin ; guano and manures ;
ides and skins ; military and naval stores ;
ores, unsmelted ; passengers' baggage ; plants,
trees, and shrubs ; seeds and roots, including
potatoes and bulbs ; 'specimens of natural his-
tory ; tallow and wool ; wheat and flour.

I will give the estimate of the Collector
of Customs, whose authority I believe is
to be relied upon as to the probable
revenue derivable from this source. There
are many who consider that a duty of five
per cent, is somewhat too high, but we must
bear in mind that we forego a large
amount by the exceptions, gold amounting
to a million and a half of our imports. If
we are to have an ad valorem duty we
ought to obtain sufficient to meet our re-

quirements. I only propose it as a tem-
porary measure to see how it works, so
that the House may hereafter be in a
position to deal with it as its operation
and effect become apparent. In the
present emergency, I am prepared to un-
dertake the duty of proposing it now for
your acceptation. The Collector of Cus-
toms estimates the probable revenue from
this impost at 177,995. I should,
perhaps, have been better pleased if I
could have proposed a duty of two and a
half per cent. ; but I can only say the
duty I now propose will most likely have
a better effect abroad, as showing that we
are willing to raise whatever revenue may
be required to enable us to meet our
engagements. I should like to have re-
duced the package duty at the same time,
but I do not think it would be safe
to do so. With these observations I
will submit the proposition I have brought
forward for the consideration of the com-
mittee.

The resolution having been put, there
were general cries of "Question, Ques-
tion," which became loud and prolonged
when the next speaker rose.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEOFFREY EAGAR,,

made 2nd March, 1866.

[From the Sydney Morning Herald of 3rd
March, 1866.]

LEGISLATIVE ASSEMBLY.

Friday, 2 March, 1866.

FINANCIAL STATEMENT.

Mr. EAGAR said : I apprehend this is
a convenient time to make the statement
of the position and prospects of our
finances ; and, in applying myself to this
task I do not propose to take up the time
of the Committee at. any considerable
length. When saying this, I would not
have Honorable Members suppose that I
desire to make a short statement simply
to avoid giving all the information that
they have an undoubted right to ask ; but
I confine my remarks in a limited compass
for reasons that must be apparent to every
Honorable Member. Within the last
three months two financial statements
have been made in Committee of this
House one by the Honorable Member
for Wellington in October last, when part
of his propositions relating to new taxa-
tion was passed, the residue being refused
by this House ; and the second by the
then Colonial Secretary (Mr. Cowper) in
December, when he took up the Ways and
Means statements of Mr. Samuel, and
brought them down to a point which en-
titled him, in his judgment, to ask from
the Committee fresh taxation to the extent
of 2 80, 000 per annum in round numbers.
In botli these statements the Committee
has had the fullest information as to the
position and prospects of the Colony at
these two particular periods. My position

is so far of this advantageous character
that, while during three administrations
no Treasurer has made a statement to the
Committee without having to acknowledge
a large amount of indebtedness and a
serious amount of deficiency, I am fortu-
nately I will not say by any act of mine
in particular or by any special act of the
Government with which I am now associ-
ated in such a position that, instead of
having to ask the House for fresh taxa-
tion, I shall show comparatively favour-
able results at the close of the present
year. It is unnecessary to analyse the
two statements I have referred to for this
reason, that Mr. Samuel's account was
made up to September, 1865, and he was
obliged to estimate the revenue for the
three remaining months of that year.
When Mr. Cowper subsequently made a
supplementary statement, he did not sub-
mit to the Committee any fresh account
of revenue derived from its actual collec-
tion, but, taking the figures of Mr. Samuel,
he dealt with them as the basis for fresh
taxation. My position, then, is this, that
the year 1865 having expired, I am en-
abled to show to the Committee the actual
revenue raised during that year, as well
as so much of the expenditure as has
actually occurred, and I am further in a
position to show the Committee the deficit-
or surplus with a greater degree of accu-
racy from the mere effluxion of time than
could have been shown by the Honorable
Member. In making this statement, there
is this difference in my position contrasted
with that of any of my predecessors, that,
while there was great difficulty in obtain-
ing the taxation necessary for the wants of

164

MB. EAGAE.

[1866.J

the country, and a question was raised as
to the proper time for fresh taxation, and
also as to the amount, it now appears to
me that the taxation of the country- being
settled definitely, for a term at least,
that question is so far removed beyond
the pale of present controversy. But 1
apprehend that a new feature is this,
that having the wants of the revenue satis-
fied, we have impressed upon us, with
far greater force than on previous occa-
sions, the subject of expenditure "and the
necessity for retrenchment and economy.
I shall therefore answer sufficiently my
present purpose by laying before the Com-
mittee as accurate a statement as I have
been able to prepare of the public accounts
for 1865 ; and of our prospects for 1866.
The first statement to which I call atten-
tion is my own estimate of Ways and
Means for 1866. Honorable Members will
perceive by the account current, No. 1,
that I end the year 1865 with an esti-
mated deficiency of 2,671 3s. 3d. By a
comparison of this document with the ac-
count current laid before the Committee
by Mr. Samuel, it will be perceived that
while the Honorable Member's estimated
deficiency for 1865 was 22,313 6s. 7d.,
the estimated deficiency shown by my ac-
count for the whole term is only 2,671
3s. 3d. The Honorable Member's calcula-
tion of revenue was up to September,
leaving an estimated calculation for the
last three months now gone by. On the
year's actual revenue there is an increase
of 21,332 over and above the calculation
of my honorable friend. On the debtor
side of the account for 1865, I take the
same figures for Appropriation Act,
special appropriations, &c., amounting to
1,825,272 3s. lid. The Honorable Mem-
ber's supplementary estimates amounted to
71,725 9s. lid., against my estimate of
84,210 6s. 5d. The additional special
appropriations show a diminution, as com-
pared with Mr. Samuel's account, the
amounts shown in my later account being
the actual payments. My smaller de-
ficiency on the year's estimated revenue
and expenditure arises from two circum-
stances; firstly, from the collection of a
larger amount of revenue during the last
three months of the past year than my
honorable friend estimated, and secondly,
from my having to place a larger amount
under the head of savings. With regard

to these savings, we have followed the
example of our predecessors in including
the unpaid balances of road funds for
1865. When pressure was brought to
bear upon the late Government to compel
them to treat these unexpended road
balances not as savings, but as funds ap-
plicable for purposes of expenditure as
required, the Government had omitted
from the Estimates any provision for
minor roads. It may be said, why follow
their example? This is not done. The
present Government have placed on the
Estimates a large amount for minor and
main roads, and having done so, they are
informed by the officers charged with this
branch of the public business, that the
amounts placed on the Estimates for this
purpose are sufficient for the present year.
It would therefore embarrass the public
account unnecessarily to retain on it these
surplus votes when ample funds are pro-
vided on the Estimates for the require-
ments of the present year. If it should
occur that more money can be spent, or
may be required to be spent, on these roads,
the Government will make such further
provision as may be necessary. Having dis-
posed of the account of 1865, and by a
comparison with the account of Mr. Samuel
for a like term, established an identity
between the respective balances, I now
invite the attention of the Committee to
the account marked No. 2, in which I sub-
. mit the probable outcome of the accounts
at the end of 1866. I start with a deficit
of 2,671 3s. 3d., and Honorable Members
will then find on the debit side, charges on
the Consolidated Revenue Fund, under
the heads General services, special ap-
propriations, appropriations under consti-
tutional and colonial Acts, and 20,000
likely to be required for the Panama
Steam Postal Service, amounting together
to 1,932,745 ; and charges to be provided
by loan, 820,500. On the credit side,
they will find the amount of revenue for
the year 1866, as set out in tho paper
marked A, which has been compiled from
very carefully considered information pro-
vided by the various departments. From
these estimates, it appears that we are
likely to have, during the year, revenue
amounting to 2,084,511, which, with the
amount to be provided by loan, will leave
an estimated surplus of 149,094 16s. 9d.
I think it unnecessary to make any com-

[1866.]

MR. EAGAR.

165

parison between this statement and the
statement marked A 5, submitted by Mr.
Samuel, as in that statement the honorable
gentleman included the amount of his con-
templated taxation, which was not agreed
to. Neither will it be necessary for me,
for obvious reasons, to allude to the state-
ment of Mi % . Cowper, made in December,
1865 ; but if the Committee desire me to
analyst those, I am both prepared and
willing to do so, and I only avoid doing so
now from a desire not to tire the Commit-
tee unnecessarily. I now come to the es-
timates of expenditure submitted to the
Committee by the present Government,
and I may call attention, without in any
way desiring to say anything disrespectful
of the late Government, to the peculiar
mode pursued by that Government in car-
rying out the retrenchments that had been
insisted upon by the House. Honorable
Members are no doubt aware that a cir-
cular of a somewhat arbitrary character
was sent round by the honorable Premier
to the heads of departments, to the effect
that unless they could propose some pos-
sible retrenchment, they would have to
submit to a ratable reduction of all sala-
ries. Under pressure of this particular
character certain communications were
addressed from the different heads of de-
partments to the Principal Secretary, re-
commending what, in their judgment, was
the only retrenchment capable of being
carried out. I may say that this Govern-
ment dissent entirely from that mode of
dealing with the question. They believe
that the responsibility of carrying out the
retrenchment that the House lias insisted
upon should fall upon the responsible
Ministers themselves, and not upon their
irresponsible subordinates ; and that,
whilst they would seek information, from
the heads of departments, any retrench-
ment should be carried out more with
regard to the efficiency of the service than
the economy of the public funds. Holding
these views, some of these recommenda-
tions have been adopted by the Govern-
ment, whilst some have been ignored,
and to that extent some reductions in
departmental expenses have been made. I
think it right now to read to the House a
short statement which will show prac-
tically to what extent reductions have
been made by the present Administration.
I shall go through these items in detail, as

this is a most important matter and, as
I read them, the items will furni i
key to the inn 1 reductions which

the ( lovenni'c'.it lure thought right to
make. The Housv will see that Mr.
Samuersestimates amounted tol, 331, 7 17,
whilst those of the present Government
amounted to .1,367,942, showing an in-
crease in some respects of 77,233, and a
decrease in other respects of 41,000.
The first item struck off is the pension of
200 to Mrs. Chishohn. While the
Government are wiling to acknowledge
the claims of this lady, they think that this
is not the proper mode of meeting them
that it is not by a pension but by the vote
of a lump sum that she should be re-
munerated. Thus, then, whilst the Govern-
ment will not propose a pension to this
lady, they will be quite willing to support
any reasonable charge Honorable Members
may think fit to propose for consideration.
In the department of the Chief Secretary,
a saving of 825 per annum has been
effected, owing to the death of Mr. Elyard,
and the retirement of Mr. Owen ; from
the Volunteer vote has been struck off,
961, the salary of the brigade adjutant
and the pay of the musketry instructor.
We have also reduced the police expendi-
ture 10,880, and the gaols and penal
establishments, 3,904 ; whilst we have
increased the expense for lunatics by 200.
We have struck 1,000 off the otiftft**
tory, as we did not consider that the mea-
surement of an arc of the meridian was a
matter of that importance that we should
go to the expense to do it at the present
time. We have added 5,000 to the vote
for National, and 5,000 to the vote for
Denominational, education. We have re-
duced the expenditure of the Protestant
Orphan School by 72, whilst we have
increased the vote for charitable allow-
ances by 1,175* believing that this was
one of the particular modes of expenditure
to which the Committee could hardly
entertain an objection. The immigration
vote has been increased by certain changes
that have been proposed, by 375 ; and
in miscellaneoi - there is a nominal

decrease of 30,000 nominal, because
the amount will be found charged else-
where, ll arises from the sum of 50,000
for municipalities having leen struck off,
and the amount added on to the minor
roads vote: whilst under this head, 20, 000

166

MR. EAGAR.

[1866.]

are proposed for taking the census this
year. If the House intend to have the
census taken every five years, then this is
the fifth year, and provision must be made
for it. It is, however, entirely a matter
for the House to decide upon. In the
department of the law offices of the
Crown there is an additional 100 in fees
for counsel defending aborigines, and the
Supreme and Circuit Courts show an in-
crease of 1,000, partly owing to the fact
that it has been determined to restore the
Master in Equity to his place on the
Estimates, allowing him 200 for doing
the duty of Commissioner of Insolvent
Estates, and next from the increased
allowance for travelling expenses. From
the department of the Sheriff have been
struck off the Inspector of Prisons and
the officers consequent upon that appoint-
ment ; consequently there has been a re-
lative increase in th'e department of the
Sheriff by restoring to that department
the officers of the penal establishment.
There have been 200 struck off the
salaries of Bailiffs of the District Court,
because their fees of office amount to
large sums that amply repay them. 170
have been added to Petty Sessions in
further allowances to police magistrates
for visiting other benches. I now come to
my own department that of Treasurer
and Secretary for Finance and Trade ; and
in reference to this I may say at once
that, except in the case of the Mint, I
have not considered it advisable to carry
out the plan of retrenchment proposed by
the gentlemen holding situations of trust
under me. And for this reason that the
departments under me are charged with
the important function of collecting the
revenue, and of preserving the mercantile
marine of the country. Considering that
in so far as the Custom House is con-
cerned, this department *s entrusted with
the collection of nearly a million of money
annually, I have felt myself bound, so far
from cutting it down, to ask for an in-
crease ; and in regard to the Navigation
Department, when I was last in office I
effected most important changes in that
service, making reductions that brought
this department to the point of conjoined
efficiency and economy. I do not consider
that it would be right that that which is
now efficient should be weakened by re-
duction. On these grounds I have been

unable to consent to any reduction. I
have adopted the reductions suggested by
the Deputy-master of the Mint ; for,
though I am aware that it is said that
some hardship will occur, yet if such be
the case, and the hardships be made out,
the Government will be quite willing to
submit to the House any claim that may be
made for compensation. But the Parlia-
ment has made provision by statute for
this department, which is one' not under
our control, and of the working of which
we know nothing ; and when I find that
the gentlemen charged with the conduct
of the establishment, and who must be
considered to know what is required for
its efficiency propose these reductions, I
consent to them at once. The course I
have taken has been this. I recommend
an increase of 12 to an old and de-
serving messenger, 10 under the head of
stamp duties, and 1,020 for three addi-
tional officers of Customs. There is one
department in which I have made no re-
duction that of the Government Printer
because I believe that a very large re-
duction may be made in a way different
from that recommended by that officer.
I think I shall be able to show when we
come to this department in Committee, a
mode by which the large and growing ex-
penses of this establishment can be re-
duced. I come now to the department
under the control of the Secretary for
Lands. In the Lands Office 480 will be
saved, consequent on the removal of Mr.
Halloran to the Colonial Secretary's Office,
leaving a vacancy that will not be filled
up. In the case of commission to land
agents 500 will be saved ; and in the
gold-fields estimate there will be a present
saving of 3,099, with a large prospective
saving when the bill has been passed for
transferring the performance of the duties
of Gold Commissioners to Justices of the
Peace. In the scab in sheep estimate
there is a saving of 375, and in the coal
fields of 444, whilst for the Botanical
Gardens there is an increase of 75. In
the case of the minor roads my hon. friend
estimates the expenditure at 57,200;
for miscellaneous services there is an es-
timated increase of 1,344, but this is
principally on account of compensation for
losses incurred by failure of appeals on the
Western Gold-Fields. I now come to the
department of Public Works. There is a

[1866.]

MR. EAGAR

167

reduction of 70 in. the head office, and a
reduction 6,073 in the working expenses
of the railway, and 1,150 in the depart-
ment of Harbours and Rivers. The esti-
mate for main roads is 30,840. In the
Telegraph department there is a reduction
of 4,220. I now come finally to the
Postmaster-General's department. In this
department there is an estimated reduction
of 1,486, and a saving of 2,000 in the
conveyance of mails. The total increases
on the estimates generally amount to
77,233, and the total decreases to
41,008, or a net increase over those
of our predecessors of 36,000. I have
stated what the Government have done
in the way of retrenchment, and if any
Hon. Member feels inclined to be dis-
satisfied because we have not done more, I
would say we are a Government of five
weeks' standing only, and it can scarcely
be expected that what my hon. friend Mr.
Cowper failed to do during his many years'
acquaintance of office, and his large official
knowledge, we should be able to do in five
weeks. During the previous tenure of
office of the present Government, no set
of men had a stronger desire to economise,
but all that we were enabled to do was to
effect a reduction of 20,000 a year. I
think it cannot be expected of us to do
more than we have done during the last
five weeks. We have made certain reduc-
tions in the various departments, and we are
pledged, if we retain office, to investigate
and decide upon our own responsibility,
what further reductions we consider to be
necessary. It was impossible to cut down
salaries without great injustice, and I do
not think that any member of the Com-
mittee desires us to be guilty of injustice
to any of the public servants. I am aware
that some Hon. Members think that we
might make a ratable reduction in the
salaries of public officers ; but I think the
statement made by my hon. friend, Mr.
Cowper, must have convinced Hon. Mem-
bers that a very small saving could be
effected in that direction, while a very
large amount of injustice would be done.
The general idea of the Government is this
that you cannot cut down salaries, but
you can reorganise, and you can get done
by private individuals many things that
are now done by the Government. I
allude, among other things, to the Fitzroy
Dry Dock. For what earthly reason

should the Government keep up this dock
and a large establishment for the accom-
modation of private vessels'? And so with
the abattoirs, why should the Government
slaughter cattle for the butchers 1 It will
be in reorganisations that retrenchments
will be effected. I think I have said
enough on this point, so I shall leave it
to Hon. Members to call for any further
information that they may desire. I will
now come to the subject of our public debt,
and at the outset I will remark that the
idea of providing some machinery for in-
vesting funds with a view to reduce and
extinguish our public debt is not new to
the public. The matter was mentioned by
my hon. friend the Colonial Secretary at
Kiama, and my hon. friend the member
for the Hawkesbury asked a question on
the same subject the other night. At
that time the Government were not in a
position to state what they were prepared
to do in the matter, but now I may state
that the Government are prepared to adopt
the suggestion of appointing commissioners
to whom shall be paid annually a sum of
money not less than 10, 000, out of the Con-
solidated Revenue Fund to invest for the
purpose of extinguishing our public debt.
We have a special kind of public debt our
deficiency loans, which, I think, may be
left to be dealt with by the commissioners.
That loan embraces an authorised issue
of 400,000 of Treasury bills, but of this
sum we have an unsold balance of 77,500.
During 1866 and 1867 we must make pro-
vision to repay this loan of 400,000, if all
negotiated, as the time of payment is limited
to that period. Then we have a Loan Act
for deficiency purposes, passed during last
session, to raise 550,000, and another
authorising us to raise 300,000 to meet a
like sum falling due on the 1st January of
this year. The first has a very peculiar
but, I think, a very wise provision, namely,
that the Colonial Treasurer shall pay out
of the consolidated revenue a sum not less
than 100,000 annually to meet deben-
tures of a like value falling due. I think
this is a wise provision, inasmuch as it
forces upon the Government economy in
order to enable them to lay by this amount,
but it falls short of the requirement in this
respect, as there is no provision to compel
the Treasurer to do this. These two loans
of 550,000 and 300,000 have a term of
ten years to run from the time of the

168

MR. EAGAR

[1866.]

passing of the Acts. I think with my hon.
friend, Mr. Piddington, that the time has
arrived when we ought to appoint commis-
sioners for the purpose of reducing and
extinguishing our debt. On the 1st Jan-
uary, 1868, debentures fall due to the
amount of ,400,000, and the remainder of
the deficiency loan at subsequent dates. I
think the Committee will agree with the
Government in their determination to in-
troduce a bill to appoint commissioners to
whom shall be paid a sum of money every
year to be invested and employed by them
for the purpose of extinguishing our pub-
lic engagements. I have now much pleasure
instating some particulars in relation to our
revenue. The Customs revenue for January
and February, 1865, amounted to 98,787,
and for January and February, 1866, to
150,634, being an increase for the latter
two months of 52 per cent, over the
corresponding two months in 1865. The
progress of our revenue would place us in
a most fortunate position, but that the
present year is burdened with engagements
in consequence of the non-sale of our De-
bentures in London. The revenue received
from all sources for January and February
of the present year, amounted to 31 1,832,
a very fair guarantee that the estimate of
2,000,000 for the year is not above the
mark. Of this revenue we have only
spent, proper to the year 1866, 136,503,
so if we had nothing to do except to meet
current liabilities by current revenue we
should have a large balance in hand at the
end of the year. But owing to the non-
sale of our debentures in London we have
had to advance during the two months of
the present year, the sum of 63,914, for
loans, and for the services of 1864, and
further sums for other purposes, making a
total of 157,499, and to that extent we
have reduced the public debt. The present
rate of collection vastly exceeds the rate
of expenditure. I will now allude to the
state of our general loan account, and in
doing so would say that I think a very
great mistake was made when we allowed
Peto and Company, who were willing to
construct our railways on the faith of our
debentures, to leave this colony.

Mr. LUCAS : We have contractors who
will do so now.

Mr. EAGAR : I am glad to hear it, as
the time has then arrived when, instead of
sending our securities to England to be

sold at a loss, we shall be enabled to carry
on our railways by means of our debentures
being paid to contractors in the colony.
We ai'e now selling at a great disadvantage
in London, and there is a possibility of
our having to submit to something like
70 or 80. The debt due to the Oriental
Bank, including outstanding credits, is
940,900, against which they hold deben-
tures in London and in transit to the
nominal value of 1,716,300. According
to the present system of the Oriental Bank
our sale is not at a larger rate in London
than 100,000 of our debentures against
the old average of 600,000. I mention
these facts because, no doubt, either this
Government or some other Government
must take steps to remedy this anomalous
state of things. The amount due to the
Bank of New South Wales in London is
on general account 85,000, and on Trea-
sury bills advance 76,000.

Mr. PIDDIXGTON : Will niy hon.
friend have the goodness to state the rate
of interest charged by the Oriental Bank
at the date of latest advices ?

Mr. EAGAR : The Bank of England
rate of interest by latest advices was eight
per cent, and the agreement with the
Oriental Bank is one per cent, above that
of the Bank of England. Our cash bal-
ance at the bank last night was 146,288
3s. 9d., but this, no doubt will be reduced
by payment of salaries to-day. While we
have this aggregate balance to our credit,
the Consolidated Revenue account has now
at its credit for the first time in two years
the sum of 3,878. But although we had
this large general balance of 146,288 to
our credit last night, the whole of it is
likely to be swept away before the March
mail goes out, as the Oriental Bank, having
made large advances to the Government,
has refused to make the advance necessary
to pay the interest on the public debt due
in London in July next, and consequently I
shall be obliged to withdraw the amount
and send it home to meet this demand.
The Oriental Bank has hitherto acted very
liberally, but by the agreement made with
the late Government, it has the absolute
power to sell our debentures at any price.
to cover its cash advances. I therefore
think that it was scarcely right of the
Oriental Bank to refuse the advance, of
150,000 to send home by the March mail.
It was very hard for me or any other

[1866.]

Mr, EAGAR.

169

Treasurer to be obliged to withdraw the
money from our local account. I trust the
information I have afforded, as far as it
goes is sufficient to satisfy the committee. I
can scarcely hope that the approval of the
committee will be extended to all that we
have done, or that we have left undone.
But for the particular purposes of this
debate, I think I have furnished the com-

mittee with all the information necessary.
I can only say, in conclusion, that I shall
be happy to afford any further information
desired. I have now to move that towards
the making good the supply granted to
her Majesty the sum of 1,447 be granted
out of the Consolidated Revenue Fund of
New South Wales.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEOFFREY EAGAR,
made 27th September, 1866.

[From the Sydney Morning Herald of 28th
September, 1866.}

LEGISLATIVE ASSEMBLY.

Thursday, 27th September, 1866.

FINANCIAL -STATEMENT.

MR. EAGAR, in moving the first re-
solution, rose and said : Mr. Garrett,
The time, Sir, has arrived when it becomes
my duty, in accordance with the usual
custom, to present to the Committee as
comprehensive a statement as I am able to
make of the financial position and pros-
pects of the colony. Arid in commencing
to do so I will require hon. members to go
back to the year 1865. This year was
in some respects a memorable year, and
I so term it, because in that year the
attempt was made, for the first time
since the inauguration of responsible
government, to restore the equilibrium
between revenue and expenditure by the
agency of new taxation thus establishing
on the part of the country the principle
that with States, as with individuals, we
can only be safe by keeping our engage-
ments within the limit of our income.
As a matter of history, the fact of a
deficiency in our finances had long been
persistently controverted. Without de-
siring to make any remark in the slightest
degree savouring of asperity, on the
conduct of the hon. gentleman who now
sits at the head of the Opposition benches,
I may state that what is now demonstra-
ted by the inexorable logic of facts, was
for a long time a matter of considerable
doubt, of considerable discussion, and
of emphatic denial. But in 1865 the

2 A

deficiency in the revenue became no
longer a matter of controversy. It
was shoAvn that our finances had been
so managed I will not say mismanaged
that, instead of a surplus, we were landed
in a considerable deficiency, a deficiency
extending over two or three administra-
tions, a large portion extending over the
time when the hon. gentleman opposite
(Mr. Cowper) was at the head of affairs,
and a large portion extending over 'the
time when my hon. colleague (Mr. Martin)
was at the head of affairs. It appears
that our financial matters were so managed
that in 1865 an accumulated deficiency to
the large extent of 850,000 disclosed
itself. During the year 1865 the Ad-
ministration being then in the hands of
my hon. friend opposite (Mr. Cowper)
new sources of revenue were resorted to.
We had the package duty passed on the
25th May in that year, which increased
the revenue 29,000 ; also the Stamp Act,
passed on the 1st July, which yielded a
revenue of 33,000 ; and we had also an
addition of 20 per cent, to the then exist-
ing tariff, under an Act which was
repealed in January, 1866, but which had,
during its operation, given to the revenue
an addition of 13,293. There were also
a large number of the fourteen years' leases
appraised under the Crown Lands Occupa-
tion Act, and thence accrued an addition
to the land revenue in the last month of
1865 of 125,000; making a total addi-
tion to the revenue, partly by increased
taxation and partly by rents falling in, of
200,293. This large addition has so far
favourably influenced the operations of the
year as to enable me to state that, instead
of having a deficit of 2,671 3s. 3d., Ihere

172

MR. EAGAR.

[1866.J

is a surplus of 28, 177 12s. 5d. I shall
be glad of the attention of hon. members
to account current No. 1, now being dis-
tributed, while I explain the change which
has taken place in the figures since March
last, and which leads to this favourable
result. The state of the account, as
exhibited on the 29th November, 1865, by
the hon, member for "Wellington (Mr.
Samuel), showed an estimated deficiency of
22,313 6s. 7d. ; and, from the best view
that I could take of it, on the 1st March,
1866, I reported to the House that I
estimated a deficiency of but 2,671 3s. 3d.
at the close of the year 1865. I now wish
to point out how the balance turns to the
credit side. Looking at the account, hon.
members will find an item voted under
the head of " Supplementary Appropria-
tions " of 75,922 16s. 9d. The amount
estimated was 84,210 6s. 5d., which
would make a decrease of 8,288. They
will also find a further Supplementary
Estimate of 3,694 a new item, while the
remaining items are in the same shape
as they were previously the estimated
surplus on the year being 28,177 12s. 5d.
On the credit side of the account the
revenue was stated at 1,761,839 Is. 8d.
This remains unaltered. The favourable
balance is occasioned by the enlargement
which has naturally taken place in the
amount written off on the credit side of
the account as appropriations not required
for 1865. These amounts are, as usual,
stated as savings in other words, they
are so much of the estimated appropria-
tions of 1865 as circumstances show
cannot be spent. When Mr. Samuel
made his financial statement in 1865,
he estimated these savings at 142,036
19s. 6d. The lapse of time up to the
period when I made my last statement in-
creased them to 152,913 9s. 4d.; and the
still further lapse of time, between March,
1866, and the present moment, has enabled
me to determine the amount of savings as
179,168 15s. 4d. This greater accuracy
turns the balance favourably on the other
side of the acconnt ; and for the com-
mencement of 1866, instead of a debtor
balance of 2,671 3s. 3d., as was antici-
pated, we shall have a surplus of 28,177
12s. 5d. Therefore, I think I was right
in calling the year 1865 a memorable year,
because not only was it the first year under
Responsible Government, when new taxes

were imposed, but the first year when an
absolute surplus may be said to have
existed, thus forming a legitimate starting
point for future improvement. I next
invite the attention of hon. members to
account current No. 2, which exhibits the
affairs of 1866 brought down to a later
date than when I made my financial state-
ment in March last. I now proceed to
examine the account of revenue and ex-
penditure for 1866. In that account we
start with a balance on the credit side of
28,177 12s. 5d., which I estimate will,
on the 31st December, be increased to
70,564 Os. lOd. The estimated surplus
which I ventured to predict in March
last as the probable balance of this year
was stated as 149,094 16s. 9cl, and no
doubt hon. members are anxious to know
how it is that so large a surplus as this is
reduced to the smaller sum I have men-
tioned, viz., 70,564 Os. lOd. Of course
it will be my duty to explain the peculiar
circumstances which have led to that re-
sult. Looking to the debtor side of this
account current No. 2, hon. members will
see that the first three items, of General
Services, Special Appropriations, and
amounts provided by Constitutional and
Colonial Acts, have been varied. In the
account of February, 1866, these were
stated at 1,912,745, while the amount
actually voted was 1,924,753 Os. 7d. So
that, in point of fact, the amount voted
exceeded the estimate by 12,008 Os. 7d.
Hon. members will also require to look at
item No. 4, Supplementary Estimates for
1866, page 9, 153,498 14s. 5d. It will
be seen at once that this large supplemen-
tary estimate necessarily has a consider-
able tendency to diminish the surplus
which I estimated in my statement on the
28th February, 1866. I will read to the
Committee the principal items which con-
stitute this amount. For services of the
year 1865 there is a sum for forage for
the police, 1,200 ; for 1866, under the
head of clothing for four additional
batteries of volunteer artillery, 1,600 ;
forage for police, 1866, a further sum of
7,500. Under the head of gaols for
1866, provisions, fuel, light, water, and
incidental expenses, 4,400. Under the
head of asylums for the infirm and desti-
tute, 1866, 2,000 ; additional ex-
penditure, incurred by buildings at Port
Macquarie. Under the head of charitable

[1866.]

MR. EAGAR.

173

allowances, 3,019 18s. 4d.; allowance of
seed wheat to distressed farmers, 3,450 ;
and there is a sum of 2,000 for the Paris
Exhibition ; there were other large sums
for interest, which, as the Committee is
aware, are rendered necessary "by the cir-
cumstance of our having a large overdraft
in London, and also an overdraft in this
city. The items of interest are as follows :
50,000, a fui'ther sum for interest 011 the
public accounts, overdrawn at the banks
where such accounts are kept, 10,000
having been taken in the main estimates
for I860. Interest on Treasury bills,
5,000 ; interest on temporary loan of
100,000, at 8 per cent., from the Aus-
tralian Mutual Provident Society, 1,900 ;
and 100,000, at 6 per cent, from the
Savings' Bank, 1,400; exchange on
remittances, 1,500 making in the Esti-
mate the large sum of 60,000 for interest
alone. At page 7 hon. members will see
the expenditure of the Lands Department
detailed as follows : Occupation of lands,
3,500 ; to meet expenses connected with
preparation of returns, 31 ; 2,500 for
the extension of Riley-street to Palmer-
street ; forming, levelling, and draining
Circular Quay, 5,000 ; repairs to river
bank, West Maitlaiid, 1,300; for other
public works, 11,529 ; roads and bridges,
1,200 ; and under the head of miscel-
laneous, 3,693 13s. 2d. This Supple-
mentary Estimate also contains 27,500
towards the subsidy for the steam postal
mail service via Panama for six months
from the 15th June. So that the Com-
mittee will see that of this Supplementary
Estimate 60,000 is for interest and
27,500 for the Panama mail service,
which reduce the other items to a compar-
atively small amount. The next item in
this account consists of special appropria-
tions, 15,090 12s. 4d., which sum is
made up of drawbacks and refund of
duties, 15,000 ; and preliminary expenses
of municipal institutions, 90 12s. 4d.
There are further payments under the
Scab in Sheep Acts, 27 Victoria, No. 26,
and 29 Victoria No. 13, 1,166 13s. 10d.,
made up of fines and collections refunded,
925 10s. 6d.; and charges on collections,
241 3s.. 4d. So that the new debits in
this account are the amount appropriated
in excess of my estimate of Februarv last,
12,008 Os. 7d. ; the Supplementary Esti-
mate 153,498 14s. 5d.; and the Special

Appropriations, which are charged as new
items. These are the additional sums on
the debit side of the account. I now come
to the credit side of the account, and hon.
members will see a reduction under the
head of revenue and receipts for the year
1866. The amount estimated in the
account of the 28th February, 1866, was
2,084,511 ; the amount actually received
up to the 31st August was 1,240,809.
The amount of estimated revenue from 1st
September to 31st December is 786,358;
making, as a whole, 2,023,579 14s. 5d.
after deducting 3,587 5s. 7d. for advances
refunded. This is as near an approximation
as I can venture to make as to the probable
revenue of the year. The account shows
the difference between the sum now
submitted and that in the account of the
28th February, viz., 60,931 5s. 7d.
In short, the revenue in the account of
the 28th February was over-estimated to
that extent. This over-estimate arose as
follows : In the Customs, 52,000 ; in
Colonial spirits, 4,100 ; and in the gold
revenue, 4,500. So that this overresti-
mate on the credit side is, in point of fact,
a charge on the debtor side of the account.
I have next to call attention to the
amounts appropriated for 1866, but not
likely to be required, namely : interest on
debentures, 105,000; interest on Trea-
sury bills, 2,604 12s. 4d. ; steam postal
service vid Suez, 5,711 2s. lOd. Hon.
members will see that in this account for
1866 I have not taken credit for what we
understand by the term " savings " ; but I
have taken credit simply for amounts of
interest which I over-estimated in my state-
ment of February last. For example, the
public debt at this amount is 5,634,930;
and it consists of debentures actually sold,
5,240,030, bearing interest at 5 percent.,
and Treasury bills actually sold, 394,900,
bearing interest at 6 per cent. The actual
interest due to the end of the year on the
public debt, so stated, amounts to 264,819
9s. 4d. ; whereas in my account of Febru-
ary last the estimate was framed as though
the whole of the debentures sent to Lon-
don had been sold, which is not the case.
The sales are^very limited. I then took
the interest "on the debenture debt as
though the principal sum of 7,400,000
were outstanding ; and the amount of in-
terest was estimated at 370,000. The
amount actually over-estimated, which

174

MR. EAGAR.

[1866.]

could not by any possibility have been
claimed for this year, amounts to 105,186
10s. 8d. The same remark applies to the
interest on Treasury bills, 2,604 12s. 4d.
There is an actual saving of 5,711 2s.
lOd. on the steam postal communication,
vid Suez ; so that the amount of sums
appropriated for the service of 1866 and
known not to be required for expenditure,
is 113,315 15s. 2d. This is not an
imaginary saving, as it has been deter-
mined, as far as certainty is possible, that
this large sum is available for the credit
side of the account. A large portion of
the amount, it will be seen, is owing to
the absence of demands for interest esti-
mated under the impression that the whole
of the debentures would be sold. The
surplus arrived at for 1866 is therefore
likely to be realised. The Government
exclude from this account all those other
appropriations for the year not required,
and which remain to be written off at
some future day. Starting, then, with a
surplus on the 1st January, 1866, of
28,177 12s. 5d., the committee will per-
ceive that after providing for a supple-
mentary estimate, making provision for a
large amount of interest on our over-drafts,
for public works, for charitable institu-
tions, and for those deficiencies in votes
for police which the Government find it
necessary to supplement, and, allowing for
a reduction of 61,000 over-estimated on
the revenue for the year, we come to an
estimated surplus which I believe will be
actual at the close of 1866, of 70,564
Os. lOd. The Committee will, from this,
observe that commencing the year with a
moderate surplus, we close it with a largely
increased surplus, so that we have pro-
gressed in a favourable degree. This brings
rne to account No. 3, to which I invite the
attention of the Committee. I am exceed-
ingly gratified that circumstances should
have placed me in a position to announce
an estimated surplus at the end of next
year of 310,077; and I shall proceed
to point out how I arrive at such a
satisfactory result. This account starts
with a surplus brought forward from the
close of 1866, which I venture to prophesy
will be realised, of 70,564 Os. lOd. I
then estimate the revenue of 1867 to be
2,253,505, and it will be seen how that
result is arrived at. The paper marked B
is an abstract of the revenue of 1865, the

actual and estimated revenue for 1866,
and the estimated revenue for 1867. I
shall proceed from this to point out those
particular items from which the estimated
additional revenue for 1867 is anticipated.
We are now so far drawing to the close
of 1866, as to be in a position to estimate
pretty accurately the amount likely to be
realised this year, and that amount is set
down at 2,027,167 ; whilst the revenue
for 1867 is estimated at 2,253,505. In
the Customs revenue, the estimated in-
crease is 45,003 upon the following items :
Spirits, 2,010 ; upon tobacco, 2,155 ;
upon tea, 12,134. Hon. members will
recollect that, with respect to the revenue
of the present year, owing to anticipated
fiscal charges, a large amount of tea,
amongst other dutiable articles, was taken
out of bond previous to the close of 1865;
and, as the amount of revenue from that
article for 1866 is, from that casualty, re-
duced to 47,866, 1 have estimated an in-
crease of 13,000 as one on which I may
fairly calculate. On sugar and molasses
the estimated increase is 7,526, on pack-
age charge 1,110, ad valorem, 13,266,
and Murray River Customs, 6,902. So
that, with these additions to the Customs
revenue, which I believe will be actually
verified, there is an estimated increase in
this source of income to the extent of
45,003. With regard to the gold revenue,
it will be seen that there is an estimated
decrease of 14,000, it being the intention
of the Government to bring in a bill to
reduce the gold duty to Is. during the
currency of this year, to 6d. next year,
and the following year to abolish it alto-
gether. The Mint receipts I have esti-
mated a little over those of last year.
There is a larger estimated increase
in the land revenue, and I will endea-
. vour to explain how it is likely to arise.
Hon. members will perceive that an addi-
tional 90,000 is expected under the head
of land sales. My hon. friend the Minister
for Lands is under the impression that a
very large amount will be received in
1867 from pre-emptive purchases, under
the old fourteen years' leases, so that it is
exceedingly probable there will be this
addition to the ordinary revenue. On the
item, balances on conditional purchases,
the estimated increase is 11,000, which
has been calculated by the Minister upon
the rate of increase going on this year.

[1866.]

MR. EAGAR.

175

An additional amount, to the extent of
23,000, is also expected from interest on
land sales to conditional purchasers. The
next item, rent and assessment, speaks for
itself. These are the principal items of
increase under the head of land revenue,
to which the Minister in charge of that
department has given great consideration.
The next item is an increase of 10,000
for postage, and the Postmaster General
has given an assurance that this increase
is almost certain to arise. Then there are
spirit licenses, fees of office, fines and for-
feitures, rents (exclusive of land), and
stamps, \vith regard to which the estimates
do not differ in any noticeable degree from
the amounts realised from those sources of
revenue during the present year. There
is an estimated increase on railway receipts
to the amount of 28,000, and the Minis-
ter for Public Works informs me that the
additional traffic that may be expected
from the extension of the lines will cer-
tainly place the public revenue in receipt of
this additional amount. The increase upon
electric telegraph receipts is estimated at
3,000. These are the principal items of
increase. Well, I estimate the public
revenue of 18G7 at 2,253,505, and I
"have reason, as far as human calculation
can go, to expect that revenue. I have,
on the other side of the account, charges
on the Consolidated Revenue Fund for
general services 1,450,888 provided by
Constitutional and other Colonial Acts
58,604, and special appropriations
504,500, making a total charge upon
the revenue of 2,013,992. To take
matters in order, it will be right to point
out some of the new items in these esti-
mates, or rather some of the new items,
and the important increases in the old
items. The first is under the head public
instruction, for which there is an increase
of 10,000; the vote last year was
80,000, the vote proposed to be taken
is 90,000; reformatory and industrial
schools, 10,000, a new item ; six
American 450-pounder guns with car-
riages, 3,000, a new item ; stockade and
prison to be established at Trial Bay, with
a view to making it a harbour of refuge,
6,000, a new item ; completion of new
wing to Maitland gaol, 5,000, a new
item ; district gaol for Western district,
10,000, a new item ; completion of new
wing to Australian Museum, 2,000;

addition to Benevolent Asylum, Liverpool,
2,000; new court-house, Wot Maitland,
7,000 ; erection of telegraph station at
Albury, 2,800 ; addition to the Roman
Catholic Orphan School, 1,200 ; towards
fortifying the South and Middle Heads,
5,000; erection of stockade, 2,000;
alterations to abattoirs, Glebe Island,
3,000 ; expense of steam postal com-
munication with Great Britain vid
Panama, 55,000. These are the chief of
the new items which appear on the Esti-
mates submitted by the Government, as.
well as the more important increases on
old items. I now come to a subject that
no doubt will give rise to considerable dis-
cussion, that is the proposed reduction of
one-twelfth in the salaries of the whole of
those persons employed by the Govern-
ment. I may say that this is the particular
form in which the Government think it
desirable that retrenchment should take
place. (" Hear, hear," from Mr. Driver.)
I am quite aware, notwithstanding the
somewhat derisive cheer of the hon. mem-
ber opposite, that this particular form of
retrenchment is a disputable point, and
that there is likely to be some discussion
upon it. I intend to argue the question
very quietly, and without making any
reflections upon members of previous ad-
ministrations, and in a conciliatory manner,
that I hope will be responded to by hon.
members on the other side. This question
of retrenchment has been pressed upoc
every successive Government since respon-
sible institutions began. Ever since Re-
sponsible Government, the Opposition o
the day has always pressed severely upon
the persons in power the inevitable neces-
sity, at all times existing, for reducing the
public expenditure. I have much pleasure
in stating that the first step taken in this
direction was in 1864, when my hon. and
learned colleague (Mr. Martin), then at
the head of the Government, effected a
clear saving of 30,000 in the public ser*
vice by an actual reduction of annual
salaries. That Government got very little
thanks, however, for that retrenchment,
either from the House, or from the Civil
servants, who were not slow to record their
indignant feelings, and at the general elec-
tion following the ballot afforded them an
opportunity of placing a black mark
against us. It shows how much gratitude
is likely to attend any conscientious effort

to cut down expenditure. The next step
in this business was taken by the hon.
member opposite (Mr. Cowper) who, in the
course he adopted, did not appear to
exercise any remarkable knowledge of the
world or of human nature. That course
was to consult the heads of departments as
to what decrease they could effect, and
then was issued the memorable circular of
January, 1866. The hon. member im-
posed upon the heads of departments an
almost painful pressure, and after showing
reasons for reduction, intimated that if it
were not provided for in the mode he
suggested, a per centage would probably be
taken off the salaries.

Mr. COWPER : The circular said
nothing of the kind.

Mr. EAGAR : This is not to be deter-
mined by the personal statement of either
the hon. member or myself. The matter
is one of record, and I will refer to the
document presently. I think it right to
go fully into this question, because
retrenchment is so serious a step both as
regards the revenue and the interests of
persons affected, who are a very large
number in this country, that I feel bound
to take notice of the action of the hon.
member, in order to show how signally
he failed in his endeavours, and also to
show what was the alternative his
Government felt justified in suggesting,
in case his propositions did not succeed.
In the correspondence upon retrench-
ment, laid upon the table and printed by
order of the House, I find a circular
addressed to the heads of departments.
It is as follows :

Colonial Secretary's Office,

Sydney, 2nd January, 1866.

Sir, During the recent discussions in the
Legislative Assembly, upon the Budget and the
present financial condition of the Colony, an
earnest desire was expressed th'at large reduc-
tions should be made in the public expenditure.
I am therefore directed by the Colonial Secre-
tary to call your serious attention to the sub-
ject. The cost of the Government establish-
ments is enormous, and concurring, as Mr.
"Cowper does, with what seemed to be the
general feeling of the Assembly, a distinct
assurance was given that endeavours would
immediately be made to ascertain in what
respect they could be placed upon a more
economical footing.

The point which you will have to consider is,
not whether reductions can be made in your
department you will assume that they must
be made, and the only point for determination
is, in what respect they can be effected with the

[1866.]

least injury to the Public Service. No delay
can be permitted, as the Colonial Secretary,
upon the re-assembling of Parliament after the
recess, proposes to state the particulars in
which the Estimates now before the Assembly
can be reduced. It is suggested that, by re-
quiring a more punctual and regular attendance
of the officials during office hours, and insisting
that they shall commence work not later than a
quarter-past 9 o'clock, by restricting somewhat
the time usually taken for lunch to half-an-hour,
and by extending the time of leaving office to
half-past 4, a number of clerks could be dis-
pensed with. The general impression in the
Assembly would seem to be that the number of
officials is very largely in excess of what should
be employed, and I am to add, that if the
number is not reduced, a per-centage deduction
from salaries generally will probably be enforced.
The subject is of such deep importance to the
public servants themselves, and to the Public
Service of the Colony, that Mr. Cowper desirea
me to press it upon your anxious and careful
consideration, and to request your report at the
earliest moment.

I have, &c.,

W. VALLACK.

Where I think the hon. member showed
a want of knowledge of human nature
was in applying to the heads of depart-
ments for any recommendation that would
amount to an actual reduction. The hon.
member does not seem to understand the
difference between, ordinary and official
human nature, and the result of his
appeal must have convinced him that he
had made a signal mistake. A brief
examination of these lengthy documents
will indicate what the heads of depart-
ments recommended under the pressure
imposed upon them. The Inspector-
General of Police cannot recommend any
reduction of the central establishment,
which includes his own salary; all the
costly staff in the city of Sydney must be
retained at full salaries, with the excep-
tion of one clerk in the office who is to be
dismissed. The recommendation, other-
wise, is confined to the dismissal of a few
sub-inspectors, senior sergeants, and con-
stables, and the lopping off a few contin-
gent expenses, and this without any
consideration of the state of the interior,
or of crime at the period. In fact this
so-called saving is no saving at all. He
recommends that the salaries of the whole
of the police magistrates, which amount
to 6,000, shall be cut off; that is, that in
every district, * where members of this
House believe that police magistrates are
necessary to bring justice to every man's
door, the Inspector-General of Police, in

[1866.]

MR. EAGAR.

177

the fulness of his zeal, recommends that
the whole shall be done away with, but
he does not propose that his own salary
shall be touched. He also proposes a
reduction of 756 for some contingencies,
and the total amount of the reductions
recommended by him, but which have
never been carried out, is the sum of
20,000. I next come to the Police
Magistrate of Sydney, Captain Scott, who
proposes to dismiss a clerk ; and the
Water Police Magistrate also proposes to
dispense with the services of a junior
clerk, who is paid 125 a year. The
Auditor-General merely proposes to dis-
miss two junior clerks, and so reduce to
the extent of 120 a year. I then come
to the Registrar-General, whose pi'oposals
are certainly of a novel character. He
proposes to increase the fees payable by
the public, and to reduce the fees paid
to the District Registrars. Thinking that
the public do not pay enough for their
searches in the Registry Office, he pro-
poses that the fees shall be increased so
as to bring in an additional revenue of
1,500. This is a modest proposal cer-
tainly. On the one side of the account
he proposes to place this gain of 1,100
a year by victimising the public, and on
the other hand he proposes to reduce his
expenditure to the extent of 1,100 by
cutting down the fees of the District
Registrars from 3s. to 2s. for each regis-
tration. But the Registrar General and
his establishment are to draw their
salaries to the full amount. These pro-
posed reductions have not been carried
out either by the hon. gentleman opposite,
or

Mr. COWPER : I was turned out of
office before I had a chance to carry them
out.

Mr. SAMUEL : We have had all this
before.

Mr. EAGAK : Well, I never knew a
case where a Finance Minister, when
making his statement, was interrupted in
this unseemly way. I am explaining to
the Committee how it is that by the
failure of this notable scheme, the Go-
vernment are driven to adopt the plan of
retrenchment submitted on the Estimates.
I now come to the office of Registrar
General, in so far as it affects the Lands'
Title Department. I do not find that any
of the gentlemen there are willing to submit

to reduction. The Examiners say : " If
you must reduce, here are two or three
Commissioners who are paid for doing no-
thing. We can do their duties just as welL
Get rid of the Commissioners, and we will
do the duty." (Hear, hear.) I am very glad
to find that the Committee receives this
with so much favour, though neither the
previous Government nor the present have
carried out the proposition. We now come
to the Astronomer Royal ; he can make
no reduction. The Sheriff reports to the
same effect. The Superintendent of
Cockatoo Island proposes to make a re-
duction of 667, which is to be effected
by taking away ten prisoners and six con-
stables, and he thus foists the expense of
maintaining them on some other depart-
ment of the public service. We now
come to the Matron of the Protestant
Orphan Scool at Parrarnatta. All that
this lady can suggest is that the unfortunate
master is not to have his proposed increase
of 27 a year, and one female and one male
attendant are to be dispensed with. I then
come to the Superintendent of the Lunatic
Asylum, who, under the powerful pres-
sure placed upon him by my honorable
friend opposite, and who, not caring suffi-
ciently for the dangerous community in
which he lives, proposes a reduction of
288, by dismissing one master and three
junior male attendants. In all these cases
the reductions are to be made by getting
rid of persons holding minor appoint-
ments, who have no friends to protect
them. The high salaries are to be re-
tained. The Superintendent of the
Lunatic Asylum at Parrarnatta reports
that he can make no reduction. In the
Stamp Office reduction is proposed to the
extent of 350 by getting rid of one clerk
and one stamper. In Immigration and the
Customs there is no reduction. The Inspec-
tor of Distilleries proposes to dismiss one
inspector, thereby saving 300, but he
does not touch his own salary. The
Acting Deputy Master of the Branch
Royal Mint proposes a saving of a thou-
sand ayt-ar. The Deputy Superintendent of
Stores and the Shipping Master report
that no reduction can be made. The
Inspector of the Glebe Island Abattoirs
proposes to dispense with an assi
at 150; and the Superintendent of
Pilots, Lights, and Harbours proposes re-
ductions in the minor offices. In the

178

MR. EAGAR.

[1866.]

Roads Department, under Mr. Bennett, it
is proposed to dismiss a junior clerk ; and
the Engineer-in-Chief and Superintendent
of Cockatoo Island proposes to dismiss a
shipwright carpenter. The Inspector of
Telegraph Lines and Stations proposes to
reduce the salaries of the line inspectors,
and to dismiss two messengers and a junior
operator. In the Department of Harbours
and Rivers, Mr. Moriarty proposes to
reduce the crews of the steam dredges
Hunter and Pluto 200, and the salaries
of engine-drivers and men, 210. All
the high salaries in his own department
he has left untouched. The chief clerk
of the Railway Branch effects a saving of
250, as he imagines, by transferring a
clerk from his own department to another.
The Traffic Manager proposes to get rid of
a night-watchman, a day-watchman, and
three porters. I then come to the
Engineer-in-Chief for Railways. This gen-
tleman, I may remark, and I say it with-
out offence, receives the high salary of
1,500, as much as a Minister of the
Crown. All that this highly-paid gentle-
man, when put under the powerful pressure
of the hon. member opposite, can propose,
is to dismiss eight men from the carriage
and locomotive departments, whereby
1,064 per annum would be saved. He
that says the gangers

Mr. JOSEPH : What is the whole saving ?

Mr. EAGAR : I do not think it ever
came to a practical result. It is nowhere
stated in these papers.

Mr. FORSTER : It was said to be about
90,000.

Mr. EAGAR : Well, this gentleman pro-
poses that the wages of the labourers and
gangers, which were at that date at 10s.
and 7s. a day, should be reduced to 9s.
and 6s. 6d. His proposition does not
touch the high salaries of his department.
I then come to the scale of reductions
submitted by Mr. Cunneen, whose pro-
posals are of a somewhat similar charac-
ter. I find three clerks reduced 100
a year, and one 132. One postal inspec-
tor is proposed to be abolished 300, and
three letter-carriers, 396. The course of
reduction in this department, as in all
the others where the heads are appealed
to, is not a general system of reduction
a reduction based on the principle that the
ablest men should have the highest pay,
and inferior men the lowest, but it is

based on the miscalled principle that the
head of the department and the high
officers, shall be left untouched. The reduc-
tions are suggested in the salaries of those
who have no friends or powerful patrons
to protect them. I think I have con-
vincingly shown the Committee that any"
idea of appealing to the heads of depart-
ments for such reductions as would be just
to the public service is entirely out of the
question. I think that there is no mem-
ber who will not admit that my hon.
friend's scheme failed in the most un-
mistakeable manner. The heads of de-
partments, like ourselves, have their own
interests mainly in view, and the natural
consequence is that these gentlemen will
reduce the salaries of every one but them-
selves. It thus became our duty to ascer-
tain in what way retrenchment could be
carried out by this Government. My lion,
friend's scheme having shown the folly of
appealing to the heads of departments, we
at once came to this conclusion, that we
must cast about for some other means of
retrenchment which, while fair to the
public service, was also likely to be ac-
cepted by the Committee. I may state to
hon. members that during the recess I
caused a circular letter to be addressed to
the banks and most of the public compa-
nies on this subject. [Mr. Eagar read the
circular. It was dated April 6. It stated
the intention of the Government to re-
organise the public departments and to re-
arrange the salaries of public officers.
Information was desired of the rates of
remuneration given to employes by those
to whom the circular was addressed, and
stated that such information would be
strictly private.] I was obliged to receive
the information in confidence ; but under
this pledge I received a good deal of in-
formation, which I was enabled, under the
restrictions here given, to classify. The
conclusion I have arrived at, after careful
consideration of the salaries paid by the
banks and public offices, is that persons of
talent are remunerated at higher rates in
private service than in the public service,
due regard being had to their abilities and
the analogous nature of their duties. In
all those cases in the public service where
a high degree of ability where special
and trained ability is required the Go-
vernment pay a great deal less than is paid
for like ability by the banks, and in private

[1866.]

MR. EAGAR.

179

service. On the other hand, in all the
minor departments of the public service
the pay is higher than that given for
similar ability by private individuals. In
my view the reason is this: up to 1857
the appointments made by the gentlemen
previously administering the Government
were made chiefly as marks of favour, and
not on the ground of personal merit.

Mr. COWPER : That is a nice charge
to make against your predecessors.

Mr. EAGAR : I am speaking of the
period prior to the introduction of respon-
sible government. The gentlemen admi-
nistering the Government prior to that
period having no responsibility and no
check, the appointments were made mostly
as marks of favour to friends and depen-
dents, but not distinctly upon the score of
ability ; so that the public service, and I
make the remark without intending any
offence, has been filled to a considerable
extent by gentlemen of mediocre attain-
ments. And, looking at the conduct of
affairs since responsible Government, I
believe my hon. friend, Mr. Cowper him-
self, will admit that a great many appoint-
ments are necessarily made from political
considerations. The rule no doubt is, that
merit should prevail, but under the
institution of responsible Government, as
a matter of fact it does happen in the
regular course of things that some portion
of the public service is recruited by means
of persons bearing the strong and urgent
recommendation of hon. members of this
House. I say this without reflecting on
hon. members, and I trust without reflect-
ing on preceding Governments. The point
I am endeavouring to establish is, that
from the force of peculiar circumstances,
we have in the public service numerous
instances of mediocrity highly paid a
state of things which could not occur in
private service, where political considera-
tions have no weight ; for private employ-
ers look for what they can get for their
money an absolute quid pro quo. I
will endeavour to state to the Committee
what my views in this matter are. I do
not think that any member of this House
can charge me with having ever uttered a
single syllable from which could be drawn
the inference that I believe the salaries of
the public servants are too high. I have
never been an advocate in this House for
any large and indiscriminate cutting down

of the salaries of the public servants. On
the contrary, when Mr. Cowper had a
retrenchment committee in 1859, being
then a member of the Upper House, I
was summoned as a witness by that Com-"
mittee ; and in my evidence, as recorded,
I distinctly stated my impression, that as
a whole the salaries of public servants
were less than as a whole were the sala-
ries of persons in private employment. I
then said that I did not think that any
person should be received into the public
service at a less salary than 200 a-year.

. I was never an advocate for this indis-
criminate retrenchment, which in my
humble judgment has been too frequently
forced by the Opposition on the Govern-
ment of the day. I can say the same
of my hon. friend Mr. Martin, and my
hon. friend Mr. Wilson. With respect to
my hon. colleague, Mr. Parkes, I am

well aware that a point has been taken
against him for a casual remark of his,
which has been much exaggerated. [Mr.
SAMUEL : Not casual : made over and over
again.] It is alleged that my hon. friend
expressed himself prepared to cut down
the expenditure by 250,000. My hon.
friend has already explained that what he
had said was that a reduction of about
100,000 could be made. [Mr. SAMUEL :
A quarter of a million.] Well, I persist
in my statement, and the statement is as
good as another until contradicted. My
hon. friend is my authority. At all
events my hon. friend and colleague when
making that statement had not had the
advantage of office. There is no other
position which so teaches hon. members
to be careful what statements they make.
But the point of my remark is this, that
the Government, or individual members
of the Government, have never stood up
in this House and made loud protestations
of retrenchment.

Mr. FORSTER : How did you carry the
estimates ?

Mr. EAGAR : I admit that as a Govern-
ment we have taken the obligation upon
ourselves, which obligation is alluded to in
the Speech delivered at the opening of
Parliament. I do not hesitate to say to
the Committee that any plan of retrench-
ment likely to be practical, or even to be
received favourably by this House, must
be framed in a spirit of justice to the Civil
Service; and viewed in the spirit of

180

MR. EAGAR.

[1866.]

justice such retrenchment can only be
effected through reorganisation of Depart-
ments. If Ministers contemplate any plan
of retrenchment, the condition of justice
must be at the root of it, and they are
forced to the conclusion that such retrench-
ment must arise from reorganisation, and
such reorganisation can only be arrived at
from a personal knowledge of every depart-
ment. I say, then, that this Government
having been in office only from January of
the present year, have not yet acquired
that knowledge of every respective depart-
ment wliich entitles them to say "here is
a plan of reorganisation based upon jus- '
tice." I admit the right of the Assembly
to deal as it pleases with the public purse ;
I admit also that retrenchment, based upon
reorganisation, is necessary. I am willing
to admit not that individual salaries are
too high but that by reorganisation num-
bers may be dispensed with. Then the
question arises, what plan can be submitted
to the House which comprehends the con-
dition of justice, and presents at the same
time such a reduction as would be worth
having, and as the House would be likely
to agree to 1 What the Government have
done is this : they have had the advantage
of considering the principle suggested by
my hon. friend Mr. Cowper, who has had
great experience of the public service and
the affairs of Government they find that
the fairest mode in their judgment of deal-
ing with this question, at present, and
pending the needful reorganisation, is to
take the principle laid down by my hon.
friend, who says in his letter " If you, as
heads of departments, cannot point out
reductions, I must take the affair into my
own hands and make a per-centage reduc-
tion from all salaries." What, then, do
this Government propose to do ? They say

this : If we remain in office [Mr.

COWPER : I think you had better carry
out my whole proposition if that is the
case.] We consider that as retrenchment
can only take place by a thorough reorga-
nisation, and as that reorganisation can
only follow a personal knowledge of the
working of every department, the least
objectionable proposition the Government
can make, pending reorganisation, is some
such principle as that shadowed forth by
Mr. Cowper in January, 1866. We pro-
pose a reduction of one-twelfth in the
salaries of the public servants, beginning

with my hon. friend the Colonial Secre-
tary, and going down to the lowest
grade in the public departments [Mr.
BUCHANAN : And including the Governor.],
except those whose salaries are secured
by Act of Parliament, and with whom
we cannot meddle in the Estimates.
The sum by which the salaries will be
reduced, if this proposition be accepted, is
over 41,000. I may say to the Com-
mittee that the Government do not put
forward this proposition as absolutely
wedded to it. We acknowledge the right
of the Committee of Supply to deal with
the Estimates as they please ; we admit
the necessity for retrenchment in all the
departments of the public service ; and we
submit our proposition to the Committee
to deal with it in any way they may think
proper. If they, after all we have heard
of retrenchment, year after year, consider
it desirable to save 41,000 next year, we
furnish them with the means of doing so,
by adopting our Estimates in the way they
are submitted. But if the Committee, on
the contrary, believe the salaries are not
too high if they think that the proposed
form of retrenchment is not a suitable one
if they think the recommendation of the
Government does not meet the exigencies
of the case I repeat it, we do not hold
ourselves bound by the proposition we
have submitted. It must not be supposed
that some retrenchment has not, from
time to time, been effected. Reductions
in the public service have been going on
continuously since 1864. The salaries
voted in the Estimates of that year have
been greatly diminished. In 1864 the
total salaries voted for public servants on
the establishment amounted to 557,035.
In 1865 they were 540,579. That is,
the salaries voted in 1865 were 16,456
less than the salaries in 1864. The salaries
voted for 1866 were 524,513. That is
to say, there were 16,066 less voted in
1866 than in 1865. The salaries for 1867,
as proposed, amount to 473,835, being a
reduction of 50,678 on the salaries voted
for 1866. So that from the year 1864
downwards, the example set by the then
Government, of which my hon. friend op-
posite (Mr. Forster) was Colonial Secre-
tary, has been really followed by successive
Governments, and there has been a gradual
reduction in the salaries from 1864 to 186 7.
The reduction during the years 1864-65-66

[1866.]

MR. EAGAR

181

and '67, supposing our proposition adopted,
amounts to .83,200. So that while this
demand for retrenchment has been con-
tinually made, some steps in the dii-ection
of retrenchment have also been made, both
by the present Government, in the Esti-
mates of 1866, and by the preceding Go-
vernment, in the Estimates of 1865. It
is right I should state to the House that
this reduction of one-twelfth is only
brought forward as a temporaiy reduction
pending that full inquiry into the depart-
ments on which reorganisation must be
based. The Committee will see that we
have not taken one-twelfth off each salary,
but off the gross amount for salaries in each
department. Without sufficient opportunity
for preliminary inquiry, this proposition of
reduction is submitted, perhaps somewhat
hastily, in the view of a great crisis at a
time of great financial difficulty at a
time when no man's position in this colony
is safe it is submitted at a time of pecu-
liar difficulty it is submitted at a time
when every private income is likely to be
reduced. It is under these circumstances,
when the operations of trade are stagnant,
when every individual outside the circle
of official life is likely to be injured, when
large losses are taking place, when convul-
sions in trade and large failures are taking
place it is under these exceptional cir-
cumstances, that the Government ask the
Committee to consent to a temporary re-
duction of one-twelfth in the salaries of
the Civil Service.

I have now to allude to the surplus
which I have estimated we shall receive at
the end of 1867, which I have put down
at 310,077 Os. 10d., and it is a very sat-
isfactory thing to know that that surplus
is likely to exist. On the 1st of January,
1868, our Treasury bills mature. We have
to pay on that date, 400,000 of Treasury
bills and 100,000 of debentures, which
will become due on 31st December, 1867,
under the deficiency loan passed last
session. In this particular case short-
dated debentures were issued to the extent
of 850,000, and 100,000 of these de-
bentures mature on the 31st December
next year, so that it is very fortunate that
this surplus can be applied to meet this
particular liability, without imposing upon
the country any further taxation. I can-
not help feeling it to be a matter for per-
sonal congratulation that tin's desirable

result, which I believe will be carried out,
does not arise from the operation of those
fiscal principles, which characterise my
hon. friend opposite (Mr. Samuel), and
which were presumed to characterise the
Government, of which Mr. Cowper was
the head. This particular result, a surplus
of 310,000 on the 31st December, 1867,
does not result from the operation of any
theories of free trade and direct taxation.
On the contrary, it results from the adop-
tion of those fiscal principles initiated by
the Government of which I was a member,
in December, 1863, and which were coldly
looked on by the House at the time, but
which are becoming the fiscal policy of the
whole of the Australian colonies. I trust
I may be pardoned if I say a few words on
this point, because I had more than my
share of public odium for what was at the
time considered a failure. The main fea-
tures of the fiscal scheme which I announced
in December, 1863, were adopted by
the Victorian Assembly in the early part
of 1864, and after a long and painful
struggle have at last become law. The
scheme I refer to was based upon the
principle of indirect taxation. In Queens-
land, we find the Government obliged to
fly at last to indirect taxation, as the only
means by which a large revenue can be
speedily and equitably obtained from com-
munities that number a comparatively
small population. And what is the state
of facts in Tasmania ? An appeal is now
being made to the country, which, I can-
not doubt, will result in the confirmation
of that principle of taxation which was
introduced into this House in 1863, and
which is now going the round of the whole
of the Australian colonies. It appears to
me that, in establishing its fiscal system,
each colony has to regard its own revenue
wants, and the supplying of these wants
in exact accordance with the circumstances
of its own positioTi. The time has not
yet arrived to carry out the doctrine of
free trade and direct taxation in r
Colonies, if we except direct taxation,
through municipalities and for municipal
purposes. But we find in the o -Ionics,
which, like ourselves and QaMBtknd and
Tasmania, have lived hnr.-ly beyond their
means, that the operation by which the
largest revenue can l.e most spe.-dih
and at the least cost, is that fiscal sy
which is founded upon indirect taxation.

182

ME. EAGAR.

[1866.]

And I cannot help saying that the uniform
tariff which is predicted for the Australian
colonies, will not be uniformity in ^the
direction of free-trade and direct taxation,
but uniformity in carrying out to its
fullest extent a system of indirect taxa-
tion. We find in South Australia a
system which embodies a 5 per cent, ad
valorem duty, we have in this Colony a 5
per cent, ad valorem duty, in Queensland
a 7 1 per cent, ad valorem duty, and in
Victoria a 10 per cent, ad valorem duty,
thus completing that circle of fiscal agree-
ment, the operation of which we now see
going on in these colonies, and which is
entirely opposed to the views of my hon.
friend the member for Wellington.

My exposition of the state of our ac-
counts during the years 1865 and 1866,
and my gratifying announcement of a
surplus of 310,077 Os. lOd. at the end of
1867, exhaust the first branch of my sub-
ject. But the question probably arises in
the minds of hon. members, " If you have
this surplus at the end of the present year,
and a possible surplus of three hundred
and ten thousand pounds next year, how
is it, in the face of all these gratifying
figures, that the Government is obliged to
go into the market and compete with
other borrowers T It becomes my duty
to show the Committee that, while the
revenue is more than sufficient for our ex-
penditure, we have been obliged to go into
the market and borrow money. The
reason we are temporarily embarrassed in
our cash matters is this we are obliged,
from the proceeds of revenue, to carry on
the public works that are chargeable upon
loan. For a long time past there has
been an absolute cessation of all sales of
our debentures in the London market, and,
as a consequence, that particular source of
money supply is at present dried up. No
debentures are sold, and we must either
stop the public works, which would be
a very dangerous thing to do nay,
would be the greatest calamity which
could befall this country or, make some
provision to carry on necessary public
works till more favourable times arrive.
I think I have some reason to complain of
the mode in which the hon. member for
the Glebe placed the deficiency loan of
1865 upon the London market. In June,
1865, two Loan Acts were passed, under
which 850,000 worth of short-dated

debentures were authorised to be issued.
The issue of 300,000 was authorised to
meet a like batch of debentures falling
due in January of the present year, and
550,000 to cover the deficiency of 1865.
The provisions of the Loan. Act were of
this kind. It was desired by the Legis-
lature of the day so to frame these deben-
tures, that they should be payable within a
certain term of years. They were short
dated, and issuable for ten years. The
intention of the Legislature was, that
100,000 of these debentures should be
paid off every year. The mistake that the
hon. member for the Glebe made was, that
instead of issuing his loan for the entire
term of ten years, he issued it in a series
of debentures. That is to say, a loan of so
much, maturing the first year, and so much,
the second year, and so much, the third
year, till the loan was exhausted. The
debentures were issued and were sent to
London 400,000 on the 20th August,
1865, and 300,000on the 21st September,
of the same year. Perhaps it is as well
that I should state to the Committee the
exact shape in which these debentures were
issued. The Loan Acts were passed in
June, 1865, authorising the issue of
850,000, and the dates on which pay-
ments were to be made in reduction of the
loan, are specified in the Acts. 100,000
were to be paid off on the 31st December,
1868, another 100,000 in 1869, and
another 100,000 in 1870, 60,000 in
1871, 90,000 in 1872, 100,000 in 1873,
100,000 in 1874, and 50,000 in 1875
making altogether 700,000. The hon.
member kept back, no doubt from proper
reasons, 150, 000. Well, 700,000 of short-
dated debentures, issued in a series of eight
years, were sent home, 400,000 in August
1865, and 300,000 in September of the
same year, accompanied by the instructions
of the hon. gentleman. The sale was left
to the discretion of the Oriental Bank, and
without any suggestion as to their quitting
them at a reasonable limit. I do not, by
this statement, in any way intend to
impute blame to the hon. member opposite.
On the 21st August, 18 65, the hon. member
in sending home the first portion of the
short-dated deficiency loan, did not express
any particular desire to the Oriental Bank,
in London, to realize ; his advices were in
these terms : " for your guidance in the
disposal of these debentures, I beg to refer

[1866.]

MR. EAGAR.

183

you to my letter of the 21st April last,
No. 90, in which I conveyed to you, in
general terms, the views held by the
Government as to the limit within which
the sale of our securities should be confined;
but at the same time to reiterate my assur-
ance that we have no desire to fetter the
action of your establishment in the matter,
or to interfere with your discretion." And
in his letter of the 21st September, 1865,
he says : " In the sale of these debentures,
as well as those already in your hands, and
in transit by the last mail, I continue to
rely with confidence upon the same regard
being had to the interest and honor of the
Colony, which has hitherto characterised
your management of the financial agency."
I read these letters to . show that if there
has been a delay there has been no
pressure placed on the Oriental Bank to
sell those particular debentures.

Mr. SMART : What pressure could I put
upon them ?

Mr. EAGAR : I am not endeavouring to
cast censure on the hon. member opposite,
but merely desiring to establish the fact
that no pressure was placed upon them.
Those debentures were sent home in August
and September, 1865, in two lots ; and
the Oriental Bank attempted to place the
loan, as a whole, on the London market
in March, 1866, when the Bank of England
rate of discount was at 7 per cent., about
the lowest rate during the year. The
quantity actually sold of the loan was
8,100, at an average of 94, and 24,600
at 91, the total sales being 32,700. The
long-dated debentures were sold at the
same time at 88, showing that those other
debentures, under ordinary circumstances
would have been saleable.

Mr. SMART : Why did they not sell
them?

Mr. EACJAR : I am not mentioning this
non-sale as a matter of reproach, because
if I had been in the lion, member's position
I might have fallen into the same error as
to the form of the debentures. I do not
say, that the hon. member did not act to
the best of his ability, but I want to show,
as I shall presently, that the unfortunate
mode of issuing these debentures, in a
series of eight years damnified the whole
operation. To show this, I shall quote a

communication I received from the Oriental
Bank, in London, through the Sydney
Office :

Oriental Bank Corporation,

Sydney, 19th May, 1866.
The Honorable the Colonial Treasurer,

SIR, In continuation of my letter of 17th
April last, I beg to communicate the following
extract from a letter received here from our head
office, bearing date 26th March, 1866.

" We advised you by telegraph, that our en-
deavours to place the short dated debentures
have been unsuccessful, and it becomes necessary
now to discuss such of the causes of failure as
the Government have the power to remove, with
a view to a more satisfactory result.

The amount of debentures placed was only
32,700 as per memo, endorsed, the entire
amount applied for at any price having been
58,700.

From this it would appear that the loan was
entirely unpopular, and although a certain
adverse effect was no doubt produced by the
state of our money market, and by the
advertisement of the Chilian and New Zealand
loans immediately after ours, yet we cannot
but admit that the principal reason for our
failure was the unmarketable form of the bonds.

" We enclose a copy of our advertisement (one
was sent you last mail), and would say that in
consultation with the brokers the minimum
prices for series 1, 2. and 3 were fixed at 95,
H2.J,, and 91 respectively, for 100 debentures.
We need not now, however, discuss the pro-
priety of these prices, as the small amount of
bonds applied for at all, shows that this had
nothing to do with the want of success.

A person unacquainted with the preferences
and prejudices 01 the Stock Exchange would
naturally suppose that a loan investment issued
at a discount, and of which more than a tenth
part was to be paid off every year, could not fail
to be attractive, and there is no doubt but the
principle of a sinking fund properly applied does
make an investment popular ; but in this case
the bonds were all of different terms, and there
was not an amount sufficient of each term to
make a market, so the dealers would not touch
the bonds, not one of those who have done so
largely in New South Wales securities having
applied.

What we would now recommend the Trea-
surer to do, is to issue under the Acts No. 4 and
5 Vic. 29, 850,000 of bonds, all falling due
within ten years, as provided by these Acts,
with coupons attached to each for the whole
period, and forward these securities to us in
exchange for those we now hold at the same
time giving us authority to invite subscriptions
for the bonds payable by instalments extending
over a certain number of months, and authority
also to pay off 100,000 per annum or there-
abouts, on the 31st of December in each year,
commencing in 1867, such payments to be deter-
mined by drawings. This introduces a specula-
tive element, and we are advised that such a
concession would fully command its value on the
Stock Exchange, and tend greatly to make the
loan successful.

184

MB. EAGAR

[1866.]

A further sum of 6,500 of the long-dated
debentures has also been disposed of at 88.

Usual monthly memorandum, showing the
state of the Government account with this Cor-
poration in London as on 26th March last, is
herein enclosed.

I am, &c.,
(Signed) S. MURRAY,

Acting Manager.

I am only bringing these facts forward to
show that a certain number- of circum-
stances led to the failure of this particular
loan, and deprived the Government of the
day of this large sum of money. The hon.
member opposite committed an error of
judgment.

Mr. SMART : I deny it the House did

Mr. EAGAR : "Well, suppose we shift the
blame to the House, and say that the hon.
member is not responsible that he pre-
sents an example of a responsible Minister
of the Crown disclaiming responsibility !
Under the Loan Acts of 1865, 700,000
of debentures were issued in a particular
form ; that is to say, instead of the whole
loan being issued for ten years for the.
aggregate sum, with a provision to pay off
100,000 a year, a series of debentures
was issued for successive years, and three
of those series comprehended such small
amounts as 60, 000, 90,000 and 50,000,
and the Manager of the Oriental Bank
Corporation in London says that the
amount of each series was not sufficiently
large to tempt the speculators on the Stock
Exchange, and that consequently the loan
failed. The Government decided to fol-
low the advice of the Manager of the
Oriental Bank, and have issued new de-
bentures for 850,000. Those debentures
are issued for the full term limited by the
Act. But there is this provision, that the
whole of the 850,000 authorized to be
raised, will be paid off as follows (this is
contained in the body of the debenture,
and forms part of the contract between
the Government and the purchaser) :
100,000 on the 31st December, 1867,
and 100,000 on the 31st December every
year thereafter until the year 1875, which
exhausts the term. The debentures to be
paid off each year are to be determined by
an annual drawing, for which provision is
made. By this form of debenture the
recommendation of the Oriental Bank has

been strictly carried out, These deben-
tures were sent home by me, 425,000
on the 22nd June, 1866, and 425,000 on
the 23rd July in the same year. One of
my principal reasons for delaying the finan-
cial statement so long, is that I was anxious
to be able to inform the Committee what
probability there was of the new issue
being sold, and at what rates. The mo-
ment we received advice on the 23rd May
of the failure in reference to these deben-
tures, we took steps to replace the loan,
and of those steps Mr. Murray of the
Oriental Bank here advised the London
office. I did not think it expedient to
delay longer the financial statement, but I
hope that the mail of next month will
bring us satisfactory intelligence in regard
to the disposal of the new issue. I have,
however, received an extract from a letter
from the Oriental Bank, in England, ex-
pressing gratification, that they had been en-
abled to offer suggestions which the Govern-
ment of this Colony had thought it expe-
dient to avail themselves of. Until the
next mail arrives we shall not be in a
position to say whether this new issue will
take with the London speculators or not.
Well, in May of this year, this was our
position a large supply of money that
we had a right to expect from the Defi-
ciency Loan of 850,000, was not forth-
coming. This loan having failed, for the
reasons I have mentioned, it became in-
cumbent on us to consider how best to
carry on the public works, for neither this
House nor the country would have been
satisfied if necessary public works had not
been carried on with some degree of rapid-
ity. I need scarcely point out what
alarming consequences would befall us, if
the public works were suspended what a
large number of persons would be thrown
helpless on society had such a result
been determined on. So that we had rea-
sons of great magnitude compelling us to
resort to some means of raising money, to
carry on the public works up to the end
of the year. I shall now take the oppor-
tunity of pointing out how we stand in
the matter of contracts. When the hon.
member for Wellington (Mr. Samuel)
made his statement last year, he correctly
said that the contracts then outstanding
amounted to 1,084,995. Since that
date the only additional contract which
has been taken and which was unfor-

[1866.]

MR. EAGAR

185

tunately taken on the 18th day of
May, before we received the news
of the failure of our loan in England
was for a portion of the Great Western
Railway extension, .256,000. The con-
tracts, at present outstanding, amount to
1,340,995 ; so that we had to cast about
to find means to pay for so much of these
contracts, as in the natural course of
things would be carried out by the 31st
December of this year. Before I go any
farther, I wish to show how our cash
account stands. I can show two things.
First, the revenue bears all the ordinary
demands on it ; and second, that the mo-
ment our debentures are realised we shall
have 469,616 7s. 9d. to get back from
the loan account. The state of the cash
account and hon. members will see it is
a very different thing from the account of
revenue and expenditure up to the 22nd
September, 1866, stands in this way : I
now read from an abstract of our general
account in the Bank of New South Wales.
We commenced on the 31st December,
1865, with a cash balance of 106,155 3s.
8d. a very good balance indeed ; and I
shall presently show what has become of
it. We received on account of the Con-
solidated Revenue 1,330,934 7s. 6<L, and
as part of the loans lately negotiated by
me, 70,000. Up to the 22nd Septem-
ber we have received in all, including
Loans account proper, Lodgements, Church
and School Fund, and Civil Service Super-
annuation Fund, 1,616,168 8s. 4d. a
very large aggregate sum, and very pro-
mising as to the collections for the rest of
the year. I shall now show how that has
been disbursed : Out of our revenue
proper for the year, we have paid for
services chargeable upon the year,
1,071,622 3s. 8d. ; so that if we take
the revenue of the year, as far as it is col-
lected, and contrast it with the expendi-
ture, as far at it is made, we shall find a
balance in favour of the revenue of
259,302 3s. lOd. If, then, we had
nothing to do but pay the proper expenses
of the year, we should have a very large
surplus ; but we have had to pay 154,303
17s. 2d. for the services of previous years,
so that these services have more than
absorbed the large balance, which my hon.
friend opposite handed over to his suc-
cessor. We have paid 42,300 off the
advance made by the Bank of New South

Wales on Treasury Bills ; we have paid
off certain of those bills to the extent of
14,300, and on the loans account we
have paid 346,813 7s. This is a large
payment out of the revenue, on loans
account, and by means of it we owe as a
debtor balance on lodgments, 121,755
14s. 5d. ; on Church and School fund,
8,500 Os. 6d. ; and on Civil Service
Superannuation fund, 7,761 14s. lOd. ;
and these leave us, besides, with an over-
draft of 63,089 14s. 4d. in the Bank of
New South Wales, on the 22nd ultimo.
Hon. members will at once see, that if we
had simply to discharge the current ex-
penditure with the current revenue, we
should have a quarter of a million of
money in hand. But we have been
obliged, in consequence of the non-sale of
our debentures, to pay from revenue the
expenditure proper to loan account, and
these disbursements, on that account,
amount for railway works to 40,000 per
month. When our debentures are dis-
posed of, we have to get back from the
loan account, the large sum of 469,616
7s. 9d. 230,074 Os. 4d. of that belongs
to revenue; 106,452 13s. Id. will re-
place lodgments ; 63,089 14s. 4d. bank
balances ; 50,000 loan, Mutual Provident
Society; and 20,000 loan, Savings' Bank.
So that our position has been one of tem-
porary embarrassment only. We have a
large income, coming in freely ; and we
have an expenditure that does not keep
pace with our receipt of revenue. But
having to carry on these public works out
of our revenue, exhausted it so far as to
render it necessary in May and June
when the news was received that the de-
bentures of this Colony could not be sold
in London to cast about for some means
of raising a loan on equitable terms, in
order to carry on the public works to the
end of the year. I will tell the House the
conditions on which these loans are made.
We have borrowed altogether 200,000
100,000 from the Savings' Bank at 6 per
cent., and 100,000 from the Mutual
Provident Society at 8 per cent., the aver-
age interest on the whole amount bor-
rowed being 7 per cent. When Queens-
land comes down here and borrows money
at 10 per cent., and we are paying 1 1
cent, in London, the great money-market
of the world, I think our negotiating a
loan at 7 per cent., did the Government

186

MR. EAGAR.

[1866.]

no discredit. And I am now selling
Treasury bills, in lots of from one to
six thousand pounds, at par ; which fact
is another proof of the good opinion
entertained of the public securities of this
colony. When my hon. friend opposite
moved the other night for the papers in
reference to the loans negotiated with the
Savings Bank and the Mutual Provident
Society, I did not delay the production of
those papers from any disrespect to the
hon. gentleman, but because I thought
it unnecessary to disturb the public mind
by premature disclosures, which would
have to be made when the financial state-
ment was delivered. The arrangements
too were then pending ; and I thought it
would not be right to accede to the hon.
gentleman's request, that I should then
lay the papers on the table. I will now
read to the House, a statement of the
arrangements made with the two institu-
tions I have named. Before doing so,
however, I will mention to the Com-
mittee what will be accomplished by
these loans, in the prosecution of our
railway works. This 200,000 will carry
on these works to the end of the year
will allow time for the sale of our new
loan will give us breathing time, as it
were and what we shall accomplish is
this : my hon. friend, the Minister for
Works, informs me that the permanent way
on the Great Western extension, will be
laid to Bussy's, and, if the carriages arrive
in time, will be open for traffic at the end
of the year. On the southern line it will
be laid to the Fitzroy Iron Mines, and will
be actually open for traffic by the first day
of next year. And this gratifying result
will be the consequence of our borrowing
this money, at the moderate interest of 7
per cent. I now desire to inform the
Committee of the nature of the arrange-
ments made with respect to these loans.
I think it is only necessary for me to read
my applications to the Mutual Provident
Society and the Savings' Bank, and their
replies, as I intend to lay the whole of
the papers on the table. I may say, look-
ing at the results attained, that I consider
it a fortunate thing that so far back as
July I was able to get this money.
The Government could not get it now.
The circumstances are entirely altered
but that is a question I shall touch upon,
when I speak of a National Bank. On

the 20th July, 1866, I wrote the folio wing
letter to the Manager of the Savings'

Bank :

' The Treasury, New South Wales,

20th July, 1866.
The Managing Trustee, Savings' Bank,

Sir, In transmitting to you, herewith, Trea-
sury bills for 15,700, which the Government
are under an obligation to hand to you this day,
I am directed by the honorable the Treasurer to
state, for the information of the Trustees, that,
in terms of the 17th clause of the Savings' Bank
Consolidation Act of 1862, he is prepared to
receive on deposit in the Colonial Treasury such
portion of the funds of the bank up to 100,000,
as may be available for the purpose, on such
terms and conditions as may be mutually agreed
upon.

The Treasurer notices, from the balance-sheet
of 31st December, 1865 (which had been for-
warded to him for the approval of his Excellency
the Governor), that a large sum of money is lent
on Queensland debentures, which cannot be
regarded as preferable to the public securities of
this colony. He notices also, that upwards of
200,000 are deposited with certain English and
Colonial banks. Withoiit desiring to question
their soundness, the Treasurer conceives that
the claim of the Government to a large propor-
tion of the Savings Banks' deposit, at a fair rate
of interest, is superior to that of any private
institution, and, having in view the official con-
nection which subsists between the Government
and yourselves, he anticipates that no difficulty
will arise in making such arrangements as will
afford, on the one hand, the best security to
depositors, while, on the other hand, the
accommodation to the Government, in the pros-
pect of a great financial pressure, will enable
them to avoid interruption to the progress of
necessary public works, and tlms directly benefit
the industrial classes, on whose continuous
employment your deposits must largely depend.

I have, &c.,
(Signed) HEXRY LANE.

To this letter I received the following
reply :

Savings' Bank, Sydney,

31st July, 1866.

The Under Secretary to the Treasury,

Sir, In acknowledging the receipt of your
letters, S. 193-3204 and S. 205 of the 20th and
24th instant respectively, I have to state, for
the information of the honorable the Minister
for Finance, that, at a special meeting of the
trustees, held yesterday, the following resolution
was adopted, viz. : " That the trustees of the
Savings' Bank are willing to deposit in the
Colonial Treasury a sum not exceeding one hun-
dred thousand pounds, at the rate of six per
cent, per annum, payable half-yearly, in such
amounts and at such intervals as may be
mutually agreed upon, on condition that the
Colonial Treasurer will deposit with the trustees
debentures to the amount of one hundred and
fifty thousand pounds as security therefor, with
the right reserved to the trustees to pledge or
sell the whole or any part of such debentures at

[1866.]

MR. EAGAR.

187

their discretion ; and on the further condition,
that the Government will indemnify the bank
from any loss which it may incur, by reason of
having to raise money on these securities.

I have, &c. ,
(Signed) GEO. O. ALLAX,

Managing Trustee.

I may say that these stringent conditions
were imposed because there was then
a doubt as to whether the news from
London would not cause a run on the
Savings' Bank. I need scarcely say that
the news was not of such a nature as to
cause that inconvenience. I then had a
personal conference with three of the
Directors of the Mutual Provident Society,
and on the 1st August last they wrote to
me the following letter, which embodies
what took place at that conference :

Australian Mutual Provident Society,
New Pitt-street, Sydney,

1st August, 1866.
The Honorable the Colonial Treasurer of New

South Wales,

Sir, I have the honor to inform you that the
proposition submitted by you to a deputation
from this Board was finally considered at a meet-
ing of the directors held yesterday, and I am
now authorised to state that the Society is pre-
pared to advance to the Government of New
South Wales the sum of fifty thousand pounds
(50,000) for the period of twelve calendar
months ; interest at the rate of eight pounds
(8) per cent, per annum as an overdraft against
one hundred thousand pounds (100,000) stock
of 5 per cent, debentures of this colony, to be
placed in the hands of the Society for sale. The
Society to be at the same time duly appointed
the agent for the Government for the sale thereof,
at a limit of ninety pounds (90), provided,

1. That the loan be advanced in the following
manner, viz. :

By an instalment of ten thousand pounds
(10, 000) on the 5th August current, and by fur-
ther instalments thereafter of such amount and
at such intervals as is convenient to the Society,
the whole sum of 50,000 to be paid, however,
not later than the llth October next.

2. That interest on the sums so advanced be
paid on the 1st day of January, and first day of
July hereafter, during the continuance of the
said loan, or so long as any of the said advances
shall be unpaid, with proportionate interest on
payment of any principal money, should it not
be paid on either or any of the above-named
days.

3. That the Society be authorised to charge a
commission of one-half per cent, on all sales of
debentures made through its agency.

I have the honor to be, Sir,

Your obedient servant,
(Signed) A. J. RALSTOX, Secretary.

I made that arrangement for the first
50,000, and subsequently obtained the
second ,50,000 on the same terms. As I

before said, I shall lay these papers on
the table, and move that they be printed,
so that the Committee may be fully cogni-
sant of the details of those arrangements,
which I made in the public interest,
and by which I procured the money
to carry on the public works to the
end of the year. I now desire to in-
form the Committee, in what way I have
provided for the interest on debentures
due on the 1st January next, and in enter-
ing upon this subject I may say it was
without the slightest disrespect that I de-
clined a few days ago to give information
on the subject, when requested by the hon.
member for Wellington. I delayed giving
the information because arrangements
were then pending, and it would have
been scarcely prudent to make them public
until they were completed. The Com-
mittee are aware that the Government in
March last sent home 150,000 to pay
the interest due in July then following.
With reference to the like sum, due
1st January next, I had a right to calcu-
late on receiving the money, in London,
from the sale of debentures the Loan
account being so largely indebted to
revenue. But there being no sale for
debentures, and our London account
being heavily overdrawn, I had to devise
other means to meet this liability, and I
succeeded in making arrangements, before
the departure of the last mail, with the
Bank of New South Wales, to obtain from
them, before the departure of the next
mail, their draft for 50,000 ; and I also
arranged with the Oriental Bank, between
this and the 31st December, to pay them
100,000, they guaranteeing, on these
conditions, to pay the interest due on
debentures in London, on the 1st January.
This 150,000 will have to be repaid to
the Treasury here from the first sale of
debentures. The following letters will
explain fully the details of those arrange-
ments :

The Treasury, New South Wales,

22nd September, 1866.

The Manager Oriental Bank Corporation, Sydney.
Sir, I am directed by the Honorable the
Treasurer to acknowledge your letter of the 14th
instant, and in reply to that portion which
states that you are instructed to communicate
with the Government to provide for the half-
yearly interest, due the 1st January next,
on debentures and Treasury bills, which your
London directors express themselves averse to

188

Mr, EAGAK.

[1866.]

advance, I am to inform you that the following
arrangements are proposed for such payment
in which I am to invite your concurrence :
The Treasurer undertakes :

1 To hand to you in time to remit by next
month's mail to London, a bill of exchange,
drawn by the Bank of New South Wales on
their London office, for 50,000, to mature on
the 28th December next ; and,

2 To pay to you, on or before the 31st De-
cember next, the sum of 100,000. You, on
the other hand, undertaking :

1. That your London office, in consideration
of the provision so to be made, shall pay the
interest due in London on the debentures and
Treasury bills on the 1st January, 1867 ; and,

2. That so soon as debentures are sold by
your London office to the extent of 150,000,
that sum shall be placed by you at the disposal
of the Government here, in a way to suit our
mutual convenience, without reference to the
state of the London account.

I am further to inform you, in respect to the
large value of debentures held by your London
office at the date of their latest advices, that it
appears to the Government, in view of the high
rate of interest payable on your London advance,
and having regard to the imperative necessity of
the cost of public works being defrayed from
the source which Parliament has provided for
the purpose, that it would be desirable to place
the whole of the debentures in your hands upon
the London market, at a price even below that
recently communicated to you. Under any
circumstances it would meet with the approval
of the Government, if, in the exercise of the
power contained in the subsisting agreement,
your London office realized without further
delay, sufficient debentures to cover their cash
advance, without reference to the price obtain-
able for the same.

I have to request an acknowledgment of this
communication before the departure of the out-
going English mail.

I have, &c.,
(Signed) HENRY LANE.

In reply to that letter I received last
Saturday the following :

Oriental Bank Corporation,

Sydney, 22nd September, 1866.

The Honorable the Colonial Treasurer,

Sir, I am in receipt of your letter, S. 252, of
this date, notifying the arrangements proposed
for meeting the interest due in London on 1st
January next, and requesting we should under-
take that our London office will pay the same ;
also, expressing the wishes of the Government
in connection with the disposal of the deben-
tures, which shall be duly communicated to our
head office by the outgoing mail.

In reply, 1 have only to state that, en com-
pletion of the arrangements as therein specified,
i shall be prepared to comply with your re-
quest.

I have, &c.,
(Signed) S. MURRAY, Manager.

I yesterday received the following letter
from the Bank of New South Wales :

Bank of New South Wales,

Sydney, 26th September, 1866.

The Honorable the Treasurer,

Sir, As arranged, we shall be prepared to
hand you, before departure of the next. overland
mail, our drafts on London for 50,000 (fifty
thousand pounds), payable there on the 28th
December as part provision for your interest
falling due on the 1st January next.

I have, &c. ,
(Signed) CHAS. M. PALMER,

For the General Manager.

On sending this letter to the Oriental
Bank, I received the following reply :

Oriental Bank Corporation,

Sydney, 27th September, 1866.

The Honorable the Colonial Treasurer,

Sir, I am in receipt of your letter, dated 26th
instant, S. 260, requesting, in consideration of
the Government binding themselves to carry out
the arrangements detailed in your communica-
tion of 22 idem, S. 252, we should undertake
that the interest on debentures and Treasury,
bills payable 1st January next will be duly met,
and enclosing copy of letter from Bank of New
South Wales, engaging before departure of the
next overland mail to hand you draft on their
London office for 50,000, to mature on the 28th
December next, and which draft you undertake
to transmit to us in terms of the agreement
above referred to.

In reply, I beg to inform you that the pro-
posed arrangements having so far been carried
out, I have pleasure in acceding to your request,
by herewith guaranteeing payment of the afore-
said interest and shall not fail to advise our
Directors in London to that effect by the ensuing
overland mail.

I have, &c.,
(Signed) FRED. CROZIER,

For the Manager.

By the last mail I understand that in-
structions for the payment of the interest
were virtually sent home. It was utterly
impossible that I could remit this 150,000
in one sum, and at one time, and therefore
these arrangements were made with the
Oriental Bank ; and if, in the meantime,
there is a sale of debentures to this extent,
the money is to be refunded to the
Treasury. It is of importance that I
should call the attention of the Committee
to the amount^of overdraft due by the
Government to the Oriental Bank, which
by the last advices is ,837,748 8s. 3d.,
and against which they hold about
2,000,000 in debentures, including those
of short dates. For this sum the Govern-
ment have, by the last advices, to pay an

[1866.]

MR. EAGAR.

189

interest of 11 per cent. a rate obviously
ruinous to the country. Under the ar-
rangement made with the Oriental Bank
Corporation, by the honorable member
for the Glebe, as Finance Minister, in
1865, two things were conditioned that
the advances of the bank at one time
should be limited to 250,000, and that
the bank should have the power at any
time to sell sufficient debentures to cover
their advances, without limit as to price.
This power the bank has not yet exercised,
and their account against the Government
has risen from half-a-million to over
800,000. It would no doubt have been
better for the Colony, if the bank had
exercised this power of sale ; but with a
view, as they allege, to maintain the credit
of the Colony, and not desiring for that
reason to sell at a low rate, they did not
press our debentures upon the market.
Matters having arrived, however, at such a
stage, that claims are made upon us that it is
almost impossible to meet, we have decided
to give the bank, in order to close this heavy
charge upon us, instructions to sell
sufficient to cover the overdraft, at cur-
rent rates. Things are in this anomalous
position, that while we are able to borrow
in this city at 7 per cent., we have to pay
this charge of 11 per cent, in London.
The Government have no desire to reflect
upon the Oriental Bank for what may yet
prove to be the exercise of a wise dis-
cretion in delaying their absolute power of
sale, but, having regard to all the circum-
stances of our position, it was considered
right to send home a letter by last mail,
stating the desirability of placing the
whole of our debentures in their hands on
the London market, at a price even below
that already indicated to them. [MR.
JOSEPH : The whole of the 2,000,000 ?]
Yes, the whole loan. Two or three
months ago we consented that the Oriental
Bank should sell even at 80, fixing that as
the minimum ; but we have now written
to Mr. Murray (and I have read the letter
to the Committee), expressing the opinion
of the Government that it was desirable
to place the whole of the debentures upon
the London market, if they brought a price
even below that. In short, in our position,
with over 800,000 overdraft, increasing
every week, with no sale of debentures,
and paying for interest 1 per cent, beyond
the Bank of England rate of discount, it

is such a drag upon the Finance Minister
that the Government have thought it
right, at all risks of the market, to close
this account. It acts as a dead weight :
our debentures are tied up, and we can
make no arrangements of any kind. Our
instructions therefore are of a positive,
definite, and peremptory character in
order to get rid of this enormous over-
draft to sell our debentures even at what
in ordinary times would be considered a
sacrifice. It would be better, in my
opinion, to sell even at 50, and get rid of
this burthen- coupled as it is with such a
heavy interest. It may be interesting to
the Committee to know in what way our
debentures are placed. The debentures
actually sold and constituting our public
debt amount to 5,240,030. There are
for sale in London, held by the Oriental
Bank, 2,006,300. These, with deben-
tures held in this city as security for
temporary loans, and those not issued,
make a total of 8,240,330, the actual
public debt on debentures being five and
a quarter millions in round numbers. In
June, 1865, the debentures (long dated)
sold at 93, and the price has gradually
fallen to 88, and there has not been a
single debenture sold in June and July
last.

I have now got through I trust, without
trespassing very much on the attention
and patience of the Committee, with what
properly speaking would constitute my
financial statement. But before I sit
down I desire to say a few words with
reference to the establishment of a Govern-
ment Bank of Issue not that the head of
the Government, at the present moment,
contemplates introducing to the notice of
the Committee, any proposition for the
establishment of an institution of the
kind, but because the present extraordinary
and anomalous state of affairs has naturally
given rise to much discussion on this par-
ticular question. The matter has been
agitated a great deal in this city, and many
individual members of the House have
pressed it on the notice of the Govern-
ment I therefore think that, under these
circumstances, and in the face of what
promises to be a very alarming crisis,
I should be wanting in my duty to the
House and to the country, if I failcxl to
lay before the Committee the vi.us
which 1 rntiTtain with reference to the

190

ME. EAGAR.

[1866.]

establishment of a National Bank. The
idea of a National Bank is not a new idea
in this colony. In 1852, before the in-
troduction of responsible Government, when
we had a single Chamber comprehending
many very eminent men, highly distin-
guished for their talents and information
on this and kindred subjects, there was a
Select Committee appointed to inquire into
Currency and Banking, and this Commit-
tee, on the 1st of October, 1852, agreed
to a report which was laid upon the table
of the House ; but, if I mistake not, no
further steps were taken afc, that time
to procure its adoption. A prominent and
leading member on that Committee was
the present head of the Government, and
the chairman was the Hon. Mr. Murray,
who is now the President of the Legis-
lative Council. I think I am right in
saying that, although this document bears
the signature of Mr. Murray, it was, in
fact, drawn up by my honorable friend
Mr. Martin. This report seems to me, in
some of its passages, to contain such
sound principles on the subject, and, in
some of its remarks, so nearly to depict
the present state of affairs that, with the
permission of the Committee, I will read
one or two extracts :

The daily experience of every one must satisfy
him that the notes of Banks, on the solvency
or stability of which no suspicion has been cast,
are received in payment as readily as coin, and
that, in the popular mind, the idea of a pound
sterling is far more frequently represented by a
pound note than by a certain weight of
standard gold. Nothing can be more natural
than that a piece of paper which is uni-
versally received as a pound should be popu-
larly considered and treated as the substance,
of which it is only the representative. Prac-
tically, therefore, the increase or the dimi-
nution of a bank-note circulation has the same
effect upon the value and convertibility of
property, and influences trade in all its count-
less ramifications in precisely the same way as
an increase or diminution of the metallic
currency would do, were there no paper cur-
rency in existence. In the latter case, with the
withdrawal of money from any country, the
property of that country must fall in value, and
become less convertible than before, and the
converse is equally unquestionable.

So long, therefore, as this power of expanding
or contracting the currency of a country is left
to private speculators, so long will the pros-
perity of that country be constantly liable to the
most violent and disastrous fluctuations. There
must always be in such a state of things a pro-
bability of trade and speculation being unduly
stimulated at one period, and unduly depressed
at another. An infinite number of unforeseen

causes may, at any moment, induce private
banking institutions to expand their issues to
an extent wholly disproportioned to the metallic
capital ' of the country, and thus bring about a
state of feverish excitement, the sure forerunner
of a fatal collapse. On many memorable
occasions, both in this Colony and elsewhere,
have crises such as these occurred, and from this
cause ; and we are but now emerging, by a com-
bination of circumstances, most favourable and
most unexpected, from a period of depression in
which the hopes and fortunes of Irandreds of
our most enterprising colonists have been
ruined beyond redress. In every well-regulated
community the prosperity of its people should
increase with the increase of its valuable pro-
ducts, for it is those products that really and
truly constitute national wealth. We, however,
in this Colony have seen the curious phenomenon
of rapidly augmenting wealth co-existing with
rapidly-diminishing prosperity. So long as, in
1840 and 1841, each wild speculator found one
still wilder than himself to prey upon, the credit
of the whole body was sustained ; and, although
coin was rapidly leaving the country, property
was convertible, because unlimited credit kept
an unlimited paper currency afloat. When the
shock came, the credit of the community van-
ished, and with its disappearance a great part
of the paper circulation vanished also. The
consequences fell then, not on the speculators
only, but on the entire community, and all
because private joint stock companies were
allowed to regulate that which itself regulates
the general prosperity.

To prevent a recurrence of these evils, your
committee have arrived at the conclusion that a
National Bank of issue is absolutely necessary.
The convenience of a paper currency is un-
questionable. The wear and tear of coin in use
is considerable, and its great weight renders it
difficult to employ it continually in making any
but the smallest payments. A paper substitute
is, therefore, clearly desirable ; but it should be
a substitute issued as the coin itself is, by the
State only ; and issued to no greater extent than
the amount of coin which the State actually
has to give for it in exchange. A circulation
thus based would have all the certainty and
stability of coin, and all the convenience and
facility of transmission of paper ; and the pros-
perity of the country that possessed it would,
instead of continually oscillating between the
widest extremes, become steady, solid, and
enduring. The peculiar circumstances of this
Colony at the present moment render the time
favourable, in an eminent degree, for the intro-
duction of this radical and necessary change.
Producing gold as we now do, here and in the
neighbouring Colony, to the extent of 15,000,000
annually, there could.be no difficulty in pro-
viding a currency sufficient for all our require-
ments.

How far it might be practicable or necessary
at once to interfere with the issues of existing
banking institutions, your Committee are not
prepared to say. That their present power of
issuing notes is inconsistent with the public wel-
lare, your Committee, for the reasons already
stated, are thoroughly convinced. That they
should be confined to the only legitimate business

[1866.]

MR. EAGAR.

191

of bankers the dealing in and not the creating of
money appears to your committee to be almost
self-evident. If their functions can in any way
be so limited without a direct prohibition, it
would be desirable to adopt that course. Your
committee think that this beneficial object can
be in a great degree, if not entirely, effected by
making the notes of the National Bank a legal
tender everywhere except at the bank, and
directing all payments to the Government to be
made either in those notes or in standard coin.

The expense of such an institution as your
committee have suggested might easily be pro-
vided for on the establishment of the Mint in
Sydney, either by a seigniorage sufficient to sup-
port both establishments, or by making the bank
the means of collecting the revenue from the
gold-fields, by compelling the whole produce of
those fields to be sold to the bank at a fixed rate.
Into this important branch of the inquiry your
Committee do not consider it within their pro-
vince to proceed, as another Committee has been
appointed to report upon it.

Your committee, in conclusion, would recom-
mend as follows :

1. That a National Bank of issue be estab-

lished in Sydney, with a power to issue
notes only in exchange for gold bullion,
or the gold coin of the realm.

2. That the public accounts be kept in such

bank, and all payments to the Govern-
ment be made either in its notes or in the
coin of the realm.

3. That the notes of such bank should be

made a legal tender everywhere except at
the bank.

4. That except as aforesaid the gold coin of

the realm be declared the only legal
tender in any payments beyond forty
shillings.

5. That the establishment of any new bank

of issue be absolutely prohibited.

Your Committee are of opinion that if the
above recommendations be carried out our mone-
tary circulation will be fixed on a basis so firm
that none of the ordinary vicissitudes of com-
merce M'ill ever be likely to disarrange it ; and
what is more, that at no distant day this Colony
will become the centre of operations in this
hemisphere, rivalling in magnitude those which
have given wealth and grandeur to some of the
noblest emporiums of the north.

Of course, I take these recommenda-
tions in the light in which they were
made. Circumstances may have so far
altered at the present time as to render it
desirable to vary some of these proposi-
tions. But, at all events, what I contend
for is this, that what was desirable in
1852 is pre-eminently desirable at the pre-
sent moment. If the Committee ask my
reasons, they are these because a crisis
is impending, nay has begun and will,
if not checked in time, go on to an alarm-
ing extent in this colony. And why?
Because the banks have suddenly con-

tracted their paper accommodation. For
a long time past the banks in this colony
have paid enormous dividends to pro-
prietors by unduly stimulating the public
credit; and after pushing it with great
vigour for several years, there is now a
sudden collapse, because the operations
based on credit are now required to be
realised by cash payments. I will show
the Committee, by incontrovertible figures,
that the banking business of the city is
done upon a most erroneous, a most infirm
basis, and is liable at any moment to a
crash of the most alarming and the most
dangerous character. And when I say
this, I do not hazard assertions rashly,
and without having the means of proving
them and without having had some per-
sonal knowledge and experience of banking
business myself. Having regard to those
sworn periodical statements which the
banks publish by virtue of the existing
law, and taking the nine banks in this
city, I find that for the quarter ending the
30th of June, 1866, their notes in circula-
tion were 690,076. Their fixed deposits
that is to say, money lying at interest,
and which depositors can withdraw at
the expiration of specified periods, as
contra-distinguished from "current ac-
counts" which are fed by discounts,
were 3,656,200, making the total lia-
bilities of the banks, to the public, on
these two particular items, 4,346,276.
Now what had the banks on the 30th
June last to represent this particular lia-
bility? In coin and bullion they had
1,188,480, or a little more than one-
quarter. This is striking evidence of a
most unsound state of things ; and it
proves that if a sudden demand were made
upon the banks by their depositors, it
would end in something like universal
ruin. But I may ask, what necessity is
there for the panic? The only damage
done to financial interests in this city by
the commercial crisis in England has been
by the stoppage of the Agra Bank, and
that does not amount to more than 60, 000.
What is the reason, then, that the banks
should be so stringent, and suddenly insist
upon cash payments ? The reason alleged
is that this Government has borrowed
100,000, and the Queensland Govern-
ment has borrowed 200,000. These
amounts having been suddenly and unex-
pectedly taken out of the banks, it is

MR. EAGAR.

[1866.]

stated that they are obliged to resort to
the demand for cash payments. We find
that the total assets of the banks on the
30th June were eleven millions ; and is it
credible that the banks, having such assets,
should thus suffer by the withdrawal of
300,000 from their fixed deposits ? Does
it not prove that there is a rotten system
of credit which has been patched up by the
banks 1 If the withdrawal of so compara-
tively small a sum of money is to lead to
these disastrous results that is to say,
the destruction of commercial confidence,
and a consequent money panic, how un-
sound must the system be ! These eleven
millions of assets represent the squatting
and agricultural property of the country,
and the commercial and trading interests of
the Colony, and yet the whole of the money
of the country, in the coffers of the banks,
is little over a million ! This is the result
which arises from unlimited paper accom-
modation, and the absence of all restraint
upon the currency ; and it imposes upon
the Government of to-day or- to-morrow
the necessity of doing in this country, on
a small scale, that which is done by the
Bank of England on a large scale. It is
high time for the Government to interfere,
and to take into its own hands that right
of creating and regulating the currency,
with which it has improperly parted. By
this sudden stringency of the banks every
man's property is reduced in value. Pro-
perty worth a hundred thousand pounds
in value yesterday is not worth more than
ten thousand pounds to-day. Not only
are the people whose credit has been bol-
stered up ruined, but the industrious per-
sons who depend upon them are also
ruined. The speculators do not stand or
fall alone ; they are mixed up, more or
less, with the general interests of the com-
munity. The moment the banks begin to
press them the pressure is felt by every-
body else, and the wealthy man of yester-
day is reduced to be the poor man of
to-day. A crisis, in fact, is initiated, and
who then is .to answer for the conse-
quences 1 It must, I conceive, be a matter
of the highest interest to the Committee
to notice the relief which is afforded by
the Bank of England to the public in times
of money-panic and commercial difficulty.
Referring to the course of events since
the Bank Charter Act of 1844, in 1847
there was a money-panic created by a bad

harvest, and great speculations in corn and
railways. The Government on this occa-
sion authorized the Bank of England to
increase its issue by two million notes.
In 1857 there was a money-panic, conse-
quent on. the failure of American mercan-
tile houses in England, and several large
Joint Stock Banks. Here again the
Government interposed, and extended the
Bank of England issue by two million
notes. Again in the money -panic which
occurred in England but the other day
and which may not yet have completely
subsided, Mr. Gladstone at once consented
to relax the Bank Charter, and permit an
extended issue of two million notes. We
have, unfortunately, in this Colony, 110
great State institution capable of affording
substantial relief of this or, indeed, of any
other character. I hope I may not weary
the Committee if I refer to the chain of
events which preceded the Bank Charter
Act of 1844. In 1797 the famous Bank
Restriction Act was passed, which made
the Bank of England note inconvertible.
In 1819 another great Bank Act, known
as Sir Robert Peel's Act, was passed, in
which the bank note was again made
convertible, and cash payments resumed.
In 1844 Sir Robert Peel passed his Bank
Charter Act, which revolutionised the
financial system of Great Britain. Up to
that time the issue of notes formed part
of the business of the bank, but after that
period the issue; department was kept
entirely distinct from the banking depart-
ment. The Government, by this Act,
gave the Bank of England power to issue
14,000,000 of notes, on the basis of public
securities these securities being held by
the bank, for the debt due by the Govern
ment to the bank. Beyond this limitation
any further issue of notes is in exchange
for gold bullion. The Bank Act of 1844
also compelled the Bank of England to
give its notes in exchange for gold, the
amount payable for standard gold being
3 17s. 9d. the ounce. There were, at
this time, a great many private banks in
existence, but many of them gave up their
business of issuing notes, on being allowed
1 per cent, by the Bank of England for
twelve years. This Act established the
currency on a safe basis. It secured the
convertibility of the note, and the effect
of the safeguard imposed was, to preserve
an equilibrium in the business operation

[1866.]

MB. EAGAR.

193

of the country. I should like to read to
the Committee, from Hansard's Parlia-
mentary Debates, some remarks made by
the late Sir Robert Peel, when moving the
second reading of this bill. It will then
be my duty to show how such an institu-
tion could practically be brought into
operation here. Sir Robert says :

Some have contended, and I am not prepared
to deny the position, that, if we had a new state
of society to deal with, the wisest plan would be
to claim for the State the exclusive privilege of
the issue of promissory notes as we have claimed
for it the exclusive privilege of coinage. They
consider that the State is entitled to the whole
profits to be derived from that which is the re-
presentative of coin, and that, if the State had
the exclusive power of issuing paper, there
would be established a controlling power which
would insure, as far as possible, an equilibrium
in the currency.

I read this to show, that if this eminent
statesman's views could have been carried
out in their integrity, the issue of paper
money in England would have been con-
fined to one great national institution.
But he had to deal with a number of vested
interests, in the shape of private and pro-
prietary Banks, so that the principle of
the Act of 1844 could not be carried out
in its integrity. I apprehend that, in this
Colony,- no difficulty would arise under our
simpler and less complicated system. Sir
Robert further says, and this is the result
of his own consideration :

It appears to me that we have, from reasoning,
from experience, from the admissions made by
the issuers of paper money, abundant ground for
the conclusion that under a system of unlimited
competition, although it be controlled by con-
vertibility into coin, there is not an adequate
security against the excessive issue of promissory
notes. \V e should infer, certainly from reason-
ing, that free competition in the supply of any
given article will probably ensure us the most
abundant supply of that article at the cheapest
i-ate. But we do not want an abundant supply
of cheap promissory paper. We want only a
certain quantity of paper, not, indeed, fixed and
definite in nominal amount, but just such a
quantity of paper, and that only, as shall be
equivalent in point of value to the coin which it
represents. If the paper be cheaper than the
coin, it is an evil and not an advantage. That
system, therefore, which provides a constant
supply of paper equal in value to coin, and so
varying in amount as to ensure at all times im-
mediate convertibility into coin, together with
perfect confidence in the solvency or the issuers
of paper, is the system which ought to be pre-
ferred. Now, unless the issuers of paper con-
form to certain principles unless they vigilantly
observe the causes which influence the influx or
eflux of coin, and regulate their issues of paper

accordingly, there is danger that the value of
the paper will not correspond with the value of
coin. The difference may not be immediately
perceived nay, the first effect of undue issue,
by increasing prices, may be to encourage
further issues ; and as each issuer, where there
is unlimited competition, feels the inutility of
individual efforts of contraction, the evil pro-
ceeds until the disparity between gold and paper
becomes manifest ; confidence in the paper is
shaken, and it becomes necessary to restore its
value by sudden and violent reductions in its
amount, spreading ruin among the issuers of
paper, and deranging the whole monetary trans-
actions of the country.

And then, with respect to the allegation,
that to confine the issue of notes to a single
government institution, would interfere
with free trade in money, and unneces-
sarily restrict banking business, he says :

Our general rule is to draw a distinction
between the privilege of issue and the conduct
of the ordinary banking business. We think
they stand on an entirely different footing. We
think that the privilege of issue is one which
may be fairly and justly controlled by the State,
and that the banking business, as distinguished
from issue, is a matter in respect to which there
cannot be too unlimited and unrestricted a com-
petition. The principle of competition, though
unsafe in our opinion when applied to issue
ought, we think, to govern the business of
banking. After the issue of paper currency has
once taken place it is then important that the
public should be enabled to obtain the use of
that issue on as favourable terms as possible.

Having said so much on the Bank of
England, I will proceed to show that some
such institution, in so far as relates to the
" Issue Department," would work well in
this country. This Colony stands in a far
more favourable position for a Bank of
Issue than Great Britain does. We are,
in point of fact, the only part of the
British territory where gold is a native
product, and where there is a Mint ready
to convert it into sovereigns. In England,
where all the gold used is imported, the
quantity capable of being retained in the
country, must entirely depend upon the
exigencies of her foreign trade. Having
no gold except that which is imported the
amount of the precious metal held by
the Bank of England represents the
balance of foreign operations. But
the state of things here is en-
tirely different. We have gold as a
commodity, dug out of the soil, and the
quantity of gold in bullion or in coin,
which we could keep in the coffers of the
State Bank, would depend, not on the
exigencies of our foreign trade, but upon

194

MR. EAGAR.

[1866.]

the certainty of the supply of gold a
natural product being equal to the de-
mand that supply being apparently in-
exhaustible. Under these circumstances,
the gold would remain in the coffers of
the Bank of Issue, so long as the people
had confidence in the Government, and
took their notes in exchange for it. [Mr.
SAMUEL : The Government does not
get the gold.] I can only state my views,
and the hon. gentleman will have an op-
portunity of expressing his views on the
subject. I insist upon the striking ad-
vantage which this country possesses over
Great Britain, for a Bank of Issue. The
quantity of gold capable of being retained
in this country as the basis of a paper
currency, would not depend upon the
same circumstances here as they do in
England. Considering, then, that we
have unusual advantages in this matter,
I will now point out how such an institu-
tion might be brought into immediate
operation. Any Act passed by the Legis-
lature, to establish a Government Bank
of Issue, must have a similar provision to
that in the Bank Charter Act, namely, to
give its notes in exchange for gold bullion.
It would be necessary to abolish the gold
export duty and the escort charge, and to
promulgate a regulation of this kind
that all gold brought to the Mint, in ex-
change for notes, should be coined for
threepence per ounce, or paid for at the
rate of 3 17s. 7|d. per ounce. The
digger would then sell his gold to the
Mint instead of to the banks. At pre-
sent, the freight and insurance of gold to
England cost from 1 to 2 per cent., sub-
ject to an increase of these charges, when
a war risk is to be met. I speak advisedly,
when I say, that with a Bank of Issue
the Sydney Mint could give the highest
price for gold, obtainable in the world.
The Bank of England gives the Mint
price for gold, less l|d. per ounce. But
although the Bank of England is compelled,
by law, to give this price for standard
gold bullion to the importer, he, the im-
porter, on the other hand, is subjected to
the cost of bringing it into England
and the freight and insurance may be
stated at two per cent., which is a deduc-
tion to that extent from the price obtained
for his gold. Here, on the contrary,
the native gold brought by escort free to
the Mint, and coined at 3d. per ounce, sub-

jects the gold producer to a deduction of
but 6s. 3d. per cent, from the price ob-
tained 'for his gold. And this is what I
mean by the Sydney Mint giving the
highest price to the local producer. As-
suming, for argument's sake, that our gold
product for a year, which may be valued
at a million sterling were exchanged in
the course of the year at the Bank of Issue,
through the Mint, for State notes, there
would then be a million notes issued,
against a million sovereigns or gold bul-
lion of equivalent value, held in the coffers
of the Bank.

Mr. JOSEPH : What about exchanges ?

Mr. EAGAR : I admit that there would
be a demand for gold in the case of foreign
exchanges, but for this purpose only ; and
what was taken out to-day would come in
to-morrow. In Great Britain such a
drain could only be supplied by the legi-
timate operations of foreign commerce,
but here it would be supplied by the daily
operations of the digger. Having by
these means acquired a deposit of sovereigns,
equal to the value of the notes issued upon
the sovereigns so deposited, we could issue
paper money to the extent of two-thirds,
without a representative sovereign at all.
We could do this far more safely than the
Banks, the solvency of whose issue is sub-
jected to the risks and hazards of a specu-
lative banking business. In other words,
if we had 100,000 sovereigns perpetually
in our coffers, we could keep in circula-
tion 300,000 worth of notes. Experi-
ence has shown, that on an average, in
Great Britain, sixteen millions of Bank of
England notes, 011 the lowest calculation,
are perpetually out. That is to say, the
requirements of the country keep afloat
sixteen millions of Bank of England notes,
which, under no circumstances, can be
presented for gold. This has been ascer-
tained from the recorded observations of
a long series of years. In the same way
it is shown here that our Banks can keep
afloat 700,000 worth of notes. Now,
what is to prevent the Government hav-
ing the advantage of that issue ? Looking
at it on broad and general principles, this
Bank must be established, sooner or later,
to act as a controlling element, and on
the ground of a great public necessity I
say that the Bank ought to be established.
But we may also look at it in another
light that it would act legitimately as an

1866.]

MR. EAGAR

195

assistance to the Government and to the
public. I do not think that we ought to
establish such a Bank, simply because the
Government is in a difficulty ; that is the
mistake they have fallen into in Queens-
land ; but I do say that having a gold
product, having a Mint, and having a
large recognized circulation, we would be
fools and madmen to permit this engine
longer to be used to feed the profits of
private companies. In making this re-
mark I would not desire to act in an-
tagonism to the Banks, but I would en-
deavour to act in harmony with them.
I would not willingly entertain the pro-
position to cancel the present circulation,
without allowing time to elapse to call in
the notes, and without compensation. In
the earlier history of the Colony, when we
had not much capital, it was a good thing
for the country that individuals possessed
of money formed themselves into com-
panies and issued paper upon a convertible
basis. But there is a time when the
State must vindicate its own rights and
privileges, and insist on issuing the bank-
note, as well as stamping the sovereign.
As I have already observed, I would give
the banks compensation for cancelling
their issue. I would give them twelve
months to call in their notes, and say for
seven or fourteen years I would allow
them a compensation of two per cent, on
their annual average issue. The gain
which the banks derive from their note
circulation is not capable of being reduced
to a present money value, and does not,
like the operations of the banks by dis-
counts, show every half-year an amount of
profit which is determinable. The gain of
a bank-note circulation is not so appre :
ciable as the gain of a bank by discounts.
But T think the terms I have mentioned

would be ample compensation. Th-y
would give the Bank of New South
Wales, for example, not less than 4,000
a year. I believe that if the Govern-
ment established a National Bank of
Issue, the business of the country and of
the Government would be so enlarged that
the circulation instead of being 700,000
would, at no distant date, be a couple of
millions.

1 have now to return to the Committee
my sincere thanks for the patience with
which they have heard me, and for the
marked attention which they have shown
to a lengthened statement necessarily
abounding in many not very interesting
details. But before I sit down I have
yet a few words to say. I would be the
last person in this community to address
my hon. and learned friend and colleague
the Attorney-General with the voice and
in the language of flattery. It is the
simple truth to say, that to my hon. and
learned friend, the country is mainly
indebted for the introduction of the
Mint. His labours in furtherance
of the social interests of the Colony,
are before you in the measures that
have been passed during the present
session of Parliament, and I doubt not he
will accomplish much more, in other bene-
ficial directions, should his tenure of
office be anything of a lengthened cha-
racter. But, beyond all this, what to me
would be a source of the highest satisfao*
tion, would be my association with my
hon. and learned friend, whether as a
colleague or as a private member of this
House, in the promotion of what would
most appropriately crown his political
career the establishment of a National
Bank.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEOFFREY EAGAR,
made 12th September, 1867.

[From the Sydney Morning Herald of 1.3th
September, 1867.]

LEGISLATIVE ASSEMBLY.

Thursday, 12 September, 1867.

FINANCIAL STATEMENT.

MR. EAGAR said : Mr. Garrett, In
commencing to make my financial state-
ment, I think it desirable, as a matter of
convenience, that I should state to the
committee the order in which I propose to
treat the several subjects, some of them of
unusual importance, comprised therein. I
adopt this course at the outset, because I
think that it will be a means of rendering
what I have to say in this statement more
intelligible to hon. members generally. It
will be my duty, in the first instance, to
present to the committee an accurate
statement of the public account for 1867.
Having done that, it will then be my duty
to lay before the committee full particulars
of the loan account, with the view of
showing whether the operations for the
year 1867 result in a deficiency, or in such
a surplus as may be fairly applicable to
the extinction of the deficiency loan. I
shall then, in the third place, have to lay
before the committee an estimate of the
proposed expenditure and possible revenue
for the year 1868 ; and finally, it will
become my duty to refer to the projected
loan of 3,000,000, and to show the com-
mittee as well as I am able the provision
the Government propose to make for the
interest of that loan. In dealing with the
first part of my sxibject a statement of
the accounts for 1867 I shall ask hon.
members to go buck with me as far as the

year 1865, because at that point of time
commenced our operations upon the new
basis. All the deficiencies of former years
up to the end of 1864 were wiped out by
certain deficiency loans, and on the 1st
January, 1865, we commenced with a clean
sheet. I had the honor last year of making
two financial statements, one on the 1st
March, and a second on the 27th September.
On the latter date I submitted to the
then committee the accounts of 1864 and
previous years, and with reference to
the account for the year 1865, I was
enabled at the close of that year to state a
possible surplus of 28,177 12s. 5d. The
account as stated previously by my hon.
friend Mr. Samuel showed, I think, a
deficiency on his then view of the account
of something between 2,000 and 3,000 ;
but I was enabled on the 27th September,
1866, in restating the account for the year
1865 to show that this estimated deficiency
would become a surplus of 28,177 12s.
5d. I have now the pleasure of stating to
the committee that by tho operation of
time, which has further developed the
amounts of debtor and creditor, the surplus
has risen from 28,177 to 38,133 ; and
that which gives rise to this increased
surplus consists in the savings, being, as
now ascertained, larger ihan were calcu-
lated upon on the 24th September, 1866.
Then the savings were estimated at
179,168 15s. 4d. ; but I am now enabled
to state that they amount to 191,496 8s.
3d., which enables me to show a surplus
for 1865 of 38,133 12s. 2d. I have
next to invite the attention of hon.
members to the account for the year 1866,
which I shall deal with in the same way,
not troubling hon. members with many

198

MR. EAGAR.

[1867.]

details, the more important account being
that of 1867. When I stated the accounts
in September, 1866, 1 commenced the 1866
account with a credit balance of 28,177
12s. 5d., but by a more accurate and more
recent view of the case, that balance is
now estimated at 38,133 12s. 2d., thus
increasing the surplus of 1865 by 9,955
1 9s. 9d. Looking at the debit state of the
account hon. members will see we have had
some increases in the public expenditure
as shown by the supplementary estimates
passed after the main estimates of 1866.
For example, we had for the year 1866
an additional supplementary estimate of
16,708 13s. Id., and a further additional
supplementary estimate of 17,925 16s.
7d. "We have also had further special
appropriations, amounting to 15,664 Is.
9d., making a total increase on the debit
side of the account of 50,298 11s. 5d.
We have on the other hand, I am glad
to say, an increase in the actual outcome
of the revenue as compared with the
estimated revenue. When I made my first
statement on the 1st March, 1866, I then
estimated the revenue at 2,084,511 ; but
on the occasion of my making a second
financial statement on the 27th Septem-
ber, 1866, circumstances had occurred
which induced me to make a considerable
reduction in my estimate of March. In
1866 the country was visited with droughts,
and during the latter part of that year a
severe monetary panic extended to this
country and was productive of much com-
mercial depression and distress. Under
these circumstances I thought it right on
restating the account for 1866 to reduce
the amount of my former estimate, which
I fixed at the latter date at 2,023,579
14s. 5d. I am glad to be able to
state to the committee that this estimate
has been exceeded by 7,170 18s. 10d.,
being tne second occasion during respon-
sible Government on which the actual col-
lections of revenue have exceeded the
estimate of the Treasurer. To the hon.
member for Wellington (Mr. Samuel)
belongs the credit of the first instance in
1865, when the collections of revenue
exceeded the estimate of the Treasurer by
21,331 12s. 2d. My own case in 186 6 is the
second occasion on which the actual receipts
have exceeded the estimate which they
did in this instance, by 7,170 18s. 10d.,
leading, I hope, the House and the country

to believe that the time has arrived when
it is possible for a gentleman holding the
office of Finance Minister to make an esti-
mate of revenue which is likely to be
realized. In this account for 1866
there are the following increases on the
credit side of the account ; an increase of
9,955 19s. 9d. on balance brought for-
ward from preceding year, an increased
actual revenue over estimate of 7,170
18s. 10d., and by the operation of time I
am enabled to fix the savings of that year
at 187,806 7s., against 113,315 15s. 2d.
estimated by me in September 1866,
making a total increase of 91,617 10s.
5d., against increases on the debit side, of
50,298 11s. 5d., and leading to this
result, that, whereas in the former account
I estimated the surplus at the end of 1866
at 70,564 Os. 10d., I am now enabled
to state that this surplus will amount
to 111,882 19s. lOd. I now come to
the year which more particularly concerns
us 1867 ; and if hon. members will turn
to the account they will find a balance
brought forward from the close of the
preceding year of 111,882 19s. lOd.
There are some changes on both the
debtor and creditor side of this account
since last submitted. I have, on the credi-
tor side of the account, diminished the
amount I formerly estimated as likely to
be received for the revenue of the year,
and I have added to the debtor side of
the account supplementary estimates and
other sums which have been voted since
the former account was laid upon the
table, and this is the position of the
account : When the Estimates of Ways
and Means of 1867 were laid on the table
last year, the main estimates were stated
as amounting to 2,013,992. The amount
actually voted by the House was however
2,052,912 6s. lid., making an increase
on the main estimates of 38,920 6s. lid.
There are also some new items in this
account as compared with last year. First
there is a supplementary estimate of
107,442 5s. lid., and further special
appropriations to the amount of 17,201
18s. 4d., making altogether 163,564 11s.
2d. since the account of last year was pre-
sented to the committee. I have thought it
right in restating the account this year, to
reduce the amount of my expected income.
In last year's statement I estimated the
revenue at 2,253,505. I have seen reason

[1867.]

MR. EAGAR.

199

since to alter my calculation, and T have
now to state the revenue as 2,164,624
18s., which makes a reduction on my
former estimate of 88,000. I have also
introduced into this account savings of
153,000, which are less than the average
savings as ascertained by the last two
preceding years. The supplementary esti-
mate of 107,442 is a large one. I shall
read to the committee a number of items.
For instance, under the head of police
there is included in this estimate 5,133;
under the head of gaols, 4,193; charitable
allowances, 6,609 ; Floods Relief Fund,
5,240 ; labour and new type required
for printing electoral rolls for this year,
2,650 ; reception of the Duke of Edin-
burgh, 5,000 ; probable amount of
Murray River Customs to be refunded,
15,000; disease in sheep, 7,744; regis-
tration of brands, 3,811 ; roads other
than main roads, 4,622 ; harbours and
rivers navigation, 4,218; public works
and buildings, 8,229 ; roads and bridges
(public works), 7,474 ; floods damage,
10,000. These are the principal items
in this large supplementary estimate which
the House will be asked to vote. The
position of the account was increased
on the debit side by the larger votes of the
Assembly last year and these supplemen-
tary items, and diminished on the creditor
side to the extent of 88,000, but increased
by the ordinary amount usually taken for
savings. The account stands thus : While
in my former statement I estimated the
surplus at 310,077 it is now shown to be
only 251,951 6s. 8d., and as far as
it is possible for any individual to judge
of that which is not immediately before
him, but for which he must wait four
months, I believe I am justified in saying
the House may fairly estimate that this
surplus will be realised by the end of the
year. Looking to the operations of 1865
and of 1866, I do not hesitate to express
my conviction that 011 the 31st December
of the present year we shall have a surplus
of 250,000. I have great gratification
in making this statement to the House,
because, although the larger surplus of
3 10,000 is not likely to be realised, I feel
confident .that a surplus of a quarter of a
million is certain. Now having gone
through as briefly as possible the accounts
of 1865, 1866, and 1867, I now con
what I may call the second division of iny

subject. This is a very important one ;
it relates to the deficiency loan account, and
it will be my duty to show how the
Government propose to meet the defi-
ciency which I shall presently show in that
account whether by means of new
taxation or such other means as we
may be able to determine upon. Our
deficiency loan account is comprised in
the securities which have been issued under
two Acts of Parliament, the Treasury
Bills Act of 1864, which authorized the
issue of Treasury bills to the extent of
400,000, to provide for the deficiency of
1863 and previous years, and the Deben-
ture Act of 1865 the short-dated deben-
ture Act, which provided for the issue of
550,000 for the services of 1864. I may
state to the committee, what is possibly
very well known to them, that the 400,000
loan was to meet the deficiency which had
accrued under the Administration of Mr.
Cowper, and the 550,000 to meet an
estimated deficiency which had accrued
under the Administration of Mr. Martin
in 1864. These loans have been disposed
of and are now maturing, and provision
must be made to meet them. I proceed to
state how that account stands. The
Treasury bills became payable at the end
of four years from the 1st January, 1864,
and the short-dated debentures became due
in annual instalments extending over nine
years and a half, from the 1st July, 1865,
but the obligations that will mature by the
end of the year are as follows : I take the
first payment under the short-dated deben-
ture issue, which has to be paid on the
31st December, 1867, 100,000. I take
the Treasury bills falling due on the fol-
lowing day, amounting to 398,500, and
for reasons for which I will state directly,
I take the second payment unjder the short-
dated debenture issue due on 3 1 st December,
1868, 100,000, making a total of
598,500. It becomes my duty to inform
the committee how it is proposed by the
Government to meet this large sum of
money, whether by a new loan of any kind,
or whether by taxation of any form that
the Government may feel its duty to adopt.
I consider that the House and the country
are not placed in an unfavourable position
in respect to this loan. We have reali/c.l
from Treasury bills actually sold 398,000,
and out of that realization, after )>
thu whole charges which these bills \MTO

200

MR. EAGAR

[1867.J

sold to meet there remains 11,637 2s. lid.
In alluding to these figures, I may call
attention to a statement of account which
has been prepared showing this result. It
will be seen by the account current of
Treasury bills representing the authorised
services for 1863 and previous years
that these bills realised 398,849 14s.
5d. After paying all the charges for
which this money was raised, there re-
mains an unexpended balance as already
stated of 11,637 2s. lid. If hon.
members will now turn to the second
account of the same character in relation
to the short-dated debentures, the
account current of the issue of debentures
under the authority of 29 Vic., No. 4,
they will find that after paying all the
obligations for which this loan was con-
tracted and sold, there remains an unex-
pended balance of 92,420 12s. lid. I
have then available to meet this large
sum of 598,500, an unexpended balance
of Treasury bills of 11,637 2s. lid.,
which the House will see I can apply to
no other purpose than the redemption
of these bills, and 92,420 12s. lid.
unexpended proceeds of the short-dated
debentures. With these sums, and the
estimated surplus of 1867, which is
likely to amount to 251,951, there
will be available a sum of 356,008
towards meeting the large sum that has to
be provided for, leaving a balance to be
provided for of 242,492. In otherwords,
when the 1st of January arrives, presuming
my surplus to have developed itself, and
this transaction to be completed, there will
have been wiped out of this deficiency loan
356,008, leaving a balance of 242,492
to be provided for. The question is how
is this to be provided for 1 Is the Govern-
ment to propose to the committee any new
taxation? Does the committee consider
that for a deficiency loan of this particular
character the Government should come
down and ask the House to inflict upon the
country taxation to the extent of a quarter
of a million of money to meet it 1 I say the
Government have no such intention. The
Government have no intention of taxing
the country to the extent of one penny to
meet this deficiency, which arose under
circumstances not likely to occur again in
the history of this colony. This deficiency
loan represents, in point of fact, the want
of experience common to all finance minis-

ters, myself included. It shows that in
the colonies we have not yet learned how to
manage our financial operations. We are
learning daily. No doubt we are im-
proving. No doubt the time will come
when some eminent man will arise in this
colony and develop qualities equal to those
of any financier in the world. But that
has not yet arrived, and while I assume
no credit to myself, I say that my prede-
cessors in ofiice have made errors of a
similar kind to mine. Now what is the
nature of this deficiency loan for which we
are called on to provide. Up to the end
of 1863 the Governments of the country
had never succeeded in raising sufficient
revenue to meet their expenditure ; and
the year 1864 arrived when an investiga-
tion of the state of the public accounts
took place and the result was the discovery
of an enormous deficit. That caused the
passing of the Treasury Bills Act to raise
400,000 to provide for the deficiency.
Then as regards the short-dated debenture
loan you can hardly blame us because
we did not obtain from Parliament such
an amount of taxation as would bring
our expenditure to an equipoise with
our revenue. We made great efforts, and
earned through this House a tariff which
would have given us a quarter of a million,
and which would have saved us from the
necessity of that loan. But that tariff
was rejected in another place and as a
consequence, from no fault of ours, the
provision was not made, and the deficit
became greatly enlarged. This deficit
having arisen under circumstances, which
I will venture to say are not likely to occur
again, we should be positively criminal
if we were to meet such an exceptional
case by new taxation, which would be
applied to entirely different purposes.
Therefore, the Government do not intend
to introduce any new taxation to deal with
this matter. I will now show how we pro-
pose to deal with this balance of 242,492
on the deficiency loan account, which I
shall call 'in round numbers a quarter
of a million. I say this, that as we have
in this present year (1867) a quarter of a
million of surplus to apply to extinguish-
ing this loan in part, we shall cast upon
the surpluses of succeeding years the ex-
tinction of the remaining portion.' We
have a right to calculate on a surplus in
succeeding years. We have passed through

[1867.]

MR. EAGAE.

201

much adversity and may now look forward
to more prosperous years. We have a
right to calculate on largely extending all
branches of industry, on a larger agricul-
tural population and a larger amount of
agricultural produce, and having regard to
all these things I think we may say that
for several years to come we are likely to
have a considerable surplus every year.
I propose, therefore, to cast the extinction
of this loan on the surplusage of succeed-
ing years. Hon. members may say, " How
do you propose to do it V Certainly not
by a short-dated loan. I think that is not
the proper way to deal with the matter.
The plan I propose is to introduce some-
thing analogous to the Exchequer Bill
system of England. That is, we intend to
ask the House to grant us a bill to author-
ise the issue of a quarter of a million of
Treasury bills next year, having a twelve
months' currency, and at a rate of interest
not exceeding six per cent. These bills
will anticipate the revenue of the year,
and will be extinguished at the end of the
year. I may here quote some trite obser-
vations on this subject from a work by Mr.
M'Culloch. [The hon. member here quoted
from M'Culloch in support of his argu-
ment.] My proposition to the Committee,
which will by-and-bye be submitted to the
> Assembly in the shape of a bill, is to give
the Government authority to issue, on or
after the 1st of January next, Treasury bills
at a rate of interest not exceeding six per
cent., and having a currency of twelve
months, to be payable at the end of the
year. In 1868 the bills will be renewed
for a small amount ; in 1869 they will be
renewed for a still smaller amount, and in
1870 they will be renewed again for a
smaller amount ; and so on until the deficit
is cleared off. I may state to the House
that the mode in which our revenue is re-
ceived renders this necessary. It is with
us either a feast or a famine. We receive
large amounts at one time and compara-
tively nothing at another ; so that while
our expenditure is uniform throughout the
yc;u- our receipts are not. I will read to
hon. members a statement showing this.
Taking the year 1866, we received in the
month of June 60,000 more than the
usual average, on account of the publicans'
licenses ; in September, 30,000 more
than the usual average by reason of tli<-
assessment on runs ; and in the month of

December, we received 359,150, or about
a fifth part of the entire revenue. So that
it must be obvious that as a matter of con-
venience to the Government a measure of
this kind would be advantageous. But
what renders it more necessary that some
arrangement of this kind should be made
is this fact, that although the amount due
for Treasury bills, 398,500, and the
amount due on short-dated debentures at
the end of the year, 100,000, are provided
for as between the public and the Govern-
ment as between the holders of bills and
bonds and the Government yet there is
due a large sum from the deficiency loan
account to the consolidated re venue account,
so that it becomes a matter of absolute
necessity to give us this issue to repay ad-
vances made to meet these sums at maturity.
It is, therefore, almost absolutely necessary
that a measure of this kind should be
granted by the House. I now arrive at
the account for 1868, and I am sure hon.
members will be glad to see that that
account shows an estimated surplus at the
end of the year of nearly 200,000. I
believe that this account will terminate
in a surplus of 196,902. It is not
the intention of the Government to
propose any new taxation. The Gov-
ernment is decided on that point. They
do not intend to propose any new taxation
except in one particular item. With
respect to the package duty, they are not
disposed to re-enact that measure. They
would certainly be justified in re-enacting
it, because, with a deficiency on Loan
Account of 250,000, they might reason-
ably decline to part with a shilling of
revenue. But as the Government propose
to issue bills to ease off this deficiency,
they have decided that they will not pre-
sent any proposal to re-enact the Package
Duty Act. That measure will die out at
the end of the year, never, I trust, to be
revived. There is nothing which has caused
so much inconvenience to the mercantile
community as this tax. It is objectionable
on many grounds. It is open to numerous
evasions, and it does not yield the revenue
it should do. Now, with reference to 1 868,
I may say I do not intend to weary the
committee by going into details with respect
to the estimated revenue, because it will
be the duty of hon. members on the
Opposition benches to point out what may
seem to be oviT-i-stunates, and I shall have

MR. EAGAR.

[1867.]

an opportunity of explaining. I shall
therefore merely state that having pointed
out what I think the proper disposal of the
surplus of 1867, I treat 1868 entirely on
its own merits. The account shows on the
debtor side an estimated expenditure for
the year, of 2,118,916. There are fur-
ther charges to be provided for by loan,
amounting to 309,507. On the credit
side there is an estimated revenue of
2,315,818, and 309,507 proposed to be
raised by loan, and supposing my calcula-
tions to be right, I make the estimated
balance at the end of the year 196,902.
It is the intention of the Government to
propose amendments of two Acts, namely
the Act imposing the ad valorem duty, and
the Stamp Duties Act. We have had a
Tariff Act, in operation since January
1866, which imposes ad valorem duties,
and the result is that the revenue has not
improved as it should have done. It has
been suggested that owing to the im-
perfect state of the law this Act is evaded
to a very large extent, and the honest
importer suffers. Several gentlemen have
called upon me and said, "We should
like to be without the ad valorem duty
altogether, but as long as the necessities
of the country require it, we beg of you
to make it stringent so that the honest
importer shall not suffer." We wish to
place all persons on the same basis, and, if
possible, prevent those frauds which we
have reason to believe are perpetrated.
And so with regard to the Stamp Act.
As we are bound to see that it gives
the duties it was intended to give, a Bill
will be presented to the House to make
the Stamp Act yield the revenue it should
yield, and to prevent evasions. The
only alterations with regard to taxation
are these with reference to the ad va-
lorem duties and the Stamp Act. Of
course we do not intend to raise the duty.
We merely intend to prevent frauds and
to give greater facilities to importers. I
have no doubt that we shall be able to
make such arrangements as will allow of
drawbacks in instances where packages are
broken. These are the only two matters
connected with taxation that the Govern-
ment intend to deal with, except one
other that is, they intend to fix a duty
on kerosene. The only tax at present
paid on kerosene oil, which is an article of
universal consumption, is Hd. per gallon

as package duty, and 1-Jd. under the ad
valorem duty. The Package Duty Act
will expire on the 31st of December of
the present year, and kerosene oil will
then be subject only to the small duty
of l^d per gallon. But under these cir-
cumstances the Government consider that
kerosene oil would be placed in a more
favourable position than other articles
imported under the ad valorem duty, and
they accordingly propose to place upon it
a duty of 2d. per gallon to the 31st of
December, 1867, and 6d. per gallon from
the 1st of January, 1868. Besides kero-
sene oil there are likely to be imported
large quantities of crude stuff capable of
being made into kerosene. On petroleum,
in a crude state, and on all liquid sub-
stances from which kerosene oil can be
extracted, the Government propose to im-
pose a duty of 3d. per gallon ; and upon
all such substances in a solid state, 2s. 6d.
per cwt. These proposals will be submitted
in due course. By this tax we expect to
raise 11,000 next year, which with the
surplus of 196,902, which I calculate on
at the 31st of December, 1868, will give
the Government atotal surplus of 207,902.
Of course my calculations may not be borne
out, and it will be open to hon. members
to examine them and point out where they
conceive that I am in error. Having dis-
posed of the public accounts for 1867 and
1868, I now come to our contemplated
loan of 3,000,000 and what provision the
Government contemplate making for the
construction of railways. I may state
what every hon. member must have long
since perceived, that in the present loan
system there are one or two great errors.
The first of these, and that to which I
attribute most of our misfortunes in a
financial sense, consists in not having, long
ago, when the money market was favour-
able and our debentures were high,
borrowed a sufficiently large sum of money
to carry out the necessary railway works
of the colony in anticipation of contracts
to be taken. The second fault consists in
our having taken loans without making
provision for a sinking fund by which to
redeem the debt. In illustration of the
first of these defects I may read to the
committee, beginning with the year 1858,
the amount annually realised by the sale
of our debentures and the rates of interest
obtained from the year 1859 to 1867. It

[1867.]

MK. EAGAR

203

will show to the committee that under the
system which obtains the amount of the
sales has been very irregular, and we have
iii-viT had enough money raised by our
agents, the Oriental Bank, in anticipation
of the contracts taken. In 1858 the total
amount of debentures sold was ,130,000,
and the rates averaged from 95 to 100.
In 1859 800,000 was sold at 97 to 103 ;
in 1860, 560,000 at 98 to 102 ; in 1861,
when our railway expenditure was at the
rate of half a million a year, only 206,000
was sold at 98 to 101 ; in!862,495,000
at 96 to 99 ; in 1863, 610,000 at 99 to
102 ; in 1864, when our debentures
obtained their highest price, the amount
sold out was 288,000, and the rates were
from 96^ to 102f ; and in 1865 the amount
placed was 292,000, at from 90 to 95.
Notwithstanding the small sales of deben-
tures in 1864 and 1865, we never stopped
the public works for a moment ; and hon.
members would at once see what a position
of embarrassment the Government were
placed in by the non-sale of these deben-
tures, and that would explain to the House
why he was obliged to put a pressure on
the Oriental Bank, the consequence of
which was that in September and Novem-
ber, 1866, 1,313,900 worth of debentures
were sold at from 85 to 90. In 1867 the
amount was 832,000 placed at 85i. The
committee will see from this short resume
that we were not wise enough when the
market was favourable to place on it
the five millions which would be required
to meet our contracts, and which we might
have had safely invested at interest.
Under our fitful and mischievous system
this five millions instead of being raised
in 1858 and 1859. has been doled out in
driblets up to 1867, when pressure was
brought to bear upon the Oriental Bank,
and they were obliged to desist from sell-
ing privately and were forced into the
open market. In 1866, 850,000 were
sold by tender for the first time ; and in
1867, 832,000 were sold by tender. So
that, under the existing system, we have
been ten years in realising 5,000,000
worth of debentures at considerable loss
to the colony, when we might during the
first and second yeai-s of that period easily
ha\ i-realized the whole five millions. Apart
from this, and the error in not providing
a sinking fund, the c-vmtry is landed in
this unhappy position that all these loans

are maturing at inconvenient periods, and
in such sums as it will be impossible by
any new "taxation to redeem. I blame no
one for the results of this system. It has
been adopted by my predecessors, and we
have all followed the ordinary usage. I
have now before me a statement of the
particulars of the public debt of the colony
of New South Wales on the 31st of August,
1866. From this it appears that our
public debt, in round numbers, is seven
millions and a quarter ; that is to say,
seven million and a quarter of debentures
have been sold. We have nearly two
million to pay within nine years, and I
ask the committee how that is to be paid.
The country cannot be taxed to pay any-
thing of the kind. The error was in not
making these debentures for long periods.
In 1869 we must pay 100,000 ; in 1870,
100,000; in 1871, 200.000; in 1872,
100,000 ; in 1873, 250,000 ; in 1874,
250,000 ; in 1875, 50,000 ; in 1876,
735,800. The amount which must be
provided for somehow or other in the next
nine years is thus 1,785,800. Then there
is a gap of twelve years. In twenty-one
years hence we shall have to provide for
half a million ; twenty-two years hence,
nearly 900,000 ; 23, 718,000 ; 24,
225,000, and 25 years hence, nearly two
million. I name these things not alone
to show the entire rottenness of the system,
but to point out that at no distant day we
must consolidate this debt. Before three
years are over we must go to the London
capitalists and consolidate this debt by
issuing debentures for a long period of
time, accompanied by such provision in
the shape of a sinking fund that the debt
may be extinguished. I mention it to show
our large obligations maturing, and the
duty which will devolve upon some Gov-
ernment or other to deal with this debt in
the shape of consolidation. All these
facts, supported by such inferences as I
have endeavoured to draw from them,
demonstrate, I think, these three positions :
that there is a vital necessity for a change
in the present loan system ; there must
be a change in the : form and character
of our debentures, which must contain
provision for a sinking fund ; and there
must be a change in the mode of placing
them on the market. The mode of placing
our debentures on the market which can
only realise five million in nine or ten years

204

MR. EAGAR

[1867.]

is a bad one. We should adopt some other
method, and I take it we should deal with
large contractors. Instead of tinkering
with our hundred thousand pounds, or five
hundred thousand pounds, we are bound
to go into the market and get a large loan,
sufficient to carry out our works, and leave
the market free for two or three years.
That is the way. Not to go in three or
four times a year for small sums, eternally
unsettling the market, the British capitalist
not knowing when you are going to cease
and disdaining a colony which only goes in
for half a million. We must go in vigor-
ously and distinctly for a loan of three
million and raise sufficient to benefit the
country in the expenditure for railways,
and in all the ways in" which benefit must
result from the introduction of three
millions of money. Conceiving that some
change is necessary, it is my duty to in-
form the committee that the loan project
we have in view is intended to carry out
these three objects. I will begin in the
first place with the change in the form of
our debentures. In this proposal for the
loan of three millions I learn by calcula-
tion that by the annual payment of
210,000 the loan will be extinguished in
twenty-six years. This debenture em-
bodies a new clause of this kind ; the sum
of 210,000 will be paid and applied by
the Government of New South Wales each
year in the following manner : First, for
the payment of interest on the bonds then
subsisting ; second, towards the reduction
and final extinction of the loan by a pay-
ment of 60,000, being a sinking fund of
two per cent, redeemed bonds to be deter-
mined by annual drawings at par ; and
third to the purchase of the bonds. The
committee will see that at the end of the
first year the payment of 210,000 will be
confined to the year's interest (150,000)
and to the year's paying off of 60,000.
[Ma. PIDDINGTON: What will be the
total amount required to extinguish the
loan of 3,000,000 ? I make it6,500,000.]
Those are particulars we can go into by
and by. These calciilations were made not
only by myself but also by an actuary. I
was endeavouring to explain how the thing
would work. For example, supposing a
loan were taken on the 1st January, 1868,
the 210,000 on the 31st December, 1868,
would be applied in this way : first,
150,000 for the year's interest, and

60,000 for paying off so much of the
money borrowed The capital sum will
thus be reduced to 2,940,000, and the
interest instead of 150,000 will be for
the following year 147,000, and so year
by year it will be reduced until in twenty-
six years it will be extinguished. Apart
from paying the interest and sinking fund
on existing bonds, there would arise from
a saving of interest a gradually increasing
fund to purchase the bonds of the loan.
I think my hon. friend in making his cal-
culations has added the interest. [MR.
PIDDINGTON : Of course I have taken the
total amount.] Well, we propose to make
that alteration in the character of our
existing system ; that instead of issuing
debentures which, by and by, might form a
large sum to be paid by posterity, we
propose a sinking fund which would ex-
tinguish this loan in twenty-six years.
With regard to the next proposition the
change in the manner of putting our loan
upon the market I have already stated
that I think a preferable mode to that of
employing a banking institution would be
to place our loans in the hands of some large
monetary house. I shall now state what
negotiations subsist between this Govern-
ment and such a house as that to which
I refer. A gentleman named Kohn
waited on me in October of last year, and
stated that he was authorised to treat
with the Government of the country in
the way of negotiating a loan on the part
of Messrs. Oppenheim, Alberti, and Co.,
of Paris, and Messrs. Fruelen, Goschen,
and Co., of London, firms of undoubted
standing and character in the financial
world. The proposition was made to me
in general terms. Shortly afterwards I
proceeded to Melbourne, and on my return
Mr. Kohn called upon me again and made
me an offer on behalf of the firms I have
mentioned. In my ignorance of the
character and standing of great houses in
the mother country (which I have never
seen) I thought it right to communicate
with the Government agent in London
(Captain Mayne), and request him to make
inquiries concerning the character and
standing of the house of Fruelen, Goschen,
and Co. [The hon. member here read a
letter in reply from Captain Mayne, which
commenced as follows : " 1 6th May,
1867. Dear Sir, In pursuance of the
wish conveyed in your letter of the 20th

[1867.]

MR. EAGAR

205

March last, marked private and confi-
dential, I have made inquiry and am
informed that the standing and financial
character of the house of Fruelen and
Goschen are high," &c.] With that
assurance of Captain Mayne's I thought it
a right and proper thing on the part of the
Government to enter into negotiations
with those parties. I did not make any
inquiries as to the firm of Oppenheim and
Company. I am told that they have been
negotiating large loans under favourable
conditions. [MR. SAMUEL : Did the hon.
member tell Captain Mayne the object of
his inquiry ?] I did not. I merely asked
Captain Mayne to report to me as to the
financial standing of Messrs. Fruelen and
Goschen, anft I have read his account to
the committee. Mr. Kohn made an offer
which I will read. It is dated 18th
July, 1867, and signed Joseph Kohn and
Co. It states that Messrs. Oppenheim
and Company are willing to take a loan
of two millions at 84 per cent. In case
the state of the money market on receipt
of the advice of the acceptance of this
offer should be so adverse as to prevent
the issue of the loan, Messrs. Oppenheim
and Company would nevertheless take
500,000 loan at 84, with the option
of taking the remainder 1,500,000 at
the same figure, or at such a price as might
be agreed upon by themselves and the
Government, and the debentures would
be issued in London, Paris, Amsterdam,
and Frankfort by the correspondents of
Oppenheim, Alberti, and Company. The
Government have conditionally accepted
this offer. That is to say, we have ac-
cepted it subject to Parliament granting the
loan. Of course if Parliament disapproves
no harm is done. The committee will see
that this offer applies to 2,000,000,
whereas the proposed loanisfor3,000,000.
A further part of our project is to offer the
remaining 1,000,000 on the joint account
of the contractors and the Government.
I think I shall be able to show the com-
mittee that this offer of 84 is equivalent
to 87. The offer is 84 net cash in
London without any charge for commission.
The Government would deal with this
money like men of business. Having two
or three millions in London to draw
against they would be in a position to go
into the market every month, and invite
tenders for their bills. They would draw

60-day bills and receive the exchange
of the day, 1|, or whatever it might be.
[MR. JOSEPH : You would soon so knock
down the exchanges that you would get
nothing.] These are entirely matters of
agreement. The rate of exchange must of
course be regulated by mercantile neces-
sities. No hon. member can say that at
the end of the year it will be 1 per cent,
or 6 per cent, premium, or 5 per cent, dis-
count. The Government having three
million at their disposal in London would
be able to do what the Commissariat did
years ago with their bills they can call
for tenders for say 100,000 a month
when the rate is high. Suppose, for in-
stance, the Government now called for
tenders for 100,000 bills on London, the
rate of exchange being 1, the operation
would be this : every 84 we drew for
upon London would be at sixty days and
a two month's passage would give us 4
month's interest, or equal to 2 per cent.,
so for every 84 we should get in this
country 87. But what the Government
would do would be this. They would call
for tenders. They would not borrow this
money to meet past obligations, but they
would store it up, and then no matter
what may happen on the Continent of
Europe, or what war may take place, we
could draw upon it at our convenience
when exchanges were favourable. We
should let it out at interest, so that it
might fructify. [An hon. member : Then
the Government would become money
lenders.] It is better that we should
become money lenders than borrowers
from local institutions. I have shown
that instead of 84 we shall get 87, and
I invite comparison between the last reali-
sation by means of the Oriental Bank and
what this loan will produce. The net
result of the last realisation by the Ori-
ental Bank was, if I recollect aright, only
close up to 81 per cent. I distinctly
guard myself from imputing blame to that
institution, but I think I am right in
stating that the last sale when money
was at 2 per cent was only 81. Here,
however, we are offered a price which
will give us 87 net cash, and the con-
tractors will take all the risk of an in-
creased value of money or the contingencies
of a war in Europe. The Government
thought it right to make a conditional
acceptance of this offer, subject always

206

MR. EAGAR

[1867.]

to the approval of Parliament. I will
now state the main reasons which in-
duced us to make this conditional accept-
ance of the offer. The first was that we
should get our money at once ; that the
contractor, in point of fact, would take all
the risks which may or may not occur
between the time of making this offer and
the time the debentures would reach the
London market. No man can say what
the value of money will be in the month
of December. No man can say that in
the month of December next there may
not be a European war. But this is clear
if we want to borrow money for railway
purposes the thing is to do so when we
can, and leave others to take these risks.
If we pretend to deal with the loan in any
other way, we shall never get the money.
The second consideration was this : that
by dealing with these large contractors we
should introduce Colonial securities for the
first time to continental markets. Hitherto
our securities have been placed in London
only, but if this agreement were approved
they would be placed also in the exchanges
or bourses of Paris, Amsterdam, and
Frankfort. Thus, for the first time they
would have a world-wide currency. The
third consideration was this : the ultimate
result of this operation, carried out to its
legitimate result, must be to raise the
whole value of our public debt. If by
this operation our debentures were intro-
duced to the money markets of the Con-
tinent there could not be a doubt that the
result would be a permanent rise in the
value of our public debt, and as a con-
sequence we shall get a higher price for
our securities when we again go into the
market. I trust that these considerations
will also weigh with the committee. I
have observed enough from what has
already taken place to see that certain hon.
members are likely to meet the conditional
negotiation with opposition. Of course
we are entirely in the hands of the House.
If hon. members do not ratify the agree-
ment no harm is done. I have no doubt
some hon. member will be ready to try to
prove that great damage has been inflicted
on this colony, but I do not think they will
be successful. At all events we have left
this to hon. gentlemen on the Opposition
Benches. No doubt they will endeavour
to damage us and the loan as much as
they can. I shall now endeavour to meet

by anticipation some of the objections. If
the debate is adjourned I shall, of course,
have ample opportunity (the House being
in committee) of answering other objec-
tions as they are raised. [Mr. FORSTER :
How is the interest to be raised "?] That
is coming presently. I am taking things
in an easy and logical way. Now, hon.
members may say, as one has already
said, the price is too low, and we shall be
told that a much higher price can be
got in the London market that, having
regard to the value of money and latest
quotations of debentures, a higher price
will be got in the London market. With
every respect for the opinions of hon.
members here, I cannot but say this, that,
unless hon. members have some miraculous
power imparted to them, we are all on a
footing of equality, and no .man in this
country is better able to predict the state
of things in December than myself. With
regard to this power of prophesy we
all stand on a footing of perfect equality,
and I have as much right to my own
opinion on the matter as others have to
theirs. But there is the authority of a
different kind to which I can refer an
authority in London itself and that
authority I shall proceed to read to the
committee, and the committee will be
enabled to see what probability there is of
putting a loan upon the London market
this year at all. It does not resolve itself
into a question whether you can get a
higher price or not, but whether you can
raise a shilling in the London market during
the currency of the present year. I cannot
quote a higher authority than that of the
Oriental Bank Corporation in London. In
common no doubt with many hon. members
of this House, I shared the opinion that
because money was low in London, Aus-
tralian securities necessarily should rise in
value. It is an obvious opinion for any
man to form. The natural inference
would be if money is 2 per cent, our
securities ought to sell rapidly at a higher
price. But those higher authorities, the
Oriental Bank Corporation, tell us that it
is not the state of the case, and that there
is no necessary connection between the low
value of money and a high price of our
securities. The Oriental Bank, writing
on the 23rd of April, 1867, rebuked me
for entertaining this obvious opinion, and
the local manager says " No mistake can

[1867.]

MR. EAGAE.

207

be more palpable than to suppose, because
it is a year of peace and money in London
is abundant, that Colonial and other securi-
ties necessarily become easier of sale." It
does not follow that because money is
unusually cheap Australian securities must
necessarily sell. We have got that delu-
sion dissipated. Cheap money does not
raise the price of our securities. This
gentleman goes on to show that "the
presentation of continuoiis loans on the
London money market must be fatal to the
credit of any Government, although our
manager is doing the best he can to sell
bonds on hand. His opinion is against
disturbing the money market again for
twelve months, and that the propositions
to borrow should be accompanied by one
for a sinking fund." Mr. Murray also
enclosed a quotation from a letter from the
London manager, dated 14th June, 1867,
in which he says " we must assure the
public that no loan beyond the ,832,000
will be introduced this year." What does
all this meditated opposition amount to.
Hon. members sixteen thousand miles from
the market, and with no miraculous know-
ledge of events may say we can get a
higher price than 84 if we place the loan on
the market ; but the Oriental Bank says
you cannot place another shilling on the
market this year, and you cannot get a
higher price. I leave the committee to
say whether at this distance of time
they are able to calculate contingencies
whether they can say a loan of this kind
could be placed upon the London market
at a higher price than 84, when the London
manager of the Oriental Bank says, there
has been a practical exclusion from the
London market of any further loans
during the present year. So that having
regard to this fact, if we are to avail
ourselves of the low rate of money in
London, and raise our loan before the
commencement of next year, and avoid the
risk of the great war in Europe, which so
many prophesy as imminent, we are bound
to bring our loan out as soon as possible,
we are bound to have our loan in the
London market in 1867. But then, the
Oriental Bank says it cannot be done.
That is one of the reasons why the Govern-
ment propose to adopt what is not an
ordinary course. Hon. members, no
doubt, will refer to last quotations from
London and say, how can you expect

us to consent to a proposition for 84 ?
I have in my hand a telegram received
by the last mail to this effect "New
South Wales long-dated debentures 89 \
to 90." I put it to hon. members of
this House whether if our loan of three
million a project to increase the debt of
the colony 50 per cent, was in London at
the time, it would not have caused these
prices to recede 1 These prices which
ruled two months ago were current when
the public debt was known ; but had these
three millions worth of securities been in
the market at the time, and the project of
this loan launched, I appeal to the com-
mon sense of hon. members whether, with
this addition to our liabilities, the prices
would have remained at 89 to 90. It is
an observation of the idlest kind to say that
because the prices two months ago ruled
at 89| to 90|, that state must remain un-
altered when the state of facts is entirely
changed. There is another point to be
observed. It is this : supposing this offer
of 84 is taken, the contractors run the
risks, and give us our money free of
charge. [Mr. SAMUEL : But there is no
guarantee that you will have the money.]
All I have said is that it is a conditional
offer conditionally accepted, and in that
shape I have put it to the House. The
contractors run the risk at all events to
the extent of half a million. They run
the risk of increased value of money and a
European war. We all know that cheap
money makes dear money, and vice versd.
If the loan were granted to-day the
debentures could not reach London till
December; and who is to say what the
value of money will be then, and what the
state of the Continent of Europe ? On this
view of the case, believing there is a neces-
sity and a desirability of pressing on our
railway works to certain paying points,
knowing the value of money is low, and
seeing that we have an offer of thia
kind, such as it is, the Government felt
itself justified in accepting the offer, sub-
ject to the approval of the House. By
this project we shall in reality be borrow-
ing three million in face of the risks of
possible war, that some regard is immi-
nent at less than 6 per cent. I have now
come to the last proposition with whu-li I
have to deal, and that is to point out in
what way we make provision for 150,000
interest and 60,000 sinking fund for

208

MR. EAGAR

[1867.]

1868. I require now merely to state how
I propose to make provision for it. I have
already shown by the accounts for 1868
that we estimate a surplus of 196,902,
and by our new impost on kerosene oil
11,000, making a total of 207,902 with
which to pay 210,000, and irrespective
of this sum we shall have the interest on
the temporary investment of the money.
If this loan were granted we should invest
it, and the interest obtained will go with
this surplus at the end of the year, with
the results of the new impost to form an
ample fund out of which to make the first
payment. As regards future years we
have a provision by means of the new
Land BUI. Should that Bill pass, we
have a very large contribution towards the
annual payment of 210,000, without in-
flicting a single further tax on the people
of the country. If our Land Bill pass,
and more problematical things have hap-
pened in this House to my own knowledge,
our position will be this : We will not
derive from it, during the year 1868, any
addition to our land income ; but during
1868 those provisions will come into effect
for reappraising the runs, which will cause
an increase of revenue in 1869. What we
expect from the operation of that year
is an increase of the land revenue to
the extent of 150,000 a year. The
present revenue derived from squattages
is 280,000, and the same will be received
next year ; but the year after, and follow-
ing years, I expect to receive an addition
under the new Land Bill of 150,000, to
be obtained on a fair appraisement of the
squattages of the country. From these
sources, without a single additional tax
upon the people of the country, I expect
sufficient revenue to pay the interest of
this particular debt, the object of which is
to extend the railways of the country, and

among the very people whose contribu-
tions will assist in paying the interest. I
have now to thank the Committee for the
very patient attention they have accorded
me, and will endeavour to summarise in a
few words the result of my observations.
I have endeavoured to show the committee,
in the first place, a legitimate mode by
which, without further taxation, we should
be enabled to tide over the payment of the
balance of our deficiency loan of 250,000
with the surplus of future years ; I mean
by the issue of Treasury bills payable at
the end of 1868. I have shown a surplus
available for the first year's interest on the
loan. We have projected this loan for the
first time in our Colonial history on the
basis of a sinking fund, which, in twenty-
six years, will extinguish the 3,000,000.
We have done all this, of course, subject
to the approval of Parliament, and we
have done it in a way which we think
ought to meet with the approval of the
committee and of the country. We have
done it without new taxation, with the
provision of a sinking fund, and we have
also made what we consider a fair nego-
tiation for a loan. We have proposed to
do that which will bring three millions
into this country, more than half the
capital of the nine existing banks, the
expenditure of which will be the means
of extending railways to points at which
they are likely to pay, and also afford
legitimate means of giving employment to
a large amount of labour which, under the
operation of our Land Bill, we hope to see
introduced, and that of a good and an ac-
ceptable kind. I now beg to move,
"That towards making good the supply
granted to Her Majesty, there be granted
out of the Consolidated Revenue Fund a
sum not exceeding 1,455."

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SAUL SAMUEL,

made 7th January, 1869.

[From the Sydney Morning Herald of 8th
January, 1869.]

LEGISLATIVE ASSEMBLY.

Thursday, 7 January, 1869.

FINANCIAL STATEMENT.

Mr. SAMUEL said : In submitting to
the committee the financial statement, I
feel that I labour under great disadvan-
tages. During the short period I have
been in office I hav^ had very many im-
portant matters to attend to, and my
thoughts have been so distracted by events
which have occurred, that I have not been
able to devote that attention to the prepa-
ration of the financial statement which
was so necessary for its satisfactory pre-
sentation to the committee. I feel, too,
that the time is most inconvenient for
making provision for the year upon which
we have just entered, and I feel also that
I labour under considerable difficulty from
the fact that until I came down to this
House I hardly knew whether I should be
permitted to make the statement to-night
or not, as might be seen from what had
occurred. It would be in the recollection
of the House that when, in the course of
the year 1867, the late Colonial Treasurer
made his Financial Statement, doubts were
expressed whether the hon. member's
anticipations as to the prospects of the
future financial position of the country
would be realised. I think it will be
admitted (when the statements which I will
shortly have the honor of laying 011 the
table are explained and understood by hon.
members) that the fears which were then
expressed by myself and others when on the

other side of the House were not without
foundation. Hon. members were told by
the hon. member. (Mr. Eagar), that if the
Committee consented to allow the esti-
mated surplus of 1867 to be carried over
to 1868, to supplement the revenue of that
year, there would be sufficient ways and
means to meet the estimated expenditure of
1868. The statement which lam about
to submit will show how far short the
hon. gentleman was in his calculations,
and how far the Opposition were justified
in taking the course they then considered
it their duty to take. I will now ask the
Committee to look at the balance-sheet
which I shall lay before them. Whatever I
may advance with regard to my predeces-
sor's treatment of these matters, I wish it
to be understood that I do not say it in
any party spirit, or from any desire to
damage the hon. member, but simply in
order to justify my own conduct, when in
opposition, and to show the true financial
position of the country. I claim attention
first, to the balance-sheet for the year
1867, which I have endeavoured to simplify
as much as possible so as not to overwhelm
hon. members with statements which are
unintelligible and irrelevant. I have
started with the ascertained cash balance
in the books of the Treasury on the 31st
December, 1867. I have charged on the
debit side all the payments made against
that*balance, and given credit on the other
side for all additional receipts. The esti-
mated surplus which I bring down at the
end of 1867 is 67,726 2s. 5d. That was
a balance which the hon. member (Mr.
Eagar) estimated would be 150,000. I
will presently reconcile that balance with
the balance which the hon. member left in

210

MR. SAMUEL,

[1869.]

the Treasury, as shown by the statement
made up in July last. The deficiency at
the end of the year 1868, which the hon.
member told us would be 17,000, turns
out to be a deficiency of 157,454 3s.
I cannot help referring to what has taken
place before this. Hon. members would
recollect that the late Colonial Treasurer
made a series of financial statements, and
it was necessary to refer to those state-
ments to enable them to compare the results
of 1867 and 1868, as now ascertained, with
those shown by the hon. member. When
the hon. member made his financial state-
ment on the 27th September, 1866, he
estimated that he would have a surplus in
1867 of 310,077. On that occasion the
House accepted the statement of the hon.
gentleman. They passed his Estimates
on the assumption that that balance would
be realised ; but it was far from being
realised. On the 12th September, 1867,
a year afterwards, the hon. gentleman
made another financial statement, and
estimated the surplus for 1867 at only
251,951. Members of the Opposition
strongly asserted that these estimates
would never be realised ; that the hon.
gentleman's anticipations were gross ex-
aggerations. On the 9th of March, 1868,
the hon. gentleman made another state-
ment, in which he estimated his surplus at
153,094 9s. 6d. This was" the balance
which had dwindled down to 67,726 2s.
5d. The actual state of things was this :
At the end of last year (1868), taking
credit for the surplus from 1867, we had a
deficiency of 157,454 3s. When the
hon. member retired from office he left a
statement, in July last year, wherein he
estimated that he would have 106,000
deficiency. That deficiency had become
increased by a larger Supplementary Esti-
mate than the hon. member contemplated,
and winch reconciles his deficiency with
that now exhibited by me. For the present
I will leave 1868 and proceed to deal with
theyear 1869. Turning to the account for
that year hon. members will find that I
have brought down an estimated surplus
of 31,123. In order to effect this I have
credited the account with 100,000, pro-
posed to be raised by loan, in order to meet
an equal amount of short-dated debentures,
which will fall due at the end of the year
the account, as will be seen, being charged
with that liability. I think I shall be

able to show that I am perfectly justified
in adopting this course. In 1865 I went,
with Mr. Cowper, into office as Colonial
Treasurer, and then found a deficiency of
800,000, represented by Treasury bills
and short-dated debentures, and I sought
to provide taxation to meet that deficiency.
I now find that that deficiency has been
increased to 850,000 ; the increase, I
believe is accounted for by the debentures
issued to meet these deficiency loans having
been sold considerably under par. Having
been only two months in office, and having
been met with an amount of obstruction
almost unprecedented, it has unfortunately
fallen to my lot a second time to provide
for this deficiency, increased, as I have
said, by 50,000. The hon. and learned
member for the Lachlan stated the other
evening that this was not a time to
have recourse to increased taxation, and
as I perfectly agree with him, I shall be
prepared to show that I will be able to
deal with this matter without resorting to
the imposition of increased fiscal burdens.
I am not going to shirk the responsibility
which rests on my shoulders to provide for
this deficiency loan. But I desire to show,
first, what was done in 1865 with reference
to these deficiency loans, and particularly
the course I took myself in regard to
the matter. I believe that the greater
part of the increased expenditure which
absorbed the taxation of 1865 to 1868
was justifiable ; but I hold that when a
Government proposes increased expendi-
ture that same Government has a right
to provide ways and means to meet it.
This, however, had not been done. From
the year 1865 to 1868 we had levied extra
duties in the following way : In 1865
for package charge, 31,269 7s. 6d. ;
for ad valorem duties, 2,012 15s. 7d. ;
for stamps, 33,700 15s. Id. ; making a
total of 66,982 18s. 2d. In 1866, pack-
age duty, 45,468 17s. ; specific duties,
21,794 7s. lid. ; ad valorem, 156,350
6s. Id. ; stamps, 65,870 15s. 5d. ; total,
289,484 6s. 5d. In 1867, package duty,
40,473 ; specific duty, 17,737 2s. ; ad
valorem, 104,739 Is. lid.; stamps,
62,853 3s. 7d. ; total, 225,802 7s. 6d.
In 1868, package duty, 2 4s. (in that year
the Act expired) ; specific duties, 24,329
Os. 3d. ; ad valorem duties, 129,477 13s.';
stamps, 62,251 19s. 4d.; total, 2 16,060
16s. 7d. The grand totals were for

[1869.]

MR. SAMUEL.

211

package duty, 117,213 8s. 6d. ; specific
duties, 63,860 10s. 2d. ; ad valorem
duties, 392,579 16s. 7d. ; stamps,
224,676 13s. 5d. In all, 798,330
8s. 8d. This increased taxation was
specially levied to meet the deficiency loans.
I shall now show the Committee how it
has been absorbed by reading from a
return which I have had prepared. The
following is a statement of increased ex-
penditure and new services since the year
1864. Althdugh I have the details here
I will only read the totals : Interest on
debentures and treasury bills, 276,281
1 7s. 4d. ; interest on temporary loans and
bank overdrafts, 64,158 lls. 7d. ; public
instruction, 38,000 ; Panama postal
services, 131,984 Os. 3d. ; railway work-
ing expenses, 54,857 10s. 8d. ; public
works, 60,432 Is. lOd. ; reformatories
and industrial schools, 19,045; Mint,
additional under 28 Victoria, No. 3, say
6,000; Stamp Department, 5,528 lls.;
reception expenses Duke of Edinburgh,
25,175 Os. 7d. ; stores and stationery,
21,739 7s. 6d. ; appraisement of runs,
15,986 lls; Volunteers and Naval
Brigade, 17,923 lls. 5d. ; military,
22,834 6s. 5d. ; charitable allowances,
41,540 Is. 5d. ; total, 801,486 lls.
This increased expenditure was about the
amount of the extra taxation. There were
343,200 Treasury bills outstanding pay-
able in April. There were also short-
dated debentures outstanding on account
of deficiency loan, due as follows, namely :
On 31st December, 1869, 100,000;
December, 1870, 100,000; December,

1871, 100,000; and at the end of

1872, 50,000. Adding to these sums
157,454 deficit for 1868, the amount was
850,674.

Mr. PIDDIXGTON : What is the amount
of the outstanding short-dated debentures'?

Mr. SAMUEL : On account of the
deficiency loan or altogether ?

Mr. PIDDIXGTON : On account of the
deficiency loan.

Mr. SAMUEL : 350,000, and there was
a deficiency at the end of last year of
157,454. The hon. member (Mr. Eagar)
paid off deficiency loans to the amount
of 250,000.

Mr. PIDDIXOTOX : Part of that is on
account of Treasury bills.

Mr. SAMUEL : Yes ; but by paying
off those Treasuiy bills and short-dated

debentures it leaves the deficiency exactly
where it was, or as nearly as possible?.

Mr. EAGAR : The hon. member is
mixing them all up together.

Mr. SAMUEL: I am, because I want
to show our financial position. They will
all have to be paid, whether Treasury bills
or short-dated debentures. The hon. mem-
ber paid off these Treasury bills and short-
dated debentures out of funds which left
him with another deficiency.

Mr. EAGAR : Of less amount.

Mr. SAMUEL: Now, I shall be com-
pelled to say that which I did not intend
to allude to. The hon. member borrowed
100,000 more than he ought to have
borrowed, and paid off 100,000 with
borrowed money ; and if he borrowed
money to pay off an obligation, it of course
left him exactly where he stood before.

Mr. EAGAR : On better terms.

Mr. SAMUEL : Taking the short-dated
debentures and Treasury bills which re-
present the whole outstanding deficiency
loan, and taking also the deficiency at the
end of 1868, it cannot be denied that our
deficiency is the same as when I went into
office in 1865.

Mr. EAGAR: I deny that, and will
show to the contrary.

Mr. SAMUEL : I shall be glad to hear
the hon. member's explanation. If he ad-
mitted that there were outstanding,
358,000 short-dated debentures, and
343,200 Treasury bills, and that the
deficiency at the end of 1868 is
157,454, it is difficult to see how he
can fail to admit a total deficiency of
850,000. However, I shall leave the
matter in the hands of the House. With
regard to this deficiency loan, I disap-
proved, at the time of the plan of issuing
Treasury bills. I disapproved of the plan
which brought back upon the Treasury a
charge of 400,000 or 500,000 every
year. I have no doubt it was favourable
to the banks, but it was not so for the
Government of the country, for, in times
of pressure, the banks would come down
upon the Treasury for payment. It was
a plan I always disapproved of because it
was fraught with danger to the Govt-rn-
ment in a country like this, win re money
was fluctuating. In times of plenty, no
doubt it was good, because then the banks
had their coffers full ; but in times of
pressure they would not hesitate to press

212

MR. SAMUEL.

[1869.]

for payment. We had also 100,000 of
short-dated debentures falling due every
year. The interest on our public debt
amounts to half-a-million of money, and
that, with all these large sums, was more
than we should be called upon to provide
for in one year. I have a plan to propose
to the House, which is not fraught with
so much danger, which will not make
increased taxation necessary, and which I
shall propose, if permitted, by-and-by
not this session, and fortunately there was
no necessity for any immediate action,
because we could provide for this loan
by again issuing Treasury bills. [Mr.
PIDDINGTON: Hear, hear.] Well, the
hon. member would not expect me to
come down now with such a proposition,
as that he meant to propose ? The pro-
position is that we should have a small
funded debt for the colony, independent
of the debts in the London market a
funded debt which would enable people to
invest their money here, and on which
there would be no interest sent out of
the country every year. Trustees in the
colony had a difficulty in finding invest-
ments when they wanted them. This
fund would give such, while the debt itself
might be paid off or provided for by
small instalments. There will be no diffi-
culty in disposing of Government securities
such as I speak of to the amount we
require, say one million. I should be sorry
to see this loan go out of the country, but
would prefer that it should be negotiated
here, and the interest kept amongst us.
With a little foresight there would be no
difficulty in dealing with this matter ; and
I have 110 hesitation in saying that such a
loan as this, bearing 5 per cent, interest,
would go off readily, at a premium. We
might annihilate the debt in about thirty
years, without feeling any pressure from
it, and it would be a matter of very great
relief. The hon. member opposite laughed,
and I can easily understand why. It is
because he knows, as we all know, how
difficult it is to annihilate a debt by means
of a sinking f jmd ; we could however guard
against an improper application of
the sinking fund. [Mr. PIDDINGTON :
You have done so with the short-dated
debentures.] The amount proposed then
was much too large to be paid off in one
year ; and I am sure the hon. member for
the Hawkesbury will admit that I said at

the time the amount was too much to set
aside every year. A Treasurer has to
look at all the probable charges for new
services that will come upon the country
every year in addition to the ordinary
expenditure, and provide for meeting them
all. I am quite sure that the course which
I indicate is desirable, and that when hon.
members consider the matter they will
see it is a prudent way of meeting this
deficiency loan. Before I refer in any way
to other matters I will allude to the
public debt of the colony, of which I have
had a return prepared to show how the
debentures fall due. This return shows
the exact due dates of the debentures, and
that the whole of the public debt of the
colony is 9,585,830. In certain years
large amounts fall due, and therefore the
question of the consolidation of the public
debt, in order that the inconvenience and
difficulty of having these large amounts to
provide for in such unequal sums, pressed
itself upon the attention of the late
Treasurer, as indeed it must do on every
one who occupies his position. But the
consolidation of the public debt was not
to be done off-hand in the way the hon.
gentleman, and his colleague, the hon.
member for the Lachlan, spoke of. It was
not always easy to consolidate the debt of
the country; and when our debentures
are at 102 and 103, as they now are, the
consolidation of the debt would be difficult.
However, next session, I will, if in office,
be prepared to submit some scheme for
the consolidation of our public debt, by
which to provide some day or other for
its extinction. I am not prepared at this
moment to submit any proposition, but I
desire to call attention to the question,
and while doing so I desire to refer to
the sale of the million loan which took
place recently in England. I am glad to
say that that loan has been most satis
factorily placed upon the London market.
The highest price offered for our debentures
was 102, and the lowest 98 Os. 6d.,
giving an average of 96 4s. 2cl. [Mr.
PIDDINGTON : 99.] No; the charges,
which are rather heavy, make up the
difference. The average rate in the gross
was 98 3s. 4d., but then there were the
accrued interest, 17s. 4d. per cent., given
in, which amounted to 8,666 13s. 4d. ;
discount on payments in full, 433 14s. 4d.;
brokerage, 4,965 10s. ; bank commission,

[1869.]

MB. SAMUEL.

213

half per cent, 5,000 j advertising,
503 13s. 6d. ; and other charges,
13 8s. 6d; total charges, 19,582 19s. 7d.
Deducting these charges, the average price
was 96 4s. 2d. for every 100. Although
these charges entailed a loss upon us the
sale itself was most satisfactory. I do not
choose to make any observations on my con-
duct in regard to this matter, but I am
glad to learn that the loan has realised so
well. I consider that our agents the
Bank of New South Wales and the
Messrs. Rothschild have managed the
loan in a manner which reflects the
highest credit upon them. Having re-
ferred to the deficiency loan, the public
debt, and this million of debentures, I now
wish to refer to the state of the banking
account when I took oifice, and its con-
dition at the end of last year. We heard
something about this banking account when
I took office, and although I am sorry to
have to refer to anything which has been
said, still I think it is only right that a
wrong impression with regard to our posi-
tion should not go abroad. When I took
office on the 27th October, 1868, the cash
balance to the credit of the Government in
the Bank of New South Wales was
204,269 10s. lid. [Mr. EAGAR : Hear,
hear.] But my hon. friend who cheers
me might have stated that to make up
that balance he had borrowed 150,000.
[Mr. PIDDINGTON : How did he borrow
it ?] From the bank of New South Wales
on the million loan. [Mr. PIDDINGTON :
That does not matter.] Of course the
statement made by my hon. friend behind
me (Mr. Sutherland) was a mistake.
On the 31st December, 1868, we had paid
off the amount borrowed, and had a balance
of 1 38,000 at the end of the year. Hon.
members must not confuse the balances in
the bank Avith those of the Treasury books,
because we might have balances in the
bank and at the same time liabilities far in
excess of those balances. There is another
statement I should like to have submitted
to members, but which is not yet complete.
Having got the amount of the loan ac-
counts, I was anxious to get a statement
of the liabilities against them that is
the whole of the contracts outstanding
to ascertain whether- the debentures issued
would be sufficient to meet such claims.
I believe the loss upon our debentures
that is to say, the difference between the

amount obtained and the amount author-
ised to be borrowed would be something
like 500,000. We have in point of fact,
received less from our debentures than
they represented in money, to the extent of
500,000. I merely mention this inci-
dentally, and will lay the statement re-
ferred to on the table as soon as possible.
I should like also to say one word about
the course I propose to take with respect to
the deficiency loan. In asking the House
to assent to the proposition I have hinted
at that is, that we should raise a loan for
a longer period than that of either the
Treasury bills or short-dated debentures
I have a justification for that course by one
proposed by the late Government. I found
a bill of theirs in the Treasury in which they
proposed to add the whole of the deficiency
debt to the public debt of the colony. I
do not wish to justify anything I do by
the action of the hon. gentlemen opposite,
but I wish to show that they contemplated
doing this, and that the only difference
between their plan and mine is, that I
wished to keep the money in the colony.
I have had another return prepared which
may be interesting ; it is a return showing
what the appropriations of Parliament are
for the services of the year 1857, and what
they are estimated to be for 1869. I
do not know that much can be gathered
from a return of this kind, except that it
is interesting as showing in what respect
our expenditure was increasing. It would
be tedious to read the details of the appro-
priations for the different departments,
but I will give the totals. The total a|>-
propriations for the year 1857 amounted
to 1,195,765, and the estimated appro-
priations for 1869 to 2,135,449. The
expenditure per head of the population in
1857 was 3 18s. 3d., and it was esti-
mated that in 1869 it would bo 4 1 Is. 7cL
Leaving out the intc rest on the public debt,
the difference per head in the ordinary
expenditure would not be found very great.
In 1857, the population w;ts 305,487 ;
at present it was about 466,000. I now
desire to say something about the Esti-
mates. I do not hesitate to say that the
Government have had very little time to
go through them. After taking off the
increases, and two or three items that we
thought objectionable, such, for instance,
as that for the proposed im jrovemente in
the Parrainatta Kiver, wo have taken the

214

ME. SAMUEL.

[1869.]

Estimates of our predecessors. Any con-
demnation of the Estimates therefore
would fall upon them. But the present
Government are prepared to do their
utmost to reduce the expenditure of the
country. They will do their best to keep
the expenditure within the income. We
will not increase the large deficiency
already accrued, and if we find additional
expenditure necessary we shall submit pro-
positions for additional ways and means.
We will keep the expenditure within the
income, but more than this we are not in
a position to promise at present. With
regard to the Estimates I impressed upon
the heads of departments the necessity of
putting into the Estimates-in-chief all that
would be necessary, in order to avoid com-
ing down with a large supplementary esti-
mate, and so putting me in a false position.
The increased expenditure set down in the
Estimates was brought about by no fault
of the present Government. 40,000 of
the increase was for working expenses of
the railways, and I have myself added
10,000 more, so that I shall not have
to come down with a large supplementary
estimate. I have therefore endeavoured
to submit the Estimates truthfully, and I
think the House need not look for any
large supplementary estimate next year.
I find that there are savings effected every
year to the extent of about 100,000,
which have generally been absorbed by
the supplementary estimates, but I hope
so to keep the expenditure down as not
to swallow up these savings, which will
increase my estimated surplus for 1868.
I find that the salaries for the Civil
servants (including the Police) amount
to 560,742. This is a very large
item, but the Government have not yet
had much time to ascertain to what extent
it could be reduced. It required a con-
siderable amount of courage to perform
this most unpleasant and unpopular duty.
In most instances the salaries are not too
high ; but I am under the impression that
there are too many persons employed
more than the necessities of the Public
Service require. I have commenced with
the pruning knife, and have made some
reductions in my own department, and
in doing this I have been actuated by a
sincere desire to serve the country. I
now come to the question of which hon.
members have heard so much the policy

of the Government. In the first place, we
desire to remove any restrictions existing
upon trade. The 5 per cent, ad valorem
duties do not affect free trade or protection,
but they are an undesirable form of taxation.
My hon. friend and colleague, the Colo-
nial Secretary, when referring to them, said
it would be desirable to abolish these
duties gradually, but I think it will be
preferable, when we touch them, to get rid
of them altogether. They were demoralis-
ing, and unjust to the honest trader, and
they opened the door to an amount of
fraud that could scarcely be checked. The
revenues derived from them could be
raised by other means. I will take care
that every one who ought to contribute to
the revenue of the country shall bear his
just proportion. It would be impossible
to devise a scheme that would be accept-
able to all ; but when any additional taxa-
tion becomes necessary, I will endeavour
so to arrange it that it shall be equit-
able. We have been invited by the
Government of New Zealand to an inter-
colonial conference, with a view to arrange
some important matters in connection with
trade. I have suggested some additional
subjects that I think we should confer
upon, such as a Customs union and a uni-
form tariff. If a Customs union and
uniform tariff were agreed to by the
colonies it would be a great boon. We
have been invited by the New Zealand
Government to consider the best means to
obtain admission for the wool of these
colonies into the United States free of
duty. I do not know of any circumstance
that pointed more directly to the advan-
tage of free trade than this, and it was
only by reciprocity that we could hope to
obtain this. [Mr. LORD : We do not
tax the produce of the United States.]
Our ad valorem duties taxed the produce
of every nation. I am glad to see that
the feeling is gaining ground that there
ought to be free trade in intercolonial
produce, and we are endeavouring to bring
about so desirable a result. [Mr. LUCAS :
You won't do it by abolishing the Custom-
house.] We do not intend to abolish the
Custom-house ; but so far as I can in
imposing Customs duties, I will fetter com-
merce as little as possible. With a Cus-
toms union all revenue could be collected
and divided ratably according to popula-
tion and consuming powers. This is no

[1869.]

MR. SAMUEL.

215

new idea of mine, for in 1865 I submitted
a resolution to tliis House to the effect
that it was desirable to have a Customs
union and a uniform tariff". I now
come to the Panama Mail Service. There
is no doubt we have effected a saving by
the cancellation of the contract with the
Panama and New Zealand Mail Company.
I do not hesitate to say that I am very
glad of it. This mail service has not been
without its advantages, but it did not
realise all that was expected of it. The
unfortunate mail company, however,
faithfully performed their contract up to
the time of their failure, and I think it is
entitled to the sympathy of hon. mem-
bers in its present position. The agents
of the company have given the Government
notice that the service will cease, and
that notice has been accepted as a cancel-
lation of the contract. There were
advantages arising out of the service ; but

so far as we are concerned we are well rid
of the contract I believe I have now
touched upon most of the matters with
which I had to deal If I have omitted
anything I shall be happy to give all the
information in my power to those hon.
members who may desire to be further in-
formed. I have to thank hon. members
for the patient hearing they have given
me, and to express a hope that if I remain
in office, and have again the honor to make
another financial statement, I shall have
to congratulate them upon a larger surplus
than I can show at the present time, and
that the country is in a state of greater
prosperity. I now beg to move that,
towards making good the supply granted
to Her Majesty, the sum of 1,650 be ap-
propriated to defray the salaries and con-
tingencies of the establishment of His
Excellency the Governor.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SAUL SAMI I;L,

made 14th October, 1869.

[From the St/dney Morning Herald of 15th
October, 1869.]

LEGISLATIVE ASSEMBLY.

Thursday, 14 October, 1869.

FINANCIAL STATEMENT.

MR. SAMUEL, said : It is now my duty
to submit the financial statement. I have
to state to the committee the estimated
expenditure for the year 1870, and show
how I propose to provide Ways and Means
to meet it. I have also to submit to the
committee the accounts for the current year
as well as those for past years in order that
hon. members may understand clearly the
financial position of the country. I shall
not trespass on the time of the committee
by any prefatory remarks. All I shall ask
of hon. members is to give me a patient
and uninterrupted hearing, and I promise
in return to be as brief as I possibly can,
consistently with the importance of the
matter with which I have to deal. I ask
hon. members to refer to the accounts
which will now be distributed. I shall have
to carry them back to the year 1867, in
order that they may understand exactly the
true financial position of the country. I
take them back to the year 1867, because
that is the one with which I started when
I made my financial statement at the be-
ginning of the present year. Hon. mem-
bers will perhaps recollect that I estim-
ated there would be a surplus at the end
of the year 1867 of 67,726 2s. 5d.
From the late period to which we have
now arrived, I am enabled to make a more
accurate estimate, and I am happy to say
that the surplus of that year will amount,

as far as 1 am now able to ascertain, to
.104,918 8s. 2d. The increase in that
surplus may be acccounted for in this way
that the appropriations of Parliament
which were formerly taken into account
have not all been required. In fact, what
are commonly known as " savings " have
swelled this surplus. I hope it will not
be out of place here to point out the incon-
venience which arises from this system of
carrying over from year to year these
savings. A practice prevails here which
does not prevail in England or among the
British colonies generally, of carrying over
balances of appropriations and allowing
them to accumulate for a number of years.
In England balances are generally written
off at a certain period, and if any of them
should afterwards be found necessary
Parliament is again invited to re-appro-
priate them. I propose in the Audit Bill
which I hope to have the honor of sub-
mitting to Parliament, to remedy this state
of things, and to provide that at the
end of two years balances outstanding on
votes in connection with which contracts
have not actually been taken shall be
written off; and if afterwards it shall be
found .that additional funds are wanted,
Parliament may be again invited to pro-
vide for the amount required. While I
am on this subject it may be as well that
I should refer shortly to this Audit Bill,
of which we have heard so much. The
hon. and learned member for the Lachlan,
Sir James Martin, said the other evening
that he would be no party to an Audit
Act which should in any way control tli.-
Government in their I'xprndituiv. Tin-
Bill which I desire to introduce will con-
tain no such restriction. It will simply

218

MR. SAMUEL.

[1869.]

provide that the Auditor-General or Audit
Commissioners (as may be determined
upon) shall be the officer or officers of
Parliament, and that any expenditure
incurred without the authority of Parlia-
ment should at the earliest period possible
be reported by him or them to Parliament.
That will be the main object of the Bill,
and I believe it will have a beneficial effect.
The surplus of 1867, namely 104,918
8s. 2d., I carry over to the year 1868
which may be said to be the last financial
year of the late Government, because it
will be recollected that the present Gov-
ernment came into office late in that
year. The revenue for 1868 was
2,034,887. The savings for that year
were first estimated by me at 100,000,
but they have since increased to 111, 645
1 3s. 6d. On the other side of the account
we have the authorized expenditure and the
amount of further charges under supple-
mentary estimates, besides some special
appropriations. But the deficiency which
was estimated last year at 157,454 3s. (the
deficiency which the late Government left
at the end of 1868) is now, so far as we
have been able to ascertain, reduced to
130,370 19s. 8d. I have made every
inquiry, and do not think it is likely to be
reduced much more, so that this sum may be
taken to be as near as possible the actual
deficiency at the end of that year. I shall
now have to say something in relation to the
year 1868, and I would crave the atten-
tion of hon. memberswhile I do so. I would
first point out that the actual expenditure
of 1868, so far as it can be ascertained up
to the present time, is 2,170,176 7s. lOd.
The net revenue is 2,034,887, so that the
excess of expenditure over revenue in 1868
was 135,289 7s. lOd. That is to say
our predecessors spent in the year 1868
135,289 7s. lOd. more than was actually
received ; but by bringing over the surplus
from the year 1867 of 104,918 8s. 2d.,and
charging the 100,000 short-dated deben-
tures falling due in 1878, it leaves the
deficiency already mentioned of 130,370
19s. 8d. at the end of that year. I think
it only right to state that had the late
Colonial Treasurer not paid off a certain
amount of the deficiency loan (to which
I will presently refer), this deficiency
would really have been a surplus. This
is the deficiency which I told the House

last session I intended to ask its authority
to make good by a loan. I then pointed
out that I had taken office with a deficiency,
and that I thought it only fair, as it had
been created by paying off part of the
deficiency loan, which I previously had
provided for, that I should ask the House
for authority to borrow to meet that
amount. I did so because I felt that
although this deficiency was an apparent
one on the year, it was really brought aboiit
by the payment of part of the deficiencies
that accrued in 1863 and 1864. Although
the deficiency loans had apparently been
reduced by the payment of a portion of the
Treasury Bills, and short-dated debentures,
yet they had practically never been reduced
at all. That was the position I then took,
and for which I was attacked by hon.
members opposite, and particularly by the
hon. member for the Hawkesbury. I
think the late Colonial Treasurer also
took exception to my dealing with this
balance in this way. On reconsidering
the matter I felt that I should have been
hardly justified in going into the market
again for another deficiency loan; nor would
it have been prudent, having due regard
to the honour and credit of the country.
I determined, therefore, to make this
130,000 a charge on the year 1869, and
I have brought it forward accordingly. I
would now ask hon. members to turn to
the balance sheet for the year 1869,
marked No. 3. They will there find that I
have brought this deficiency of 130,000
to the debit of the account for that year,
which I may call the financial year of the
present Government. I may premise the
remarks I have to make by telling the
committee that it is a matter of con-
gratulation to me, and I believe it will be
to the country also, that the revenue of
the present year will exceed the expendi-
ture of the present year. Whilst p the
expenditure of last year exceeded the
income, the revenue of the present year
will, as far as I am able to estimate, and
I can confidently rely upon my estimate,
exceed the expenditui-e by 80,000. The
revenue of 1869, as we now estimate it,
will be 2,174,943; the expenditure, as
far as we are able to say at present, and I
believe it will turn out to be less, may be
set down as 2,094, 256 8s. 4d. ; which will
leave us, as I before said, a surplus of about

[1869.]

MR. SAMUEL.

219

,80,000. The revenue, as I formerly
estimated it, was .2,166,572 ; but as I
now believe and I even hope it may be
something more will be 2,174,943. If
my present expectations are realised, the
actual receipts will exceed my former
estimate by ,8,371. So that, although
I was charged with over-estimating my
revenue last year, with a view to make the
accounts appear better, I have now the
satisfaction and I say it is an immense
satisfaction of having really under-esti-
mated the revenue for the present year.
The amount will therefore be in excess of
what I estimated, and will in consequence
create a surplus of 80,000. Well, I
would ask hon. members to look at the
account, and observe that I have brought
over 130,000 of a deficiency left for me
to deal with. Besides that there is another
100,000 falling due on account of the
deficiency loan at the end of the present
year. Now these two sums will make
230,000 of a charge upon the present
year on account of the deficiency loan. It
is my intention to ask the permission of
the House to borrow for one-half of the
100,000, and to pay out of revenue only
50,000, thereby making a charge of
1 80,000 upon the account of 1869. If we
undertake to pay off 180,000 of the
deficiency loan in one year, I say with
confidence, and I am sure all unprejudiced
persons who listen to me will agree with
me that we shall do remarkably well.
When I say pay it, I mean make it a
charge upon the revenue of the year,
because I will show how I intend it to be
paid off. I charge it to the year 1869,
and I believe that while so charging it I
can rely upon the revenue to pay it off.
By charging the 230,000 to this account,
and crediting the 50,000 before referred
to, it will leave me at the end of the
present year with a deficiency of 99,684 8s.
Now, in order that hon. members may
see that I have not over-estimated my
revenue, and that I may give them some
guarantee that this is not mere guess work,
I would point out that the three-quarters'
revenue up to the 30th September, gives
an increase, as compared with the corres-
ponding period of 1868, of 69,000. That
is, actual receipts of the nine, months of
this year, as compared with the receipts
of nine months of 1868, show an increase

of nearly 70,000. I therefore say with
confidence that my estimate of revenue
for the remaining quarter of the year will
be fully realised. I would however point
out at the same time that while there is a
large increase in the revenue as a whole,
there is a falling-off to the extent of about
12,000 in the rents of pastoral runs.
This is not surprising when we consider
the severe season we have gone through,
and the present low price of our staple pro-
duct. When it is considered that we have
gOne through a season of great difficulty
and trial, 12,000 is but a small decrease
hi the revenue received from the pastoral
tenants. While it is anticipated that the
decrease under this head will not exceed
that amount, it will be found that under
almost every other head of revenue there
is an increase. I may now refer to another
point in connection with the present year,
namely, the Supplementary Estimate. The
Supplementary Estimate for 1869 is smaller
than any Supplementary Estimate for
many years past. We directed our officers,
in furnishing their Estimates for the year
1869, so to frame them as to avoid the
necessity for putting items upon a Supple-
mentary Estimate ; the consequence of this
instruction is that the Supplementary Esti-
mate for the present year is 63,000 only.
I will mention the amount of a few of the
Supplementary Estimates of previous years,
in order that hon. members may see the
difference between them and the present
Estimate. The Supplementary Estimate
for 1864 was 96,455 3s. 3d.; for 1865 it
was 84,210 6s. 5d. ; for 1866 it was
153,498 14s. 5d. ; for 1867 it was
107,442 5s. lid.; for 1868 it was
155,239 10s. 4d.; and for 1869, it is, as
before stated, only 63,221 9s. 6cl. It
may not be uninteresting to hon. mem-
bers to know the heads of revenue
which during the last nine months gave in-
creases, and the sources whence the in-
creases arise. The Customs during thejast
nine monthsshow an increase of 32,710 ;
the duties on refined sugar and molasses
gave an increase of 3,953; the duty on
spirits distilled in the Colony shows a de-
crease of 3,865; the gold revenue gave
an increase of 1,330; the Mint receipts
a decrease of 3,474 ; and the land iwrmn-
an increase of 17,971. The ass-.-Mii.-nt
on sheep undeY the Scab Act, a matt.-r

220

MR. SAMUEL.

[1869.)

of not much importance, shows a decrease
of 2,991. The fees on inspection of
cattle and sheep have decreased 39. The
postage exhibits an increase of 3,010;
the money-order commissions show an
increase of 245; and the fees under the
Registration of Brands Act show a decrease
of 371. The fees under the Necropolis
Act of 1867 show an increase of 1,249.
Licenses show an increase of 195 ; fees
of office gave an increase of 1,997 ; fines
and forfeitures show a decrease of 139 ;
rents exclusive of land show a decrease of
591 ; stamp duties show an increase of
3,933 ; railway receipts gave an increase
of 27,102; electric telegraph receipts
exhibit an increase of 1,193 ; pilotage
rates, harbour dues, and fees an increase of
1,660 ; and tonnage dues an increase of
1,030. Under the head of miscellaneous
receipts there is a decrease of 16,945, and
under the head of contributions under the
Cattle Diseases Prevention Act a decrease
of 1 6 . The increases amount to 9 7 , 5 7 8,
and thedecreases to28,521. Now,Ithink,
looking at this statement, it may be con-
sidered that we are in a satisfactory condi-
tion that the resources of the colony are
far greater than people are inclined to
believe. Looking at the severe trials the
country has gone through, the low price of
our staple product, the severe season of
drought last year, it is really puzzling to
me, although at the same time a source of
satisfaction and congratulation, to find
under such circumstances that the revenue
is increasing to find that our imports
and exports as well as our live stock have
also increased. As a proof of this, I will
read some statistical returns which I have
had prepared, shewing the progress we
have made. The imports in 1867 were
6,599,804, and in 1868 they had increased
to 8,051,377 ; the exports in 1867 were
6,880, 715, and in 1 868 they were increased
to 7, 1 92,904. Although the drought was
severe and of long duration last year, I
find that the stock of the colony has been
increasing rapidly. On the 31st March,
1868, the horses numbered 280,201, and
in 1869 they were 283,210; on the 31st
March, 1868, the horned cattle numbered
1,728,427, and in 1869 they were
1,825,222, being an increase of nearly
100,000; on the 31st March, 1868, the
sheep numbered 13,909,574, and in 1869

they were 15,082,722, being an increase of
over one million. I submit these returns
as most gratifying. Before I enter upon the
year 1870 I would like to call attention to
a few matters which I think should be
laid before the committee, and which
appertain properly to the duty I am now
performing. I would first state the
position of our bank account. On the
30th of September our balances stood
thus : London account, 389,340 4s. Id. ;
local general account, 246,444 15s. Id. ;
suspense account, 19,775 2s. lid. ; mak-
ing the total (less a small overdraft on the
Civil Service Superannuation Fund),
654,880 5s. 6d. We have cash in hand
at the Treasury, 507 10s. 2d., and sums
to the credit of various funds amounting
to 55,650 ; making a total of 711,037
15s. 8d. I will next refer to the state of
the public debt of the colony; and although
I may lay myself open to the charge of
being tedious, I would ask hon. members
to bear with me in my remarks upon this
important matter. The following are the
due dates and the amounts falling due
in each of these years: In 1867 there
remained a balance of 800, which then
became due; in 18 69, 100,000 short-dated
debentures fall due; in 1870, 100,000
short-dated debentures and 343,200
Treasury bills; in 1871, 200,000 de-
bentures; in 1872, 100,000; in 1873,
250,000; in 1874, 250,000; in 1875,
50,000 ; in 1876. 735,800 ; in 1888,
500,000 ; in 1889, 893,000; in 1890,
718,800 ; in 1891, 225,500 ; in 1892,
1,782,300; in 1893, 40,000; in 1895,
832,000 ; in 1896, 977,400 ; in 1897,
65,800 ; in 1898, 177,400 ; in
1899, 48,900 ; and then we have also the
1,000,000 loan, of which 20,000 is to
be drawn for annually, commencing with
1872 ; interminable debentures, or payable
in 1882 at the option of the Government,
240,830 ; permanent debentures, 2,700;
making the total amount of our out-
standing debt, 9,634,430. I refer to
this matter because large amounts are
falling due in particular years, and also
because that when the lion, member for
West Sydney occupied the position of
Treasurer, he proposed to consolidate the
debt. This question of consolidation has
forced itself upon us as a matter of neces-
sity, and I intend, as soon as possible, to

[1869.]

MR. SAMUEL.

221

submit a proposition for effecting this
object on a plan similar to that of the hon.
member with this exception, that I pro-
pose that the payment of the debentures
shall extend over a longer period, and that
we shall set aside a smaller amount annually
for the purpose of paying them off. Practi-
cally, however, our propositions will not
vary much. I will now refer to the
Treasury bills which fall due next year,
and represent a portion of the deficiency
loan. In dealing with these the opera-
tions have been very successful up to the
present time ; indeed, I succeeded in
placing them upon the market at a price
never previously obtained for our secu-
rities ; they sold at a premium of 2 Os.
Hd. per cent., which gave us the money
at about 3 per cent. Still I look upon this
mode of raising money as a dangerous and
improper one. . These Treasury bills return
to us eveiy year, and we are at the mercy
of the banks, who may or may not take
them. If the money market was in such a
state that the banks would not take them,
we could not negotiate them, except
at prices which would not be advanta-
geous, or which might involve a great
sacrifice. It would not perhaps be
prudent to state the particulars of the
tenders for the last issue, but I may
say this that the larger portion of the
amount was taken up by one bank. The
time, however, may come when the banks
will not require to invest in securities of
this kind, and then we should be placed in
a difficulty. It is only when money is
abundant that the banks will take them.
I do not think the Government of the
country should have some .400,000 or
500,000 falling back upon them every
year, and being thereby placed at the mercy
of the monetary institutions of the country.
I intend to submit a proposition to Parlia-
ment to enable me to raise this money in
another way, and to make it a fixed debt,
providing at the same time for its gradual
extinction. It has been said that I always
contended that the deficiency loans should
bo paid out of current revenue. I am
ready to admit that I have done so, but I
never contended that they should be wholly
met in one year. When it was represented
to the House by the preceding Government
that there was a large surplus, I contended
that the surplus should be applied to the

liquidation of the deficiency loan?, and T
am now prepared to act upon the principle
which I then contended for when in opposi-
tion. I have also had prepared an account
which will be found interesting and which
I have heard the hon. member for the
Hawkesbury speak of as desirable, when
he and I were on different terms to those
which, I regret to say, now subsist between
us I refer to the loan account. A like
statement has never before been submitted
to Parliament. This account shows how
the loans stand at the present time. I
will briefly direct attention to it. There
was a cash balance at the credit of the
loans account on 30th September, 1869,
of 636,321 9s. 9d.; balance of debentures
issued but not negotiated, 148,900. I
may be permitted to diverge here to say
with regard to that part of last year's loan,
that we have sold 50,000 at about K)l,
which it must be admitted is a good price
for long-dated debentures. In reverting to
the accoxmt, the value of railway material
in stock and chargeable to railway votes
as issued, amounts to 131,323 13s. Id. ;
amount of advances to the Commissioner
for Railways, to be hereafter accounted
for, 3,328 Is. 7d. ; amount of payments,
prior to 30th September, 1869, in anticipa-
tion of services proposed to be provided
for by loans, as per Supplementary Esti-
mates for 1869 and previous years, 4,222
5s. ; amount yet to be raised in order to
meet the following, viz. : amount short-
raised under certain Loan Acts, in con-
sequence of the debentures issued there-
under having sold under par, 440,597
18s. lid. ; charges on sale of debentures,
62,337 19s. 3d. ; loss on redemption of
debentures in 1867, 111 15s.; in all,
503,047 13s. 2d. It will thus be seen
that the amount realised on debentures is
short of the amount required to meet the
appropriations by about half a million.
The total amount to the credit of thi^
account is 924,095 9s. 5d. The amount
of liabilities on the 30th September. 1869,
1 icing appropriations for public works and
other services, authorised to l>o provided
for by loans jvnifiinintr mwanwndfcd on
that date was 1, 4 1-V.3" :N. This will b,-
mlure.1 by i'l ;'.'. t;:i:; HU. ll.l.. appropria-
tions estimated as not likely to be required.
The deficiency before stated, vi/. . I : ">< ' \' ' I 7
1 3s. 2d. , has to be reduced by appropriations

222

MR. SAMUEL.

[1869.]

not required to the amount of 181,246
11s. 6d., leaving thereby a sum of only
321,801 ls.8d. yet to be raised. Such then
is the present state of the loans account,
and in future there will be no difficulty in.
bringing up a continuation of it. Now, sir,
I come to our railways and it may be in-
teresting to hon. members to hear something
about them. The actual revenue to 30th
September, 1869, was 182,533; the esti-
mated revenue for October, November, and
December is 85,000 making a total for
the year of 267,533. The actual working
expenses to 30thSeptemberwere120,441 ;
the estimated expenses for October, Novem-
ber, and December are 42,158 making
a total of 162,599. The revenue in
excess of the expenditure will therefore be
104,934. At this rate the percentage on
the capital of say 5,000,000 will be about
2- 2s. I have had a return prepared
showing the traffic rates charged in this
and in the other colonies, from which it will
be seen that our rates are considerably
under those of our neighbours. I am of
opinion that we ought not to carry for
rates which would leave a great loss to the
public ; that while the railways are a
national undertaking, we should at the
same time treat them as a commercial
one, and should therefore charge fail- and
reasonable rates, with a due regard to
the interests of the country, and to the
rendering of competition impossible. Our
railway rates should not be made the means
of gaining popularity for any Government,
but should if possible be made remunera-
tive. I put it to those gentlemen who
represent places in the interior whether
they would not a few years ago have gladly
paid the then current rates of cai-riage, if
they could only have obtained the certain
and speedy delivery of their goods. I say
that there is not a man in this colony who
resides in the interior, and who had to get
goods up from Sydney a few years ago, but
would have willingly done that. Now,
however, that the Government have been
forced to become carriers, they are expected
to cany at minously low rates. These rail-
ways are paid for out of the general revenue
of the country, and not out of the special
revenue of any particular district ; and I
take it that it is incumbent upon every
Government to charge such rates for the
carriage of goods which, while they defy

competition, will be the highest compatible
with that consideration. If we charged
proper and reasonable rates there would be
a very small difference between the interest
payable on the capital invested in the
construction of these works and the revenue
we would derive from them ; or, in other
words, they would nearly pay the interest
on the cost of their construction. I look upon
railways as being absolutely necessary for
the development of our resources, and I
would do all that is practicable to facili-
tate the carriage of goods to and from
the interior. If hon. members will bear
with me for a few moments, I will read a
return prepared for me by the Works de-
partment. I do not vouch for its accuracy,
as I have not prepared it myself, but much
of the information has, I understand, been
obtained from the different Governments,
In New South Wales there were 298 miles
open, and 92 miles in progress; in Victoria,
254 miles open ; in Queensland, 206 miles
open, and 1 2 in progress ; in South Aus-
tralia, locomotive power, 85 miles open,
and 50 in progress of horse traction there
were 33 miles open and 30 in progress.
The average cost of construction per mile
in New South Wales was 14,000; in Vic-
toria, where the lines are double, 36,000;
in Queensland, 10,500 ; in South Aus-
tralia, locomotive, 15,531 horse trac-
tion, 5,000. The average cost of seven
of the principal English lines was 41,373 ;
and of 4,000 miles of lines in India,
17,000. The English and Victorian
lines are chiefly double, the others mainly
single. The passenger fares per mile
in New South Wales are under 3d. for
the 1st class, and 2d. for the 2nd class;
in Victoria, 3|d. for the 1st class, and 2|d.
for the 2nd class ; in South Australia, id.
for 1st class, and 2. 1 >d. for the 2nd class ;
and in Queensland, 4d. for the 1st class,
and 3d. for -the 2nd class. Goods rates per
ton per mile : In New South Wales, 4d.
for the 1st class, 4|d. for the 2nd class, 5d.
for the 3rd class, and 9d. for the 4th class ;
special rates were charged at 1-^-d., l^d., and
Id. ; and in Victoria, 5d. for the 1st class,
6d. for the 2nd class, 7d. for the 3rd class,
9d. for the 4th class. The rates in Queens-
land are much higher. In live stock and
wool rates, as well as in parcels and coach-
ing traffic generally, New South Wales
rates are lower than those of other colonies.

[1869.]

MR. SAMUEL.

223

The total expenditure on the construction
of railways in New South Wales, includ-
ing rolling stock and machinery, for lines
open for traffic, as well as for those in course
of construction, was, on 31st December,
1868, 5,222,248 7s. 8d. Receipts and
expenditure for 1868 were as follows :
New South Wales, receipts, 224,359; ex-
penditure, 144,080 ; netreceipts, 80,270 ;
Victoria, receipts, 581,402; expenditure,
282,976; net receipts, 298,426. Queens-
land, receipts, 59,129 ; expenditure,
53,381 ; net receipts, 5,748. And South
Australia, receipts, 82,980; expenditure
96,283 ; loss, 13,303. With regard to
telegraphs, I may state that we have 6,000
miles of telegraph lines open, on the con-
struction of which there has been expended
185,341 14s. 9d. I may also refer shortly,
and but very shortly, because I do not
wish to weary hon. members, to the ques-
tion of telegraphic communication with
Europe. The Government have been in
communication with the Queensland Go-
vernment on the subject, and they hope ere
long to submit a proposal to Parliament
under which a small subsidy will be pay-
able by this country in order '.c obtain the
advantages of telegraphic communication
with Europe; the amount of the subsidy
will be but small, aad, it is confidently
believed, may be recovered by the messages
transmitted. I will also allude shortly to
the fact that we have made some changes
with regard to the agency in England. I
do not know whether these changes have
led to the resignation of Captain Mayne
or not, because he does not state why
he has resigned. Hon. members will
recollect that some years since we invited
tenders for carrying on our agency in Eng-
land, and that instead of paying for the
conduct of our business, we were really
paid 1,000 by the firm whose offer was
accepted for the privilege of being allowed
to transact it. That was, no doubt, very
properly considered to be a most unsatis-
factory arrangement ; because it was ap-
parent that those who thus obtained the
conduct of the business must get a profit
out of it in some way or other. The agency
afterwards passed into the hands of a firm
who undertook to do it without making
any charge or making any payment to the
Government. After a time that was
deemed almost equally unsatisfactory, and

an agent was appointed at an annual
salary of 1,000 and 300 for expenses,
whom Captain May ne afterwards succeeded.
When I came into office it was intimated
to me that our business was being carried
on in conjunction with a commercial
house ; that our officers were in the same
building ; and that the same clerks were
doing the business of the agency as well
as the business of the commercial house.
That struck me as being so improper and
so derogatory to the position of this colony
that I called upon the agent to inform me
whether it were true. Captain Mayne re-
plied that it was* perfectly true, and that
he was under the impression that he had
communicated the arrangement to the
Government before. In this I believe
he was mistaken. Captain Mayne wrote
out to say that the allowance of 300 was
insufficient, thaj; an additional annual sum
of 200 would be required for a separate
office, and a sum of 100 to furnish it.
We thought the arrangement by which
our business was transacted in conjunction
with that of a commercial house, by the
same clerks and under the same roof, so
objectionable that we deemed it advisable
to 1 ave it terminated immediately, and
that Captain Mayne should be instructed
to taa.e suitable offices, and employ a
proper clerical staff. We authorized the
expenditure, relying upon Parliament to
sanction it. In a few days I hope to lay
upon the table of the House the whole of
the correspondence relating to this matter.
We thought that in dealing with all trans-
actions relating to freight, and contracts
for railway material, it was advisable that
two colonists, resident in London, should
form a Board, to act in conjunction with
the agent, and to confer with him. [Mr.
FARNELL : One of them is totally unfit. 1
I think that both of them are well fitted
to discharge that duty. One of them
is Mr. George Thornton, formerly a
member of this House, and a gentleman of
great experience, and the other is Mr.
Donald Larnach, manager of the Bank of
New South, Wales, a gentleman of high
character and ability. These gentle-
men have, so far as we have been able
to judge, performed their duty well up to
the present time. In making these ap-
pointments the Goveinment have been
actuated by no other desire than to do

224

MR. SAMUEL.

[1869.]

that which they believed to be for the
best interests of the colony. Before I
conclude these general matters I would
like to tell hon. members the result of
the operations of the Sydney Branch of
the Royal Mint. The Sydney Mint was
opened on 14th May, 1855 ; from that
date to the 31st December, 1868, it received
for coinage 6,820,198 ozs. of gold, of
the value of 26,725,563. This gold was
the produce of the following places,
namely : New South Wales, 4,084,007 ozs. ,
of the value of 15,693,365 ; New Zealand,
1,256,563 ozs., of the value of 5,040,301 ;
Victoria, 1,225,873 ozs., of the value of
5,052,125; Queensland, 229,562 ozs., of
the value of 848,010 ; Tasmania, 2,188
ozs., of the value of 8,269 ; California,
2,248 os., of the value of 8,225 ; British
Columbia, 218 ozs., of the value of 759 ;
foreign coin, 19,544 ozs., of the value of
74,509. The total number of ozs. was,
as already stated, 6,820,198, and its value,
26,725,563. The amounts received in each
year were: 1855, 217,589 ozs., 871, 300;
1856, 239,492 ozs., 939,776; 1857,
223,216 ozs., 879,182; 1858, 342,541 ozs.,
1,332,034; 1859,358,127ozs.,l,380,403;
1860, 470,464 ozs., 1,823,6*38; 1861,
477,607 ozs., 1,863,632 ; 1862, 696,312
ozs., 2,700,452; 1863, 493,332 ozs.,
1,908,527; 1864,728,019ozs.,2,878,399;
1865, 598,607 ozs., 2,351,402; 1866,
739,363 ozs., 2,935,923 ; 1867, 629,722
ozs., 2,501,369; 1868, 605,807 ozs.,
2,359,526. The issues from the com-
mencement to the end of 1868 were,
in value, 26,695,156, namely in sove-
reigns, 23,495,500 ; in half-sovereigns,
1,552,500 ; and in bar gold, 1,647,156.
The revenue from Mint charges for
coinage, paid into the Colonial Treasury,
up to the end of 1868, amounted
to 281,928. Of this amount 185,371
was received on gold the produce of New
South Wales, and 96,557 on gold the
produce of New Zealand, Victoria, and
other places. In August, 1 866, on the pub-
lication of the Queen's Proclamation de-
claring the Sydney coin a legal tender on
the United Kingdom, the Mint charges
for coinage were reduced about one-
seventh, or 14 per cent. : and again, on
the 30th June last a further reduction
was made by the abolition of the addi-
tional charge of twopence per ounce ex-

acted until then as the condition of early
payment. The whole expense of the
Mint, from its initiation to the end of
1868, including machinery, construction,
and maintenance of establishment, was
227,478. The revenue within the same
period having been 281,928, the surplus
of income over expenditure was 54,450,
which was equal to a profit of about 4,000
per annum for the benefit of the Colonial
Treasury. The Act 28 Victoria, No. 3,
making a permanent provision of 15,000
per annum for the maintenance of the estab-
lishment of the Mint, came into force in
this colony on the publication in August,
1866, of Her Majesty's proclamation de-
claring the Sydney coin a legal tender in
the United Kingdom. Out of this en-
dowment a saving of about 3,000 per
annum has been made, and this saving
will be returnable to the Colonial Trea-
sury. Last year the Imperial Govern-
ment took advantage of the presence of a
Branch of the Royal Mint here to renovate
the copper circulation of the colony. Old
coin and private tokens to the amount of
2,431 were exchanged at their full cur-
rent value for our bronze coin, and an
additional amount of bronze coin to the
value of 4,000 was put into circulation.
All the expenses of this service were
borne by the Imperial Treasury. A sup-
ply of bronze coin is kept in store at the
Mint to provide for the due mainten-
ance of a healthy circulation. The
silver naturally present in much of the
gold of these colonies has hitherto been
lost on account of the inconvenience and
expense of applying any of the old methods
of refining to the extraction of the silver
from the gold. A simple and economical
method of refining has however recently
been discovered by one of the officers of our
Mint, and active steps are now being taken
to bring the system into operation. When
this is accomplished, which will probably
be about the end of the year, a considerable
benefit will accrue to the public; and also,
it is expected, to the revenue of the Mint.
I may further state that I have, through
His Excellency the Governor, applied to
the Imperial Government to allow the silver
coinage to be dealt with in the same way as
the copper coinage has been dealt with here,
so that I hope we shall soon be able to
substitute a more perfect coinage for that

[1869.]

MR. SAMUEL.

225

which is at present in circulation. I now
proceed to deal with the estimated account
for the year 1870. Hon. members will
recollect that I brought down a deficiency
balance for the year 1869 of 99,684 8s.
The revenue for 1870, as I have estimated
it and I have estimated it on the basis
of the receipts of the present year will,
I feel assured, be fully realised. Looking
forward to the increased prosperity of the
country, and to the fact that our mines are
becoming more productive, and our popula-
tion increasing, I think we may reasonably
expect an increase of revenue for the year
1870. I have therefore estimated the
amount at 2,269,746. Comparing this
amount with the revenue of 1869, it shews
an increase of ,94,803. Before proceeding
further I desire to refer to the estimates of
expenditure for 1870, and while doing so
should like hon. members to follow me.
The estimates of expenditure shew reduc-
tions to the amount of 114,545, against
which there are increases amounting to
67,602. I am not now speaking of special
appropriations, nor yet of the interest on
the public debt, but of the items in the
general estimates. As some hon. members
seem to doubt this assertion I will go
through every item of these reductions and
increases. I do not say these are all savings,
but they are reductions. In schedules A,
B, and C there is a decrease of 2,033; in
the establishment of His Excellency the
Governor there is a decrease of 120 ; in
the Legislative Council there is an increase
of 300 ; Legislative Assembly, a decrease
of 13 ; Legislative Council and Assembly,
an increase of 48 ; Parliamentary Library,
an increase of 19 ; Colonial Secretary,
an increase of 110; Volunteers, a de-
crease of 2,003 ; Police, a decrease of
23,518; Gold and Escort, a decrease of
2,000 ; Gold Receivers, an increase of
20 ; Petty Sessions, a decrease of 3,836 ;
Gaols and Penal Establishments, a de-
crease of 14,179; Lunatic Asylums, an
increase of 4,377 ; Vaccine Institution,
Coroners' Inquests, Surgeons' Fees, Abo-
rigines, Medical Adviser, Vaccination,
Medical Officers, &c., an increase of
2,475 ; Auditor-General, an increase of
50 ; Registrar-General and Brands' Re-
gistration, a decrease of 360 ; Colonial
Agent, an increase of 200. There is
aii increase of 5,000 in the item for

Public Instruction. This is one of those
items in which an increase is botli inevit-
able and desirable. In the item Grants
in aid of Public Institutions there is a
reduction of 300 ; Industrial Schools, a
decrease of 1,531 ; Reformatory for Girls,
Newcastle, an increase of 285 : Inspec-
tor of Public Charities, a decrease of 300 ;
Protestant Orphan School, a decrease of
388 ; Roman Catholic Orphan School, an
increase of 154 ; Asylums for the Infirm
and Destitute, a decrease of 2,750 ; Charit-
able Allowances, an increase of 1,700 ;
Miscellaneous Services, a decrease of
1,075 ; Law Officers of the Crown, a de-
crease of 52 ; Supreme and Circuit Courts,
a decrease of 100 ; Sheriff, a decrease of
215 ; District Courts, a decrease of 15 ;
Quarter Sessions, a decrease of 1,250 ;
Treasury, a decrease of 35 ; Stamp Duties,
an increase of 125 ; Customs, a decrease
of 3,726 ; Printing, Bookbinding, and
Postage Stamps, a decrease of 1,280 ;
Stores and Stationery, a decrease of
8,375. The Store Department belongs
to the Treasury, and I have directed
my attention to that department as one
in which a considerable saving might
be effected. I believe that in all the
public departments more stationery is
used than is necessary. After communi-
cating with the Clerk of Stores I came
to the conclusion that the service might be
carried on with a considerably less quantity.
Circulars were accordingly sent to the
officei-s connected with the issue of stores,
urging upon them the necessity of exer-
cising economy. It has hitherto been the
practice to send home for clothing. This
year I have accepted contracts for the
material only, intending to have the cloth-
ing made up in the colony. A considerable
quantity will be made up in the gaols. I
believe that by this means a larger saving
will be effected than is shown by the
estimate. Indeed I anticipate that more
than 10,000 will be saved in the Store
Department alone. The next item is
for the Gunpowder Magazines, which
showed a decrease of 140 ; Health and
Immigration Officers, an increase of 5 ;
Quav.-nitin.'. a decrease of 400; Ship-
ping Masters, an increase of 21 ; Har-
bours, Lighthouses, and Pilot Department,
an increase of 64 ; Miscellaneous Ser-
s, a decrease of 3,357 ; Departim-nt

226

MR. SAMUEL.

[1869.]

of Lands, a decrease of 91 ; Survey of
Lands, an increase of 9,660 ; Occupation
of Lands, a decrease of 146 ; Goldfields,
a decrease of 1,520 ; Prevention of Scab
in Sheep, an increase of 357 ; Botanic
Gardens, an increase of 1,705 ; Govern-
ment Domains and Hyde Park, a decrease
of 1,467 ; Roads, other than main roads,
an increase of 3,426 ; Necropolis, Haslem
Creek, a decrease of 656 ; Miscellaneous
Services, Lands Department, an increase of
5,126; Department of Public Works, a
decrease of 50 ; Railways, an increase of
31,375 ; Harbours and River Navigation,
a decrease of 3,065 ; Colonial Architect,
an increase of 50 ; Public Works and
Buildings, a decrease of 10,550 ; Roads
and Bridges,a decrease of 12,303; Fitzroy
Dock, a decrease of 4,352 ; Miscellaneous
Services, Works Department, an increase
of 500; Post Office, a decrease of 3,903 ;
Money Order Department, an increase of
150 ; Electric Telegraphs, a decrease of
3,491 ; making a total for decreases of
114,545, against which there were in-
creases to the amount of 67,602. Whether
the reductions had been made or not the
increases would have been inevitable.
It will, perhaps, be inconvenient at this
time for me to go into a defence of the
Government scheme of retrenchment. Re-
trenchment is one of the most difficult
questions which could beset any Govern-
ment. But I think this Government
has taken it in hand in the only way
in which it can be taken that is, by a
re-organisation of the Public Service. I
am not now going to discuss the merits
of the proposition of the hon. Colonial
Secretary with regard to the police, but
I may say this the present system of
police was as loudly condemned when it
was brought in by Mr. Cowper, as any
system could have been, and those who
then condemned it are now the loudest
in their opposition to any alteration. I
believe if a fair trial is given to the pro-
position of the hon. Colonial Secretary a
greater saving will be effected than has even
been stated. Having now referred to the re-
duction of the Estimates, and having shown
that there would be a very great reduc-
tion in the expenditure of the country, I
will now turn to the revenue. I propose to
ask the House to amend the Stamp Act, by
which amendment I expect to get an increase

in the revenue from that source of 55,000.
I do not propose to increase the number
of the items in the schedule of that Act,
but I propose to reduce some of the
charges as they stand in the present Bill.
I propose to make the law operative, so
that it cannot be evaded as it is at the
present time. My proposition will have
the effect of making that Act really yield
the revenue which was intended, and there-
fore I expect to get 55,000 extra. If
time will not permit of my getting the
proposed Bill through before the close of
the year, I may perhaps have to ask the
House to pass a short continuing Bill, so as
not to allow the present Act to lapse. If that
course should be found necessary I am sure
hon. members will have sxifficient regard
for the interests of the country to assist me
in passing such a measure. I know there
are some hon. members who are opposed to
every system of taxation, but I am con-
tent to rely on the patriotism and good
sense of the House. Then again I expect
to receive a very large increase from condi-
tional land purchases. The present Govern-
ment have issued a regulation by which
they have made it optional with condi-
tional purchasers to pay their balances
by instalments of not less than Is. per
acre. I have estimated the increase from
this source at about 30,000, but I
believe, from the eagerness of a great
number to pay up their balances, the
amount received will be veiy much larger.
The free selectors themselves will hail this
regulation as a great boon. They will now
be able to pay off their balances as they
have money to spare, and thereby lessen the
annual interest. We propose to give the
land agents a small commission for collect-
ing these balances and the interest that may
be due from time to time to the Govern-
ment. These agents, from whom we shall
take additional security, will see it to be
to their own interest to hunt up the free
selectors, and explain to them the advantage
which will accrue to them from paying up
their balances, by instalments of Is. per
acre. In this way we shall, I believe,
obtain a much larger sum than I have esti-
mated. Before I proceed further I will
tell the House the amount now due by con-
ditional purchasers. The amount due on
purchases prior to 1868 is 887,262.
That is the amount upon which interest

[1869.]

MR. SAMUEL.

227

is payable. But the whole amount of
balances, including those upon which
interest is not yet payable, is 1,366,900.
The quantity of land taken up this year,
greatly exceeds, as stated in his Excellency's
speech, that of any year since the passing
of the Land Act, and it is estimated that
the number of those who will have taken up
land in 1869 will be about 5,000. I have
in my hand a return showing the amount
received as deposits on conditional pur-
chases, the amount of deposits refunded,
and the amounts received as balances on
such conditional purchases in each year,
from the passing of the Crown Lands Aliena-
tion Act of 1861, to the 31st December,
1867. From this return it appears that the
deposits in 1862 were 88,888; in 1863,
63,902; in 1864, 41,174; in 1865,
37,862; in 1866, 89,663; in 1867,
59,503, making a total of 380,995. De-
ducting refunds 52,973, the net deposits
amount to 328,021. These figures, multi-
plied by three, will give 984,063. From
this we must however deduct 96,802 for
balances paid. This certainly proves that
there is a disposition on the part of many
of the selectors to pay up. There is, in
fact, a natural desire on the part of men to
acquire the fee simple of their property,
and they will strain eveiy nerve to do it.
[Mr. SUTHERLAND : Unless they are per-
suaded otherwise.] Unless repudiation is
urged upon them unless they are per-
suaded otherwise I have no doubt they
will come forward and pay. Having indi-
cated to the House the sources from which
I estimate there will be an increase of
revenue, I now come to what no doubt
many have looked for anxiously the
duties we intend to give up. In the first
place we intend to give up the postage
charge on newspapers. I have not myself
been favourable to giving up this charge for
I was in favour of its imposition. A
great deal might be said on both sides with
regard to it, but it is not a matter
of such importance that I should stand
out in opposition to an order of this
House. The House ordered that this rate
should be given up ; a number of my col-
leagues are in favour of giving it up, and
public feeling being also in the same
direction, I have somewhat surrendered
my views upon this matter. There must
in all cases of this nature be some com-

promise ; but whilst I would be the last
man to give up my views on any question
of great importance, unless convinced there
were good reasons for it, I felt that I might
in this case consent to the repeal of this
charge without any great inconsistency. I
now come to a matter which will be of far
greater interest, namely, that relating to
ad valorem duties. I do not think any
one will be surprised, knowing the views
I have always held, that I should wish
to get rid of these duties at the earliest
possible moment. I looked upon their
imposition as a retrograde step. The hon.
and learned member for the Lachlan (Sir
James Martin) told us the other evening
that the advantage of indirect taxation
through the Customs was that a man did not
feel when he paid taxes in this way ! A man
might be greatly robbed without knowing
it ! I look upon the mere fact of a person
being deprived improperly of that which
belongs to him, as an injustice ; and because
he did not know it, that circumstance
should certainly not be used as an argu-
ment in favour of his being robbed. The
Customs' taxes fall upon the great mass of
the people. They fall upon the consumer,
and any tax whatever which throws the
whole burden upon the people generally,
and does not distribute it according to
means, is unfair and unjust ; but more
unjust is that tax which permits evasion,
by which the revenue is defrauded and
the honest trader injured. Only this
day a case came before me of a flagrant
character. An entry was passed a few
days ago for goods, the declared value of
which was about 500. They were stopped
by the Customs' officers, and had since been
declared by sworn valuators to be worth
double the amount. These goods came
out by the last mail steamer to a house of
standing in this city. [Mr. WILSON :
Their names ought to be published.] I
think they ought, but it would not be
desirable for me to publish them now.
This is not the only case, and therefore I
do not desire to single out any particular
house. [Mr. WILSON: They ought to be pub-
lished.] I will not do it now. (Hear, hear.)
This return of the valuators only came into
my hands to-day. Yesterday it was pointed
out to me that one house, dealing in soft
goods, paid one-seventeenth of the whole
of the ad vdonm duties received in this

ME. SAMUEL.

[1869.]

colony. Do hon. members think that any
one house does one-seventeenth part of the
business of the colony? It is an iniquitous
and improper system, and one which I
hope I may have the honour and satis-
faction of repealing. If it were in my power
I would repeal the ad valorem duties to-
morrow. But it cannot be done with
justice to those who have large stocks on
hand. I therefore intend to propose that
on the 30th June next the ad valorem
duties shall be reduced one-half, and that the
other half shall cease to be collected at the
end of 1870. Although 180,000 is about
the amount of revenue derived from the ad
valorem duties, I have estimated them for
1870 at only 120,000; so that I expect
to lose 60,000 from this source, and
10,000 from the newspaper tax this year.
After giving up 70,000 of revenue, and
paying off 230,000 deficiency loans, I still
expect to have at the end of next
year a surplus of about 8,000. I have
had the satisfaction on two occasions of
correctly estimating the revenue, and I
think the House may confidently believe
that I have not over-estimated it on this
occasion. Having said that I shall re-
quire no new taxation for 1870 it may be
asked what course I intend to take if the
revenue should be found insufficient 1 ? I
believe it will be amply sufficient; but if
it should not be so, the Government must
go on further, and retrench. Without the
ad valorem duties, the revenue is over two
millions; and surely that ought to be suffi-
cient to govern 500,000 people. It ought
to be sufficient; and if I remain a member
of the Government I will do all I can to
make it sufficient. If, however, with our
railway extensions and other charges, ad-
ditional taxation should be imperative, I
shall be prepared to go to the property of
the country and make its owners pay their
fair share of taxation. I ask, what does
property in this country pay for the pro-
tection which is accorded to it ? It pays
nothing. The poorest man in the country
contributes as much as the wealthiest. It
is our warehouses stored with goods, and
our houses filled with valuables, which
occasion the necessity for expenditure on
police and gaols. Except through the Stamp
Act nothing whatever is obtained from
property. Property is increased in value
by the extension of railways, and by the

erection of bridges and other public works,
and it is, for its protection that our large
expenditure is incurred ; and yet property
contributes nothing to the taxation of the
country. I know I shall have the hon.
member for the Hawkesbury coming out
with a speech of mine delivered in 1865,
in which I argued against property and
income tax. I plead guilty to having
done so on that occasion, but how was I
situated? Mr. Cowper invited me to become
his colleague as Treasurer, and I found a
deficiency of eight hundred and some odd
thousand pounds, and no provision made
to meet it. I came down with a scheme
in accordance with the views I held then
to collect the revenue from duties which
would be as nearly as possible in accord-
ance with the principles of fre'fe trade and
with a due regard to the fiscal requirements
of the country. I proposed to levy a duty
on tea and sugar, and I am neither afraid
nor ashamed to acknowledge it. I proposed
also a scheme of trade licenses. Our posi-
tion was such that we wanted revenue
immediately, and, though I felt that an
income and property tax was undesirable
in a country like this, I nevertheless did
argue in favour of that tax. If the neces-
sities of the country demand it we must
have it. My proposals were then made
under pressure of immediate wants, and
there was no time for delay. I would
avoid an income and property tax if I
could ; indeed I would do anything to avoid
increasing the taxation of the people in
any form whatever. I do not think we
shall require to increase the taxation now,
but if we should find it absolutely neces-
sary I shall prefer an income and property
tax to the ad valorem duties. I would prefer
an income tax to use the words of the
hon. member for the Lachlan to taking
the money out of people's pockets in such
a way that they do not feel it. If the
people felt that they were paying the
taxation of the country they would not
submit to extravagant expenditure. They
would wake up and resist extravagance
and improper public appointments. I will
be no party to fettering the trade of the
country. My efforts and exertions shall
rather be directed in the opposite direction
to relieve the industry of the country.
If we take off these ad valorem duties we
shall reduce the cost of living to every

[1869.]

MR. SAMUEL.

229

person in the country, and when we reduce
the cost of living we benefit the general
masses of the community. It is my decided
opinion that we shall not require to increase
the taxation, for I believe the Estimates of
revenue I have had the honor to submit to
the committee will be fully realised, and
that at the end of 1870 we shall have the
surplus I have indicated. Having now, Sir,
gone through the whole of these accounts,
I wish, before closing, to give the com-
mittee a short resume of what I have
brought under notice. I have shown how
we intend providing for the .130,000
deficit of 1868 that I intend to pay off
100,000 of short-dated debentures during
the years 1869 and 1870 that we have
effected considerable reductions in the
public expenditure of the country, and
that if we remain in office we shall endea-
vour to effect further reductions that we
have initiated steps for the abolition of a
vexatious impost, one to which the whole
community almost to a man, excepting those
who are in favour of protective duties, are
opposed to that with a due regard to

economy, and with a prospect of the reali-
sation of the Revenue Estimates submitted,
we shall not require the whole of the ad
valorem duties in 1870 I have explained to
the committee that it is desirable to amend
and continue the Stamp Act. I have shown
the present state of the public debt and
the position of the public account ; and I
think I may claim for the Government the
credit of having been the first to arrest
the onward progress of the deficiency, and
establish an equilibrium between the re-
venue and the expenditure of the country,
and that we have brought that expenditure
within our income. I have now only to
thank hon. members for the patient hearing
they have given me. If I have fallen short
of what might have been expected, I can
only say, Sir,' I have done the best in my
power to make clear the financial position
of the country, and to lay before the com-
mittee the views of the Government with
regard thereto. Whatever may be the
result of this debate, I at all events feel
that I am actuated by no other desire than
to do the best I can for the country.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SATJL SAMUEL,
made 17th February, 1870.

[From the Sydney Morning Herald of
February, 1870.]

LEGISLATIVE ASSEMBLY.

Thursday, 17th February, 1870.

FINANCIAL STATEMENT.

MR. SAMUEL said : Mr. Lackey, it
now devolves upon me to state to the com-
mittee the present financial position of the
country. This will be the third statement
that I have had the honor to make since I
entered upon the duties of Treasurer in
October, 1868, and it is the second which
I have made for the present year. These
financial statements are of a dry and un-
interesting character, and I am not aware
that any thing has occurred to prove that this
will be an exception to the rule, for I have
only to deal with matters which must be
familiar to hon. Members. During the
interval that has elapsed since I made my
last statement very little change has taken
place in the financial position of the coun-
try, so that in point of fact there is very
little novelty that I can introduce in the
statement I am about to make. From the
fact that the year 1869 is concluded, I am
now, however, enabled to deal not with
estimated figures, as in October last, but
with actual results. I will not detain the
committee by further remark, but will ask
them to look at the statement of accounts for
the year 1868, which will now be distributed.
I would request lion. Members to follow
me as closely as they can, while I en-
doavour to make these accounts as intelli-
gible as possible, in order that they may
perfectly understand them. The credit

balance of 256,547 19s. 3d. with which
I start the account just handed to hon.
Members is that which stood in the books of
the Treasury at the credit of the Consoli-
dated Re venue Fund on the 31st December,
1868. There is also on the same side of the
account an amount of 25,000 received in
1869 from the Government of Victoria on
account of the Murray River Customs of
1868, and there are also some repayments
madein 1869 on account of services for 1868
and previous years. On the debit side there
are charged payments made in 1869 on
account of 1868 and previous years services
to the amount of 319,134 18s. Id. There
is also 32,881 9s. 4d., amount of a Sup-
plementary Estimate for 1868 and previous
years, less the sum of 24,466 Os. 6d, paid
to the 31st December, 1869, leaving a
balance unpaid of 8,415 8s. lOd. Then
there are votes and balances of votes fov
1868 and previous years still retained as lia -
bilities on the Consolidated Revenue Fund,
amounting to 70,117 13s. 3d. Taking
the aggregate amount of the credits from
the aggregate amount of the debits thus
shown, the result is a deficit on the 1868
account of 1 1 0, 743 1 4s. 1 d. In October
last year the deficit was estimated by me at
130,000 ; but as certain amounts which
we consider are not likely to be required,
have been written off since, the deficit
has thereby been reduced to the amount
stated. Indeed the outstanding liabilities
of 70,000 may perhaps be still further
reduced. The expenditure of the year
1868 was 2,165,274, and the revenue
2,034,887. 100,000 of shortnlated
debentures were paid off during this
year, so that it left the excess of expen-

232

MR. SAMUEL.

[1870.]

diture at .130,387 over revenue; but
if that 100,000, which did not pro-
perly belong to the ordinary expenditure
of the year, had not been charged then
the deficiency would only have been
30,387. Now, I will ask hon. members
to turn to the balance sheet for 1869,
which will be distributed. They will see by
that account that I started with an estab-
lished deficiency on account of 1868 and
previous years of 110,743 14s. Id. The
appropriations and other charges for 1869
are 2,117,261 6s. 8d., besides which
there is an amount of 106,085 8s. 6d. on
the Supplementary Estimates of the present
year. This is the supplementary estimate
which in October last I estimated would be
63,000. As I will go more into detail
about that presently, I now simply content
myself with calling attention to the cir-
cumstance. The next item in the account
is that for special appropriations, which
amount to 15,410 5s. 6d ; and the next
100,100 for short-dated debentures fall-
ing due in 1869, being part of the defi-
ciency loan, about which I shall also have
to speak presently. On the other side of
the account I credit the net revenue for
1869, which is now ascertained to be
2,196, 970 5s. lOd. Thisincludes 30,000
due by the Government of Victoria at the
end of the year, on account of the Murray
River Customs, which amount has since
been in part adjusted. The appropriations
for services of 1869 not likely to be required
are estimated to amount to 100,000. Al-
though we usually take credit for only
100,000, the amount is seldom less than
140,000 or 150,000. I, however, have
followed the practice hitherto observed, as
it would not be prudent in my opinion to
take credit for more than usual. The
amount proposed to be raised by loan
for additional public works for 1869 is
97,999 10s. 7d. It will thus be seen that
by charging the estimated deficiency of
1868, whick is 110,743 14s. Id., and
the 100,000 of short-dated debentures
falling due, and which is part of
the deficiency loan of 1864, the result
is a deficit at the end of 1869, of
152,530 8s. lid. I would like to point
out that the actual revenue of 1869 is
2,196,970 5s. lOd. When I made my
financial statement in January, 1869, I
estimated that the revenue would be

2,166,572, so that the actual revenue is
30,398 over the estimate which I then
made. But take my estimate in October,
1869, of 2,174,943, when I was better
able to judge of the operations of the year,
and it will be seen that the revenue ex-
ceeded my estimate (it is very gratifying
to be able to say) by the sum of 22,027.
But I may say further and it must
be a source of satisfaction to hon. members
and to the country that the revenue
received in 1869 was the largest amount
ever received in one year in the colony.
While a considerable portion of this
large amount had been raised by taxa-
tion, a very considerable sum was de-
rived from the progress that is being;
made in the settlement of the country.
Now, I think I should, before proceeding
further, show how it is that the Supple-
mentary Estimates of 1869 are so much
beyond what they were estimated to be
when I made my statement in last October.
Supplementary Estimates are an intoler-
able nuisance to every Finance Minister.
When the Colonial Treasurer prepares his.
Estimates he applies to the head of every
department to know what amount he will
require for the year's expenditure, and he
receives from each a detailed account of
his expenditure. I always impress upon
the head of every department the expe-
diency of avoiding a Supplementary Esti-
mate. I urge upon these officers to give me
the whole expenditure of the country as
nearly as they can arrive at it, to enable me
to provide the necessary Ways and Means.
In October I found there was a Supplemen-
tary Estimate, which, though the smallest
we ever had, was still, I believed, all that
would be required. At a later period of
the year I found that that Supplementary
Estimate was insufficient, and that a fur-
ther sum of 40,000 was required. Hon.
members will see that this does not form
part of the ordinary expenditure of the
country. It is what may be called extra-
ordinary expenditure ; that is to say, it
is not departmental expenditure. It is
not required for the payment of salaries
nor for an increase in the number of
public servants but it is required for
various services, which cannot be foreseen.
If hon. members will follow me I will go
through some of the items of increase in
the Supplementary Estimates. Newcastle

[1870.]

MR. SAMUEL.

233

Industrial School provisions, 400 ; lu-
natic asylums, 1,350 ; grants in aid of
educational institutions, 845 ; charitable
allowances, 1,270 ; Free Public Library
(a new item), 470; expenses of Return-
ing Officers, 3,000. This was consequent
on the general election, and could not
possibly be foreseen at the time ; towards
the erection of a statue to Captain Cook,
300 : expenses of the Commission ap-
pointed to inquire into the cause of floods in
the Hunter River district, 245 10s. ;
stores and stationery for the Public Ser-
vice generally, 2,800 ; balance of claim
for warlike stores obtained from the Im-
perial Government in 1854-5, 3,690 ;
Murray River Customs payable to Vic-
toria, 7,992 16s. 3d. (this item appears
on both sides of the account) ; commission
to land agents, appraisers, and others,
2,700 (this arises from a larger quan-
tity of land being sold than was originally
estimated). There is an increase of
15,000 in railway working expenses.
The total of these items is 41,072 15s.
9d., which is about the amount of the in-
crease in the Supplementary Estimate.
This increase is one of those matters which
it is quite impossible to foresee, but it is
one of those matters I shall endeavour, if I
remain in office, to guard against in future
by the adoption of a different system. I
may now mention another point : In my
last statement I estimated that the excess
of revenue over expenditure would be
80,686 11s. 8d. at the end of 1869.
Instead of that, the excess was 58,213 5s.
2d. That is to say, the revenue exceeded
the expenditure by over 58,000. I do
not include in that sum 100,000 of short-
dated debentures charged upon the year.
But the ordinary revenue exceeded the ordi-
nary expenditure by 58,000 ; while in
the preceding year the expenditure was
slightly in excess of the revenue. I may
also point out, before I proceed to deal with
the year 1870, that both the railway ex-
penses and the Murray River collections
which appear as a charge upon the revenue,
are always represented by 'receipts that
is to say, in the case of the railways the
receipts are largely in excess of the
penditure, and the Murray River Customs,
which we charge in the Estimates, is the
amount which we collect upon the bonier
for the Victorian Government under an

agreement between the two Governments.
So that though these amounts appear as
charges upon the revenue thoy do not
form any portion of the ordinary expendi-
ture. About this I shall have t > say more
presently ; in the mean time I must ask
lion, members to turn with me to the
account of 1870. Hon. members on looking
at that account will see that I start with an
estimated deficiency of 152,530 8s. lid.,
brought from the year 1869 ; I charge
2,148,906 as the appropriations for the
year, and 100,000 as another instalment
towards paying off the deficiency loan. On
the other side I have an estimated revenue
of 2,282,796, and the amount proposed
to be raised by loan, namely 1,571,600,
which, it will be seen, appears on both
sides of the account. The estimated defi-
ciency at the end of the year will be
118,640. I wish to call hon. members'
attention to this, that, after having charged
myself with 152,000, the deficiency at
the end of 1869, and 100,000 for short-
dated debentures falling due this year, a
deficiency of only 1 18,640 8a lid. is the
result. So that it will be apparent that
this deficiency is not caused by the ordi-
nary expenditure for these years, but by
paying off or charging these deficiencies
of previous years. Had these sums on
account of deficiencies not been charged,
the ordinary revenue of the country would
have exceeded the ordinary expendi-
ture by about 200,000. That is to say
that during these years 1869 and 1870 the
ordinary revenue would exceed the ex-
penditure, and there would be no defi-
ciency, but rather a surplus. Not only
have I charged these amounts, which
produce this deficiency, against the
account, but I have reduced the estimated
revenue derivable from ad valorem duties
to the extent of 40,000 ; and there will
also be a further reduction, by the aboli-
tion of the postage upon newspapers, of
10,000. But the estimates also provide
for an increase of 55,000 annually by an
amendment of the Stamp Act I may in-
form hon. members that, in estimating
that increase on stamp duties, I do not
intend to proi>ose any increase in the items
on the schedule of that Act. I simply wish
to ask the Parliament to make the Act
operative. At present it is evaded in
every way ; the honest person pays, but

MR. SAMUEL.

[1870.]

the dishonest does not. The Act is exten-
sively evaded, and the revenue originally
expected from it is not realised. I ask
for nothing more than that the Act be
made operative, and it will then give us an
increase of 55,000 annually. The esti-
mate of revenue for the year 1870 is
2,282,796, and the estimated expenditure
proper will be 2,148,906 ; so that if we
were to exclude the 100,000 which falls
due in 1870, there would be an excess of
revenue over expenditure of 133,890. I
shall not further detain the committee,
but at once tell them how I propose
to deal with the estimated deficiency
at the end of 1870, and how to meet
this deficiency and the loss of revenue by
by the abolition of the ad valorem duties.
I intend to ask authority to borrow for the
outstanding amount of the deficiency loan,
as it matures, to the extent of 700,000.
The deficit was originally 850,000 ; about
150,000 have been paid off, and there
appears outstanding a sum of 700,000.
I intend to ask the House to permit me to
borrow as it falls due this 700,000, which
includes the 100,000 paid off in 1869. If
we do this we not only do away with the
necessity for increased taxation but we are
enabled to repeal an obnoxious impost at
a cost of 35,000 a year, the interest of this
debt, which interest is already provided for
in the Estimates for 1870. If we increase
the burdens of the people we have no
guarantee that the produce of these
burdens will not be absorbed extra-
vagantly as before. It is not the expendi-
ture during our administration in 1869
which has brought about these deficiencies.
They are the results of past years, and
being the results of past years I think it
is desirable at this particular moment, in
order to avoid casting additional burdens
upon the people, to adopt this method of
continuing the loan, and to put off the
day of payment rather than resort to an
objectionable system of taxation. But
there is something more in connection
with this. We are not pressed in any way
to pay this amount. There will be no
difficulty in raising this amount at any
time. I have an idea that a small funded
-debt for this Colony is most desirable.
By such we would provide an invest-
ment for trust funds, which is much
required. This is a Loan which should not

be sent out of the Colony, and may be
well retained here. I put this matter to
hon. members, I put it to them whether
they will force upon the country the
necessity for increased taxation, or adopt
the plan I suggest ? I know I shall be
chai'ged with inconsistency in making this
proposal ; but I do not think hon. mem-
bers will care much for these charges even
if they are proved, if the propositions I
now make are for the benefit of the country.
I am prepared to bear all the odiuin that
can be heaped upon me, believing that I
am now doing what I consider to be the
best for the interests of the colony. This
is not the first time it has been proposed
to borrow money to meet these loans. It
was proposed on a former occasion by
myself, and it is the practice to renew
annually the Treasury bills. The proposi-
tion is this bringing down the estimated
deficiency and taking credit for the
200,000, 1 propose to borrow, the balance
will be 81,359 11s. Id. Before this is
assented to, hon. members have a right to
ask whether it will enable the revenue to
bear the loss of the ad valorem duties
without increased taxation for 1871. I
have prepared a statement which I think
clearly proves that this can be done. The
borrowing of this 200,000 to meet the
deficiency loan instalments of 1869 and
1870 will enable the ordinary revenue to
cover the ordinary expenditure without
the ad valorem duties. I am not, as hon.
members are aware, called upon to deal
with 1871, but with 1870, and to state
how I propose to provide Ways and
Means to meet the expenses of that year
only. When I propose to give up
140,000 I should however be prepared to
show that this remitted duty can be dis-
pensed with. I will now explain this : If
we bring forward the creditor balance of
81,385 lls. Id. at the end of 1870, and
take credit for the revenue based upon the
Estimates for this year, less 140,000 for
ad valorem duties, and charge 2,148,806,
appropriations based on the estimates of
1870, together with 50,000, which will
probably be required for additional inte-
rest on the public debt, there will appear
a surplus of 25,249 lls. Id. at the end
of 1871, which I do not think is an
over-estimate. We may reasonably hope,
looking at the improved prospects of the

[1870.]

country, and the splendid harvest just
got in, for an increased revenue in future.
I hope I have made clear to hon. members
what I really propose to do. In borrow-
ing this money, it is not for the ordinary
expenditure of the two past years, but for
the deficiencies of previous years. I propose
that the ad valorem duties shall be re-
pealed one half at the end of September
in the present year, and that they shall
cease and determine altogether at the end
of the year. We shall after the end of
September next collect one half only, and
at the end of the year they shall cease
entirely. I will now say something about
a matter of which we hear a great deal.
It is the question of retrenchment. We
have endeavoured by every means in our
power to see in what direction retrench-
ment can be made, but we have been able
to do very little in that direction [Hear,
hear from the Opposition.] But that
little at all events is not so small as to be
insignificant. My hon. friends opposite
might have spared their cheers. We
have in the Estimates of 1869 succeeded
in knocking off an amount of over
100,000, and I will shortly show what
these items are. In the Estimates-in-
Chief for 1870 there is no doubt, as was
pointed out last night, an increase in the
aggregate ; but if it had not been for
these reductions of over 100,000 in 1869
there would have been another 100,000 in-
crease. It will be seen that the increases
are unavoidable, and do not belong to the
ordinary but to the extraordinary expen-
diture of the country, while the decreases
occur chiefly in the ordinaiy expenditure.
The decrease on the Volunteers for 1870
is 2,003 ; on police, 23,518 ; gold and
escort, 2,000 ; Petty Sessions, 3,911 ;
gaols and penal establishments, 14,179 ;
asylums for the infirm and destitute,
2,750; Quarter Sessions, 1,150; Cus-
toms, 3,276 ; printing and bookbinding,
1,280; stores and stationery, 8,515;
gold-fields, 1,450 ; domains and Hyde
Park, 1,467; harbour and river navi-
gation (Public Works), 1,590; public
works and buildings, 5,178 ; roads and
bridges (construction and maintenance),
7,915 ; Fitzroy dock, 3,066 ; post
office, 3,485 ; electric telegraphs, 3,081.
I will now ask hon. members to look
where the increases are. Lunatic asy-

235

lums, 5,406; public instruction, 5,000
this is an additional vote to the Council
of Education, which I suppose no hon.
member will be disposed to find fault
with ; Free Public Library, 4,656 ; in-
crease granted in aid of public institutions,
1,050; charitable allowances, 2,100;
survey of lands, 11.142 this large item
is occasioned by the progress of the
settlement of the country, and by the
increased number of conditional pur-
chasers, who last year exceeded the number
of any previous year ; roads other than
main roads, 6,566 ; 5,000 of this was
forced upon the Government by the last
Assembly. There is an increase of
31,200 on railway working expenses.
As railways are extended these expenses
must necessarily increase ; but there is also
a corresponding increase in the revenue.
Harbour and river navigation, 3,354 ;
interest on public debt, 41,226. I hope I
have shown satisfactorily that the Esti-
mates are increased by charges which arc
inevitable. But these Estimates have been
increased by the action of the Government
to the extent of 100,000. Many are under
the impression that we are very extrava-
gant, and that the ordinary expenditure of
the country is growing as we grow older.
But this is not the case. The expenditure
grows with these extraordinary items. If
the railways and telegraphs are extended
further you must have larger expendi-
t'.ire. The same with the interest of the
public debt. But the amount for depart-
mental services is not much greater for the
year 1 870 than it was in 1865. I feel these
details are very tedious and not over
interesting, but it is necessary that they
should be made known, because it is desir-
able that this question should be under-
stood and set at rest. Those hon. mem-
bers who urge retrenchment do not show in
what direction it should be made. The
Estimates of 1865 were 1,824,245 ; in
1870, they amount to 2,148,906. The
increase arises in this way : The interest of
the public debt in 1865 was 316,458 ; in
1870 it will be 487,160, or an increase of
170,702. There is another charge which
appears on our Estimates. It is for
drawbacks and refunds of duty,
always appears upon the Estimates and is
only a return of revenue for goods
exported. In 1865 it was 25,000; in

236

MR. SAMUEL.

[1870.]

1870, 35,000. So that there is an in-
crease of 10,000 which does not belong
to expenditure proper. There are also
returned receipts in 1870 amounting to
15,000, being an increase of 5,000 on
1865. The charges of collection (a
peculiar charge) were 1,000 in 1865, and
3,000 in 1870, showing an increase of
2,000. In these items no reduction is pos-
sible. The expenses of troops in 1865 was
15,729 ; in 1870, 22,000. This is a
charge we cannot reduce ; it is provided
for by special Act of Parliament. Then
there is an item of 15,000 for the Mint
in 1870, which is an increase of 874 over
1865, but a considerable portion of this
will be returned, and the actual expendi-
ture it is estimated will be only about
12,000. The cost of the Volunteers in
1865 was 8,729; in 1870 it will be
1 1,966. This is an increase of 3,237 on
1865. The amount for public instruction
in 1865 was 70,000 against 105,000
in 1870, being an increase of 35,000.
Charitable allowances amounted to
21,993 in 1865, and. to 36,381 in 1870.
This is an increase of 14,388. Railway
working expenses in 1865 were 99,500,
and in 1870 will be 171,250, increase
71,750. Steam dredges, stores, repairs,
&c., cost 7,100 in 1865, and 10,000 in
1870. Public works and buildings in
1865 amounted to 47,621, and in 1870
to 67,122. The total net increases is
78,301, so that, in point of fact, the
ordinary departmental expenses of the
country for 1870 will not much exceed
those of 1865. The whole of the items
upon which there are increases owe chiefly
those increases to the progress of the country
and the extension of public works. Some
hon. members talk about effecting retrench-
ment by the reduction of the salaries of
public servants. Some of those salaries it
must, however, be remembered, are pro-
vided for by special Parliamentary appro-
priations. I do not think that any appre-
ciable reduction could be made in the
salaiies of public officers. If retrenchment
cannot therefore be made from this source,
can we get it from any other ? Unless hon.
members are prepared to diminish the
charges for minor roads and bridges and
works and services of a similar kind,
I do not see how any large reduction of
the expenditure can be affected. I do not

mean to say that I entirely dissent from
the possibility of retrenchment, but I
believe it is a matter which can only be
accomplished as opportunity offers, and
that it must be gradual. As vacancies
occur retrenchment may be effected, but I
do not see how in any other way large re-
ductions in the expenditure can be made.
I think it my duty now to point out to the
House the state of our banking account :
On the 31st of December, 1869, we had in
the Bank of New South Wales local account
412,602; London account, 326,208;
and cash in the hands of the chief clerk
of the pay branch, 20,883, making a
total of 759,693. On the 14th February
last the account stood as follows : -Bank
of New South Wales local account,
442,684 ; London account, 307,469 ;
cash in hands of chief clerk, 392, making
a total of 750,545. The following is an
account of the public debt as it stood
on 31st December, 1869 : Long-dated
debentures, 8,652,030; short-dated ditto,
550,800 ; Treasury bills, annual cur-
rency, 343,200 ; total debt outstanding,
9,546,030. Add debentures remaining
unsold 31st December, 1869, 137,300;
total outstanding and authorised debt,
9,683,330 The proposed new loans are
as follows: Balance required to be raised
to meet loss in the negotiation of sums
from time to time, 322,709, 12s. 6d. ; to
provide for short-dated debentures due 31st
December, 1869, 100,000; railways, and
other public works, as per Estimates-in-
Chief for 1870, 1,571,600 ; public works
as per Supplementary Estimates for
1869, 97,990 10s. 7d. ; these would bring
the debt up to 11,775,630 8s. Id.
Before concluding, I would wish to point
out that the sum set down in October last
for the extension of railways was
1,600,000. The amount on the present
Estimates is 1,248,000. It is intended
to complete the lines from Murrurundi to
Tarn worth in the north, to Orange in the
west, and to Yass in the south. The
Estimate was formerly prepared on a cal-
culation of 10,000 per mile. The
Engineer-in-Chief , however, now estimates
that the lines may be made for 8,000 per
mile. The surveys are all completed. He
is thus enabled more accurately to estimate
the cost, and he believes he will be able to
construct these lines at the reduced rate.

[1870.]

MR. SAMUEL.

237

They are trial surveys,

AN HON. MEMBER : On the present
system 1

Mr. SAMUEL : That is a matter which
must be dealt with when the subject comes
on for discussion.

Mr. FARNELL : Are not the surveys only
trial surveys?

Mr. SAMUEL
I believe.

Mr. FARNELL : Then the surveys are
not completed ?

Mr. SAMUEL : I do not suppose there are
sectional surveys.

Mr. FARNELL : Then the Engineer can-
not tell the cost.

Mr. SAMUEL : The hon. member will
have to fight that out with the engineer
himself. The Hon. Minister for Works
informs me that the sections are so far
taken that the engineer is able to make an
estimate of the cost.

Mr. FARNELL : Then the Minister for
Works has exceeded the authority of the
House, which only authorized a trial survey.

Mr. SAMUEL : I am afraid that is a
question which we cannot deal with just
now. There is one account the Loans
account which I submitted last October,
and which it is necessary I should submit
again. I will not however weary hon. mem-
bers by readingit, but will lay it on the table.
If time permits I will submit a proposition
during the present session for establishing

Post-office Savings Banks in this Colony.
If in the course of my speech I have
omitted to refer to any particular matter
upon which information is required, I shall
be glad to furnish it. I feel assured that
the proposition I am about to make will be
dealt with by hon. members regardless of
any party considerations. The motion I
now move is that the sum of 1,530 be
voted out of the Consolidated Revenue
Fund to meet the supply granted to Her
Majesty. It is however, my intention sub-
sequently to move the following resolutions :
" 1. That the postage rate of one penny
payable on every newspaper posted within,
or transmitted through the post within the
colony, shall not be demanded or be pay-
able on or after the first day of April, one
thousand eight hundred and seventy. 2.
That, instead of the ad valorem duty now
levied under the Additional Customs
Duties Act of 1865, there shall be charged,
from the first day of October to the thirty-
first day of December, one thousand eight
hundred and seventy, both days inclusive,
on the importation of all goods not liable
to duty by any existing law, a duty of two
pounds and ten shillings for every one
hundred pounds of the value thereof, the
articles excepted under the above-cited Act
being admitted free of duty ; and that on
and after the last-mentioned date the said
duty shall cease and determine."

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE SAUL SAMUEL,
made 20th October, 1870.

[From the Sydney Morning Herald of 21st
October, 1870.}

LEGISLATIVE ASSEMBLY.

Thursday, 20 October, 1870.

FINANCIAL STATEMENT.

Mr. LACKEY: I feel that some apology,
or at least some explanation, is due to the
House for the delay which has occurred
in submitting to the Committee the
Financial Statement. It was my earnest
desire to have made it at an earlier period,
but a variety of circumstances have com-
bined to prevent this desire being earned
into effect ; not the least was the wish to
make the Statement as complete as
possible, by allowing the last quarter to
end, so as to enable me more correctly to
estimate the revenue of the present year,
in order that I might lay the accounts
before the House and the couhtiy in a
more satisfactory form and Avith greater
accuracy. Even now, although some im-
patience has naturally been evinced to
know the financial position of the country,
the time that has elapsed since the meet-
ing of Pai-liament has not been unusually
long for the Budget to be submitted. Sir,
the annual exposition of the financial state
of the country is at all times the cause of
much interest to the House and to the
community at large, and of deep anxiety
to the Minister charged with the prepara-
tion of that exposition. That interest On
the one hand, and certainly the anxiety on
the other, have not been lessened by the
recent discussions which have taken place,
both in this House and the other Chamber,

on our financial position. I feel that I
have a task before me of more than ordi-
nary difficulty, and I must ask the kind
forbearance and consideration of the Com-
mittee whilst I endeavour to perform it to
the best of my ability. With this indul-
gence I trust I shall succeed in making
such a statement as will at least be clear
and intelligible. I will not detain honor-
able members with any further remarks,
but will at once proceed to deal with the
accounts which I have had prepared in a
form similar to those submitted to the
House during last Session. These are
four in number 1868 and previous years,
1869, 1870, and the account of estimated
revenue and expenditure for the year
1871. 1868 and previous years' account :
The first account therefore to which I
would invite the attention of the Com-
mittee is that for 1868 and previous years,
marked No. 1. This account is simply a
continuation to 30th September last, of
the one submitted last Session. The de-
ficiency was then estimated to be <! 10,743
14s. Id., but by lapse of time it is ascer-
tained that some of the appropriations then
retained for expenditure are no longer
required. The estimated deficiency now
shown is therefore only 86,190 Is. 5d., a
sum considerably less than first estimated
by me. The practice of retaining appro-
priations of Parliament for several years
after the one for whirl i thoy were voted,
has, ever since the introduction of Re-
sponsible Government, and even before
then, been attended with great incon-
venience. It is in a great measure owing
to this practice that so much uncertainty
has always existed as to the exact state

240

MR. SAMUEL.

[1870.]

of the Revenue Accounts. Whilst there
is a balance of appropriations outstanding
it is almost impossible for the Finance
Minister to come down and state the
actual balance to the debit or credit of
each account. He is compelled to estimate
the balances, and I regret to state that
these estimates have often differed from
the actual balances. Until the plan
adopted in England of charging the ex-
penditure of the year against the revenue
of the year is in force here, differences in
these balances from time to time will be
unavoidable. On the Audit Act coming
into operation this uncertainty will, how-
ever, be greatly diminished ; for, under its
provisions, all appropriations not expended
by 31st March of the year following that
for which they were obtained, must be
written off, unless where votes are in
course of expenditure under contracts, or
where contracts have actually been entered
into before that date. To a certain extent,
therefore, the balances will still continue
liable to variation, but it is anticipated
that these variations will be trifling com-
pared to what they are now found to be
under the present system. If honorable
members will look at this account (No. 1)
they will perceive that the deficiency of
86,190 Is. 5d., now stated, cannot
possibly vary more than by .19,572 19s.
9d., the amount of appropriations retained
for issue. The deficit maybe less, but it can-
not possibly be more. These appropriations,
particulars of which are given in the state-
ment attached, marked A, are all, I am
assured, required for expenditure. It was
my desire to have closed this account
entirely, by writing off everything that
was outstanding at the present time ; but
on inquiry I find that if this course were
adopted it would necessitate the taking
of new votes for services already provided
for, a proceeding which could be produc-
tive of no benefit to the revenue, as it
would simply be relieving the year 1868
at the expense of the year 1870 or 1871.
Turning now to No. 2 account, that is
the one for 1869, honorable members
will find that I have charged to that year
the estimated deficiency at the end of
1868. I will go through this account in
detail, in order to show wherein it differs
from the one given with Ways and Means
of February last. 1, On the debit side I

bring forward from 1868 and previous
years' account, as already stated, an esti-
mated deficiency of 86,190 Is. 5d., in
place of 110,743 14s. Id., that is, a
reduced charge of 24,553 12s. 8d. 2.
Instead of 106,085 8s. 6d., amount of
Supplementary Estimate of last Session, I
charge only 94,029 17s. 4d., that being
the actual amount voted by the Committee
of Supply. There is therefore a reduction
hereof 12,055 11s. 2d. 3. On the other
hand, however, we have additional charges
to the amount of 15,165 Is. 6d. ; which
is composed of 8,830 15s. 3d. for an Ad-
ditional Supplementary Estimate, 3,034
6s. 3d. further Special Appropriations, and
3,300 for a portion of the short-dated
debentures issued under the Acts 29 Vic.,
Nos. 4 and 5, which were not exchanged
by the holders for those afterwards issued.
These additional charges, deducted from the
amount of the two reductions just men-
tioned, will leave, when one or two trifling
variation^ are taken into account, a net re-
duction of 21,444 on this year's account.
It will be observed that there is no increase
on the credit side of the account. The
amount formerly taken credit for as esti-
mated savings was 100,000. As the
present year has yet two or three months
to run, I have thought it advisable not to
increase that estimate, although I may
state that I believe it will ultimately be
found to be considerably in excess of that
sum. The net reduction of 21,444 in
the chai-ges against this year brings down
the estimated deficiency at the end of
1869 from 152,530 8s. lid. previously
stated, to 131,086 8s. lid. now shown,
which is the amount I carry forward as a
charge upon the present year. Before,
however, passing on to this year's account,
I wish to point out to the Committee
that, whilst the revenue of 1869 was
2,196,970 4s. 10d., the estimated ordi-
nary expenditure was only 2,138,566
12s. 4d., showing thereby a surplus of
revenue over expenditure of 58,403 12s.
6d. This it will be recollected was the
first year of our administration. It will
thus be seen that had it not been for the
deficiency at the end of 1868, which had
accrued before I took office, and the
103,300 part of the deficiency loan of
1864, there would have been a surplus at
the end of 1869. I must now ask honor-

[1870.]

MR. SAMUEL.

able members to turn to the 1870 account.
Starting with the deficit brought from
1869, I will now proceed to deal with this
account, and show the Committee' in what
respect it varies from the one I submitted
last Session for the same year. In the
first place we had to come down last
Session with additional Estimates for
26,248 11s. 9d. after I had made my
Financial Statement, which, after taking
into account a few reductions made in
the Estimates-in-Chief in passing through
Committee, increased the charge for general
services from 1,481,161 to 1,503,493
12s. lid., making an actual increase of
22,332 12s. lid. on the Estimate as first
submitted. In the second place I have
now to add a Supplementary Estimate for
this year amounting to 60,785 13s. 3d.,
which although lai'ger than I expected,
will, I am sure, be admitted as moderate,
when compared with previous Supplemen-
tary Estimates. I will take an oppor-
tunity, before I close my remarks on this
account, to refer to some of the principal
items in that Estimate, to show how
these charges have arisen. From these
two increases (the Supplementary Esti-
mates and the Additional Estimates of
last session) in the estimated expenditure,
amounting together to 83,118 6s. 2d., we
have to deduct the difference between the
deficit of 1869 formerly charged, and that
now brought forward, viz., 21,444 ; this
will give a net increase of 61,674 6s. 2d.
on the debit side. If honorable members
will turn with me to the credit side, I
will explain the changes which have there
been made. In my Ways and Means of
February last I had estimated the revenue
at 2,282,796 ; now I estimate it at
2,178,936, showing a falling off of
103,860. We have, however, to deduct
from the present actual and estimated
revenue, 30,000 received this year from
the Government of Victoria on account of
the year 1869, and 6,872 13s. 6d., amount
of advances refunded, which in an account
of this nature cannot be taken in as
revenue. These two sums, amounting to
36,872 13s. 6d., deducted, leave a sum of
2,142,063 6s. 6d. to be credited as the
net revenue of this year a sum less by
140,732 13s. 6d. than taken credit for
in my last statement. I will presently
explain how the falling off arises ; but, to

preserve the sequence of my remarks it
will be necessary that I should go through
the account first. This arrangement will
also, I believe, be more convenient for the
Committee. I am anxious indeed more
than anxious to make clear these
accounts to the Committee and the country.
The second amount which I have taken
credit for is 110,360 12s. 5cl., being the
estimate for appropriations for general
services not likely to be required. Had I
taken the average of the actual savings
for the past three or four years, the
amount would have been considerably
larger, probably 150,000, but I have
preferred to follow the usual course, and
leave a wide margin for any future con-
tingency. The result is an estimated
deficiency of 210,686 16s. 2d. as against
the previous estimated deficiency of
118,6408s. lid. I will endeavour to show
in a more concise form how this result
arises.

s. d.

Take the estimated deficit for-
merly submitted 118,640 8 11

To which add

Increased appropriations of
last session after the Finan-
cial statement was made ... 22,332 12 11
Present Supplementary Esti-
mate 60,785 13 3

Decrease in revenue as al-
ready stated 140,732 13 6

Making in all a sum of 342,491 8 7
From this however

we have to deduct

the reduction in

the deficiency

brought forward

from 1869 ... 21,444

And the estimated

savings on the ap-
propriations for

1870 110,360 12 5

together amounting to

131,804 12 5

leaving a deficiency, as now

estimated, of ... 210,686 16 2

Although this is a result I did not
anticipate at the beginning of the year,
still it is one that from subsequent events
I was not altogether unprepared for.
When honorable members recollect the
heavy rains with which the Colony has
been visited, and the disastrous conse-
quences of the floods which followed they
can hardly be surprised to find that this
year's revenue has not turned out tottt-r.

242

MR. SAMUEL.

[1870.]

Indeed, I am agreeably surprised to find
that we are not in a worse position for,
after all, the deficit is only 10,686 16s. 2d.

because the Committee will remember

that I distinctly stated last Session that
it was impossible to pay off the 1869 and
1870 instalments of the deficiency loans
out of current revenue. It was to pro-
vide for the payment of these instalments
that I brought forward the Deficiency
Loans Funding Bill, a measure which I
again intend to submit, although perhaps
in a different form. Whilst there is this
small estimated deficiency of 10,000 at
the end of the year, a deficiency which
will ultimately I believe prove a surplus,
it must be borne in mind that it has been
occasioned by paying off the deficit of 1868
and previous years ; or better to explain
this, the revenue for the past and present
years will have exceeded the expenditure
by 78,803 5s. 3d., thus,

The actual revenue of 1869

was 2,196,970 410

The expenditure of 1869 was 2,138,56612 4

Showing an excess of revenue
over expenditure for that
year of 58,403 12 6

In the year 1870 (the present

year), if my estimate for

the last quarter is realized,

the net revenue will be ... 2, 142,063 6 6
The expenditure, as estimated 2,121,66313 9

Leaving an excess of revenue
over expenditure of

20,399 12 9

Now, sir, I think, this is a result, if I may
judge from the tone of the debates during
the past and present Sessions, which few
could have expected. Although I do not
include the deficiency loans outstanding,
I claim for the present Government credit
for having kept the ordinary expenditure
within the ordinary income during the
last two years. When honorable mem-
bers recollect the dreadful prophecies of
evil ; and that both in this House and the
other Chamber we have been told that
there would be a deficiency of a million at
the end of this year ; and that I had been
compelled to borrow from the Loans'
Fund an amount variously estimated from
the small sum of a quarter of a million to
the large sum of a million, and consider-
ing all the difficulties with which I have
had to contend during the past two years,

I think we have reason to feel gratified,
and to claim some credit for having kept
the ordinary expenditure of the country
within the ordinary income ; and that
instead of increasing the deficit which
existed when I took office, we have
succeeded in reducing it by the large sum
of 78,803 5s. 3d. When I state that
the revenue has not come up to the esti-
mate submitted by me in February last,
by 103,860, I should point out in what
direction this falling off has occurred. It
will be remembered that at the time I
made the original estimate, we proposed
to abolish the ad valorem duties and news-
paper charge, by which we expected to
lose 50,000. On the other hand, had
we succeeded in getting the Stamp Act
amended, there would have been an
increase of revenue from that source, of
45,000, leaving a difference of 5,000
only. The statement, which I will now
read to the Committee, will show wherein
my estimate has failed to be realized in
other directions. On the 17th of
February I estimated that the receipts
from Customs would be 804,200; my
present estimate is 862,365, showing an
increase of 58,165. I estimated the
duty on refined sugar and molasses at
19,000; my present estimate is 19,833,
showing an increase of 833. I estimated
that the duty on spirits distilled in the
colony would be 20,000 ; the present
estimate is 12,914, a decrease of 7,086.
I estimated that the gold revenue would
be 25,000 ; the present estimate is
19,839, a decrease of 5,161. I esti-
mated the Mint receipts at 18,000 ; the
present estimate is 11,142, showing a
decrease of 6,858. I estimated the land
revenue at 621,950 ; I am sorry to say
that it will be only 526,802, being a
decrease on my former estimate of 95,148.
I estimated the assessment on sheep under
the Scab Acts and the fees on the inspec-
tion of sheep and cattle at 6,525 ; the
present estimate is 8,589, showing an
increase of 2,064. I estimated the
postage receipts at 74,500 ; the present
estimate is 81,406, showing an increase
of 6,906. I estimated the receipts from
money orders' commission at 2,800 ; my
present estimate is 2,892, showing an
increase of 92. I estimated that the
fees under the Registration of Brands Act

[1870.]

MR. SAMUEL.

243

would be 500 ; my present estimate is
568, showing an increase of 68. I
estimated the receipts from licenses at
80,675 ; the present estimate is 77,657,
showing a decrease of 3,018. I esti-
mated that the fees of office would amount
to 30,346 ; the present estimate is
25,531, showing a decrease of 4,815.
I estimated that the fines and forfeitures
would be 7,275 ; the present estimate is
6,490, showing a decrease of 785. I
estimated the amount that would be
received from rents, exclusive of land,
27,275 ; the present estimate is 26,607,
showing a decrease of 668. Stamps,
which I estimated at 110,000, I now
estimate at 65,437, showing a decrease
of 44,563. Railway receipts I estimated
at 320,000 ; the present estimate is
315,240, showing a decrease of 4,760.
Electric telegraph receipts I estimated at
35,000 ; the present estimate is 31,079,
showing a decrease of 3,921. Pilotage
rates, harbour dues, and fees, I estimated
at 18,000 ; the present estimate is
17,740, showing a decrease of 260.
Tonnage dues I estimated at 8,350 ; the
present estimate is 7,253, showing a
decrease of 1,097. Interest on city
debentures I estimated at 10,000 ; the
present estimate is the same. I estimated
miscellaneous receipts at 43,400 ; the
present estimate is 49,552, showing an
increase of 6,152. The total amount of
receipts, I estimated in February, would be
2,282,796 ; my present estimate is
2,178,936. There is an increase of
74,280, against a decrease of 178,140.
Deducting the increase 74,280 from the
increase of 178,140, it shows a decrease
on the present estimate of 103,860. If
to this decrease we add the amount
received this year from Victoria on
account of Murray River Custom's Account,
1869, viz., 30,000, and the6,872 13s. 6d.
for advances refunded, together amounting
to 36,872 13s. 6d., we arrive at the
difference already mentioned, namely
140,732 13s. 6d., between the amount
credited to 1870 last Session, and that
now credited. It will be observed that I
have allowed for a considerable falling off
in the land revenue, as compared with pre-
vious estimates. I confess that I have been
somewhat disappointed in not receiving
a larger amount from the conditional

purchasers of land, as I believed the
facility afforded them of paying up by
instalments would have induced many to
have reduced their balances, with a view
to secure their freeholds. In a great
measure, doubtless, the season has been
the cause of their holding back, but
speeches in this House have also had their
effect, and led to an expectation not only
of a reduction in the price of land, but of
a remission of balances due by this class
of purchasers. In order that I might
satisfy myself on this point, I caused a
circular telegram to be sent to the different
Land Agents throughout the colony, to
the following effect :

" REFERRING to additional Regulations under
the Land Act, published in Gazette of 21st
September, 1869, and to instructions relating
thereto, please state whether the conditional
purchasers are generally acquainted with the
fact that they can pay their balances by instal-
ments, and inform me why, in your opinion,
greater advantage has not been taken of the
facilities for payment."

I will read to the House extracts from
some of the replies which I have
obtained :

Inverell:

Most of the conditional purchasers believe,
and many of them have told me, that either the
75 per cent, balance will be shortly wiped off
by an Act of the Legislature, or some other
sweeping reduction.

Tamworth.

The reasons why greater advantage has not
been taken of the facilities of payment are :
some are not in a position to pay, while amongst
others there is a belief that there is to be a
great change in the Land Laws, and that the
price will be reduced. This unsettles them,
and they hold on and continue to pay interest
in the hope they may not be called upon to pay
the balance of the purchase money. The un-
certainty about the Land laws has an injurious
effect.

Burrow.

Greater advantage has not been taken of the
facilities for payment, on account of the general
belief amongst conditional purchasers that
eventually the balance will not be demanded.

Eden.

The little advantage taken of them in this
district has arisen first, on account of leases
sustained by the late floods ; and secondly,
from an opinion which appears to prevail that
some alteration may possibly take place in the
price of hind.

MR. SAMUEL.

[1870.]

Armidale.

I am of opinion that their not having taken
greater advantage of this boon, is owing to a
very general impression on their part that the
price of land will be reduced, and that some
concession will be made to them with regard to
the amount of balance they will be required to
pay.

Murrurundi.

The reason why advantage has not been taken
of the facilities for payment, in my opinion,
partly arises from a general belief on the part
of the conditional purchasers that the price of
land will be lowered, and that they will not be
called upon to pay the full amount of their
balances ; and partly from the fact that many
of them are unable to pay anything beyond their
yearly interest.

Bathurst.

I think inability to pay may be the chief
reason they do not avail themselves of the
arrangements.

Grenfell.

I am clearly of opinion that the late severe
winter has prevented numbers paying their
balances, and that the present year is no
guide as to the future.

Tumut.

A very general impression also prevails that a
time will come when more favourable terms of
payment will be offered by the Government.

Orange.

They do not avail themselves of the privilege,
mainly from want of money ; also because many
are under the impression that a reduction
in price will be made.

Braidioood.

I am of opinion that they believe the Govern-
ment will in a short time amend the Land Act,
so as to give the land to them at 5s. per
acre, being amount of deposit.

Albury.

Believe primary cause why greater advantage
has not been taken of facility for payment is on
account of popular belief existing that on a
future day land laws will be so amended that
either the balances will not be required to be
paid in full, or that interest paid will be credited
as an instalment in payment of balances.

Kiama.

It is anticipated by many persons that the
Legislature will at some future time forego
the balance, or a portion of it.

Glen Innes.

Conditional purchasers have generally in*
formed me, when paying interest, that they
prefer doing so, instead of paying balances,
or portions thereof, awaiting amendment of
the Act in their particular case.

Bega.

Do not seem inclined to pay their balances by
instalments, in my opinion, because they think
there will be a reduction in the price of land.

Cooma.

Conditional purchasers have an idea that ul-
timately some of the balance may be remitted.

Bombala.

First, a great scarcity of money ; and second,
an impression, on the part of free selectors, that
eventually their balances will be remitted.

Berrima.

I have no hesitation in offering it as my
opinion that the conditional purchasers, as a
body, expect that an entire abatement of their
balances will some day be made.

Wagga.

Others affirmed that before twelve months
had passed there would be a new laud measure,
that land would be down to ten shillings an acre,
and that then they would be called upon to pay
five shillings more, and get their deeds. This
idea is a very general one amongst all classes
here ; and, as the penalty to the conditional
purchaser of maintaining that view does not
exceed 5 per cent., he is not jeopardized in any
way, while it is convenient to use this argument
as a reason for paying no more than just
what the law requires or compels.

Singleton.

And it appears to me, if I am allowed to state
my opinion, that they are under an impression
that new Regulations will be in force.

Dungog.

Some are impressed with the belief that
sooner or later an amendment of the Land Law
must take place, when they have no doubt that
their positions will be greatly improved, and
probably still greater facilities be given
for acquiring their grants.

Muswellbrook.

The agitation which took place at the last
General Election with reference to the desir-
ability of making a reduction in the price of
land is, in my opinion, the principal reason why
greater advantage has not been taken of
the facilities afforded by the Regulation.

The long continuance of wet weather render-
ing the settlers unable to get to market with
their produce to obtain cash, and a latent hope
(expressed to me by several) that the Govern-
ment will forego a portion of the balance of the
purchase money remaining due, are the chief
reasons why a greater number have not hitherto
paid instalments of balance due.

[1870.]

MR. SAMUEL.

245

Wollongony.

There appears to be an impression amongst
some of them, no doubt induced by their wishes
that in the event of any alteration in the Land
Law, the payment of their balances might
be reduced to some extent.

Camdt n.

I may add that there is an impression that
the upset price will be eventually reduced, and,
that those who pay up in full, or largely, will in
such event be at a disadvantage.

Raymond Terrace.

There is a very general impression that some
alteration will shortly be made in the price of
land, and that they, as well as future conditional
purchasers, will become proprietors at a
lower price than 1 per acre.

CassHi.-/.

I have also been told, when explaining the
advantage of paying instalments, that the Go-
vernment will some time or other giv

interest altogether,
with the quit rents."

other give up the
they have done

Molony.

Several selectors have told me that they in-
tended to pay their balances, but would wait
till the end of the year, to see if any alterations
would be made in the Crown Lands Act.

From these it will be seen that both the
reasons I have stated have operated
against a larger revenue from this source.
There is certainly no warrant for the con-
clusion that Parliament will assent to any
remission of the balances. Then again,
the late appraisements of the rents of the
Pastoral Runs have been considerably
less than the former rents ; and not only
is there a falling off in these rents,
but I am afraid a still further re-
duction may be anticipated. This may
be a convenient time for me to in-
form the Committee of the state of the
Treasury balances on the 30th September
last, and the distribution of such balances
on that date. I know the honorable mem-
ber opposite (Mr. Piddington) is particu-
larly anxious on this point, because he has
asked me several questions with regard to
it. I did not reply to these questions
because I felt that it would be premature
to do so, as, without other information,
my replies might have been misunderstood,
and might thereby have led to statements
calculated to mislead. The statement
which I have had prepared, and which I

will now read to the Committee, will show

exactly what these balances were :

Credit balances s. d

Loans Account ... ... 18,517 8 9*

Lodgment Account 1231421 5 10

Special Accounts

Church and School Estates

Fund 37,553 14 4

Superannuation Fund ... li'.U 19 5

180,187 8 4
l>ebit balance

Consolidated Revenue Fund 166,881 1 6

Net aggregate credit bal-
ance 13,306 6 10

DISTRIBUTION OF BALANCES.
Bank of New South Wales-
Local Account
Balance ...46,340 3 5
Newcastle
branch Bal-
ance 9,738 2 1

56,078 5 6
Cash in the
Treasury ... 8,173 13 7

64,251 19 1
Debentures and
other securities
in the Treasury
chest 63,000

127,251 19 1

Deduct overdraft on the account
with the Bank of New South
AVales, London 113,945 12 3

Net aggregate credit bal-
lance 13,306 6 10

From this statement it will be seen that
the credit balance, as shown by the books
of the Treasury, on the Loans' Account
was 18,517 8s. 9d., which amount was
more than represented by the balance in
the local bank at that date, and that there
was an overdraft on the Consolidated Re-
venue account of 166,881 Is. 6d., which
was represented partly by the use of trust
funds, and partly by an overdraft on the
London account. It includes, however,
the payment of the 100,000 of the De-
ficiency Loans Debentures due at the end
of 1869, which I hope the House will
again authorize me to raise by loan. Now
it will be clear, I trust, that as the whole
debit balance on the Consolidated Revenue
account was only 166,000, it could not
possibly be indebted beyond this sum to
any other fund. The actual cash balance
to the credit of the Loans' fund on the

246

MR. SAMUEL.

[1870.]

30th September last was 18,517 8s. 9d.,
being the only amount available at that
period for the purpose of carrying out the
public works of the colony, except
.128,000 of debentures then in England,
and the last two issues, 450jOOO (of
which only 322,000 were to be sold)
and the 407,100, authorized during the
present session. I hope, therefore, I have
made it clear that some honorable mem-
bers have fallen into a mistake in suppos-
ing that the Consolidated Revenue fund
was largely indebted to the Loan Fund,
and that when every engagement has been
met during the present year the total de-
ficiency will be 210,686 16s. 2d., of
which 200,000 is part of the deficiency
loan which I sought power to borrow,
and which power was granted to me by
this House, during the past session. As
it did not become law, however, in con-
sequence of its rejection by the Council,
I shall again have to request authority to
borrow the amount in a manner to which
I shall hereafter refer, and which, I trust,
will meet with the approval of both
branches of the Legislature. It may be
asked by those who are not thoroughly
acquainted with these accounts how it can
be possible, with an overdraft of 166,000
on the 30th September last, that I esti-
mate a deficit of only 10,000 at the end
of this year ? My reply is, that if you
refer to the statement of Ways and Means,
you will there see that I estimate the
revenue for the present quarterat 747,444.
Out of this sum the deficit of 166,881
Is. 6d. has to be paid, leaving for expen-
diture during the remainder of the year a
sum of 580,562 18s. 6d., which has to
be supplemented by the 200,000 yet to
be raised by loan. But whether the House
permit me or not to raise that amount, it
will remember, I trust, that it is not a new
deficiency. Of course, it is open to ques-
tion whether my estimate of revenue is
correct or not. I may possibly be dis-
appointed to some small extent, but the
actual revenue for the corresponding quar-
ter of last year was 743,000, being only
4,000 less than I now estimate it ; so
that I do not think I can be charged with
endeavouring to mak,e things look better
than there is reasonable expectation that
they -will be. The increase in railway
traffic alone ought to give the difference.

On this very day last year I submitted to
the Committee an estimate of the actual
and estimated revenue for 1869, amount-
ing to 2,207,816. The actual receipts
turned out to be 2,202,970, or within
5,000 of my estimate. I think I am
justified, therefore, in asking the Com-
mittee to consider that, so far as it is
possible for an estimate to be relied upon,
mine is likely to be realized. Before leav-
ing the account for the year 1870, I wish
to refer to some of the items in the Sup-
plementary Estimates. The largest of
these is one for 20,000, for Murray River
Customs, which, although it appears on
the Estimates, is simply a refund to the
Victorian Government of the various
amounts received, and estimated yet
to be received, on their account,
from the Government of South Aus-
tralia, and from duties collected on
the Border, under the conditions of the
Border Customs Agreement. There is
another large item of 7,500 for Steam
Postal Communication via San Francisco.
This is not a convenient time perhaps to
discuss the merits of this question, but I
feel assured that Parliament will approve
of the course adopted by this Government,
in joining with the Government of New
Zealand in the establishment of a postal
route which I believe cannot fail to prove
of immense advantage to this colony,
and I think that the originators of the
undertaking are entitled to credit and
encouragement for their great enterprise.
When we recollect the interest with which
the last European news was received by that
line, all will admit that it is calculated,
when the plan is fully developed and the
arrangements are completed, to prove
beneficial both as a postal and passenger
route. While the cost of the service vid
Panama was 55,000 a year to the
colony, we will get by this, a better
service, performed for less than one-fifth
the amount. The next item I refer to is a
sum of 6,000, on account of the Super-
annuation Fund. I may as well here
state what the Government intend to pro-
pose with reference to that fund. This
sum is placed on the Estimates to assist in
meeting the claims for the present year, as it
is the intention of the Government to ask
Parliament, in a Bill which they will
shortly introduce, for authority to return

[1870.]

MR SAMUEL.

247

to all officers in the Public Service the
amounts deducted from their salaries on
account of the Fund, and to charge
upon the Consolidated 'Revenue Fund in
future the existing pensions, less a deduc-
tion in consideration of the guarantee for
the payment of their pensions from that
Fund. I will not at present go into
further explanation, as I shall have again
to refer to the subject when dealing with
next year's accounts. There are no other
items demanding special comment, as the
purposes for which they are required will
be found set forth in the Estimates them-
selves. Having dealt with the year 1870,
I must now pass on to 1871, the year with
which we really have to deal, and one
possessing perhaps more interest for us
than those we have just passed over.
Honorable members have already had
before them the Estimates of Expenditure
for this year, and no doubt some disap-
pointment will be felt that the amount
is so large. I should indeed have been
glad if it had been possible to reduce
them ; but although we made many
attempts, I regret to say we failed in
bringing them below the present estimated
amount. I was last night reminded by
the honorable member for the Hawkes-
bury of a statement I made on one
occasion, that the expenses of the country
should be kept within two millions, and
that that sum ought to be adequate for
the Governmont of half a million of people.
I have not altered my opinion. Neverthe-
less, looking at the fact that the people of
this country are not inclined to stand still,
but are anxious rather to incur a large
expense for the extension of railways,
and the prosecution of other public works
essential to the progress of the colony, it
is impossible for the Ministers to reduce
the expenditure to any appreciable extent.
The only way in which retrenchment
could be effected would be by the reduction
of salaries of Public Officers to the amount
of 30,000 or 40,000; but although
there are a few honorable members who
hold the view that this reduction should
be made, 1 believe that a majority of the
House are not of that opinion. I will
now refer to the Estimates of Expendi-
ture for the year 1871, which amount to
2,243,138 6s. 8d. Now although these
shew an increase of 71,000, it must be

borne in mind that there is a large amount
required for increases which are inevitable.
I will read to the Committee some of these
increases : Volunteers, 3,345 consider-
ing the removal of the military, and the
recent news from Europe, I suppose no one
will deny that it is necessary to do some-
thing for our defence; Police, 10,259;
Police Guard necessary on account of the
removal of the military 6,336 ; Gaols,
3,272 ; Lunatic Asylums, 992 ; Regis-
trar General, 525 ; Reformatory for
Boys, Newcastle, 800 ; Asylums for
the Infirm and Destitute, 1,925 ;
Charitable Allowances, 1,884 ; Treasury,
550 ; Customs, 720 ; Gold and Escort,
550 ; Printing, Bookbinding, and Post-
age Stamps, 907 ; Gold Fields, 1,601 ;
Railways (consequent on extensions and
increased working expenses), 21,400 ;
Harbours and River Navigation estab-
lishments, 1,714 ; Public Works and
Buildings, 6,878 ; Miscellaneous Ser-
vices, 1,496 ; Steam Postal Communi-
cation with great Britain vid San Fran-
cisco, 10,000; Electric Telegraphs,
3,397 ; Interest on Debentures, 50,473.
Total, 129,024. The interest on the
debt, and the working expenses of our
railways alone, more than cover the in-
crease on the Estimates. Although the
Police estimate for last year was taken at
a reduced sum by my honorable colleague,
the Minister for Lands, then Colonial
Secretary, in consequence of a re-arrange-
ment of the Force, which the House disap-
proved, yet it will be seen there is an
increase of 10,000 only on this year's
Estimate as compared with that of 1870,
and the Force is now in a state as efficient
as formerly. Most of these increases are
not likely to be disputed, and will be
admitted as absolutely necessary. This
being so, it will be seen that after taking
into account these inevitable increases,
there is really a decrease on the whole,
as compared with 1870. Last year
also showed a decrease as compared with
the previous year, so that we really are not
increasing the ordinary expenditure of
the Government If it were merely a
question of the ordinary expense of the
Government of the country, doubtless it
might be kept at a low point, but so long
as we go on extending our public works,
and borrowing money for the purpose,

248

MR. SAMUEL.

[1870.]

there must be an increase in the charge
for interest, and there must also be a
corresponding increase in the working
expenses of our railways as they extend.
Of course there is the increase of revenue
on the other side, which however does not
appear in juxtaposition with the expendi-
ture. It will be noticed that there is a
reduction in the amount to be handed over
to trustees for minor roads. The object the
Government have in this reduction is to
make it conditional, that where they give
money to trustees for the repair of roads,
a proportion of the expenditure should be
contributed by the people residing in the
district. I think it will be admitted that,
until some scheme of local self-government
can be adopted, this is a correct system, as
the people will, in all probability, see that
the money, of which they contribute a
portion, is properly expended. At present
the Government have no check upon this
expenditure, further than that vouchers
are forwarded, shewing the payment ; but
we have no means of telling whether the
money is judiciously expended or not. It
is necessary that I should allude in some
way to the large amounts to be provided
for by loans. There is a sum of .290,000,
which is required to complete the lines to
Bathurst and to Murrurundi, the last
appropriation of 1,000,000 being found
insufficient. There is also an amount of
1,100,000 for the further extension of the
three existing lines, the Western line to
Orange, the Southern line from Goulburn
to Yass, and the Northern line from
Murrurundi to Tamworth ; the estimate is
based upon the assumption that the lines
will not cost more than 7,000 per mile.
The Engineer-in-Chief for railways is of
opinion that with lighter earth- works the
lines can be constructed at this rate. The
Government having well considered whether
it would be desirable to carry out a cheaper
system of railways, and having availed
themselves of all the information within
their reach, have come to the conclusion
that it is better to continue the lines to the
points now proposed, in accordance with
that officer's opinion. I hope the Hoiise
will bear with me while I read the report
of the Engineer-in-Chief on this subject.
That officer, in writing to the Com-
missioner for Railways, on the 5th August
last, says, in regard to the proposed

extensions of the Southern, Western, and
Northern railways : " With reference to
the proposed change of gauge for the exten-
sions beyond Goulburn, Bathurst, and Mur-
rurundi, I must express my decided opinion
that any reduction would be attended with
the most serious inconvenience and cause
great loss to the revenue. It has been
assumed that a very large traffic on all the
lines will be derived from the carriage of
live stock ; and, setting aside the difficulty
of changing wild cattle, wherever the
difference of gauge may exist, I assert that
no traffic of this description can be carried
economically on a less gauge than 4 ft.
8| in., and on a 2-ft. gauge it would be
impossible to conduct such a traffic with
safety. It has been asserted by the advo-
cates of the narrow gauge (3 ft. 6 in. and
2 ft.) that a 40-1 b. rail can be used on such
lines', and thus a great reduction on first
cost of construction can be effected. To
this I say, that a rail weighing only 40 Ibs.
to the yard is utterly iiseless on any gauge
where locomotives are employed. The
Cawnpore and Lucknow branch railway in
India was laid with rails weighing 40 Ibs.
to the yard, with a gauge of 5 ft. 6 in., and
was worked by locomotives ; and although
the traffic was light, the rails failed within
twelve months of the opening of the line.
Many other examples could no doubt be
found to show that what is tei-med a cheap
railway is always the most costly, as the
extra cost of working and maintenance is,
by the advocates of this system, left entirely
out of the calculation. From Mr. Higin-
botham's report to the Commissioner for
Railways in Victoria, on the subject of rail-
way extension, I have taken the subjoined
particulars, showing the estimated cost of
the North-eastern railway of that colony,
as compared with the cheapest known lines
in the United Kingdom. ' I propose to
to take each of these cases for the purpose
of showing what each line would have cost
if constructed by labour paid at Victorian
rates ; and, with a desire to understate
rather than overstate the case that I am
laying before you, I will assume that the
price of labour here is one and half times
higher than in England and Scotland, and
only twice as high as in Ireland. I will
assume also, that the weight of the rails on
each line is the same as I propose for the
North-eastern railway namely 72 Ibs. to

[1870.]

MR. SAMUEL.

249

the yard this latter assumption being the
least favourable that I can make for the
purpose of my argument. You will observe
that I have made allowance in the follow-
ing calculations for the higher price paid
for land in the United Kingdom than
here, and also for the parliamentary and
law expenses incurred there.'

Great Northern and Western Railway of Ireland.

Cost per mile in Ireland.

Permanent-way materials 1, 106

Ballast 629

Sleepers 462

Laying 99

Works and supervision . . 3,438

Land,-say 650

Parliamentary and law expenses 196

6,580

Cost per mile in Victoria.

+ 25 per cent, for freight, &c 1,382

x 2 for difference in labour 1,258

Same here 462

x 2 for difference in labour 198

x 2 for do. do 6,876

100

Nil.

10,276

Killarney Branch Railway.

Cost per mile in Ireland.

Permanent-way materials 1, 106

Ballast 629

Sleepers 462

Laying 99

Works and supervision 3,004

Land, say' 650

Parliamentary and law expenses 50

6,000

Cost per mile in Victoria.

+ 25 per cent, for freight, &c 1,382

x 2 for difference in labour 1,258

Same here 462

x 2 for difference in labour 198

x 2 for do. do 6,008

100

Nil.

9,408

Great Southern and Western Railway of Ireland.
Branch Line.

Cost per mile in Ireland.

Permanent- way materials ..... ............. 1,106

Ballast ............................................. 629

Sleepers ......................................... 462

Laying ____ . ........................................ 99

Works and supervision ..................... 4,004

Land, say ....................................... 650

Parliamentary and Law Expenses ......... 50

Cost per mile in Victoria.

+ 25 per cent, for freight, &c 1,382

x 2 for difference in labour 1,258

Same here 452

x 2 for difference in labour 198

x 2 for do. do : 8,008

100

Nil.

11,408

Malton and Thirsk Branch Railway.

Cost per mile in England.

Permanent-way materials 1,106

Ballast 798|

Sleepers 437

Laying 132

Works and supervision 1,266J

Parliamentary and law expenses 50

Land, say 650

4,440

Cost per mile in Victoria.

+ 25 per cent, for freight, &c 1,382

x 1 for difference in labour 1,198

Same here 437

x 1 J for difference in labour 198

x l|for do. do 1,899$

Nil.

100

5,214i

Honeybourne to Stratford Branch Line.

Cost per mile in England.

Permanent-way materials 1,106

Ballast 7981

Sleepers 437

Laying 1 32

Works and supervision 2.826J

Land, say 650

Parliamentary and law expenses 50

6,000

Cost per mile iu Victoria.

+ 25 per cent, for freight, &c 1,382

x 1J for difference in labour 1,1ft

Same here

x 14 for difference in labour 198

x lifor do. do. 4,239

100

Nil.

7,654

The Peebles Railway.

Cost per mile in Scotland.

Permanent-way materials 1,106

Ballast 798|

Sleepers ^

Laying..... J32

Works and supervision l.o^lj

Land, say

Parliamentary and law expenses 50

7,000

2 I

250

MR. SAMUEL.

[1870.]

Cost per mile in Victoria.

+ 25 per cent, for freight, &c 1,382

x 1 for difference in labour 1,198

Same here 437

x 1 J for difference in labour 198

x Hfor do. do 2,739J

100

Nil.

6,054J

It will be seen however that the rate of
wages in the colonies, assumed by Mr.
Higinbotham with a view of not over-
stating his case, is considerably less than
the actual difference known to exist.
But even with the rates he has taken, the
railways which are proposed to be con-
structed in the colonies bear very favour-
able comparison with the cheap lines stated
to have been constructed in the United
Kingdom. I have no hesitation in saying
that thoroughly good lines on the 4ft.
8in. gauge, with rails 70 Ibs. to the
yard, can be constructed to Yass, Orange,
and Tamworth, for about 7,000 per mile.
Since preparing my last estimate, which
amounted to 8,000 a mile, I have had
additional trial sections taken, and I find
that the earthworks shown on the original
section can be considerably reduced by
alterations in the direction of the lines.
As these revised trial surveys are still in
progress, I am not yet able to forward a
detailed estimate of the cost of these ex-
tensions." Mr. Whitton is then asked by
the Public Works Department, " Has
the Engineer-in-Chief for Railways ob-
tained sufficient information as to the
extension of the lines from Goulburn to
Yass, from Bathurst to Orange, and from
Murrurundito Tamworth, to enable him
to state at what rate per mile these exten-
sions can be constructed if they are to be
worked by locomotive engines V His
reply is " The revised trial sections are
not yet completed, but from the reports of
the different surveyors I anticipate that
the earthwork will be reduced nearly one-
half; other works, tunnels, and bridges,
will also be modified, and a saving be
made in their construction. I consider
that a good permanent-way is absolutely
essential for the public safety, and I
therefore propose to use a steel rail, 70 Ibs.
to the yard (single-headed) ; sapling
sleepers to reduce first cost, might be used,
also a smaller quantity of ballast than that

laid on the existing lines. The fencing
might ,be erected with any description of
timber the district would afford, and
wooden station buildings, platforms, &c.,
be erected in the first instance. If these
suggestions be adopted, and all the bridges
and culverts be constructed in the most
economical manner with the timber in the
district through which the lines pass, I
believe a good railway for locomotive pur-
poses may be made for 7,000 per mile."
The Government are however desirous of
trying the experiment whether tramways
for horse traction can be advantageously
introduced into the country, as feeders for
our main trunk lines. They therefore
propose to ask authority to borrow
90,000 for the construction of a tram-
way from Goulburn to Braidwood ; this
line, it is believed, is one of the best
adapted for testing the practibility of this
description of railway, -which will, at the
same time, should it prove successful, act
as a feeder to the Goulburn line from a
most important and populous district.
There is also a further amount of 50,000
for the erection of a Lunatic Asylum, but
I must leave my honorable colleague, the
Colonial Secretary, to explain the views
of the Government with regard to this
item. I will now draw attention to the
account current, which I lay upon the
table, for the year 1871, marked No. 4.
Assuming that the House will sanction
the borrowing of the 200,000, I have
brought forward to the debit of that ac-
count the estimated deficiency on 31st
December, 1870, of 10,686 16s. 2d.
There is also on the debit side of
the account the estimated charges on the
Consolidated Revenue Fund for the year
1871, and there is the fifth instalment of
short-dated debentures, on account of the
deficiency loans, amounting to 100,000.
It will also be perceived that there is a
charge on this side of the account of
25,000, to provide for the payment of
existing pensions, and others that will fall
in, under the Bill which I propose to intro-
duce. It is the intention of the Govern-
ment, as already stated, to propose to the
House to refund to the several Public
Officers from whom deductions have been
made on account of the Superannuation
Fund, the whole of the amounts received
from them, together with interest at the

[1870.]

MR. SAMUEL.

251

rate of 5 per cent, per annum, and to
make the existing pensions a charge upon
the Consolidated Revenue, subject to a
deduction, in consideration of their pen-
sions being guaranteed to them. Having
given this matter our serious consideration,
we felt that it was almost impossible to pro-
pose any scheme to Parliament which was
likely to satisfy Public Officers on the one
hand, and secure the approval of Parlia-
ment on the other, and at the same time
calculated to meet the difficulties of the case.
We have therefore thought it better to
endeavour to restore matters, as far as it
is in our power to do so, to nearly the same
position as they were in before the passing
of the present Act. It would be incon-
veniqnt at this time to discuss this ques-
tion at greater length ; we can better deal
with it when the Bill itself, which will
shortly be introduced, is under considera-
tion. It will require, in addition to this
annual charge of 25,000, a gross sum of
about 60,000 for refunding the deduc-
tions referred to, which sum it is, at
present, proposed to raise by loan. There
is also, it will be observed, a charge of
100,000, to be annually set aside and
handed over to Commissioners, towards
the extinction of the Public Debt. I will,
if permitted, submit a scheme for its con-
solidation. This debt, with the additional
amount proposed to be borrowed, is now
12,249,530, as will be seen by a state-
ment I shall lay on the table. This in-
cludes the deficiency loans. One million
of the debt has been issued, redeemable
by annual drawings of 20,000. This
arragement cannot be interfered with. Of
the remaining 11,249,530, I would re-
tain one million as a debt to be confined
to the colony ; the balance, 10,249,530,
I would send home to be exchanged, so far
as it can possibly be done, for the deben-
tures now outstanding. The remainder
to be put on the market, for the proposed
new works. It may be asked by honor-
able members what inducement can be
held out to present holders of debentures
to exchange. No doubt some advantage
will have to be offered, in the shape of a
small discount. This is a matter, how-
ever, that must, to a certain extent, be
left to our financial agents, and will, in a
great measure, depend upon the state of the
money market at the time the transaction

takes place. It has been suggested to
me that the payment of the interest
quarterly, and the making of our deben-
tures transferable by indorsement and
registration, will induce many to prefer
them. I hope the establishment of a
Sinking Fund will, if carried, present an
additional inducement. I also propose to
make these debentures terminable in forty
years, so that 100,000 set aside yearly
will about extinguish the principal in that
time, if it can be invested at compound
interest at the rate of 5 per cent, per
annum. This 100,000 a year will be
handed over to commissioners, to be in-
vested in the purchase of our own deben-
tures as opportunities occur. The interest
will of course be regularly drawn and re-
invested. This plan, I believe, is pre-
ferable to annual drawings, which subject
the holder, who desires a permanent in-
vestment, and who has purchased with
that view, to serious inconvenience, by
suddenly being informed that the security
which he holds is payable, and that if he
does not take payment, interest ceases. I
have met with cases where persons who
have been absent, and have not demanded
their interest until their return, found to
their great disappointment that they had
been losers, by the debentures having
meantime become payable. At this mo-
ment we have 800 of debentures out-
standing since 1867, which have been
drawn, but neither the money nor interest
has been claimed. Debentures redeem-
able by annual drawings do not command
such a high price as those for long terms,
and this is our own case at present. The
reason for this is obvious from the fact
that persons who are satisfied with our
securities and who want a permanent in-
vestment do not care to have it interfered
with. Were it not for this, doubtless the
plan of annual drawings would be a good
one ; but in placing securities in the mar-
ket we have to consider the form most
acceptable to borrowers. The necessity
for the consolidation of the debt is in-
creased by the fact that nearly 2,000,000
will fall due within the next six years ;
and further, it will be seen from the
correspondence I have recently laid upon
the table, that great inconvenience is
experienced in consequence of the re-
fusal of the committee of the Stock

'252

MR. SAMUEL.

[1870.]

Exchange to permit debentures sold in
the colony, and remitted hence, to be
quoted in their official list. A large
amount of our debentures have been sold
here, and are continually being sent back-
wards and forwards as remittances. The
best way, no doubt, to remedy this incon-
venience is, to have a separate debt for
the colony, which shall not be transferable.
At the present moment it is estimated
that there are upwards of a million of
the securities of the Government held in
this country. These are the main fea-
tures of the plan for the consolidation
of the public debt, to be submitted in a
Bill which I hope shortly to introduce.
Now, having shown the House that the
total estimated charges for the year 1871
amount to 2,378,825 2s. 10d., I will
state 'to the Committee in what way I
intend to provide the Ways and Means to
meet that amount: I will at once com-
mence by stating that it is my intention
to propose to give up the ad valorem duties
and the postal charge on newspapers.
Now, Sir, I have been frequently accused
of not having been sincere in proposing
to give up these duties. I think if those
honorable gentlemen who made this
charge had considered the course of events
during the last two years, they would
have seen how utterly impossible it has
been for me to deal effectually with the
matter at an earlier period. I did, on a
former occasion propose the abolition of
these duties, believing at the time, that with
an increase of the Stamp duties, and the
natural increase of the revenue generally,
they could have been well spared ; and
had it not been for the calamitous season
we have had, my estimate of revenue would
have been realized, and I should have ac-
complished all that I then proposed. How-
ever, circumstances, overwhichl had nocon-
trol, prevented my propositions from being
carried out, and I am not sorry it was so,
seeing the disastrous season we have had,
and the great falling off in the revenue in
consequence, an event which could not
possibly be foreseen or anticipated, and
which all must regret. Now, in giving
up the ad valorem duties, it becomes
necessary to propose some substitute. As
we are not in a position to relinquish such
a large amount of customs' revenue at the
present time indeed we shall require

more revenue than even that, I intend
to submit to the Committee a proposition
for a combined scheme of direct and in-
direct taxation, in order not only to in-
crease the revenue but to make up for
the loss of those duties. In having re-
course to the Customs for revenue, I act
much against my own feelings and inclina-
tion, but necessity leaves me no alterna-
tive. I have therefore to choose between
the retention of ad valorem duties, and
other duties which it is possible for us to
collect through the customs, without
placing unnecessary restrictions upon trade
and commerce. The Government having
determined to get rid of the ad valorem
duties, and the country having also
affirmed, as far as it could do so," that
these duties should be repealed, we began
to consider how far the revenue might be
supplied by what] are known as fixed or
specific diities. The articles not already
upon our tariff, which could bear fixed
duties, are very small in number, and no
large amount of additional revenue that
would serve as a substitute for the ad
valorem duties could be got from them.
I therefore intend to propose a plan which
seems to be the only one open to me,
that is, a measurement duty, the same as
that existing in the colonies of New
Zealand and Tasmania, and which, I am
informed on the very best authority
works successfully. Under such a plan
there would not be the same temptation,
nor yet the same facilities for fraud, as
under that of the ad valorem duties, nor
would the dishonest trader have the
opportunity of gaining an advantage over
the honest one to the same extent. No
declaration of value for duties of this
nature would be necessary, as a true des-
cription of the goods is all that is required,
the duty being chargeable according to
measurement or weight. We have at pre-
sent a duty upon all imports, with a few
trifling exceptions, but in the scheme now
submitted I have left out many articles
some because they would give very
little revenue and others, because I be-
lieve it would be prejudicial to place a
duty upon them. I have little to say in
favour of this proposition more than that
in favour of the ad valorem duties : neither
of them commends itself to me as desir-
able, but as we must have one or other of

[1870.]

MR. SAMUEL.

253

them; the measurement duties I believe to
be the preferable. They will not have
the demoralizing tendency of the present
system, and the Government is likely to
secure the amount of duty to which it is
entitled. There are some items of the
present tariff, in which it is my intention
to make some slight change, so as to
secure a larger amount of revenue from
them. I propose asking the House to re-
duce the duty on opium to 10s. per fi.
My reason is that we are losing the duty
in consequence of the article being brought
over in large quantities from Melbourne by
land the duty on opium in that colony
being only 10s. per Eb., whilst it is 20s. per
Ib. in this. For a somewhat similar reason
I propose to increase the duty upon cigars,
which at present is 3s. here, whilst in
Victoria it is 5s. By assimilating this
duty no objection will be raised by the
Government of Victoria to the decrease
of duty upon opium ; at the same time
both changes will give an increase of
revenue to this colony. I also intend to
ask i-he House to assent to an increase of
duty upon draught ale from 3d. to 6d. per
gallon, and on ale in bottles, from 6d. to
9d. These are the rates which prevail in
all the other colonies except New Zealand,
where they are Is. and Is. 3d. I also pro-
pose a change in the duty on. gin and other
spirits in case. Instead of charging by the
gallon, I intend to treat every case repu-
ted to contain four gallons, as liable to
the duty on that quantity. At present a
case of gin is sold as containing four
gallons, although it does not contain that
quantity. Formerly in Victoria a practice
existed similar to that which prevails here
but it was changed to that I now propose ;
and since then, a dozen bottles, I am in-
formed, have been made to contain the
quantity represented. I will presently
read the resolutions by which the Com-
mittee will see what the articles are
upon which I propose to levy duties.
When I was in Melbourne recently with
my honorable colleague, Mr. Cowper, we
had these matters discussed fully. We
learnt that Victoria would be glad to get
rid of the ad valorem duties altogether, and
that Tasmania had substituted measure-
ment duties for them, which had been
found to work without restriction to trade.
We attended the Conference with the

hope, although certainly not a very san-
guine one, that the whole of the Australian
Colonies might be induced to agree to a uni-
form Tariff, consisting of a small number of
articles bearing fixed duties, which would
have given a revenue sufficient to meet
the requirements of the various Colonies.
I regret that nothing resulted from that
meeting. The consequence is that we are
driven to impose duties upon a greater
number of articles than is desirable, be-
cause we cannot put a higher rate upon
any one article than that existing in Vic-
toria, lest we might endanger loss to our
trade, by giving a bonus, in the shape of
high duties, to the Victorian merchants,
to send their produce into this colony
overland under the existing Border Agree-
ment. The Victorian Government were
pledged to what they called discriminating
duties, which really meant nothing but
protection. Duties which would be dis-
criminating in Victoria would not be
discriminating in New South Wales. A
satisfactory arrangement having thus been
rendered impracticable, we saw the im-
possibility of levying fixed duties to
meet the [requirements of this colony,
without going beyond the duties existing
in Victoria. If, for instance, we proposed
to double the duty on tea (which we do
not), the Victorian merchant would have
a bounty of 28 per ton. Whilst the
proposed measurement duties will add a
small amount to the revenue, they will not
realise much in excess of what we are at
present receiving from the ad valorem
duties. Our Customs' duties, unless we
have a large accession to the population^
and that speedily, are not likely to in-
crease very much; at the present time
they amount to 1 15s. a head. Before
long we must lose our sugar duty if the
production of that article should meet
with the success that is confidently be-
lieved it will ; and I have, in the Estimate
for next year, had to make allowance for
a falling off in such duty. I have now
stated to the Committee how I propose to
raise additional revenue through the
Customs. Besides this, I intend again to
ask the House to assent to an amendment
of the Stamp Act, by which I expect to
increase the revenue by the sum of
55,000. It is needless for me again to
repeat that we have a law which provides

254

MR. SAMUEL.

[1870.]

for the raising of revenue, but which,
from a mere accident in its framing, is
inoperative. No doubt that Act expires
at the end of this year, but I feel assured
the Committee will assent to its renewal,
with the necessary amendments to make
it effective. It is revenue which we
cannot afford to spare, and I do not
believe that the operation of the Stamp
Act is more vexatious than that of other
Acts by which taxes could be imposed ;
certainly the Stamp Duties are collected
at a very low cost. I now come to another
proposition, which is, the imposition of a
tax new to this colony, indeed, I believe,
new to any of the Australian Colonies.
But the time has arrived when it becomes
necessary that we should attempt to make
some provision for extinguishing a debt
which is assuming such proportions. I
have already told the Committee that I
propose 100,000 shall annually be set
aside for this purpose, and now it is my
intention to ask the Parliament to impose
a special tax for raising that amount.
This special tax to be on all incomes of
200 a year and upwards. I hope, by
this means, if the House assent to the
proposition, to reach those gentlemen
whose property we are improving and
protecting, and who are spending the in-
comes they derive from it, out of the
colony. I know great objection will be
raised to this proposition, but I feel, what-
ever the result may be, that it is only just
that those having incomes should contri-
bute something more to the revenue of
the country, than those do who are desig-
nated the working classes of the commu-
nity, and who are the consumers, contri-
buting most largely to the revenue
derivable through the Customs. I do not
desire, at this stage, to anticipate objec-
tions, but prefer to meet them, in my
reply ; of this, however, I feel assured,
that whether the proposition is agreed to
at present, or not, the time is not far
distant when recourse must be had to
direct taxation. The sum to be raised
from an income tax I roughly estimate
at 100,000, which is the amount I
propose shall be handed over to Commis-
sioners for the extinction of the public
debt of the colony. I endeavoured, with
such information as I had at command, to
arrive at what might be expected from

this source, but I have failed to determine
the amount satisfactorily. But whatever
it may be, I am certain that the proposition
to raise revenue from this soiirce is a step
in the right direction ; as the greater part
of the debt has been incurred for works
which are calculated to improve property,
and as a large part of the expenditure of
the country is borne for its protection, it
is but right that those who are most
interested should contribute in a larger
proportion to the rest of the community.
As property does not contribute its proper
proportion to the State, and as we have
already gone for revenue to that source
which bears upon those who have no
property, I think it is but right that we
should look now to those who are deriving
large incomes from that source to augment
the revenue. Of course I am aware that
very serious objections may be raised
against a tax of this nature, but I know
of no duty or tax against which equally
strong objections could not be raised. For
after all, every tax is really a tax on
income, whether it be collected through the
Custom House or in any other way. You
cannot get a shilling through the Custom
House that may not be considered a tax
upon income. We all contribute out of
our incomes, whether derived from labour
or from property, I ask whether a man
who works for his daily bread is in the
same position as the man whose property
is protected by the Government, and im-
proved by public works 1 The expenses
of Government are largely increased by
the charges which property entails upon
them ; therefore a man who depends upon
his labour for his bread should not be
placed in the same position as the man of
property. The man of property may be
deriving an income from the 'country,
while he may not be contributing one
penny to the revenue. I have heard of
cases of this kind ; one, for instance,
where a gentleman who derives an income
of 10,000 a year from this country, and
pays an income tax in England on that
sum, but who does not contribute one
penny to the revenue of the colony. I
ask the House and the country whether
this is an equitable system. I believe
that it is not ; though I admit there was
a time when I did not hold these views.
Holding these opinions now, I say that

[1870.]

MR. SAMUEL.

255

we should endeavour to somewhat equalize
the burdens of taxation ; and, to effect
this object, I propose that all incomes
above j200 a year shall be subject to a
tax of sixpence in the pound, which is
equivalent to 2| per cent. I am quite
prepared for opposition from those who
have incomes ; but the people of this
country, "who have the Government in
their hands, will, I am sure, agree with
me that the time has arrived when we
should not derive all our revenue from
the Customs, when we ought not to
destroy the trade of this fine port which
should! be the commercial emporium of
the South by restrictions upon our com-
merce, but when we should endeavour to
get in the thin end of the wedge of direct
taxation. I cannot say that the time is
ripe for carrying out those principles of
free trade which I desire to see, but I be-
lieve that it is not too soon to take a step
in that direction ; and I appeal to those
honorable members who on the hustings
declared that they were in favour of the
abolition of the ad valorem duties, and in
favour of direct taxation now that the
time has come to fulfil their pledges.
In what way are you to relieve the Cus-
tom House ? In what way are you to
relieve the burdens of the great masses of
this community, unless you have recourse
to direct taxation ? I have thought it
necessary to make this appeal, because
the time has come, if we desire to adopt
those principles on which the majority of
the Members of this House were returned,
to make up the revenue from other
sources, if the abolition of the ad valorem
duties is to be effected. You could not
provide for the expenditure of the country
if you did not substitute some other tax
for those duties. Some years ago I heard
it asserted in this House that it was not
through the Custom House we ought to
collect the whole of our revenue that
we should introduce local self-government.
We all know, however, how difficult it is
to induce the sparse population of this
country to incorporate, for the purposes
of self-government ; and when the people
do incorporate, it is found that the central
Government is not relieved to any appre-
ciable extent, because we have still to
assist the various Municipalities estab-
lished throughout the colony. I am

therefore of opinion that the time lias
come when we must have recourse t<,
direct taxation. I do not think that any-
thing I may have said in the past should
be an argument against what I n.w pro-
pose. I may have seen the error of my
ways ; and if so, I am not the first person
occupying this position who has changed
his opinions. Men of far grato ability
have changed their opinions upon ;
questions, and I can never hope to attain
to the position of those enlightened states-
men -in the Mother Country who have
changed their opinions on this very sub-
ject, which in days gone by they conceived
to be injurious to the country, but which,
it has been found, has made Great Britain
one of the greatest commercial countries
in the world. Whatever course we may
be driven to take now, the day must come,
if we are to attain to the greatness of a
nation, when we must accept the prin-
ciples of free trade. If I do not succeed
in carrying this proposition I shall have
the satisfaction of knowing that it is one
which will ultimately be adopted by the
Parliament of the country. It may be
considered that by imposing a tax upon
all incomes alike I am taking a course
that is hardly justifiable ; because it may
be said that I should make a distinction
between incomes that are precarious and
those that are fixed and derived from pro-
perty. At present I cannot make a dis-
tinction of that kind. It may be that I
am wrong, but I have thought it advisable
to make no distinction, but to propose a
tax which shall affect all incomes alike
over 200 a year, whether they be derived
from trade, property, professions, or from
situations under Government I know
the difficulty of dealing with this ques-
tion, and it may be asked what data there
are to go upon for fixing the proceeds of
this tax at 100,000. 1 acknowledge
that I have no reliable data, and that
there was a time when I thought it hardly
worth collecting, but I now feel satisfied
that it will at all events reach that sum.
I believe it is far better that a man should
pay directly to the State for all the advan-
tages that are secured to him by u
ment than indirectly through the Custom
House, where only a portion of the extra
amount which he contributes to the price
of the article goes into the n-\rmie. It

256

MR. SAMUEL.

[1870.]

has been stated that the machinery for
the collection of revenue imposed directly
in this way will involve an army of tax-
gatherers. This is, I think, a mistake, as
I believe that neither the machinery nor
the cost would be greater than those of col-
lecting taxes of an indirect nature. Their
collection would occupy but a small por-
tion of the year, as they would all be pay-
able in advance, and in the first quarter.
Opportunities will doubtless be afforded
me of going into the details of the mea-
sure, which I do not care to do at the
present time. Honorable members who
have been returned to this House to advo-
cate free trade should, I think, lend their
assistance in this attempt at direct taxa-
tion, which I hope will ultimately remove
existing restrictions upon the trade and com-
merce of the port, and which will render this
colony what, I believe, it is destined to be,
the commercial emporium of the South.
I have explained to the Committee the
plan I propose as a substitute for the ad
valorem duties. The duties through the
customs I estimate will give an increase

On ale and beer, of 10,000 ; cigars, 5,000 ;
coffee, 4,000; opium, 2,000; measurement and
fixed duties, 200,000 total, 221,000. This
amount has, however, to be reduced by 180,000,
the amount that would probably have been
received from ad valorem duties ; thus leaving a
net increase from customs of 41,000 ; then, in
addition to this I expect to receive from stamps
an additional sum of 55,000 ; and, as already
stated, I estimate a possible revenue from in-
come tax of 100,000 these three sources of
revenue will amount in all to 196,000.

This amount being carried to the credit
of ways and means for the year 1871, will
leave an estimated surplus of 62,924
17s. 2d., after setting aside 100,000
towards the extinction of the debt. That
is, assuming that Parliament assents to
my proposition, there will be this surplus
of 62,924. I believe that I have not
over-estimated the revenue, but if I should
unintentionally have done so there is
this margin to make good any such over-
estimate. I trust, however, that the next
year will be brighter than the present,
and that the natural progress of the
country will give even a larger revenue
than I have estimated. Before I conclude,
I should like to read one or two accounts,
which I intended should have come in in
another part of my speech. I desire to

show the revenue of the present year as
compared with the revenue of last
year. I hold in my hand a comparative
statement of the consolidated revenue for
the three quarters ended 30th September,
1869 and 1870 respectively. The revenue
for the quarter ending March 31, 1869,
was 435,009 18s. 2d. ; for the correspond-
ing quarter of 1870 it was 458,104 16s.
10d., being an increase of 23,094 18s.
8cl. During the second quarter of 1869
the revenue was 554,833 18s. 7d. ;
during the corresponding quarter in 1870
it was 515,286 16s. Id., a decrease o
39,547 2s. 6d. During the third quarter
of 1869, that was from July to September,
it was 469,842 Is. 8d. ; and during the
corresponding quarter of 1870 it was
458,100 3s. Od., being a decrease of
11,741 18s. 8d. The total amount of
revenue received during the first three
quarters of 1869 was 1,459,685 18s. 5d.,
and during the corresponding nine months
of this year the total amount was
1,431,491 15s. lid., showing a net de-
crease of 28,194 2s. 6d. There is an-
other statement which I desire should be
made known, and I will therefore read
it to the House. It is a statement show-
ing the amounts received from conditional
purchasers and the balances yet due by
them. In 1862 the amount of deposits
received was 88,888 4s. 5d. ; in 1863,
63,902 11s. 4d, ; in 1864, 41,174 11s.
Id. ; in 1865, 37,862 10s. Id. ; in 1866,
89,663 6s. 2d. ; in 1867, 59,503 17s.
lOd. ; in 1868, 59,879 4s. 6d. ; in 1869,
99,332 3s. 4d. ; and up to the 30th
September of the present year the amount
of deposits received was 64,859 Us. 3d.,
making the total amount received since
1862, 605,066. Deduct from this
amount, the deposits refunded 59,384
7s. 6d., and it leaves a balance of
545,681 12s. 6d., which sum, multiplied
by three for the balance due on these con-
ditional purchases, will give 1,637,044
17s. 6d. Of course the whole of this sum
is not due at present, because, as honor-
able members are aware, it requires three
years before the principal and interest
can become due. If we deduct from this
sum of 1,637,044 17s. 6d. the amount
of balances paid, namely, 116,644 7s.
5d., it will leave 1,520,400 10s. Id. as
the amount still due on purchases. With

[1870.]

MR. SAMUEL.

257

the exception of a small amount, the con-
ditional purchasers are paying up in a
regular manner in a manner that speaks
volumes for the successful occupation of
the land. The other day the honorable
member for East Sydney asked whether
the Government intended to collect the
quit rents. I may now say that we do
intend to collect them, as they are obliga-
tions which the holders of the land owe to
the country. They may amount to
40,000 or 50,000, but we do not
estimate that we shall receive more than
about 25,000 next year. There is yet
one other account which I ought to have
submitted at an earlier period of the
evening. I will, however, now submit it
to the House, so that there may be no
reason to suppose that the statements I
have made are not placed beyond all
doubt. The one which I am now about
to read is an account of the receipts and
expenditure for public works, and other
services provided for by loans secured on
the Consolidated Revenue Fund, up to
30th September, 1870. The receipts were
as follows : Amount raised by the sale
of debentures as per statement certified
by the Auditor General, laid before the
Legislative Assembly on 18th August,
1870, less 137,300 debentures included
therein, not negotiated on 31st December,

1869, 9,013,081 5s. 9d. ; amount raised
by the sale of debentures from 1st
January to 30th September, 1870, being
a portion of the above sum of 137,300,
since negotiated, 9,300 ; making a total
of 9,022,381 5s. 9d. The expenditure
was as follows : By amount actually ex-
pended on public works and other services
to 31st December, 1869, as per statement
of the Auditor General, laid before the
Legislative Assembly on the 18th August,

1870, 8,285,105 Os. 3d. ; amount finally
charged (inclusive of railway store issues)
to appropriations of Parliament, from 1st
January to * 30th September, 1870,
421,650 19s. 4d. ; charges on sale of
debentures as per statement above men-
tioned, 63,292 4s. 3d.; further charges from
1 st January to 30th September, 64 8s. 4d. ;
issues on accountrailway materials
purchased, and either in stock or in transit
from England at 30th September, 1870,
but not finally chargeable to the appropria-
tions of Parliament for the construction

and extension of railways until issued
for use, 214,422 6s. ; advances to the
Commissioner for Railways remaining un-
adjusted on 30th September, 1870, 4,202
13s. Id. ; advances to Messrs. Mort, Vale,
and Lacy, and to Messrs. P. N. Russell
and Co., on account of their contracts for
supply of railway rolling stock, not yet
charged finally to the appropriation
for same, 14,794 6s. 6d. ; amount
of payments prior to 30th September,
1870, in anticipation of services pro-
posed to be provided for by loan, 331
19s. 3d. The total payments being
9,003,863 17s. The cash balance at
the credit of the Loans' Account on 30th
September, 1870, was 18,517 8s. 9d. At
the present moment however there is a
debit balance on this account. Having
now gone through all the accounts, and
shown the financial position of the coun-
try at the end of the present year, the
estimated expenditure for next year, and
how I intend to provide the Ways and
Means to meet that expenditure, there is
nothing more left for me to do than to
ask honorable members fairly to consider
the propositions I submit, not with refer-
ence either to one side of the House or the
other, but with a view only to the public
interest, bearing in mind that whatever
Government is in power the revenue must
be increased. Believing that I have done
my duty, it is a matter of indifference to
me what the result may be. I leave the
matter with confidence to the House and
to the country, knowing that I have laid
the accounts before the committee in such
a way as will show that the charges
levelled against me from time to time are
utterly without foundation, and that I have
fulfilled my promises with regard to the
repeal of the ad valorem duties.

[Sir JAMES MARTIN : Will the honorable
gentleman be good enough to state whether
he intends to put a tax upon printing
paper and printing ink, and whether he
intends to do away with the postal charge
upon newspapers 1]

I contemplate doing away with the
postal charge upon newspapers, and I also
contemplate a duty on printing paper,
printing ink, and printed books. I desire
to do away with that extraordinary
anomaly which affects the printer, to the
advantage of the importer of printed

258 MR. SAMUEL. [1870.]

books Any one can now import printed in the event of any change, they are likely

books duty free, whilst the unfortunate to receive others better calculated to attain

printer has to pay duty on everything he the object we must all have in view the

imports I intend, therefore, to propose settlement and the material progress of the

a duty on imported books. These pro- country and the means most essential to

positions may not be altogether acceptable protect the public credit. I now beg to

to many honorable members, but I think read the resolutions which I intend to

I may fairly ask them to consider whether, submit.

Tariff.

Resolved, That towards raising the supply to be granted to Her Majesty, from and after the
twentieth day of October, one thousand eight hundred and seventy, in lieu of the existing Customs
Duties there shall be raised, levied, collected, and paid, upon the several Articles, Goods, \\ ares,
and Merchandise, imported into the Colony, hereunder mentioned, the Duties of Customs specified
against each (which shall be payable on all such of these Goods as are now in Bond), namely :

(" $ 6 reputed quart \

Ale, Porter, Beer, Cider, and Perry J bottles or %U2 re- \ 9d.

( puted pint bottles. )

Ale, Porter, Beer, Cider, Perry, and Vinegar (in wood) I? gallon 6d.

Spirits, Cordials, Liqueurs, or Strong Waters, sweetened or mixed with any
article so that the degree of strength cannot be ascertained by Sykes'
Hydrometer, including all Alcohol diluted or undiluted with water
or other menstruum, and containing in solution any Essence, Essential
Oil, Ether, or other flavouring or other substance ,, 10s.

On Spirits or Strong Waters, of any strength not exceeding the strength of
proof by Sykes' Hydrometer, and so in proportion for any greater -
or lesser strength than the strength of proof

For each reputed^
four-gallon case, I
containing not >40s.
more than the re- |
puted quantity . . )

Four each reputed
two-gallon case,
containing not
more than the re-
puted quantity . . )

Do v $ gallon 10s.

Spirits, Methylated I? gallon 3s.

Spirits Perfumed.... ... ... ... ... ... ... ,, 10s.

-ITT- i i i-L n? t A 1 -L. i t ? , f ( F r 6 reputed quart 1

Wine, containing less than 25 per centum of Alcohol 01 a specific gravity of J bottles or (

825 at the temperature of 60 Fahrenheit ) For 12 reputed pint f ^ s -

( bottles ;

Do $ gallon 3s.

Pickles and Sauces . . ... ... . . ... ... ... ... . . . $ dozen reputed 2s.

pints
,, ... .. ... ... ... ... ... ... ...$ dozen reputed -4s.

quarts

(Other sizes in like pro-
portion. )
Oil of all kinds, not specially described (except Whale and Cocoa-nut Oils),

and Spirits of Tar $ gallon 6d.

Turpentine and Varnish ... ... ... ... ... ... ... ... Is.

Jewellery $ cubic foot 10s.

Watches and Watch Materials ... ... ... ... ... ... ... ,, 7s.

Apparel not specially described Bonnets, Caps, and Hats, trimmed
Confectionery and Succades Cotton Manufactures, Cotton Mixtures,
and Drapery not otherwise described Essences, Flavouring Fur
Gloves made from Skins Haberdashery and Hosiery Linen Manufac-
tures and Millinery not otherwise described Silk, and all Manufactures
containing Silk Umbrellas and Parasols Woollen Manufactures not
otherwise described ... ... ... ... ... ... ... ... ,, 5s.

Clocks Gum Leather Manufactures, and Plumbers' Wares, not

specially described Sponge... ... ... ... ... ... ... ,, 4s.

Apothecaries' Wares not specially described Biscuits, Fancy Blankets,
Rugs, and Counterpanes Boots, Shoes, Slippers, Goloshes and India-
rubber Goods Bonnets, Caps, and Hats Curry and Custard Powders
Drugs not otherwise described Perambulators Salmon and Sar-
dines Turnery and Woodware ... ... ... ... , , 3s.

[1870.]

MR. SAMUEL.

259

Capers Essence of Coffee, Cocoa, Chicory, and Chocolate Fish, potted,
preserved, or paste Fruits, bottled or preserved Gutta Percha Manu-
factures Herrings Isinglass Jams, Jellies, and Marmalade Mus-
tard Oilmen's Stores and Perfumery not otherwise described Pipes,
Tobacco Soaps, Fancy Syrups tf cubic foot. 2s. 6d.

Brushware and Brooms Carpets, Hearth-rugs, and Oil-cloths Combs

Harness and Saddlery Lasts and Wooden Pegs Papier-mach.6 Wares 2s.

Bags, Bagging, Sacks, and Woolpacks Pictures, Paintings, Engravings,

and Frames for ditto Whips and Walking-sticks ... ... Is. 6d.

Baskets and Wickerware Baking-powder Blacking, and Black-lead
Carriage materials China, 'Porcelain and Parian Wares Floor-cloth
Furniture, Upholstery, and Cabinet Wares Glass and Crockery Wares
Grindery Ink Lamps, Lanterns, and Lamp-wick Maizena, Corn
Flour, Groats, and Oatmeal Marble, Wrought Stone, and Statuary
Matches and Wax Vestas Mats and Matting Musical Instruments
not otherwise described Paper, Printing and Writing Paper-hangings
Soda Crystals Stationery, and Books of every description, including
Music Toys, and Fancy Goods, not otherwise described ... ... ,, la.

Planed Timber Boards Paper, Wrapping and Bags 6d.

Earthenware ... "*. ... ... ... ... ... ... 3d.

Sawn Timber... ... ... ... ... ... ... ...^ 50 cubic feet 5s.

Hewn ,, ... ... ... ... ... ... ... ... ,, 3s.

Plate Glass #100 sup. feet 6s.

Window Glass ... ... ... ... ... ... 3s.

Salt tfton 20s.

Rice ,, 40s.

Shot tfcwt. 10s.

Dried Fruits 10s.

Brass and Brass Manufactures Copper Manufactures not otherwise
described Copying-presses Cutlery Hardware and Ironmongery
Hollow-ware Japanned and Lacquered Ware Lead Manufactures not
descrited Safes Iron Tacks Tinware, and Tinfoil Tools not other-
wise described Weighing Machines ... ... ... ... ... 4s.

Sugar Refined 6s. 8d.

,, Unrefined ... ... ... ... ... ... ... ... ... 5s.

Molasses and Treacle ... ... ... ... ... ... ... ... 3s. 4d.

Biscuits Plain Cordage and Rope Mouldings Gilt Zinc Manufactures ... SB.

Paints and Colours, Mixed and Dry ... ... ... ... 2s. 6d.

Arsenic Bicarbonate and Carbonates of Soda Fish Dried, Pickled, or
Salted Gal vanized-iron- ware Fencing-wire, Gates, Sheets, and Gut-
tering, made of Iron Saltpetre Starch Twine and Thread White
and Red Lead ... ... ... ... ... ... 2s.

Nails Screws Soap .. ... ... ... ,, IB. 6d.

Cast-iron Fencing and Rough Castings Chains Iron Copperas- Lead
Sheet, and Piping Pearl Barley Steel Sulphur Whiting and ( 'balk
Zinc Sheets !

Malt tf bushel 6d.

Ammunition Sporting Powder ... ... ... ... # Ib. 6d.

Opium... ... ... ... ... ... ... ... ... ii 10s.

Tobacco Manufactured .. 2s-

,, Unmanufactured ... ... ... ... ... ... i> **

Cigars and Snuff ... ... ... ... ... ... ... > 5a.

Almonds and Nuts (Shelled) Candied Peel Coffee, Cocoa, Chicory, and
Chocolate Plated-ware Spices, Cassia, Cinnamon, Cloves, Ginger,
Mace, and Nutmegs Tobacco mixed for Sheepwash Tea ,,

Arrowroot, Sago, Tapioca, and Vermicelli Bacon and Hams Blue

Butter Cheese Hops ... ... ... 9 ... n **

Almond and Nuts (in Shell) Blasting Powder Candles Cream of Tartar

Glue Pepper Tartaric Acid ... ... *~

Leather

Gold Plate ! ' '"

Silver u 'l' 1 -

Arms Fire-arms and Swords .^

Carts, Dray, and Waggons... ... " I '

Doors and Window-sashes ... ... lOnf"

Harmoniums, Organs, and Pianofortes

Machines, Sewing ... ... ... ... . J*'

Cart and Carriage Wheels _ . r .P*! r ,

Carriages * pair of wheel. 80..

Buckets and Tubs . V dozen 3.

260 MB. SAMUEL. [1870.]

Palings ^100 is.

Caps Percussion, Laths, and Shingles $ 1,000 Is.

Cards, Playing $ pack 6d.

Cement, Plaster of Paris, and Resin $ barrel 2s.

Pitch and Tar ,, Is.

Canvas $ bale 20s.

Flax and Hemp ,, 10s.

All goods subject to duty by cubic measurement to be measured outside the package, and all packages of and
under half a cubic foot, to pay duty as if half a cubic foot ; and in all packages over half a cubic foot the fractional parts
of half a cubic foot to be charged in like manner.

Income Tax.

Resolved., That towards raising the supply to be granted to Her Majesty there shall

be raised annually the several Rates and Duties following, that is to say :

(1.) For and in respect of the annual income, profits, or gains of every person residing

in the Colony of New South Wales, or elsewhere, derived from lands, tenements, or

hereditaments, situate in the said Colony.

(2. ) For and in respect of all interest of money, annuities, debentures, dividends, and

shares of annuities, arising or accruing from investments in the said Colony, payable to

any person or persons, corporations, companies, or societies, whether corporate or not,

and whether resident or carrying on business in the said Colony or not.

(3.) For and in respect of the annual profits or gains derived by any person or persons

resident in the said Colony from any kind of property whatever, whether situate in the

said Colony or elsewhere, or from any annuities, allowances, or stipends, or from the

exercise of any profession, trade, or vocation, or from any other source whatsoever

(with such exemptions and exceptions as may be prescribed).

(4. ) For and in respect of every annuity, pension, salary, or stipend, payable to any

person out of the Consolidated Revenue Fund, or the Superannuation or any other

Fund.

For every 20s. of the annual value thereof respectively, where such value amounts

to or exceeds the sum of 200, from the 1st day of January, 1871 ... ... Os. 6d.

Newspaper Postage.

Resolved, That the postage rate of one penny payable on every Newspaper posted within, or
transmitted through the post within the Colony, shall not be demanded nor be payable on and
after the first day of January, one thousand eight hundred and seventy -one.

i f '

! '

ONORABLE LrEORGE WILLIAM LORD.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEORGE
WILLIAM LORD, made 9th February, 1871.

LEGISLATIVE ASSEMBLY.

Thursday, 9th February, 1871.

FINANCIAL STATEMENT.

Mr. LACKEY : It has been the desire
of the Government that the Financial State-
ment should be made at the earliest pos-
sible date. I have accordingly prepared
my Statement without delay, and I would
now ask the indulgence of the House while
I explain, as clearly and briefly as the cir-
cumstances admit, the financial position of
the country on the 31st December last,
and submit to the House the course I pro-
pose to adopt for making provision for the
financial year of 1871. If honorable
members will look at the accounts placed
in their hands, they will perceive that I
have had them prepared in precisely the
same form as those submitted by my prede-
cessor, simply putting in, where necessary,
actual for estimated amounts. The ac-
counts submitted by Mr. Samuel were four
in number, viz. : No. 1, 1868 and Previous
Years Account ; No. 2, 1869 Account; No.
3, 18 70 Account, partially estimated; No. 4,
1871 Account, entirely an estimated one.
This arrangement, although not quite that
which under other circumstances I should
have chosen, I have adopted with a view
to show clearly wherein lies the difference
between the results I arrive at, so far
as the accounts to the end of 1870 are
concerned, and those arrived at by the
late treasurer, Mr. Samuel. Having no
desire to weary the committee with minute
details, I will only ask them to follow me

while I point out briefly the variations in
Accounts Nos. 1, 2, and 3, that is, those
for 1868 and previous years, and those for
1869 and 1870. In the No. 1 Account
there have been a few changes, resulting
in an increase of 458 4s. 4d., chiefly
caused by a larger Supplementary Esti-
mate than required at the date Mr.
Samuel made his Financial Statement.
The estimated deficiency then shown by
him on this account was 86,190 Is. 5d. ;
it is now shown by me to be 86,648 5s.
9d. Before passing on to the next account,
I may just mention that it is probable this
estimated deficiency will yet be somewhat
reduced, because, under the provisions of
the Audit Act of 1870, all appropriations
on account of which contracts have not
been taken before the 31st December of
any year will lapse on the 31st March
following. This law will no doubt wipe
off many of the small balances of appro-
priations included in the sum of 18,786
Os. 4d., retained as liabilities, and in tho
meantime held available for expenditure
up to the end of March next. On referring
to the No. 2 Account, now submitted,
honorable members will find, by compari-
son with the corresponding account of the
late Treasurer, that the differences between
them are very trifling. The estimated
deficiency shown in mine is 132,061
19s. Id. ; in Mr. Samuel's it was 131,086
8s. lid., being an increase of 975 10s.
2d., which arises from an increase in the
deficiency brought from the No. 1 Account
of 458 4s. 4d., an increase on the Supple-
mentary Estimate for the year 1869 of
272 5a 10d.,and under the head of Special

262

MR. LORD.

[1871 ]

Appropriations, an increase for interest on
debentures of .245 ; together making
up the difference stated of 975 10s. 2d.
Referring now to the account for the past
year, which I regret to say does not admit
of such a favom-able report as the two I
have just dealt with, it will be remem-
bered that when my predecessor made his
Financial Statement, on the 20th October
last, he had to estimate his revenue for the
last quarter. His estimate was 747,444;
the actual amount received was, however,
only 671,205 10s. 3d., showing a dif-
ference of 76,238 9s.. 9d. If honorable
members will turn to the 1870 Account
Current, I will, as briefly as possible, show
wherein it varies from my predecessor's.
I will deal with the credit side of the
account first, as it is there where the largest
difference occurs. Mr. Samuel's actual
and estimated revenue and receipts for the
year were put down at 2,178,936 ; from
which he deducted 30,000 received from
the Government of Victoria on account
of 1869, and 6,872 13s. 6d. for ad-
vances refunded, together amounting to
36,872 13s. 6d. ; making the estimated
net revenue for 1870, 2,142,063 6s. 6d.
The actual revenue for the year has
turned out only 2,102,697 6s. 2d. ; from
which have to be deducted 30,000 re-
ceived in 1870 from Victoria on account
of Murray River Customs Account,
1869, and 20,362 9s. 4d. for advan-
ces refunded, amounting together to
50,362 9s. 4d. ; leaving a net revenue
of 2,052,334 16s. lOd. To this amount
I have added 10,000 due by Victoria
on account of this year's Customs' Ac-
count, thereby bringing up the amount
to be credited to 1870 to the sum of
2,062,334 16s. 10d., showing a reduction,
as compared with Mr. Samuel's Account,
of 79,728 9s. 8d. As honorable members
know pretty well, from the Statements pub-
lished in the Government Gazette how this
difference has arisen, I will not trouble them
with going into the matter further than by
stating that the Land Revenue alone shows
a falling off of 48,731 15s. Id., and the
Railways 11,460 4s. lid. The next item
which I have to draw attention to, on the
credit side, is the amount of appropriations
not likely to be required. It will be per-
ceived that I have adopted the figures of
my predecessor, because I believe it would

be unsafe so soon after the close of the year
to estimate a larger amount. The whole
amount of Parliamentary appropriations
for 1870 remaining unexpended on 31st
December last was only 273,799 7s. Id.
If from this sum we deduct the esti-
mated savings shown in the Account,
viz., 110,360 12s. 5d. it only leaves
163,438 14s. 8d. for expenditure in 1871.
When I inform the Committee that in
1870 the sum of 190,755 Is. lOd. was
expended for services of 1869, it will
readily be understood that163,438 14s. 8d.
is not an excessive amount reserved for
expenditure in 1871, for services of 1870.
As already stated, however, the oper-
ation of the Audit Act of 1870 will enable
a much more correct estimate of these
savings to be made at 31st March next
than it is possible now to do. Honorable
members must however bear in mind that,
although the law requires that all unex-
pended appropriations on account of which
there are no outstanding contracts must
then be written off, it does not follow that
other liabilities incurred on their account
must not be paid. The effect will be to
compel the Government to bring down
Supplementary Estimates for sums written
off, which afterwards are found to be
absolutely required. By turning to the
debit side of the account, I will show
what changes have there been made. The
first is an increase in the estimated defi-
ciency, brought from the 1869 Account,
of 975 10s. 2d. ; the second is an in-
crease on the Supplementary Estimates of
35,054 14s. 8d. ; and the third and last
under the head of Special Appropria-
tions, a further sum of 8,168 9s. 9d. ;
showing an increase of expenditure of
44,198 14s. 7d. If to this additional
charge we add the decrease on the revenue,
which I have explained, of 79,728 9s. 8d.
it will show a difference of 123,927.4s. 3d.
as compared with the accounts submitted
by my predecessor in October last. By
adding to this amount the deficiency at 31st
December last, as estimated by Mr. Samuel,
of 210,686 16s. 2d., we arrive at the
a-mount at which I have estimated the defi-
ciency on same date, viz., 334,614 Os. 5d.
It will be observed that I have not
referred to the 1 3,424 on the Supplemen-
tary Estimates for* Public Works pro-
posed to be raised by loan, because that

1871.]

MR. LORD.

263

amount appears on both sides of the
account, and consequently does not affect
the general result. In order to show
clearly how the difference arises between
the deficit on 31st December last, as
estimated by myself, and that shown by
my predecessor, I have had a statement
prepared which, with the permission of
the Committee, I will now read. Deficit
31st December, 1870, as estimated by me,
334,614 Os. 5d. ; deficit as estimated by
Mr. Samuel, 210,686 16s. 2d.; difference,
123,927 4s. 3d. ; accounted for in this
way : 1868 and previous year's account
additional charge, 458 4s. 4d. ; 1869
account additional charge for interest on
debentures, 245 ; increase on Supple-
mentary Estimate, 272 5s. lOd. ; 1870
account increase on Supplementary Esti-
mates, 35,054 14s. 8d. ; special appro-
priations, further sum, 8,168 9s. 9d. ;
decrease on net revenue as compared with
Mr. Samuel's estimate, 79,728 9s. 8d.
In all, 1 23,927 4s. 3d. Doubting whether
the usual method of stating these accounts
is intelligible to every member of the
House, I have had a statement prepared
showing the liabilities and assets on the
Consolidated Revenue Fund on the 31st
December last, which I think cannot fail
to convey to all a clearer, and therefore a
more satisfactory view of the case. I have
reversed the usual order in this account by
giving the liabilities first, they being un-
fortunately much greater than the assets.
The liabilities were : Balance of appro-
priations, 31st December, 1870, viz.,
Appropriations of 1868 and previous years,
as per account No. 1, 18,786 Os. 4d. ;
appropriations of 1869, less 100,000,
estimated as not likely to be required,
28,571 10s. 4d. ; appropriations of 1870,
less 110,360 12s. 5d., estimated as not
likely to be required, 163,438 14s. 8d.
Fourth instalment of Deficiency Loan not
yet passed through the books of the
Treasury, but paid in London 31st De-
cember, 1870, 100,000. Supplementary
Estimates for 1870 and previous years,
less 38,562 9s. 9d., paid on account to 31
December, 1870, 68,476 2s. lid., making
the total liabilities 379,272 8s. 3d.
The assets were: Cash balance at the
credit of the Consolidated Revenue Fund,
31st December, 1870, 32,058 15s. lOd. ;
balance due by the Government of Victoria

on Murray River Customs' Account,
1870, 10,000; advances on account of
other Governments, 403 19s. Gd. ; ad-
vance on account of the Main \V. 'stem
Road Vote of 1871, 2,195 I2a6i; whk-h
makes a total of 44,058 7s. lOd. ; de-
ducting the assets from the liabilities th. Ti-
ls left a deficiency of 334, til 1 o s . 5d.
No one will blame my honorable friend
opposite for the sanguine expectations in
which he seems to have indulged with
regard to his in< >rne, but we have now to
deal with results. The falling off in
revenue from sources to which the country
has hitherto looked for large returns
points to the necessity at no very distant
date for some modification of our land
laws. It is clear that the public mind is
in an unsettled state with regard to the
future price of land, and doubtless this,
together with the unpropitious season and
general depression through which tin-
Colony is passing, lias prevented many
persons from purchasing, all uniting to
greatly affect the revenue derivable from
land sales. It should also be borne in
mind that the depreciation which has taken
place in the value of pastoral properties
and stock, from many causes, has assisted
in the reduction of rents and assessments.
I am desirous that honorable members
should clearly understand the state of the
deficiency debt of the Colony. It would
be needless to endeavour to show by whom
this deficiency has been brought about It
does not concern the House, at the present
stage of the business, to ili-i-u the exact
amount of deficit which each of my prede-
cessors has left on his retirement from office.
It is enough for us to know that at this
moment the deficiency debt of the Colony
stands at 824,514 Os. 5d., which is made
up of the following sums : Treasury bills
due 30th April next, 343,200 ; deben-
tures falling due 31st December, 1871,
100,000; debentures falling due 31st De-
cember, 1872, 46,700 ; deficit at the
of 1870,as already shown,334,614 Os. :>.!.
With this deficiency del.t. tin- accumula-
tion of years, I have now to deal, and I
feel it incumbent on me that I should
make it clear and intelligible to the House
and the country. I think, sir, the time
has arrived when this 1m,- continued de-
ficiency should be finally disposed of; and,
whatever may be the views of honorable

264

MB. LOUD.

[1871.]

members on other subjects of political
government, it behoves them, in their inte-
rest for the common welfare, to unite in
sustaining the credit of the Colony. It
will be said that the deficiencies of late
years should have been covered by the
revenue derived from the operation of the
ad valorem duties, which when imposed it
was understood were to be levied only until
the debentures issued to cover these defi-
ciencies were paid ; but honorable members
must bear in mind that even supposing
these duties had been specially appropriated
to the payment of these engagements, the
deficiency as it now exists would have been
the same in amount ; possibly, had that
been done it might have resulted in in-
creased taxation and retrenchment in the
public expenditure at a much earlier period.
It has been stated in some quarters that
the burdens of the people are sufficiently
heavy, and that the trade of the Colony
would suffer by any attempt to raise re-
venue to meet this large deficiency debt.
No doubt any scheme which provided for
the immediate extinction of this amount
would be felt by all classes of the commu-
nity, and possibly trade would suffer ; and
some people have so far become impressed
with the idea that no fresh taxation ought
to be introduced as to recommend that the
whole of this deficiency debt should be
funded. To such a course as this the pre-
sent Government cannot consent, but they
propose by a system of retrenchment, in-
creased taxation through the Custom
House, and by extending their liquidation
over a longer period, eventually to wipe
these deficiencies out. It may be argued
that there is nothing binding upon a
Ministry to liquidate this deficiency, and
that in a few years there will be a repeti-
tion of the present scheme. To this I
would merely remark that the check on
the Government rests in the hands of mem-
bers of this House, who, if they do their
duty to the country, will see that the
scheme agreed upon for the extinction of
the debt is faithfully carried out. By re-
ference to the Estimates it will be seen
that we propose a reduction on the salaries
of the civil servants. Our scheme of prac-
tical retrenchment is based on a sliding
scale from 7| to 2| per cent, on annual
salaries, and on reductions in the wages of
Oovernment employes of the labouring

class. This action on the part of the Go-
vernment, which doubtless will be open to
much comment on the part of honorable
members, is merely a preliminary measure,
and intended to show the House and the
country that we are sincere in our promises
of retrenchment. We intend, as soon as
time will permit, and as an adjunct to our
present proposal, to make a thorough
investigation, in detail, of all the Govern-
ment departments, and do our best to pro-
vide for the conduct of the public service
by as few and as competent officers as shall
be practicable. It is the determination of
the Government to retrench, and they rely
on the countenance and support of those
honorable members who have spoken so
loudly on this subject. There are many per-
sons inside and outside the House to whom
the scheme will be unacceptable, and to
them I would address a few observations.
Honorable members will not forget that
the salaries of all the public servants re-
ceived an increase on the discovery of gold
in this Colony ; this increase has never
been wholly taken off. Then it must be
remembered that there is no interest in the
country, whether it be the squatting, min-
ing, agricultural, or commercial interest,
which has not suffered depreciation house
property and property of every description,
bank and other stocks all have suffered,
some to an enormous extent. Why then
should we, with signs of depression all
around *us, perpetuate high rates of sala-
ries in the departments of the State 1 If
the service of the Government be so
eagerly sought after as it is, the best proof
is afforded that the service is considered
the best paid ; and although the reduction
will be felt most by the officials themselves,
there is, I am happy to say, so large an
amount of common sense and intelligence
in their ranks that they will admit, if not
the wisdom, at all events the necessity of
the policy adopted by the Government,
and cheerfully acquiesce in it. We have
reduced the allowances to certain chari-
table institutions, schools of art, and other
public institutions, which have hitherto
been so liberally endowed by the Govern-
ment, but which, in the spirit of retrench-
ment adopted by the Cabinet, it is only
right should now be curtailed. It is a
question admitting of argument whether
these institutions should receive so large an

[1871.]

Mu. LORD.

amount of direct support from the revenue,
or whether the public in the various locali-
ties should in their own interests put their
shoulders to the wheel. I think the House
will agree with us in these reductions ; the
experiment can at all events be tried for a
year without inflicting any serious hard-
ship. As it is the intention of the
Government to carry out the self-support-
ing principle with respect to roads
under trustees, they have adopted the esti-
mate of their predecessors under this head.
With regard to the omission from the
Estimates of certain sums proposed by the
late Government to be raised by loan for
certain public works, we have decided to
let a portion of those works stand over for
the present, as they are not of a pressing
character ; not with the object of aban-
doning them entirely, but with the inten-
tion of placing them on the Estimates at
some future time. Others are provided
for by general Loan Acts. The same with
regard to the item of 1,100,000 set down
-by Mr. Samuel for the extension of rail-
ways. The raising of this money, it is
also thought desirable, should be postponed
to a later period, not only because of the
necessity of adjusting the finances of the
country before pledging it to so large an
expenditure, but because the Government
has yet to decide as to railway extension,
whether it be the completion of the
southern line only, or whether they will
proceed with the three lines simultane-
ously. In any case, however, a large sum
of money will be required ; and, as the
completion of the contracts already entered
into, for extensions to the western and
northern termini, will occupy some
eighteen months longer, there is no imme-
diate hurry either to enter upon fresh
contracts or to involve the country in ad-
ditional obligations. Honorable members
will find, on reference to the No. 4 Ac-
count Current, that the estimated ex-
penditure for 1871 is set down at
2,598,996 18s. 6d., to meet which I pro-
pose to raise by loan in England, for
public works, and other such services,
370,291, leaving as an actual charge on
the revenue a sum of 2,228,705 18s. Gd.
This includes the payment of 100,000 of
deficiency debentures falling due on the
31st December, 1871, and a sum of
10,000 to meet claims which may arise
2K

pending the settlement of the question re-
specting the Superannuation Fund. The
adjustment of this vexed subject is a
matter which has occupied the attention
of the Government, and they will be pre-
pared shortly to offer to the House a
scheme for its final settlement. I now
proceed to inform the House how I pro-
pose to dispose of the deficiency debt.
This is a matter which presses for imme-
diate attention ; for not only is there the
deficiency of 334,614 left me by the late
Treasurer, but in a few weeks there will
fall due 343,200 of Treasury Bills, which
will have to be provided for ; these two
items alone represent 677,814. I have
already said that it is not the intention of
the Government to deal with the defi-
ciency except on a plan by which it shall
be extinguished ; and I have also stated
that, in my opinion, it would be injurious
to attempt to raise revenue to expunge it
by an immediate or even short deferred
payment ; but I think that some sacrifice
should be made by the community at
large, and I believe the public are pre-
pared to do so, in order that this debt
may be dealt with in the manner I pro-
pose, and that extra taxation will be
cheerfully borne. I will presently submit
to the House the sources from which I
expect to receive my revenue for the pre-
sent year. Now, with regard to the
343,200 of Treasury Bills, I would ask
the House to sanction the renewal of this
sum for another year. It is, however, my
intention to devote the surplus revenue
which I will have at the end of 1871 to
liquidating in part these bills. I propose
that, with the ample revenue which my
tariff will yield, and with the savings
which will accrue from the vigorous scheme
of retrenchment already foreshadowed,
gradually to extinguish these Treasury
Bills in a period a little over three years ;
in fact, I propose to render available the
surplus of each year for their final ex-
tinction. If, after that result is attained,
the prospects of the country will admit of
it, it will be something for the Treasun-r
of the day to submit to the House a plan
for disposing of the surplus by a scheme
of reduced taxation. It appears to me
that my predecessors have not wen th.-ir
way to come down with a tariff capable of
yielding revenue sufficient for the wants

266

ME. LORD.

[1871.]

of the country ; they have in fact made
not perhaps sufficient allowance for the
contingencies of floods and droughts with
which this Colony has been so often afflicted,
consequently the expectations of the least
sanguine Treasurer have been disturbed by
influences in many instances beyond his
control. I propose to deal with the defi-
ciency of 334,614 Os. 5d. at the end of
1870, by the issue of Treasury Bills as
required, having a currency of three years,
negotiable in the Colony. These bills will
be issued only as the necessity for the
money may arise. The mail service to
California, vid New Zealand, expires on
31st March next. The desirability of
opening up the service by a more direct
route will be duly considered. Honorable
members will find on the Estimates several
sums for military defences, the necessity
for the continuation of which, considering
the disturbed state of Europe, cannot, I
think, be denied. I have estimated the
revenue and receipts for the year 1871
at .2,247,305, as per statement, to which
I would refer honorable members. From
Customs I expect to receive 1,000,000,
being an increase on the actual receipts of
1870 of 146,184, but I estimate that
the land revenue will not be more than
466,805, being 121,560 less than the
sum estimated by my predecessor, Mr.
Samuel, for this year. I adopt these
figures for reasons already stated, and be-
cause I find that there was a falling off
in the revenue under this head in 1870 of
105,964 as compared with 1869. The
land ' revenue of 1869 was 584,034,
while the amount actually received in
1870 was only 478,070. If, therefore,
there was this large falling off, owing
doubtless to the holding back of purchasers
in anticipation of a favourable change in
the Land Law last year, how much greater
will be the holding back in anticipation of
the change which will probably, in com-
pliance with a resolution of the House,
be introduced during the present
year. Although I may be accused
of taking a gloomy view of the
land receipts, I am justified in the
view I take by the results of the
actual receipts which last year presents.
I have made no alteration in the revenue
expected from stamps. The Government
propose to bring in an amendment of the

Stamp Duties Act, which will give some
trifling increases, not more however than we
shall lose by abolishing the succession and
legacy duties. I now come, sir, to the
most important feature in my Financial
Statement ; it is one which doubtless in-
terests the public out of doors even more
than it does honorable members. The
question of a readjustment or alteration of
the fiscal policy of the Government is
one which always excites interest in
the mercantile community. I believe
at no time in the history of the country
were men's minds more anxious that the
tariff should be brought forward, and, if
possible, put on a basis which would
not necessitate alteration for some time.
I am assured by many mercantile people
in Sydney that business has been kept
in a feverish and excited state since
October last, owing to the attempt of the
late Government to pass their tariff, and
the measures adopted to protect the
revenue by the collection of their proposed
new duties ; and in the Customs Depart-
ment there is still evidence of the magni-
tude of clerical labour which the proposed
changes of my honorable friend opposite
caused. I lay it down that it should be
the endeavour of a Government to pass a
tariff to yield, on the one hand, ample
revenue for the wants of the country, and,
on the other, that the tariff should be
such as to obviate the necessity for con-
stant changes. With these views, and
with an earnest desire to deal honestly
and fairly with the deficiency debt of the
Colony, I have prepared a tariff which
will answer all the conditions I have laid
down, and, at the same time, will not be
felt to be oppressive by those who have to
contribute to it. I have determined to
establish, where possible, a scale of fixed
duties based on the known weight, size,
or contents of the various articles, and
where such can be easily arrived at ; and
I think in this point it will be found that
I have met the opinions of the House as
expressed in the discussions which took
place on the tariff at the close of last year.
I have introduced a large free list, with a
desire to lighten, as much as possible, our
trade in articles imported from the South Sea
Islands, which is now assuming so im-
portant a character ; and also to remove,
as far as possible, the obstructions which

[1871.]

MR. LORD.

267

have prevented our harbour being visited,
as in former years, by the large fleet of
whalers which frequented these waters,
and left behind them something which
benefited the port. I have also included
in the free list many minor articles the
collection of duty on which hampers our
own coasting and trading ships. It is the
intention of the Government without
delay to submit a Bill for raising a tax, to
come into operation on the 1st of January
next, upon the property of absentees.
By this means persons who derive a large
income from the industry of this Colony
without paying anything towards the pro-
tection of the property from which such
income is derived, will be compelled to con-
tribute fairly towards the expenses of the
Government. The proceeds of this tax will
enable the Treasurer at a future date to
relieve the country of some of the bur-
thens which we are now compelled to
impose on it. I propose to increase, for
revenue purposes, the ad valorem duty
in some instances to 10 per cent., mainly
having in view that this rate covers
articles of luxury, and others with respect
to which specific duties could not be im-
posed. The tariff submitted by me is
framed solely with a view to revenue. I
have framed it to inflict as little injury
on any class as possible ; and the Bill to
carry it into effect will contain clauses
which I have every reason to believe will
protect the fair trader against the frauds
of dishonest competition. This will
remove many of the objections which have
been raised against ad valorem duties.
Before closing, I desire to refer to the
Loans Account. It will doubtless be in
the recollection of honorable members that
a good deal of discussion took place in the
House last year relative to the course the
late Government adopted for raising a
balance of 322,709 12s. 6d., which my
honorable friend opposite stated was
absolutely necessary for the completion of
Public Works authorized to be provided
for by loan. This balance was subse-
quently increased to 363,437 3s. Id. by
the re-appropriation of 40,727 10s. 7d.
for Harbour Defences, which had been
written off previous to the arrival of the

war news. On the 7th September last
Mr. Samuel therefore instructed the Bank
to raise the larger sum on the 450,000
debentures sent home in June preceding.
Before that letter, however, < ould have
reached London the Bank had negotiated
the whole issue on terms which, BO far as the
accounts received to this date show, will
realize a net average price of 97 15s. 5d.
per cent. In the letter of 7th Septe:uber|
alluded to, Mr. Samuel gave the Bank
permission to negotiate the whole
450,000 of these debentures, if that
course were considered necessary to affect
an advantageous sale ; but in that case an
amount equal to that over-raised was to
be short-raised under the next issue.
With the exception of the last loan of
407,100, for which debentures were
transmitted to England in October last,
the sale of which has not yet been advised,
all our authorized loans have been nego-
tiated. If honorable members will refer to
the Loans Account, attached to the Ways
and Means, they will there find a state-
ment of the assets and liabilities of this
account on the 31st December last in
the usual form, which I trust will afford
them all the further information which
may be required. In conclusion, I
would point out that no time has been
lost in bringing before the House the
financial position of the country. I do
not think there is a precedent where any
former Government, within a week of
the opening of Parliament, laid on the
table the Estimates of Expenditure, and
within another week the Financial State-
ment had been delivered. The preparation
of the statement I have now submitted has
necessarily been hurried, modification
therefore in some respects may be found
advisable. If honorable members con-
sider I have not given them sufficient
details, I must ask their indulgence and
refer them to the papers now before them.
I have endeavoured, in as clear a manner
as the language at my command will per-
mit me, to lay before honorable members
a statement of our financial position, and
to render intelligible the necessity which
exists for further taxation, and I now beg
to move

That towards raising the supply granted to Her Majesty, from and after the tenth day of February,
one thousand eight hundred and seventy-one, in lieu of the existing Customs Duties upoi
articles, goods, wares, and merchandise imported into the Colony, hereunder mentioned, tl

268

MR. LORD.

[1871.]

shall be raised, levied, collected, and paid, the Duties of Customs specified against each (including
all such of these goods as are now in Bond), namely :

Spirits. On all kinds of spirits imported into the Colony, the strength

of which can be ascertained by Sykes' hydrometer ... ... ... the proof gallon 10s.

On all spirits and spirituous compounds imported into the Colony,

the strength of which cannot be ascertained by Sykes' hydrometer ... $ liquid gallon 10s.

Mythelated Spirits ... ... ... ... ... ... ... ... ,, 2s.

Wines, Sparkling ... ... ... ... ... ... ... ,, 6s.

Other kinds ... ... ... ... ... ,, 4s.

Beer, Ale, Porter, Spruce or other Beers, Cider and Perry; in wood or jar ,, 6d.

,, ,, ,, ,, ,, in bottle ... ,, 9d.

Cigars... ... ... ... ... ... ... ... ... ... ... $ Ib. 5s.

Snuff ' 2s.

Tobacco Manufactured ... ... ... .- ... ... ... ... ,, 2s.

Unmanufactured ... ... ... Is.

,, Sheepwash ... ... ... ... ... ... ... ... ,, 3d.

Opium (including all goods, wares, and merchandise, mixed or saturated

with opium, or with any preparation or solution thereof, or steeped

therein)... ... ... ... ... ... ... ... ... ... ,, 10s.

Coffee, Chicory, Cocoa, Chocolate ,, 3d.

Tea 3d.

Sugar, Raw ... ... ... ... ... ... $ cwt. 5s.

Refined ,, 6s 8d.

,, Molasses and Treacle ... ... ... ... ... ... ... ,, 3s. 4d.

Grain and Pulse of every kind not otherwise enumerated ... ... ... ,, 9d.

Grain and Pulse of every kind not otherwise enumerated, when ground,

or in any way prepared or manufactured ... ... ... ... ... ,, Is.

Comfits, Confectionery, Succades ... ... ... ... ... ... $?lb. l^d.

Alkali, Soda, Ash, Caustic Soda $ ton 20s.

Soda Crystals, Cordage, Rope, Lead Pipe or Sheet, Nails and Screws,

Paints, Galvanized Iron in bars, bundles, or sheets, or corrugated ... ,, 50s.

Acids, Vinegar, Oils, except specially exempted ... ... ... ... #? gallon 6d.

Turpentine ... ... ... ... ... ... ... ... ,, Is.

Varnish ... ... ... ... ... ... ... ... ,, 2s.

Arrowroot, Sago, Tapioca, Ginger, Blasting Powder, Salt and Dried

Fish, Maizena, Corn Flour, Jams, Jellies, .Nuts of all kinds (except

Cocoa-nuts), Preserves, Preserved Meats, Fish and Vegetables ... $ Ib. Id.

Sporting Powder ,, 6d.

shot :::;' $cwt. ios.

Bags and Sacks $ dozen Is.

Butter, Cheese, Dried Fruits, Macaroni, Vermicelli, Pepper, Starch,

Spices, Bacon, Hams, and Blue $ Ib. 2d.

Candles ,, IJd.

Cement $ barrel 2s.

Bottled Fruits quarts $ dozen. 2s.

,, ... ... ... ... ...pints and smaller packages ,, Is.

Rice $toii 60s.

Whiting, Chalk, Pig, Bar, Rod-plate, Sheet, Bundle and Hoop ... Iron ,, 10s.

Iron Wire, Iron Pipes, Castings, Chains, Salt, Saltpetre, Steel ... ,, 20s.

Malt $ bushel 6d.

Hops $lb. 3d.

Soap, Common ... ... ... ... ... ... ... $ ton 60s.

,, Fancy ,, 120s.

Timber, Dressed $ 100 feet super. 2s.

,, Rough and Undressed ,, Is.

Palings $100 Is.

,, Shingles, Laths $ 1000 Is.

,, Sashes, Doors, Shutters ... ... ... ... ... ... each Is.

Spades, Shovels, Picks, Axes $ dozen 2s.

Oilmen's Stores Sauces and Pickles quarts ,, Is.

,, ... pints and smaller quantities 6d.

Iron Tanks ... ... ... ... ... ... ... ... ... ... each 5s.

Galvanized Manufactures ... ... ... ... ... ... ... ... $ cwt. 3s.

Zinc... ... ... ... ... ... ... ... ... J; 4s.

Zinc, in sheets or rolls ... ... ... ... ... ... ,, 2s.

Woolpacks -. each 3d.

Paper, Printing $ cwt. 4s. 8d.

Writing and Fancy $ ft. Id.

,, Brown and Wrapping .. $ cwt. 3s. 4d.

[1871.] MR. LORD. 269

On the several articles, goods, wares, and merchandise imported into the Colony, heretmder
mentioned, 10 per cent, ad valorem, viz. :

Agricultural Implements, Apparel, Slops, Apothecaries and Druggists' Wares (not otherwise
enumerated), Baskets and Basket Wares, Bellows, Blacking, Brassware (manufactured),
Brushware, Carpeting and Rugs, Carriages, Copper Manufactures, Cottons (manufatured),
Cutlery, Earthenware and China, Glassware, Stationery not otherwise enumerated, Looking,
Pier, and Plate Glass, Furniture and Cabinet Ware, Floor-cloth, Gas-fittings, Haberdashery,
Millinery, Hats, Caps, Bonnets, Hosiery, Gloves, Musical Instruments, India-rubber Goods,
Jewellery, Boots and Shoes, Linen and Drapery, Matches, Machinery, Weighing and Sewing
Machines, Matting and Rugs, Oilcloth, Painters' Materials, Paper-hangings, Perfumery, Gold
and Silver Plate, Platedware, Saddlery and Harness, Portmanteaus, Travelling Bags, Silks,
Tents, Tarpaulins, Tinware, Toys, Fancy Goods, Turnery, Woodware, UmbreUas, Parasols,
Watches, Clocks, Firearms, Woollens, in piece and manufactured, Blankets.

On all other goods not included in the foregoing lists, nor enumerated in the appended schedule of

exemptions, 5 $ cent, ad valorem.

Free List.

Animals (living), Anchors and Cables, Beohe4e-mer, Sandalwood, Cocoa-nuts, Sulphur, Sperm,
Black, and Cocoa-nut Oils, Fibre, Cocoa Fibre, Pulu, Copra, Lime-juice, South Sea Island
Produce (except specially rated), Church Ornaments, Fittings, and Instruments, Gold and
Silver, in Coin, Bar, or Dust, Ores, Raw Cotton, Cotton Wick and Waste, Old Sails, Old Rope,
Old Iron, Old Brass and Copper, Old Metals, Dolomite, Guano and Manures, Fresh Meat and
Fish, Kaurie Gum, Curiosities, Old Casks, Hides, Horns, Hair, Skins, Bristles, Wool, Tallow
and Animal Oils, Bones and Bone Products, Whalebone, Dyers' Materials, Rags and Paper-
making Materials (raw), Flax, Hemp, Flock, Military and Naval Stores, Oakum, Pitch, Tar,
Resin, Oars, Pictures, Printed Books, Paintings, Seeds for Garden purposes, Plants, Trees, and
Shrubs, Green Fruit and Vegetables, Quicksilver, Rattans and Canes, Shocks, Mill and Grind
Stones, Rough Stone and Marble unmanuactured, Paving Stones, Ships' Ballast, Tortoisehell,
Yams, Yellow Metal and Yellow Metal Rods and Nails, Sheathing-felt, Coal and Coke,
Passengers ' Luggage and Effects, Packages in which goods are usually imported, Specimens of
Natural History.

Penalty for false entry or valuation, to be confiscation.

The ad valorem duties to be computed on the net invoice cost at place from whence imported, witK
the addition of 10 $ cent, thereto.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEORGE
WILLIAM LORD, made 6th December, 1871.

LEGISLATIVE ASSEMBLY.

6th December, 1871.

FINANCIAL STATEMENT.

MR. LACKEY : It now becomes my
duty to lay before the Committee a state-
ment of our Financial position for the
present year, and to submit also the Ways
and Means which the Government expect
to have in 1872, to meet the expenditure
of that year, as exhibited by the Estimates
I laid upon the Table of the House on
Thursday last. As on a former occasion,
I have taken the earliest opportunity after
the opening of the Session of bringing the
financial position of the country before the
House. I would, in the first place, request
the attention of the honorable members
while I endeavour to explain, as briefly as
possible, the various accounts which I find
it necessary to submit in elucidation of the
financial position of the years to which
they refer. The accounts with which I
have chiefly to do are only three in number,
and will I trust be found framed in such a
way as can readily be understood. The
first has reference to the accounts of 1870
and previous years. The second to the
receipts and expenditure, actual and esti-
mated, for the current year, and the third
to the year 1872. Provision \v;is made, it
will be remembered, last Session, for the
deficit which, in my financial statement of
9th February last, I showed would arise
on the accounts of 1 870 and previous years.
That deficit I estimated would amount to
334,614, to cover which Parliament

authorized the issue of Treasury Bills to a
like extent, bearing interest at the rate of
5 per cent., and having a currency of three
years. The statement I now submit, and
which I have had prepared with a view to
prove that that estimate was not an exag-
gerated one, will be found marked No. 1
of the Ways and Means. To this account
I now desire to draw the attention of the
Committee. By the credit side it will be
seen that I commence it with 32,058
15s. 10d., the actual cash balance at the
credit of the " Consolidated RevenueFund"
on 31st December, 1870. This is a start-
ing point which cannot be disputed, as the
abstracts of the public accounts laid on the
Table of the House the other day clearly
show that this was the correct llance on
that date. I have also given credit for a
sum of 10,000 received in July last from
the Government of Victoria on account of
the past year's Murray River Customs,
and I have credited the account with
2,195 12s. 6d. repayment of advances
made from the revenue of 18 70 on account
of the Western Road vote of 1871. These
three credits or assets amount to the sum of
44,254 8s. 4d. It will therefore readilys
be understood that payments this year on
account of services of 1870 and previous
years in excess of that sum go towards
making up the deficiency of :'."> .''! I
which I previously estimated. If honor-
able members will now turn with me to the
debtor side, I will explain tin- M-veral
charges for which this account is liable.
During the three quarters ended 30th
September last, payments were made in
the colony to the extent of 188,134
10s. 9d., the particulars of which have

272

MB.. LORD.

[1871.]

been given in the quarterly statements
published in the Government Gazette.
In October the payments amounted to
2,566 18s. Id., thereby making the total
payments in the colony from 1st January
to 31st October, 120,701 8s. lOd.
Besides these, there were disbursements in
London by our financial agents on account of
Services of 1870 and previous years to the
extent of 122,930 7s. 2d. This large
amount includes the payment of 100,000
short-dated debentures which fell due on
31st December last, but which could not,
of course, be passed through the books of
the Treasury until the present year. The
payments here and in London to 31st
October, amount together to the sum of
313,631 16s., being 269,377 7s. 8d., in
excess of the 44,254 8s. 4d. at the credit
of this account. This excess, it will be
seen, is not an estimate, but an actual cash
deficiency. Bringing down this deficiency
of 269,377 7s. 8d. on the debtor side, I
add the appropriations, which, on 31st
October were still retained for future
expenditure. These amounted to 76,045
3s. 4d. From this sum I have however
deducted 21,209 5s. 2d., as the probable
amount of further savings, charging
the account under this head with only
54,835 18s. 2d. There is also, it will
observed, a charge of 10,790 13s. 8d. for
an Additional Supplementary Estimate.
The actual cash deficiency on 31st October,
and these two charges, bring the deficit up
to 335,003 19s 6d., which will be
covered by the proceeds of the Treasury
Bills authorized to be issued by the
Treasury Bills Deficiency Act of 1871.
This account may therefore be considered
finally closed. Before passing on to the
account for the present year, it may be as
well to inform the House that, notwith-
standing I have made payments this year
to the extent of 269,377 7s. 8d. on
account of services of 1870 and previous
years, in excess of funds available, I have
not been compelled to negotiate the Trea-
sury Bills authorized by Parliament to
meet the deficit on this account, nor do I
anticipate having to do so for some time
to come. I will explain, in another part
of my statement, how I have been enabled
to meet these payments without having
recourse to this loan. To the next
account, No. 2, I would invite the special

attention of honorable members, being the
one for the present year. Since I sub-
mitted my estimates of revenue and ex-
penditure for this year, the tariff I pro-
posed then was so modified by the House
that a very considerable reduction in my
estimates of the Customs Revenue is the
result. On the other hand, by a large
additional estimate, introduced before the
close of the Session, my proposed expendi-
tui-e was much increased. Notwithstand-
ing these unfavourable changes, I think I
will be able to show that the result of the
year's operations, as a whole, will be much
more satisfactory than could have been
expected under these circumstances. In
dealing with this account, I will follow the
arrangement I adopted in explaining the
No. 1 account. The first item on the
credit side, it will be observed, is
2,226,468, the amount of actual and
estimated revenue for 1871. Of this sum,
1,654,071 was received during the first
ten months, and 572, 397 is the estimated
revenue for the months of November and
December. Deferring for the present my
analysis of these items, it will be seen that
from this actual and estimated revenue, I
deduct 10,000 for Murray River Cus-
toms, which, although received this year
from the Government of Victoria, belongs
to the revenue of 1870, to which account,
it will be remembered, it has been
credited. The second credit is 100,000,
being the usual amount of appropriations
for general services, estiniated as not likely
to be required. I could easily show, by
taking an average of the savings on appro-
priations for a series of years past, that
this is by no means an excessive amount
to take credit for, The third item of
credit is the vote of 30,000 which was
taken in consequence of the Audit Act
coming into operation this year, to enable
the Treasurer to make advances to public
officers and others, which could not be
charged at once to special appropriations
of Parliament. As the few temporary
charges which have been made against this
vote will ultimately be transferred to
other votes, the 30,000 will lapse
altogether. It must, therefore, be ad-
mitted that I properly take credit for this
sum. On the debtor side will be found
the charges against the revenue of the
year. The first of these is for general

[1871.]

MB. LORD.

$73

services, that is, those which were voted
by the House, and embraced in the
annual Appropriation Act. These ser-
vices were estimated, at the time I made
my former statement, to amount to
1,454,368 6s. Sd. ; but owing to a rather
large Additional Estimate having been
brought forward towards the close of the
Session this amount was increased to
1,540,675 16s. 4d., being an addition
to my previous estimate of 86,307 9s. 8d.
As this was an unusually heavy additional
estimate to submit before the close of a
Session, the Committee will, perhaps,
allow me to remind them of a few of the
items embraced in it. The largest of
these I have already alluded to, in explain-
ing why I had taken credit for the amount
as an appropriation that will not form a
permanent charge on the Consolidated
Revenue Fund. I refer to the vote of
30,000 which was taken to enable the
Treasurer to make advances to public
officers and others. When the Audit Act
came into operation this year, the Govern-
ment found their hands so tied up by its
provisions that no service, however im-
portant or however pressing, could be
carried out unless Parliamentary sanction
had been previously obtained. To obviate
the great inconvenience which a strict
adherence to the law in this respect could
not fail to create, it was suggested that a
temporary vote of 30,000 would meet
the difficulty. This amount was therefore
placed upon the estimate, and cheerfully
voted by the House. The Government,
in its desire, however, to incur no expen-
diture which had not been duly provided
for by Parliament, have only made use of
this temporary appropriation in cases of
extreme necessity. Then, it will be re-
membered that there was a sum of
16,000 for Minor Roads, and 7,500 for
Steam Postal Communication with Great
Britain, vid San Francisco, placed upon
this estimate, in compliance with dis-
tinct resolutions of the Assembly.
There were also 10,000 for pur-
chase of Warlike Stores, and a fur-
ther sum of 4,000 towards defraying the
expenses of taking the Census. These five
items alone amount to 68,500. From
this explanation, I think honorable mem-
bers will see that this large additional
estimate was unforseen at the time I

made my former statement, and that souic
of the services were really inevitable.
Reverting to the account, it will !><
that the amounts for services provided by
the Constitutional and Colonial Acts, and
the Special Appropriations, remain as
before ; as also the amount required to
meet the fifth instalment of short-dated
debentures falling due on 31st December
next, and which it must be satisfactory to
the House to find will be paid out of the
revenue of the year. There is besides
these a small charge of 3,163 12s. 5d. to
meet the difference between the salaries
paid to Government Officials for January
last, under the Appropriation Act, 34 Vic.
No. 10, and the reduced amounts provided
on the Estimates-in-Chief for 1871. The
Supplementary Estimate of 13,923 Is.,
chargeable to this year's account, is, 1 be-
lieve one of the smallest ever submitted.
My estimated surplus of 24,367 18s. 5d.,
although greater than estimated by me in
February last, is not quite so large as I
then anticipated it would actually turn out.
It must, however, be borne in mind that
a very considerable reduction in Customs'
Duties resulted from the changes made by
the House in the tariff I submitted, and
on which I had based my estimate of
revenue from that source. For instance,
my estimate was diminished 100,000 by
the refusal of the House to increase the
Ad Valorem Duties ; 30,000 by the loss
of the Flour and Wheat Duty ; 3,000 on
the reduced duty on Candles ; and 1,000
on Printing Paper and Sundries : making
in the whole a loss of 134,000. It must
also be borne in mind that, from the cir-
cumstance of our not collecting the new
duties from the time of introducing the
new tariff until the resolutions passed in
committee of this House, we lost the
benefit of the new taxation for a period of
nearly four months. On the other hand,
the charges for the year were largely in-
creased, by the additional estimate passed
before the close of the Session, and to
which I have just referred. From a state-
ment I have prepared, and which I will
read to the Committee, it will be seen
wherein my former estimate of revenue is
not likely to be realized, and wherein it will,
in all probability, be exceeded. Customs,
I expect, will fall short to the extent of
139,807 j Duty on Spirits distilled in the

274

ME. LORD.

[1871.]

Colony, 1,282; Commission on Money
Orders, 348 ; Fines and Forfeitures, 554 ;
Pilotage, Harbour Dues, and Fees, 282 ;
Tonnage Dues, 1,207. Under these six
heads there will likely be a gross decrease
as compared with my estimate, of 1 43,480.
The heads under which I expect increases
are Duty on refined sugar and molasses,
2,067 ; Gold Revenue, 2,653 ; Mint
Receipts, 7, 348; Land Revenue, 28,743;
Assessment on Sheep, &c., 1,073 ; Fees
under the Registration of Brands Act,
180; Postage, 3,434; Licenses, 1,587;
Fees of Office, 2,320; Rents, exclusive of
land, 1,107; Stamps, 13,967; Railways,
35,202; Telegraphs, 2,989; Miscel-
laneous, 9,973, making a gross increase
under fourteen heads of 112,623 ; this
increase deducted from the decrease,
produces a net reduction of 30,837.
It is satisfactory to find that, with the
exception of Customs, every head of
revenue of importance shows marked
signs of improvement. This must, I think,
be admitted as a sure indication of return-
ing prosperity, in which I trust all classes
of the community will share. Had the
amended tariff come into operation earlier
in the year, the difference between my
Estimate and the actual amount of Cus-
toms receipts would undoubtedly have
been much smaller. Before alluding to
the account of estimated revenue and
expenditure for next year, honorable
members may probably expect that I
should state what were the Bank Balances
of the Government on 30th November last.
In Sydney we had to the credit of the
Public Account, 44,174 15s. Id., and to
the credit of the Loan Fund, 35 Vic.,
No. 5,, 203,807 11s. 3d.; in London we
had, according to the books of the
Treasury on that date, 46,200 5s. 6d.,
in all, 294,182 11s. lOd. If it be
supposed that these balances are small,
I would remind honorable members that
I remitted to London a short time ago
the large sum of 350,000, to pay the
fifth instalment of short-dated debentures
falling due on 31st December next, and the
interest on our loans, due 1st January,
1872, which forms a charge on the revenue
of next year. There being no balance in
London to meet these claims, nor any de-
bentures against which I could draw, I
was compelled to purchase bills of ex-

change here for the amount. I would
further, remind the Committee that I have
paid, up to 31st October last, no less a
sum than 269,000 on account of services
of 1870 and previous years, in excess
of the cash balance available for such
services. It may be said that I should
have realized on the 334,600 Treasury
Bills authorized by Parliament to meet
this deficiency. In answer to that, I
would simply ask those honorable mem-
bers who say so, what would be the bene-
fit of borrowing money at 5 per cent, and
allowing it to lie in the bank unproduc-
tive ? At the present moment we have
more money in the bank than we get in-
terest on, and quite enough to meet all cur-
rent demands upon the Government.
When that ceases to be the case, which I
certainly do not expect to occur this year,
then I can realize upon the Treasury Bills
authorized by the " Treasury Bills Defici-
ency Act of 1 87 1. " It is well known that
a larger proportion of the year's revenue
is received in December than in any other
month of the year, so that I am perfectly
satisfied I have acted wisely, and for the
best interests of the country, in delaying
the sale of these Treasury Bills until the
money is absolutely required, and I am
also sure that honorable members will see
that the Government have adopted a pro-
per course in this matter. When we got
the authority of Parliament for these
Treasury Bills, we distinctly stated at the
time that they should only be issued as re-
quired. I will now refer to the Account
of Estimated Revenue and Expenditure
for the year 1872, which honorable mem-
bers will find marked No. 3. There being
nothing of a complicated nature in this
Statement, I will endeavour to make my
remarks with respect to it as brief as pos-
sible. It affords me no small satisfaction
to be able to inform the Committee that
the Government do not intend to propose
any new taxation this Session, because it is
anticipated that our revenue will be suffi-
cient to meet our estimated expenditure.
Since we came into office, our constant aim
has been to keep the expenditure of the
country within its income, and in this I
am glad to say we have up to the present
time succeeded ; nor has this desire on our
part been lost sight of in framing the
Estimates for next year. Although these

[1871.]

MB. LORD.

275

Estimates are in excess of the appropria-
tions for the present year, it will be found
that a large portion of that excess is
inevitable. On the credit side of the
account it will be observed that I have
brought forward my estimated surplus of
24,367 18s. 5d. on the account of this
year. The revenue of 1872 is estimated
to amount to .2,393,058. Having gone
carefully through the various estimates
furnished by heads of departments, and
having satisfied myself that they are
reliable, I have every reason for believing
that this Estimate will be fully realized.
Should any honorable member however
entertain a different opinion, I would
invite his attention to the Statement of
Details attached. Railways will, I believe,
give an increase of at least 45,000. From
Customs I anticipate an increase of 32,000,
exclusive of the Border Duties, from which
we hope to obtain an additional sum of
40,000 ; and I do not think 52,000
more from land sales, interest on condi-
tional purchases, and from our gold-fields,
which are every day becoming more valu-
able, can be considered unreasonable.
These four items alone give an increase of
169,000, which is more than the dif-
ference between my Estimates and the
revenue of the present year ; and it will
also be seen that I have not increased my
Land Revenue Estimate in anticipation of
the passing of the Land Bill, although
in that event the receipts under this
head would be considerably augmented.
The estimated charges against the year
1872 for general services amount to
1,603,150 6s. 8d. Under the Schedules to
the " Constitution Act" and supplements
a sum of 52,943 5s. 9d. is required,
which is slightly under the amount appro-
priated for the present year. The amount
under the head of Special Appropriations
is 636,460, or 25,800 in excess of 1871.
This additional charge is for interest on de-
bentures, and therefore unavoidable. The
total charge against the revenue, exclusive
of repayment of loans, is 2,292,553, being
87,540 in excess of 1871, which arises in
this way There is an increase, as already
stated, for interest, of 25,800, on the Exe-
cutive and Legislative Departments, 460,
on the Colonial Secretary's Department,
8,852, on Administration of Justice,
2,371, on Lands Departments, 10,833,

and on Public Works, 46,348, being a
gross increase of 94,664. From this gross
increase must be deducted a decrease on the
Schedules of 734, on my own Depart-
ments of 3,360, and on the Postmaster
General's 3,030, in all. 7,124, leaving
the net increase mentioned of 87,540.
When the Estimates are under considera-
tion I have no doubt my honorable col-
leagues will be quite able to justify the
increases in their respective Estimates.
In my own case, I am in the rather
enviable position of having an Estimate
somewhat less than the present year's ap-
propriations. The last instalment of the
deficiency loan of 550,000, under 29
Vic. No. 4, falls due 31st December, 1872.
I have therefore charged the account with
the sum of 46,700, the balance then pay-
able. In future our surplus revenue
should become available for the payment
of the Treasury -Bills, which for some years
past have been annually renewed, although
forming part of the deficiency debt. Be-
sides the last instalment of this deficiency
loan, there is a charge of 20,000 to meet
the amount of the first " drawings" under
what is generally known as the " Railway
Million Loan," which also becomes due on
the same day. It will perhaps be recol-
lected by honorable members that this
loan was raised under the authority of the
Act 31 Vic., No. 11, which provided for
the payment of the interest to 31st De-
cember, 1871. But from and after that
date, and until the extinction of the loan,
70,000 was to be set apart for the pay-
ment of the interest, and towards the re-
duction and final extinction of the loan
itself. 20,000 of the debentures are to
be annually drawn for ; and as the amount
required for interest diminishes, in the
same proportion will funds accrue for
buying up our own debentures. In this
way it is calculated that the loan will be
paid off entirely in thirty-five years. The
gross total of estimated charges against
the revenue of 1872 will therefore amount
to 2,359,253 12s. 5A, and the revenue,
including the surplus of this year, to
2,417,425, thereby giving an estimated
surplus at the end of 1872 of 58,172 6s.,
which I do not hesitate to say will be
more than realized. This surplus should
be appropriated only towards the reduction
of Treasury Bills then outstanding. I

276

MR. LORD.

[1871.]

would here, however, take the opportunity
of informing the House, that in conse-
quence of the pay of the police having
inadvertently been put down in the Esti-
mates for next year at the rates of 1870
instead of the reduced rates of 1871, the
amount required as therein shown for the
service of 1872 is ,6,072 in excess of
what it actually should be. My estimated
surplus at the end of 1872 will therefore
be increased to a like extent that is,
instead of 58,172 6s., it will with that
reduction in the General Estimates be
64,244 6s. There is still another item
in this account to which it may be ex-
pected I should make some reference
that is, the charge for services authorized
to be provided for by loan. As the gross
amount for these appears on both sides of
the account, the balance is in no way
affected thereby. Conceiving that the
period has now arrived for extending our
railways, and having decided on proceed-
ing with the three lines simultaneously,
we have placed the sum of 1,200,000 on
the Estimates for these extensions. It is
estimated that the average cost per mile
will be 7,000. The 1,200,000 includes
also 60,000 for extending the line from
Kelso to Bathurst. This short extension
will be very expensive, in consequence of
our having to construct a bridge over the
river Macquarie. There is only one other
item in this Estimate which I think re-
quires special notice, and that is, the
amount required to pay the first instal-
ment of the loan of 300,000, which was
authorized by the Act 29 Vic., No. 5. As
that Act was virtually a renewal of pre-
vious loans for railway and other services,
it cannot be expected that the Consoli-
dated Revenue Fund should provide for
the redemption of the debentures issued
for these so long as any portion of the
deficiency debt remains unpaid. Having
disposed of the several revenue accounts,
and having I trust clearly stated our pre-
sent financial position, as well as our
prospects for the year 1872, I desire to
say a few words before I close, respecting
the two loan accounts attached to these
Ways and Means. The first is what
may now be termed the old loans, in
contradistinction to the new fund created
by the Act 35 Victoria No. 5. This
account is made out in the usual

manner, the assets being shown on the
credit side and the liabilities on the debtor
side, On the 31st October last, the balance
at its credit was 514,388 2s. 6d, ; but
besides this sum, there were certain issues
on account of railway stores and advances
to the amount of 112,728 16s. 5d. These
two items, which together amount to
627,116 18s. lid., formed the total
assets on that date. The liabilities that
is, the unexpended appropriations of
Parliament on 31st October, were
572,746 6s. 2d. If from the assets we
deduct the liabilities, there is left an actual
surplus of 54', 370 12s. 9d. As this sur-
plus has resulted from the sale of the
450,000 debentures issued by the late
Government, it may be desirable that I
should give some explanation with respect
to it. It will, I have no doubt, be in the
recollection of many honorable members
that the late Treasurer, the honorable
member for Orange, submitted a statement
of the Loans' Account to the 3 1st December,
1869, wherein it was shown that there was
a deficiency of funds to the extent of
322,709 12s. 6d., caused chiefly by the
debentures of former loans having in many
instances been sold at a heavy discount. To
meet this deficiency, Mr. Sam uel transmitted
in 1870 debentures to London to the no-
minal value of 450,000, which realized a
net sum of 439,787 7s. lid., an amount in
excess of the deficiency, as then ascertained,
to the extent of 117,077 15s. 5d. Several
appropriations which had been written off
but which have since been found necessary,
have been restored, some by the late
Government and some by the present.
These I may state to the Committee :
Works of Defence, including balance of
vote for heavy guns, 40,727 10s. 7d., for
Electric Telegraphs, 11,679 Is. 9d.,
making together 52,406 12s. 4d. ; which
deducted from the amount over-raised,
leaves 64,671 3s. Id. This amount it is
proposed to reduce still further, by charg-
ing against it the loss on the sale of the
debentures in London subsequently to the
negotiation of the 450,000 loan. This
loss, amounting to 10,300 10s. 4d. will
reduce the surplus to 54,370 12s. 9d., the
amount shown in the account under review.
A declaratory Bill will be submitted this
Session, with a view to ratify the whole
proceedings, and appropriate the surplus to

[1871.]

MR. LORD.

277

any future service which Parliament may
authorize to be provided for by loan. In
this manner the old loans' account will be
satisfactorily adjusted, and soon brought
to a close. As will be seen from the state-
ment of particulars respecting the Public
Debt, all authorised loans up to the present
time have been negotiated, excepting the
loan of 334,600 authorized by the Trea-
sury Bills Deficiency Act of 1871. The
other loan account to which I would direct
the attention of honorable members for a
short time is a statement of receipts and
expenditure under the loan Act of last
Session. Tenders wei*e called for the deben-
tures of this loan on the 1st August, and,
on the 15th of August, I accepted offers
for the purchase of 117,400. Tenders
were subsequently called for the balance,
and on the 1st September last I sold the
whole, at prices ranging from par to 4
2s. 6d. premium. From the particulars of
sale, which are fully detailed in the state-
ment, it will be seen that this issue of
debentures was realized at a premium of
524 19s. 6d., which gives an average
price of 100 2s. 9d. per cent. This
result of their sale in the Colony cannot
fail to be acknowledged a successful oper-
ation, the more especially that not one
penny of expense was incurred in their
negotiation. To prove to the Committee
how much more advantageous it was to
negotiate this loan in the local market, I
will read a statement showing the result of
a sale of 407,100 of our debentures in
London in March last. The gross proceeds
of that loan were 403,321 7s. 6d., which
give an average price of 99 Is. 5d. The
charges were as follows : Stamping bonds,
508 17s. 6d., brokerage, 1,003 10s.,
bank's commission, per cent., 2,035 10s.,
advertising, 110 12s., telegram, 3 5s., in
all, 3,661 14s. 7d. ; from which is deducted
8s. 6d. for interest on an overdue instal-
ment. When these charges amounting to
3,G61 6s. are deducted, the net proceeds
are only 399,660 Is. 6d., giving an
average price of only 98 3s. 5|d. As
the debentures were, however, sold on
credit, the loss of interest to the Govern-
ment is eqiial to 1 12s. l|d. per cent,
leaving the price netted by the Govern-
ment only 96 lls. 4^d. per cent.
The difference in favour of the sale in this
market is therefore 3 lls. 5|d. per cent.

I may here mention that I have taken the
necessary steps for having this local loan
quoted in the official list of the London
Stock Exchange. Having conformed to
all the conditions of that Institution, I
feel satisfied my application will not only
be favourably considered but complied
with. The expenditure on account of
services paid from this fund to the 30th
ultimo was 171, 617 8s. 3d., and the cash
balance in the bank of New South Wales,
on the same date, was 203,807 lls. 3d.
It will be observed that I have brought
this account, as well as the Public Debt
Statement, up to the 30th November, in
order to embrace the whole loan ; for
although the balance of the loan was
negotiated in September, 85,900 of the
debentures were not taken up till the 7th
of last month. By doing so, I have been
enabled to submit more complete state-
ments to the Committee. As it may be
expected that on this occasion I should
furnish some information respecting the
Post Office Savings' Bank, for the
establishment of which Parliament passed
the necessary measure last Session, I will
now read, with the permission of the
Committee, a return furnished to me by my
honorable colleague the Postmaster Gene-
ral. This document shows the operations
of the bank from its opening on the 1st
September last to the 30th November :
Number of deposits, 1,593 ; amount de-
posited, 10,293 2s. 6d. ; number of
withdrawals, 103 ; amount withdrawn,
498 7s. lid. ; number of accounts opened,
862 ; number closed, 43 ; number remain-
ing open, 819 ; balance due to depositors,
9,794 14s. 7d. Considering that this
statement embraces a period of only three
months, and these the first of its existence,
I think we are encouraged to hope that this
Institution is likely to become the means of
extending and creating provident habits
amongst that class of the community for
whose benefit it has chiefly been established.
On 31st December next our public debt
will stand at 10,613,130. In this sum I
have not included the 100,000 of short-
dated debentures which fall due on that
day, as I remitted the money for tlu-ir
payment in September last Our debt
consists of 10,269,930 debentures, and
343,200 Treasury Bills. The debentures
have a currency extending from 1872 to

278

MR. LORD

[1871.]

1901, but the Treasury Bills, which have a
currency of only one year, fall due on the
9th May next. Of this debt 10,223,230
are 011 account of public works which were
authorized to be provided for by Loan, and
389,900 on account of previous years'
deficiencies in the Consolidated Revenue
Fund. This deficiency debt is, however,
liable to be increased by the 334,600 au-
thorized by the Treasury Bills Deficiency
Act of last session, which would bring it up
to 724,500, and our debt, as a whole, to
10,947,730. Should Parliament authorize
the several loan services included in the
Expenditure Estimates for 1872, amount-
ing to 1,461,597, our Authorized Debt
would then amount to 12,409,000 in
round numbers. As the necessity for
consolidating our public debt has so
frequently been brought under the notice
of the House by former Finance Ministers,
I will now only state, with reference to
that important question, that it is under
the consideration of the Government, and,
that should we remain in office throughout
the present Session, it is probable a

measure will be submitted for carrying
this much desired consolidation into effect.
I am not aware, Sir, that I have any other
matter connected with the Finances of the
country to bring under the attention of
the Committee at this time. I own that I
am peculiarly fortunate in having started
this year with a clean sheet, and in closing
it, as I hope to do, with a respectable
surplus. Next year, as I have already
shown, there is every prospect of that
surplus being doubled, as the Colony, after
many years of floods and droughts and
commercial depression, has given signs of
returning prosperity, which it is hoped
will be of long continuance. It only
remains for me to say that, should I have
omitted any matter of importance from my
statement, I will gladly, when requested,
furnish such further information as it may
be in my power to give. I have now to
move, Mr. Lackey, that towards making
good the supply granted to Her Majesty,
the sum of 1,784 6s. 8d. be granted out
of the Consolidated Revenue Fund of New
South Wales,

THE HONORABLE W IJ -LIAM. J^ICHMAN PIDDINGTON.

f !
*. :

NEW SOUTH WALES.

FINANCIAL STATEMENT of the HONORABLE WILLIAM EICIIMAN
PIDDINGTON, made 20th June, 1872.

LEGISLATIVE ASSEMBLY.

20th June, 1872.

FINANCIAL STATEMENT.

ME. LACKEY : During the long
time that I have been a Member of
this House I have heard many Financial
Statements made by my predecessors in
office, and on several occasions I have
found that those honorable gentlemen
so overloaded their Financial State-
ments with a multitude of figures in
connection with statistics relating to the
progress of the Colony, which had no im-
mediate and direct connection with the
public finances, but to which I would
have no objection at the proper time
for I confess I feel very much interest in
all information of a reliable character
connected with the statistics of the Colony
that it has been difficult to understand
the real question the true state of the
public finances. As this is not however
a Statistical Society, but a Committee of
Ways and Means with reference to the
condition of the public finances, I shall
endeavour to confine my Statement to as
brief an exposition of these as I can,
consistent with justice to the importance
of the subject itself. I will therefore
make the Statement as concise as I
possibly can. And I say this, in order
that I may ask the indulgence of honor-
able members for the necessary period
which I may occupy in stating to them
the condition in which we found the
public finances of the Colony when we

took office, and the course which the
Government intends to take with reference
to the Estimates of Expenditure. I think
honorable "members will recollect that a
speech was delivered by His Excellency
the Administrator of the Government
which contained statements with regard to
the public finances, which, at the time
such statements were made, were ques-
tioned by several honorable members of
this House, among whom was my honor-
able friend and present colleague, the
Vice-President of the Executive Council,
and myself. I beg to call the attention of
honorable members of the Committee to
one or two statements which I find in the
speech of the late Administrator of the
Government. One of these has reference
to the Treasury Bills authorized by Parlia-
ment to be issued to cover the deficit of
1870 and previous years ; and another
paragraph in the speech makes a state-
ment in reference to the condition of the
Finances, which both myself and my honor-
able friend and colleague, the Vice-Presi-
dent of the Executive Council, thought at
the time was not justified by the facts of
the case. I allude more particularly now
to this paragraph : " On the 23rd day of
March last the sumof 229,425 Aras trans-
mitted to London, to pay the interest on
the public debt due on the 1st July next,
and other charges required to be met there
at the end of June. After such trans-
mission of funds, and after making due
provision for the payment of salaries and
the other necessary expenditure for the
months of February, March, and April,
there will remain in the Treasury an esti-
mated balance of nearly 300,000." Now,

280

MR. PIDDINGTON.

[1872.]

I maintain that the inference which must
necessarily have followed in the mind of
any ordinary reader of this paragraph in
the speech of the Administrator of the
Government was, that, after the trans-
mission of the remittance to pay the
interest on debts owing in London, and
after providing for the payment of salaries,
and other expenses, for the months of
February, March, and April, there
was an estimated balance of nearly
.300,000 to the credit of the Consolidated
Revenue Fund of the Colony. Now I am
ready to 'admit that the speech does not
state exactly in words that there would be
an estimated balance to the credit of the
Consolidated Revenue Fund ; but it does
expressly state that there would be an
estimated balance of nearly 300,000
after these remittances were made, and
after all outstanding debts had been pro-
vided for. Now, that inference was not
warranted by the facts of the case ; and I
am surprised that the late Government
did not express in the speech the exact
state of facts as they existed at the time,
becaiise at the date to which this state-
ment referred there was not one shilling
to the credit of the Consolidated Revenue
Fund of the Colony not one shilling.
Then there is another paragraph in the
speech which says : " Returns will be,
without delay, laid before Parliament,
showing the state of the public finances,
and I confidently entertain the hope that,
by economy in the expenditure of the
public funds, you will be able, not only
to avoid the imposition of new burthens
upon the people, but to reduce consider-
ably those at present existing." This
paragraph of the speech was evidently
intended to carry out the idea contained
in the previous paragraph ; but if there
was no actual surplus to the credit of the
Consolidated Revenue Fund of the Colony,
how was it possible that the existing
burthens could be reduced 1 Yet that was
the expression of hope contained in this
speech, when, at the time the hope was
expressed, there was not one shilling surplus
to the credit of the Consolidated Revenue
Fund of the Colony. Now, my honorable
friend, the Vice-President of the Executive
Council who had more practical experi-
ence of the public finances than I could
possibly have, having held the office of

Treasurer on three several occasions at
once hesitated to believe that the state-
ment in the Governor's speech was really
one that could be relied on, and I think,
when it was made, that honorable gentle-
man asked, " What about the liabilities 1"
but he got no satisfactory answer. I intend
to lay before Parliament returns showing
the actual state of the public finances at
the time when the present Govern-
ment assumed office. I could have easily
supposed that this statement in the speech
of his Excellency the Administrator of the
Government could not possibly be correct
that there could not possibly be any
such sum as 300,000 to the credit of the
Consolidated Revenue Fund of the Colony,
because there was a document called a
"Supplement to the Government Gazette,"
signed by my honorable predecessor, the
member for the Bogan, Mr. Lord, and
dated Sydney, 16th April, 1872, which
gives an account of the receipts and
expenditure for the quarter ending 31st
March, and also shows that on the 31st
March there was a large deficit in respect
to the Consolidated Revenue Fund. In-
stead of there being a surplus at the credit
of the Consolidated Revenue Fund, this
" Government Gazette," published on the
16th April, contains statements of debit
balances in reference to that particular
fund ; and these debit balances not
only existed in March last, but also
in December last. Now, I will read
from this document the debit balances
on the Consolidated Revenue fund,
on the 31st December 1871, and on
the 31st March of this year; and honor-
able members will easily understand that
any one who peruses this Gazette would
easily see that it was almost financially
impossible for the Government to have
had 300,000 to' the credit of that fund
at the end of March ; because the state-
ment therein gives a direct contradiction
to such an assertion, Now, I find that on
the 31st December, 1871, that is at the
close of last year, there was a debit
balance on the Consolidated Revenue
Fund of 366,684 Is. lid. Well, during
the first quarter of this year that debit
balance was not much altered, for I find
that on the 31st March, 1872, there was
still a debit balance on the same fund of
367,364 13s. lid. It is true that the

[1872.]

MR. PIDDINGTON.

281

Government between the 31st March and
the time- when they went out of office, sold
a large amount of deficiency Treasury
Bills, which had the effect of wiping out
that deficit. But whilst the deficit of 31st
March was wiped out in April by the sale
of the deficiency Treasury Bills, they
created another deficit on the Consolidated
Revenue Fund, by using money derived
from loans to pay off the Treasury
Bills which fell due on the 9th of May ;
and therefore the payment of these
Treasury Bills, 343,200, on the 9th of
May, again placed the Consolidated
Revenue Fund in a position of indebted-
ness.

Mr. LORD : You have omitted to state
that in March 229,000 was sent to
England.

Mr. PIDDINGTON : I am quite sure my
honorable friend will admit that he was
obliged to send the money to England
that he could not avoid it.

Mr. LORD : It is nevertheless a fact
that it was sent.

Mr. PIDDIXGTON : Of course it is. Now
I find that when this Government assumed
office, the outgoing Government, in pursu-
ance of a laudable custom which had
existed for some years, appointed an audi-
tor, and the incoming Government also
appointed one, to investigate the public
accounts. This audit was made on the
14th of May last, when the present
Government assumed office ; and under the
signature of Mr. Richard Jones, who was
auditor on behalf of the honorable mem-
ber for the Bogan, and that of Mr.
Charles Frith, who did me the favour to
act on my behalf, the audited statement
shows that on the 14th of May there was
an overdraft on the Consolidated Revenue
Fund of 304,717 19s. 7d. Now, that
overdraft arose from the payment of this
second batch of Treasury Bills, which had
been retired from funds not appropriately
belonging to the Government. It had
been paid out of money which had been
raised by loan for certain public services
which had not yet been carried out. Now,
with the view of giving the House and
the country all the informatiou it was in
my power to procure in reference to the
state of the finances of the country
when the present Government assumed
office, immediately I went into office I
SL

consulted with Mr. Thomson of the
Treasury and asked him to make out a
statement of the liabilities and assets of
the Colony. If I differ in opinion with
regard to the condition of the finaim
that time from an honorable member of
this House and I allude to the honorable
member for East Macquarie I hoj>e it
won't be presumed that I have any
animus against the late Government ;
I think I have a right to be considered
free from all prejudice against that
Government, especially against the honor-
able and learned member who was at the
head of it ; for when that gentleman
was associated with the- honorable mem-
ber at the head of the present administra-
tion, I gave their Government a consistent
and cordial support. When these gentle-
men relinquished office, and the honorable
member for West Sydney was in office, I
was associated in opposition with the
honorable and learned member for East
Macquarie ; and when these gentlemen
united, I still gave him a warm and
encouraging support up to a certain period.
During all these years I have never asked
from the honorable member any favour
for myself or for any one connected
with me. I gave him an encouraging sup-
port up to the period when I differed from
him in reference to the collection of the
Border duties. And in respect to them,
I am more a Martinite than Sir James
Martin himself, for I am a consistent
advocate of the policy of Sir James
Martin, which policy, from 1867 to 1>7_'
was one of non-collection of these duties;
and which policy he did his best to carry
out when he took his departure from this
Colony to Victoria in September last, with
the honorable gentleman my predecessor
and the honorable the late Postmaster
General. Therefore I deny I am actuated
in any way by animus against the late
Government. W T hat I desire is, that the
real state of the finances should be stated.
I have no desire to exaggerate anything,
but simply to set down the facts of the
case. With this view I have had a state-
ment prepared, signed by the Consulting
Accountant to the Treasury, as well as
myself, with reference to the lial.il
and assets of the Colony on the 14th of
May last ; and if the messenger will have
the kindness to deliver copies wf th>

282

MR. PIDDINGTON.

[1872.;

Statement to honorable members I will
ask them to follow me through it. It is
a Statement of the nature of a general
Balance Sheet of the Government of New
South Wales, showing the liabilities and
assets on the 14th of May, 1872 ;
and it is drawn up in a precisely similar
manner to any Statement that might be
made by a large mercantile firm when
they find it necessary to demand an
account of their assets and liabilities.
Now, I will ask honorable members first
to look to the debtor side of the account,
that is, to page 2 of this Statement, where
we will find the liabilities explained. The
first of these is 800, on account of ser-
vices of the year 1867 ; the second is
500, on account of services of the year
1868 ; the third is 1,364 4s., on account
of services of the year 1869 ; then
5,980 14s. lid., on account of the ser-
vices of the year 1870; then 43,084
13s., on account of the services of the
year 1871 ; and 315,039 18s. 9d., on
account of services of 1872, up to the
14th May ; the aggregate amount being
366,769 10s. Id. Now, in order that
there shall be no doubt on the mind of
one single member of this Chamber with
respect to these liabilities, there is an
Appendix to the account, marked A,
which is a return of liabilities, being ap-
propriations of or balances of appropria-
tions of Parliament (exclusive of loans),
chargeable against the Consolidated
Revenue Fund on the 14th May, 1872.
That is a list of the detailed items, by
which it is shown that there was this sum
of 366,769 10s. Id. as the amount of
the outstanding liabilities on the 14th
May last. Well, that was the first item,
and I think the detailed Statement
referred to will show honorable members
and they can peruse it at their leisure
that there was the sum stated of out-
standing liabilities on account of certain
public services chargeable against the Con-
solidated Revenue Fund. The second
item is a sum of 516,134 18s. 3d.
Of this amount, 461,764 5s. 6d. is on
account of appropriations for services
authorized to be provided for by loan, the
details of which will be found in Schedule
marked B; and 54,370 12s. 9d., raised
in excess of actual requirements, on an
ibsue of debentures under certain Loan

Acts to the amount of 450,000, which it
is proposed to apply to meet, to a like ex-
tent, any future services authorized to be
provided for by loan. This is a sum
that was raised in excess, under what is
generally termed the tailings loan, and
it must be quite clear that it cannot be
applied to eke out the ordinary revenue ;
it is therefore taken as a liability. These
two sums make up the second item of
516,134 18s. 3d. The third item is a
sum of 122,954 5s. Id. This liability
will be found explained in detail under
Schedule C, at page 25. There honorable
members will see the various outstanding
services creating a charge upon the Loan
Fund 35 Vic. No. 5. There is a peculi-
arity in this Loan Act that I devoutly
could have wished would have found a
place under all previous Loan Acts ; for
if it had we would have been spared a
great deal of anxiety in dealing with
money raised for loan purposes. In that
Act there is a clause providing that no
money raised thereunder shall be appro-
priated to any other purpose than that for
which it had been raised. The fourth
item is the sum of 253,884 9s. 9d.,
being the amount of the balances at the
credit of the various accounts of the Trust
Fund on the 14th May, 1872, as per
statement of details marked D. That
statement, at page 26, shows the particular
accounts which are denominated Trust
Funds. Now, these four items make up a
total of liabilities of 1,259,743 3s. 2d.
I will now invite honorable members to
look at the other side of the account, in
order to ascertain what there was to the
credit of the Government to meet this
liability. Well, the first is an asset of
3,324 9s. 3d. cash balance at the credit
of the London account. The second item
is 298,102 4s. 8d. at the credit of the
public account in the Bank of New South
Wales ; and the third is an amount of
122,954 5s. Id. at the credit of that
particular loan fund for which I have such
an admiration. These three items make
up a cash total of 424,380 19s., and in
these cash balances is to be found the pro-
ceeds of the Treasury Bills issued to de-
fray the deficit of 1870 and previous years.
Now, this is all the cash that we have to
meet these outstanding liabilities. We
have, however, a further asset in the

[1872.]

MR. PIDDINGTON.

283

shape of securities in the Treasury chest,
amounting to 51,500. Then we have a
third asset (being the loans accounts assets
other than cash), railway materials pur-
chased and in stock on the 14th of May,
but not finally chargeable to the appro-
priations of Parliament for the construction
and extension of railways, until issued for
use, 105,698 10s. 3d., and advances to
the Commissioner for Railways, 1,318
5s. 6d. ; making together a total of
107,016 15s. 9d. These items added
give a total of assets possessed by the
country of only 582,897 Us. 9d., as
against liabilities amounting to 1,259,743
Os. 2d., leaving an actual deficiency
balance at the time we entered office of
676,845 8s. 5d. Now, I would like to
ask honorable members of this Committee
whether this is a flourishing state of the
public finances 1 Well, if they can find
this I hope they will give me the benefit
of their ingenuity. One would suppose,
from the language of the Governor's
speech, that we could at once give up the
ad valorem duties. I do not believe that
any one can quarrel with the accuracy of
these accounts, guaranteed as they are by
the proper officers, from which we find
that, instead of a surplus credit of Is.,
there was an actual deficit of 676,845 8s.
5d. Well, I do not mean to say that if the
Government had done as I think they
ought to have done taking authority for
the renewal of the Treasury Bills which
they paid off on the 9th of last month
that the deficit would have been so large.
But then they did not renew them; and the
consequence is, that by paying these Trea-
sury bills one day they created a deficit
the next, and this the honorable member
for East Macquarie called "finally dis-
posing of the Treasury Bills." That is the
most humorous way of describing the
liquidation of the debt I have ever heard
By paying these off last month they have
just added so much to the deficit that ex-
isted when we assumed office. That is a
fact which I challenge any one to dispute.

Mr. STEWART : Did this deficiency accrue
within the last twelve months 1

Mr. PIDDINGTON : I cannot say exactly
how long the deficiency took to accumulate.
The Parliament, out of its great liberality,
gave the means of extinguishing the defi-
ciency in the public revenue which arose

during the administration of the honorable
member for West Sydney.

Mr. ROBERTSON : No.

Mr. PIDDINGTON : I think so.

Mr. ROBERTSON : I am sure not

Mr. PIDDINGTON : When the honorable
member relinquished office it was found
that a large deficiency had occurred during
the time he was in office a deficiency to
the amount of 334,000.

Mr. ROBERTSON : That is not 800,000.

Mr. PIDDINGTON : Don't you attempt to
lead me away from the question ; I am a
very young member of the Government
I again say that the Parliament, in its
great liberality, granted 334,000 in
Treasury Bills, to cover the deficit arising
during the administration of the honorable
member opposite.

Mr. ROBERTSON : No.

Mr. LUCAS : That is a positive fact.

Mr. PIDDINGTON : The public records
will show it. That issue was intended to
cover the deficiency up to the end of 1870.
The Treasury Bills issued to cover the
deficit more than covered it, and left a
small balance of 8,000, so that the
Government began with a clean sheet in
1871.

Mr. LORD : Mr. Samuel was in office.

Mr. PIDDINGTON : Don't let us say
a word against a gentleman who is not
here. I quite admit that the difficulty in
which the late Government have placed
themselves arises out of their own want of
common sense and common discernment,
at all events, to the extent of 334,000,
because in paying off these bilk out of loan
funds, and making no proper provision for
them, a deficit of 343,200 was created
on the 9th of May. So much for the first
statement in reference to the financial
condition of the colony on the 14th May.
Now, I have had another statement com-
piled, brought down to the 31st May, and
honorable members will find that it is
compiled in a similar manner as regards
the arrangement of the figures. If honor-
able members will look at pages 2 and 3
of this statement they will find that the
figures are varied to a small extent, arising
from the dirt'.-n-m-e in time between the
14th and the 31st May. I intend to deal
with the actual receipts of revenue to the
31st of May, and the expectations of the
Government with regard to the seven

284

MR. PIDDINGTON,

[1872.]

months ending December of this year. I
will not wade through the various items.
The sum total of our liabilities on the 31st
of May of this year was 1,222,409, and
of our assets 590,274, leaving a deficiency
of 632, 1 34 on that date. From the 1 4th
to 31st May we had a large increase of
revenue, which exceeded the appropri-
ations for the same period, and thus
reduced the deficit to the amount stated.
I will now ask honorable members to open
the Estimates of Ways and Means for the
present year. On pages 6 and 7 there is
an account current showing receipts and
expenditure from the 1st January, 1871,
to the 31st May, 1872, on account of ser-
vices of 1870 and previous years, as also
the estimated expenditure and receipts to
the close of the account. On the debtor
side honorable members will see an item
of payments made amounting to 347,655
19s. lid., and on the credit side a cash
balance at the credit of the Consolidated
Revenue Fund on the 31st December,
1870, as per the abstracts of the public
accounts laid on the table of the Legis-
lative Assembly on the 23rd November,

1871, of 32,058 15s. lOd. Then
follow four other items amounting to
12,789 13s. 6d., and the proceeds of
334,600, Treasury Bills issued in April,

1872, under the authority of the Treasury
Bills Deficiency Act of 1871, to cover the
estimated deficiency on account of 1870
and previous years, amounting to 348, 105
3s. Od., -the whole making a total of
392,953 12s. 4d., and leaving a cash
balance on the 31st of May of 45,297
12s. 5d. This balance is subject to further
reductions, namely, the amount of votes
and balances of votes of 1870, and pre-
vious years, still retained as liabilities on
the Consolidated Revenue Fund, 8,285
5s. lid., and the amount of an additional
supplementary estimate for 1870 and pre-
vious years, 28,559 4s. Id., making a
total of 36,844 10s. Od. The account
thus shows a balance of 8,771 15s. 4d.
estimated as likely to become available
towards the redemption of the Treasury
Bills issued under the Treasury Bills
Deficiency Act of 1871, which falls due on
the 1st June, 1874. By the operation of
these Treasury Bills the deficiency of
1870 and previous years is cleared off and
the account closed, excepting this small

credit balance of 8,771 15s. 7d., which
arises from the sale of these bills. If
honorable members will turn to the
account No. 2 (Consolidated Revenue
Fund) they will find a statement of the
revenue and expenditure for the year 1871.
This account, in reference to the liabilities,
differs very little from the statement sub-
mitted by my honorable predecessor in
December last. These liabilities, it will
be observed, include the fifth instalment
of short-dated debentures issued under 29
Victoria, Nos. 4 and 5, due 31st Decem-
ber, 1871, 100,000 ; the total amounts
to 2,308,202 Is. Id., less 80,000 de-
ducted for services not likely to be re-
quired, and 30,000, the amount of the
Treasurer's advance vote, which does not
ultimately form a charge on the Consoli-
dated Revenue Fund. These two sums,
amounting to 110,000, leave the liabili-
ties at 2,198,202 Is. Id. My honorable
friend will recollect that he estimated his
savings at 100,000 in 1871 ; but in con-
sequence of no Appropriation Act having
been passed for the early months of this
year, that supposed reserve was drawn
upon, and there is only the sum of
80,000 left as not likely to be required.
There are additional special appropriations
amounting to 17,502 10s. 4d., and a
supplementary estimate of 23,024 7s. 6d.
bring the total liabilities for 1871 up to
2,238,728 18s. lid. If honorable mem-
bers will turn to page 11 we will proceed
to the receipts of revenue for last year.
I find that the receipts for 1871, after
making certain small deductions, were
2,218,689 18s., leaving a total estimated
deficiency for the year of 20,029 Os. lid.
This is a rather unhappy result. I do not
know how long I shall hold office ; but I
devoutly hope that if I happen to remain
in office until the beginning of next year,
my calculations will turn out more profit-
able than the calculations of my honorable
predecessor. He estimated in December
last that at the end of the year there
would be a surplus of 24,367 18s. 5d. ;
but instead of that, we had this estimated
deficit of 20,029 Os. lid., making a
difference between the expectations of my
honorable friend and the present estimated
deficiency of 44,396 19s. 4d. Of course
the deficit on the account of last year will
have to be carried over to the present.

[1872.]

MR. PIDDINGTON.

285

There is a deficiency instead of a surplus,
and I for one sincerely regret that it
should be the case. I have no doubt my
honorable predecessor did his best to
arrive at a correct conclusion as respects
his receipts and expenditure, and I do not
make these statements with a view to de-
preciate the ability of my honorable friend
opposite, or to make any reflection upon
him. It is a position that every Treasurer
must run the risk of being placed in.
But, unfortunately for the country, instead
of having a cash surplus at the end of last
year, there is an estimated deficiency of
20,000.

Mr. LORD : That is from writing off
80,000 instead of 100,000.

Mr. PIDDINGTON : That would not
account for 44,000 ; but the money has
been spent. This account was not made
by me, but by the officers of the Treasury.
It may be observed that I have made a
slight alteration in the form of this ac-
count, by deducting from the appropria-
tions the estimated amount of savings,
instead of as formerly, placing the amount
on the credit side as an asset, a practice
which, in my opinion was absurd. It is
within my knowledge, and has been
ascertained that there was no money
representing a credit, and as there is a
deficiency there cannot, of course, be a
credit. Before I proceed to the Estimates
of the present year I mean the expendi-
ture recited in No. 3 account I wish to
state that we have taken at the present
time, practically the Estimates of our pre-
decessors, and for these very simple and
obvious reasons, that six months of the
year had nearly expired, that an Appro-
priation Act was passed by the late
Government only last month, covering
appropriations from January to June,
1872, and that we had been so short a
time in office that it was physically im-
possible to attempt to make any change
this session. We have had no time to do
so ; we have been compelled to deal witli
the Estimates at once ; and, for the sake
of the credit of the country, are compelled
to ask the House to go through them as
quickly as is consistent with the proper
examination of the Appropriation Bill for
the expenditure of the whole year. The
true position of the country is this : that
v* r are now paying the penalty of the

dissolution of Parliament, granted by the
Governor at the instance of the honorable
and learned member at the head of the
late administration, and instead of having
these examinations into the correctness
and propriety of opposing these Estimates
for 1872 entered into thoroughly and care-
fully last year, in consequence of the
dissolution, the public affairs of the
Colony have been delayed until the latter
part of the month of June before it be-
came possible for the Legislature of the
country to deal with the Estimates of this
year.

Mr. ROBERTSON : The dissolution did
not take place until this year.

Mr. PIDDINGTON : Yes ; for the very
simple reason that the late Govern-
ment did not convene the last session of
Parliament until the middle of November,
when it should have been convened two
months earlier, and, even when they were
in a minority, the late Government disre-
garded the address to the Crown, agreed
to by a large majority of the previous
Parliament, which expressly recited the
very evils anticipated, and which are
proved to exist at the present time.

Mr. LORD : What have we to do with
that ?

Mr. PIDDINGTON : The address was
disregarded, and the Governor was per-
suaded to grant a dissolution, which, to-
gether with the delay in convening Parlia-
ment, are the only true and plain reasons
for accounting for the present state of
public affairs, but more especially for the
unfortunate circumstance that the House
it almost practically deprived of the power
of dealing with the Estimates in a way
that might be desired, because six months'
supply have been granted. Although we
shall have to go through the Estimates in
detail, we cannot get rid of the fact that
six months have been already appro-
priated by Parliament Therefore the
present Government have found it utterly
impossible to make any change in tlie
Estimates ; but should we have the piivi-
lege of holding the position we now
occupy, and administering the Govern-
ment of the country for some time longer,
we intend to take the earliestopportunity of
making such changes in the public establish-
ments, and of carrying out such reorganiza-
tion iu the various departments as shall

MK. PIDDINGTON.

[1872.]

have the effect of giving increased efficiency
to the Public Service, besides securing
that efficiency with economical adminis-
tration of the entire expenditure of the
country. We intend to do that as early
as it is possible to do it. I now beg to
invite the attention of hon. members
to the debtor side of the account No. 3.
We shall find there the deficiency of
20,029 Os. lid. brought over from last
year. There is charged the sum of
2,353,588 12s. 5d., as shown in the
Estimates-in-Chief for the service of the
year 1872. Now, that is an amount
somewhat in advance of the estimate of
my predecessor (Mr. Lord). I find that
his estimate of expenditure amounted to
2,292,553 12s. 5d. ; but our estimate
exceeds his by the sum of 01,000, and that
I will explain to hon. members shortly
by reading the detailed account of the in-
creased expenditure in the different
Public Departments. In addition to this
sum of 2,353,588 12s. 5d., there are two
instalments of loans which have been
made payable from revenue as they be-
come due, namely, short-dated debentures,
46,700, and the portion of the million
loan falling due on the 31st of December
next, 20,000. These sums give a total
charge of 2,440,317 13s. 4d. The next
liability is 343,200 of Treasury Bills
issued under the 34 Vic., No. 18, which
fell due on the 9th May last. And hon.
members will see from the other side
of the account that it is my intention to
ask the authority of Parliament for the
re-issue of these Treasury Bills, which I
think the late Government would have
been wise in doing during the early part
of last Session. The next item is a charge
for public works. 485,713 7s. 3d.
These charges together make a grand total
of 3,269,231 Os. 7d. On the credit side
of the account it will be found that the
actual receipts of revenue for 1872, from
January to the 31st May, was 934,967,
and that the estimated revenue from the
1st June to the 31st December is
1,519,898, making in the whole
2,454,865, from which has to be de-
ducted a small amount received this -year
on account of Murray River Customs,
1871, of 4,010 16s. 6d., leaving a net
amount for actual and estimated revenue
of 2,450,854 3s. 6cL Of course I have

taken credit in this account for a fresh
issue of Treasury Bills to the amount of
343,200, which I hope Parliament will
authorize, in order that the money which
was temporarily withdrawn from other
sources for the payment of the last issue,
may be replaced. The bill for this re-
newal might be so drawn as to give the
Government authority to issue twelve
months' bills at any date that the exi-
gencies of the Public Service might require ;
so that if Parliament does not agree to
renew the bills it does not follow as a
matter of necessity that the whole amount
should be issued at once. The third item
of credit is 485,713 7s. 3d., the amount
proposed to be raised by loan for public
works and repayment of debentures falling
due during the latter end of this year and
the beginning of next. Well, these three
items on the credit side make a total of
3,279,767 10s. 9d., leaving an estimated
surplus on the 31st December, 1872, of
10,536 10s. 2d. Now, I will give some
information with regard to the principal
items of increase in the Expenditure
Estimates of the present Government,
as compared with those of my hon.
friend (Mr. Lord). Some of these items
were intended for the Supplementary
Estimates of this year of my predecessor ;
but in consequence of the Estimates-in-
Chief not having been passed at the usual
time, they have now been embodied in
those submitted by this Government, and
in that respect there is a difference in the
two sets of Estimates. Here are the items
of estimated increase drawn up by the
Consulting Accountant : Volunteers, some
slight additions, 401 ; prisons, chiefly for
additional warders, 1,229. Auditor-
General's Department, extra clerical assis-
tance, 300 ; Registrar-General's Depart-
ment, an extra draftsman and a junior
clerk (I believe indispensable), 300 ;
grants in aid of public institutions, 595 ;
miscellaneous services, election expenses
chiefly, 5,802 ; Administration of Justice,
2,434, consisting chiefly of Mrs. Fogg's
confiscated property, 1,445 ; half-salary
to Judge Francis on leave of absence,
500 ; law expenses in cases of appeal to
the Privy Council, 312. In my own
department there is an increase of 1,379,
caused chiefly by additional Customs
Oflicers required on the Murray, and

[1872.]

MR. PIDDINGTON.

287

appointments in connection with the
Marine Board, all of which were authorized
by our predecessors. In the Secretary for
Lands' Department there is a gross in-
crease of 23,041, which arises principally
from an additional sum i-equired for fees
to licensed surveyors, namely, 21,000 ;
an increase in the expenditure for the
management of the gold-fields, of 1,241 ;
and half-cost of survey of boundary-line
between New South Wales and South
Australia, 1,526. In the Secretary for
Works' Department the following increases
occur : Harbours and river navigation,
new tug for dredge " Hercules," 2,000 ;
stores, repairs, &c., 500 ; additional
punts for dredge " Vulcan," 2,500 ; and
several public works of great importance
under this department to the amount of
7,583 total, 12,583. Under the head
Public Works and Buildings, Colonial
Architect's Department, there is an in-
crease of 8,885, chiefly for the erection
of buildings in the interior of a very urgent
character, and some proposed alterations
in the Parliamentary Buildings. Under
the head of Roads and Bridges, there is
an increase of 10,000, 6,000 of which
is for the formation of a road from
Bathurst to Tambaroora, and the balance
for roads and bridges of equal importance.
In the Postmaster-General's Department
there is an additional amount required for
mail guards of 392, and for country
postmasters, 250 ; and in the Telegraph
Department, for additional officials, conse-
quent on the lai-ge increase of business,
583. These together amount to 1,225 ;
making in all an increase of 68,174,
from which a reduction in the Police
estimate to the amount of 5,771 has to
be deducted leaving 62,405, which
with some other reductions would bring
the amount down to what I stated as the,
gross increase. Now I think I have shown
clearly that these additions to our
Estimates arise chiefly from public works
that are works of necessity. I shall now
read to the House the items of increased
revenue, which I have estimated at
2 1 5, 964. This large increase is expected
to be derived from these different items.
Before I proceed further, however, I wish
to correct two mistakes in the printed
copies of the Estimates laid before the
House. The first is in regard to a year's

half-salary to Judge Francis of 500.
This is a matter merely under the con-
sideration of the Cabinet, and no determi-
nation has been arrived at with regard to
it. The second is with reference to a sum
of 6,000 for a road inaccurately described.
The road is from Bathurst to Hill End
and Tambaroora. I shall proceed now to
state the various items under which the
increase in the Revenue of 215,964 pre-
viously stated may be expected. The
first of these is Customs, and the increase
as shown amounts to 82,656 ; next,
duty on spirits distilled in the Colony,
1,198 ; gold revenue, 2,905 ; land
revenue, 99,400 ; contributions under
the Sheep Disease Prevention Act of 1866,
171; postage, 6,927; money orders
commission, 379; licenses, 385; fines
and forfeitures, 493 ; rents, exclusive of
land, 8,362 ; stamps, 2,334 ; railway
receipts, 36,574; electric telegraph re-
ceipts, 3,978 ; pilotage rates, harbour
dues, and fees, 2,150 ; tonnage dues,
385, showing a total increase of
248,297. But then there were certain
items upon which there would be a decrease;
the duty on refined sugar and molasses,
4,197 ; Mint receipts, 857 ; contribu-
tions under Cattle Disease Prevention Act
of 1866 (arrears), 27 ; fees under the
Registration of Brands Act, 2 ; fees of
office, 230 ; miscellaneous, 27,020.
These amount in the whole to 32,333,
and being deducted from the former
amount, leaves a net increase of 215,964.
I propose to invite the authority of Parlia-
ment, as already stated, to the issue of
Treasury Bills at a currency of twelve
months from the date of issue ; and if
Parliament gives this authority, the deficit
we found when we took office will be
diminished by the sum of 343,200, and
the balance of that deficit we expect will
be rapidly liquidated by the increased
revenue arising during the remaining
months of the year. If the Treasury Bills
are issued and the revenue increase at the
rate we hope it will, I expect to have a
small surplus of 10,532 Os. 2d. at the
end of the year. That would practically
cover the deficit of 14th May. If it be
not done there will of course be a deficit
of a large amount. One reason for the
strong necessity for our issuing these bills
arises from the fact that the Treasurer

288

MP. PIDDINGTON.

[1872.]

will have to remit to London, in the
month of September, about 317,000, to
pay interest and debentures falling due at
the end of the year, and which must be
remitted to maintain the public credit.
With respect to the propsed loan of
540,000, 200,000 of it is required to
meet the debentures which will fall due
next year on account of various public
works. It is not only the practice of
Parliament, but an inevitable necessity,
that these debts should be renewed by the
issue of fresh debentures. In the Esti-
mates of expenditure it will be perceived
that we have omitted the loan proposed
by our predecessors for railway exten-
sions. We have not placed the amount
on the Estimates, because we are aware
that there is a very great difference among
honorable members as to how the railway
works are to be carried out in the future.
We all know that the honorable member
for the Murrumbidgee, for instance, is an
advocate for the extension of railways at
a very low expenditure, and also for de-
creasing the gauge. We have therefore
thought it better to omit this item alto-
gether, in order that we may have further
consideration as to the character of future
railway extension. The public debt on
31st May last, as shown by the statement
attached to Ways and Means, amounted
to 10,606,030 composed of debentures,
10,271,413; Treasury Bills, 334,600.
Of this debt, 10,221,330 was for rail-
ways and other public works and services,
and 384,700 for deficiencies in the
revenue. Besides this deficiency debt
there is the loan which will require to be
raised to make good the money withdrawn
from the loans account to pay off the
343,200 of Treasury Bills that came to
maturity on the 9th May last. That will
make the deficiency debt 727,900, and
increase the public debt as a whole to the
sum of 10,949,230, of which, however,
I propose to pay off finally, on 31st
December next, 66,700. If honorable
members refer to the Ways and Means,
page 23, they will see that the cash credit

on the loans account, on 31st May, 1872,
was 339,591 7s. 3d. On page 31,
under the special loan account, there is an
entry " By cash balance at the credit
of this fund in the Bank of New South
Wales, on31stMay,1872,120,170 5s. 9d."
In the latter account it is the exact amount
of outstanding liabilities under the Loan
Act, 35 Vic., No. 5 ; but in the former
it is only a book credit of the account.
In the one case we have the money ; in
the other we have not. At the end of
Ways and Means, page 39, there is a
statement of credit balances on the old
loans account of 399,591 7s. 3d. ; trust
fund, 250,758 6s. lOd. ; loan fund,
120,170 5s. 9d. ; making a total of cash
liabilities of 770,519 19s. lOd. on the
31st May. We had cash on that day,
431,757 19s. 2d., and securities in the
Treasury chest, 51,500, to meet these
liabilities with. But then there was an
overdraft on the Consolidated Revenue
Fund of 287,262 Os. 8d. on same date.
This concludes my reference to the various
accounts of revenue and expenditure, as
exhibited by these ways and means.
Now that I have come to the conclusion
of my statement, I hope that whatever I
have stated, however imperfectly I may
have acquitted myself, was couched in
such terms as to admit of no misunder-
standing with regard to the facts of the
case. As I stated at the commence-
ment, my only object was to disclose
to the House and the country the true
state of our public finances. They are
not in so disastrous a condition but that
we may hope at the end of the year, sup-
posing these Treasury Bills are issued, to
wipe out this deficiency and save the credit
of the country. Any delay, however, in
remitting the money to meet the claims of
the public creditor in England, would be
attended with the greatest danger to the
credit and interests of the Colony. If
it be desired by honorable members, I am
quite ready to move that the Chairman
leave the chair, report progress, and ask
leave to sit again on Wednesday next.

.'
-

ft
I

THE ^ONORABLE HENI^Y PARKES.

(Now THE HONORABLE SIR HENRY PARKES, K.C.M.G.)

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE HENRY PARKES,
made 21st November, 1872.

LEGISLATIVE ASSEMBLY.

21st November, 1872.

FINANCIAL STATEMENT.

MR. DRIVER : I may be excused in
saying that I rise to address you with
very great diffidence, and a strong feeling
of embarrassment. I am fully aware that
I have undertaken a task for which
neither my habits of thought nor my
public life have in any way fitted me ;
and I am still further embarrassed by the
unhappy occasion which renders it
necessary for me to take this step. I,
however, hope that on this occasion I
shall receive some indulgence from
honorable members, in endeavouring
to perform a duty which, under the
circumstances, has devolved upon me, and
from which I could scarcely release myself.
It is my duty to make a statement which
at all times is received with much interest,
and which in our Country has generally had
a special interest attached to it, from the
talents and character of the gentleman
Avho has made it. I shall have to perform
this duty without any of these advantages ;
"but I shall do my best to deal in a fair
and simple manner with the Public
Account of the Country, and the policy
which the Government intends, if it is able,
to carry out. It will be best for me to
start from where my immediate predecessor
in the performance of this duty started,
that is, from 1st January, 1871, when the
honorable member opposite to me may be
said to have commenced his financial

career with a clean sheet. At that time
there was a total deficiency of 334,600,
and the honorable member obtained the
authority of Parliament for an issue of
Treasury Bills to cover this deficiency, so
that he started from a plain point of
departure. I find from a reference to the
honorable member's Ways and Means at
the time that he estimated that he should
have at the close of the year a surplus of
24,367 18s. 5d. When the honorable
member for the Hawkesbury the late
Treasurer made his statement a few
months ago, he estimated that this surplus
of the honorable member for the Bogan
would be converted into a deficit of
20,029 Os. lid. ; and I find, now that
we have approached more into the reality
of things, and can speak of what has
occurred more in the light of fact, that this
estimated deficiency of Mr. Piddington is
reduced to a deficiency of 14,057 Is. 8d.
at the close of 1871. It is due to the
honorable member for the Bogan to say,
that even now there may be savings
which to some extent may reduce this
deficit, but not to any great extent,
Well, then, starting with this deficiency
for the present year of 14,057 Is. 8tL,
we find that notwithstanding very large
payments have been made during this
year payments altogether of an ex
tional character, such as never occurred in
any one year before we shall have an
estimated surplus on the 31st of next
month of 87,887 7s. 1.1. The gr-
part of the year 1872 having elapsed, it
is not so difficult to form an appn>\r
estimate of the revenue for the \
Well, the rstimatrd increase of revenue

290

MR. PARKES.

[1872.]

this year over that of last year is about
555,400. The Government has paid off
deficiency loans which fell due on the 9th
May, 1872, to the extent of 343,300 ;
and it has provided a further sum of
30,182 8s. 7d. making a total of a
little over 373,000. Notwithstanding
this very large payment in the reduction
of the public debt, we shall have at the
end of the year an estimated surplus of
87,887 7s. 4d. And I think I am in a
position to state that this estimated
surplus will be fully realized. After a
close examination of the calculation upon
which it is based, with the assistance
which I could obtain in the different
offices, and with the instructive lesson of
what has actually taken place during the
greater part of the year, there can be no
doubt but what that surplus will be fully
realized. As the estimates of Ways and
Means have been placed in the hands of
honorable members, I do not know that it
is desirable to dwell any further at this
stage upon particular items of that
account ; and I come at once to the
Estimates for the year 1873. Now, the
Estimates-in-chief for General Services
amount to 2,667,847 11s. 5d. The
proposed loans amount to 1,562,000.
The estimated surplus on the credit side
of the account is, as I have already stated,
87,887 7s. 4d. The estimated revenue
for the year 1873 is 2,714,289. Adding
the amount of contemplated loans,
1,562,000, we have a total of 4,364,176
7s. 4d. on the credit side of the account.
The debtor side of the account is balanced
by an estimated surplus, on the 31st
December, 1873, of 194,327 15s. lid.
Notwithstanding that the interest upon
the proposed loans is provided for
notwithstanding that the loans embrace
works of very considerable extent, still we
believe that at the end of next year we
shall have a surplus little shortof 200,000.
Now, I have been very careful with
the assistance of the officers of the Lands
Department and the officers of other
departments, and with the help of the
gentlemen of the Treasury, not to over-
estimate the revenue of next year ; and
I have myself, after consultation with
those officers, made a very large reduction
upon the estimates sent in to the Treasury.
It appeared to me very desirable that we

should understate our financial prospects
rather than overstate them ; and in order
that the estimated surplus of next year
may be fully realized, I took upon myself,
in consultation with the officers best
qualified to afford the information, to
reduce the estimates of revenue sent in to
the Treasury by a very large sum indeed
something over 70,000, I have therefore
every reason to think that the estimate
which has been submitted will be realized.
This is certainly an evidence of great
prosperity. And whatever differences of
opinion may exist amongst us, I think we
shall all unite in a feeling of gratification
that the Colony is in so prosperous a state.
I certainly do not attribute this prosperity
to the present Government, nor to any
former A dministration It has grown out
of circumstances which have given a new
impulse to the industries of the Country,
which have imparted fresh life and vigour
to every industrial calling, and which has
directed enterprise into new channels,
which has been very fruitful of results so far
as they can be seen. In order that there
shall be no kind of mistake about this
increasing prosperity being the fruit of cir-
cumstances beyond and altogether apart
from the Legislation of the Colony, I had a
statement made out showing the various
branches of revenue upon which the in-
creases have occurred ; and I find that no
less than 160,000 is the amount of
increase on the item of land sales alone.
The increase of revenue in the Lands
Department amounts to 346,500. This
shows that, however meritorious the action
of the late administration may have been,
and however courageous in endeavouring
to increase the revenue of the country by
new taxation, it is not any measure of
theirs which has produced this large
amount of additional revenue. But in
order that this matter might be placed
beyond any possibility of doubt, I have
caused a return to be made showing the
exact fruit of the Tariff Bill, which was
carried into law last year, under the late
Treasurer, the member for The Bogan.
I had a return carefully prepared, under
the authority of the Collector of Customs,
showing the whole of the commodities on
which that tariff acted, even in changing
the duty from one class to another, and
imposing new duties, and in remitting

[1872.]

MR. PARKES.

291

duties, and I find that for the first twelve
months after the Act the Tariff Act of
1871 came into operation the exact
amount produced by it was 60,820 4s. 7d.
I have had this table prepared because it
gives us, on an authority that cannot be
questioned, the important fact that our
financial prosperity does not in any
material degree proceed from the legisla-
tion of last year.

MR. LORD : You have not stated the
increase on the Customs of 1872.

MR. PARKES : I did not state it, but I will
state it now. The increase of revenue from
the Customs this year has been 121,400,
but of that increase only 60,000 is the
profit of the Tariff Act of last year. The
increase of the Customs Revenue is easily
accounted for. In every country in the
world where free institutions exist the
Customs Revenue rises and falls in the
exact ratio of the depressed or prosperous
state of the industrial interests of the
country. The class which consumes the
most dutiable articles is the class which
forms the basis of society ; and in time of
depression they have to pinch themselves
in various ways, and do not consume any-
thing like the amount of dutiable goods
often not half the amount, sometimes not
one-third which they consume in a
normal state of prosperity. It has now
become a maxim in treating questions of
this kind, that the Customs Revenue is
raised just in proportion to the general
prosperity of the mass of the people. By
the statement which I have had prepared,
it is proved to demonstration that the in-
crease- of our Customs Revenue, to the
extent of 60,820 4s. 7d., is due to the
alteration of the tariff that took place last
year ; and the balance of the increase is
due to the increased prosperity of those
who consume dutiable articles. In the
Estimates of Expenditure which have
been laid before the House the Govern-
ment has considered it its duty to restore
the salaries of the Civil Servants to
the rates which existed prior to the reduc-
tions which took place in the year 1871.
If there was no other reason for this course
there would be a sufficient reason found
in the increased price of nearly all the
articles of consumption, and in the greater
demand which prevails everywhere for
valuable services, either of a skilled or

unskilled kind. In fact, the rise of prices,
and the attendant advance in the remu-
neration of services of every description,
have rendered it difficult in some cases to
obtain persons with competent qualifica-
tions, whereas two years or eighteen
months ago such persons were almost too
numerous in the Colony. In consider-
ing the Estimates the Government was
not unmindful of the great desire that
is felt for a reconstruction of the Civil
Service, and much consideration has
been given to the subject. In one or
two departments there has been something
done in that direction. For example, in the
police. The police have been put upon an
entirely new footing, all persons entering
the service for the first time will enter as
probationers, at 5s. per day ; and they will
only obtain rank as efficient policemen
upon their own merit, and receive the rate
of pay established in the Colony for some
years. Something of the same kind has
been done in the department under my
honorable friend the Secretary for Public
Works. But this question of the recon-
struction of the Civil Service was felt to be
altogether too large and weighty to be
dealt with in the time which the Govern-
ment had at its disposal apart from its other
duties. In the Estimates of Expenditure
there are a very few increases, and those in-
creases have been consented to with much
reluctance, and in all cases on one or other
of these principles : when the person was
an old and efficient public servant, who
had large interests of the public under his
direction, and who was considered to be
underpaid, taking into account the position
he held, the duties he had to perform, and
the qualifications he had proved himself to
be possessed of for the performance of
those duties ; and in cases where boys had
entered the service as cadets at a very low
salary, and had made themselves much
more efficient after a period of service, and
who are also growing to age and manhood,
and who appeared to be entitled on their
own merits to an increase of their low
salaries. The increases have been confined
to those two classes of servants. The
Government has submitted a Loan Esti-
mate, which they have thought it expedient
to separate from the General Estimates.
We have submitted a Loan Estimate
amounting altogether to 1,562,000. We

292

MR. PARKES.

[1872.]

propose, iii furtherance of a scheme
not sufficiently matured to be put upon
the Estimate Paper, to ask Parliament to
sanction the construction of four separate
lines of railway. First, the Great Southern
line from Goulburn right through to the
Murrumbidgee. We believe that this is a
measure calculated greatly to enhance the
public interests. In the outlying districts of
the Murray we have much valuable terri-
tory, and a large proportion of the popula-
tion; but, from circumstances which are to a
large extent beyond Parliamentary control,
a considerable difficulty has arisen, and a
state of circumstances has been called into
existence, which, without indulging in any
narrow feeling of jealousy of our neigh-
bours, we cannot but regret. That a large
portion of the population of this Colony,
enjoying all the advantages of this Govern-
ment, whose letters are carried through
our post office, who enjoy large tracts of
our lands at very moderate rates, have not
their social and commercial interests con-
nected with the Colony in which their
industrial operations are carried on, is
a state of circumstances which we must
all regret. One mode of correcting these
evils is to afford our southern colonists, in
the most speedy and economical way, the
means of rapid communication with the
capital of the Colony in which they reside.
Another railway extension is that of the
Western line from Bathurst to Orange.
I need not tell honorable members that
that railway, which has been carried at
such great expense and over such great
obstacles across the Blue Mountains, would
be comparatively useless, and would fall
short of the objects for which it was con-
structed, if it did not proceed further and
pierce the rich and productive country for
which it is destined. The country is of
the most fertile and valuable description,
and the whole Western District is uni-
versally rich in its natural productions.
It seems to me that no more desirable
work could be contemplated than pushing
this railway into the Western interior the
distance we propose. The same obser-
vations apply to the extension from Mur-
rurundi to Tamworth. It is by these
extensions that we may justly hope to
render these railways, constructed at such
a great cost, serviceable to the country.
But besides these lines, the Government

intend to ask Parliament to sanction a
new line of railway. We look with
apprehension to a state of things similar
to that existing on our Southern borders
arising on the border of Queensland. We
have there many tracts of rich country
perhaps none richer in the world ; we have
large mineral deposits in the Northern Dis-
tricts, including the valuable tin mines
just discovered ; and it appears to us in
the highest degree politic and wise to
open up the navigable river Clarence to
the tableland of New England and the
mineral lands of our Northern borders.
Already we have had a foretaste of border
difficulty in that direction ; we have had
little disputes and disagreeable con-
sequences arising out of those disputes.
Any one knowing the character of the
Queensland territory, and the far country
on this side of the border, will see that
great evils will result if remedial means
are not adopted. The Government of
Queensland has a railway, with a ter-
minus at Warwick, thirty miles from the
border of New South Wales. At present
it only starts from Ipswich, which is about
twenty miles from Brisbane by land, and
fifty by water. To enable the mercantile
men of Brisbane to avail themselves of
this railway they must travel the distance
I have just mentioned ; and from War-
wick to our Colony they must travel thirty
miles. This places Brisbane at a great
disadvantage, for there are many diffi-
culties which the Colony of Queensland
must overcome before imported merchan-
dise can arrive in Brisbane. The great
part of the cargoes conveyed there have to
be brought fifteen miles in lighters. It is
therefore quite clear that Sydney ought to
supply not only our inhabitants but those
in the Southern parts of Queensland.
The best plan for securing these advan-
tages is to connect the Clarence River and
the tableland of New England with our
Northern borders, which will bring us into
communication with all that rich table-
land, and with the population on both sides
of the border. We therefore intend to
ask Parliament to sanction this line of
railway, which is independent of the lines
already in existence. The railway in
Queensland is upon a gauge of 3 feet
6 inches ; and it is the only railway in the
Australian Colonies on this reduced scale.

[1872.]

MR. PARKES.

293

If there is any situation in which this
Government would be justified in trying a
narrower gauge it is this ; and taking into
consideration the desirability of commu-
nicating with the Queensland railway so
as to connect us with Brisbane, it is the
intention of the Government to try this
narrow gauge. It is to be hoped that,
consistently with durability and safety, a
railway may be constructed at a low cost,
notwithstanding that there are many natu-
ral obstacles which must be overcome by
engineering enterprise. The Government
have taken into account the circumstance
that only a part of the loans required can
be expended each year. The loan, there-
fore, will be no greater than will be re-
quired to cover the expenditure in 1873.
They are justified in this course in conse-
quence of the uncertain state of the English
money market at the present moment. We
have made up our minds that everything
shall be done that can possibly be done to
carry out the whole of the lines expedi-
tiously. We have made up our minds that
it is an unjustifiable policy to finish bit
by bit ; and we purpose if possible to
have contracts taken from one end to an-
other, so as to go on with the construction of
the whole line. We are aware that there
are difficulties in the way. We have, how-
ever, consulted with the officers who are
the proper persons to advise us, and we
learn from them that we may fairly expect
to have the railway opened to Wagga
Wagga in three years, and Orange and
Tamworth in two years ; to the highest
point of the Clarence and the most con-
venient point of the tableland in New
England, in two and a half years. Passing
to another subject : On this loan estimate
we ask 50,000 for the purpose of emigra-
tion ; and we calculate that if this vote is
acceded to the requisite number of that
class of labourers employed on railways
will be readily obtained within the time
when the works will be in a condition to be
proceeded with. The great difficulty is the
almost certain want of the requisite labour.
In the importation of these men we shall
receive a very valuable class of colonists.
I shall for a short time advert to some
other items of the Loan Estimate, one of
which is likely to be received with some
differences of opinion, because it involves
u large amount of expense, and because

some honorable members may think the
proposal premature I mean the proposal
to expend 50,000 upon the construction
of bridges across the Parramatta River.
For some very considerable time it has
been urged, and Parliament on one occa-
sion assented to it, that it would be
expedient to resume the large tract of
land known as Field of Mars, which, if
these bridges were constructed, would
become a favourite suburb. It contains
something over six thousand acrea If a
good road were established from Sydney
by each crossing-place where it is proposed
to erect these bridges, it would bring a
very extensive tract of country, which is
now almost walled out of view as far as
Sydney is concerned, into request ; and
there would be suburban residences erected
upon it It is one of the most beautiful
parts of the County of Cumberland, and it
would be one of the most populous sub-
urbs about Sydney. If this work were
done the land would become extremely valu-
able. This sum is placed on the Estimates
to carry out this great work, which will
add an entirely new and certainly a most
splendid suburb to the metropolis, and
that of itself is a very large consideration.
There is a sum of 10,000 for the erec-
tion of a lighthouse on the Seal Rocks, a
work which has been recommended by the
Report of a Select Committee to Par-
liament, and which I believe everyone who
has any knowledge of the northern coast
will admit is urgently required, to prevent
shipwrecks and serious danger. There is
also a sum towards providing new Public
Offices. This is a work which has been
talked of for a long time, and which is
really required, for the Government has
continually to rent private buildings in
which to carry on the business of the
country. Considering the undesirability
of taking this course, and the advantage
which would arise from concentrating the
Public Offices, this is a work which I think
will commend itself to the approval of
Parliament. There is also a sum of
15,000 for the Defences of the Harbour ;
and I may mention that this sum is asked
for simply to carry existing contracta to a
point where the works may be left with-
out injury, and at which they may be
resumed at some future time if necewary.
We are all of opinion that there is no

294

MR. PARKES.

[1872.]

rational ground for anticipating any inter-
ference with the security of this country
at the present time, when the world is in
a state of profound peace, and there are
no indications of any rupture likely to affect
the outlying Colonies. I can scarcely con-
ceive of any collision between England and
any Foreign Power excepting the United
States which I trust will never arise
which would be likely to affect these
Colonies. At all events we think that
there are numbers of Public Works which
much more require attention than these
fortifications. We think also that we
ought to have the opinion of some much
higher engineering authority than any we
have yet had. As to the scheme of defence
which has been originated, considering
the great interests at stake in any scheme
of defence, independently of, and in
addition to, the cost of construction, and
that the works should be found effective
for the purposes for which they have been
constructed, we ought to have the opinion
of the highest authority that could be
obtained as to the soundness and thorough
correctness of the principles of this system
of defence. In speaking of Railway Lines,
I forgot to notice that there is a sum of
XI 0,000 for trial surveys, which of course
are necessary in the prosecution of the
works which are contemplated. I may also
point out that in the scheme which the
Government have adopted they have
taken into consideration the advisability
of connecting Mudgee and the rich gold
fields of the north-west of the Colony
with the Western line of Railway.

ME. ROBERTSON : Then that makes five
lines.

MR. PARKES : We have not yet
arrived at that stage at which we consider
it justifiable to submit the proposal to
Parliament ; but we have directed surveys
to be made, and have taken the necessary
steps to enable us to decide upon the
expediency of the work. We have also
considered the expediency of a line from
Bathurst to Hill End and Tambaroora.
I simply mention the circumstance as
forming part of the general scheme of
railway construction to which the Govern-
ment have given its attention, and without
pretending to state anything definite at
this period on these points. The Estimates
of revenue which I have submitted to the

Committee, which brings out a surplus at
the end of next year of nearly .200,000,
are framed on the existing provisions made
for the different departments of the
Government ; but if a new Department of
Mines is established there would be some
cause of disturbance with these Estimates
of Revenue. If Parliament sanctions the
creation of that department the necessary
staff at the commencement would be about
.13,400 ; but there would be a reduction
of that amount by the sum now required
in the administration of the gold fields,
under the department of the Secretary for
Lands, of 6,578, leaving the net increase
of expenditure on account of the new
department .6,882. Then the Govern-
ment propose to ask the House to abolish
the tonnage dues now exceptionally im-
posed at Newcastle, Wollongong, and
Kiama. The tonnage dues are levied at
these three places only. They were levied
in the first instance for purposes of local
improvement ; but it is thought that the
time has come when these particular places
should not be subjected to any law or
impost which does not obtain in the other
Ports of the Colony. The estimated
amount of these dues is 7,175 ; and these
two amounts would reduce the surplus at
the end of next year by the sum of
14,000.

MR. ROBERTSON : Will the department
involve a new Minister 1

MR. PARKES:. Yes; that is proposed.
I should like to say a few words in addi-
tion to what I have said, as to the outline
of policy which will be pursued by the
Government if they are privileged to
retain their present positions. If our
Estimates are fully borne out by experience,
we shall seek next year, in the next
Session of Parliament, to give our atten-
tion in the most effective manner to the
question of taxation, with a view to the
amelioration of the existing system, and
the lightening of the public burdens. We
think it would be premature, at this stage,
to make any promise, or to submit any
project ; but if the experience of the
next few months should justify our
calculations, as we firmly believe they
will, we shall consider it our bounden
duty, at a very early period, to con-
sider the question which has been
often raised in regard to the ad valorem

[1872.]

MR. PARKES.

295

duties now imposed on the imports of the
Colony. I need not say more than that
in any efforts of this kind our object will
be to simplify the system of taxation, to
release as many commodities as can be
released from the interference of the
Customs, and to raise revenue upon as few
commodities as possible. That would be
the general principle by which we should
be guided if we were privileged to make
any attempt in this direction. At the
same time we should not think it an
advisable thing to disturb our estimated
balance of revenue in this direction ; and
while on the other hand we sought to
ameliorate the system of taxation, we
would, on the other, bear in mind the
necessity for carrying out improvements,
so as to make the country more accessible
to new population, and to assist the deve-
lopment of its great and vaiied resources.
We should endeavour to provide for
the expenditure of any surplus that
might arise in these two directions.

When dwelling upon the Estimates, I
ought to have pointed out that we have
in accordance with a resolution of this
House, and certainly in accordance with
my own views, not provided for a portion
of the Permanent Military Force the
Infantry upon the Estimates. This will
effect a saving of 10,000 ; but at the
same time we have increased the grant
for the purposes of instruction by the sum
of 10,000. We think that this 10,000
will be more wisely expended in extending
the blessings of education throughout the
Colony than in maintaining this Force of
a few score men, especially when there is
no prospect of these men being required,
and when their existence must in an
eminent degree tend to depress and render
inefficient the Volunteer Force of the
country. I have now, to the best of my
ability, endeavoured to perform the duty
which has devolved upon me, and to do it
in the briefest and plainest manner of
which I am capable.

v --.--.

l ,'

THE HONORABLE PEORGE ALFRED LLOYD.

. V . v

f-tlt:

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEORGE
ALFRED LLOYD, made 16th October, 1873.

LEGISLATIVE ASSEMBLY.

16th October, 1873.

FINANCIAL STATEMENT.

Mr. DRIVER : I beg to move " That
to make good the Supply granted to
Her Majesty for the service of the year
1871, there be granted out of the Con-
solidated Revenue Fund of New South
Wales, the sum of 29 6s. 3d., for travel-
ling expenses to Police Magistrates, <fec.,
further sum." The Financial Statement of
a country's affairs is a matter of so much
importance, that it is always looked for-
ward to with considerable interest, both
by the Parliament and the people. Under
these circumstances, I may well be par-
doned if I feel a little anxious lest the
statement I am about to make should not
be as clear as I could wish, or as distinct
as honorable members might desire. I
feel, however, that I may rely with confi-
dence on obtaining that forbearance which
is always given in an assembly of gentle-
men to one who, like myself, is for the
first time making a Budget Speech as
finance minister. Figures, I know, are
not generally veiy attractive, and I shall
therefore be at some pains to exclude from
the statement such figures and details as
are not essential to a proper understanding
of the subject. I may say at the outset,
that it is a source of great satisfaction to
the Government that, in common with other
countries, the Colony has for a considerable
period enjoyed an amount of uninterrupted
2u

prosperity which could hardly have
been anticipated, and I have pleasure
in congratulating the House upon the fact
that the prosperity of the people is repre-
sented by an almost unexampled increase
in the public revenue. Our pastoral, agri-
cultural, mining, and commercial interests
have all thriven to an extent beyond the
sanguine expectations of most men. Some
individuals, it is true, may be suffering
from losses incurred by imprudent invest-
ments in mining operations, yet, on the
whole, I think the Colony has benefited by
the excitement which existed last year in
this direction. We all know that wealth
must be obtained from the earth, and as
yet we can form no adequate idea of the
extent and value of the mineral deposits
of this colony. Men of large means who,
a few years ago, would as soon have
thought of throwing their money into the
sea as of investing it in such operations,
were induced by the rich discoveries made
at Hill End and other gold fields to put a
portion of their capital into mining enter-
prises, and the undertakings in which they
are engaged will I have no doubt eventually
command success. The fever of mining
speculation raged high, but the crisis is
over ; and, although there has been a great
reaction in regard to investments in gold,
tin, and copper companies, yet we have
abundant evidence that these minerals are
richly deposited over large areas of the
Colony, and will still yield a handsome re-
ward to persevering industry. The sea-
sons have been most propitious for our
agricultural and pastoral pursuit* Dunn-:
the last year the prinluce of the soil was

299

MR. LLOYD.

[1873.]

considerably more than during the year
before ; and our imports of food were less,
by far, than they have been for some years
past. With regard to our pastoral inte-
rests, we have not only had increasedproduc-
tion, but higher prices, and the result has
been that many colonists who are engaged
in this department of industry have found
themselves placed in circumstances of com-
parative independence. I shall not weary
the Committee with statistics, because I
know that they are not particularly inte-
resting ; but there are some of so much
importance that I feel I must detain
honorable members for two or three
minutes while I state a few facts in illus-
tration of the extraordinary prosperity of
the country. Statistics derived from a
comparison instituted between the years
1863 and 1872, the last decennial period,
show that in 1863 the total value
of exports was 6,936,839 ; and for
1872, 10,447,049; the increase being
3,510,210, or nearly 50 per cent. The
vessels entered inwards represented a ton-
nage in 1863 of 479,827 tons; and in 1872
they represented a tonnage of 774,490 ;
being an increase of 294,663 tons, or over
60 per cent. The vessels entered outwards
represented a tonnage in 1863 of 511,373
tons, and in 1872 of 813,550 tons, the in-
crease being 302,177 tons, or about 59
per cent. With regard to the settlement
of the country, in the year 1863, the free-
hold occupiers of land were 11,534, and in
1872, 24,227 ; the number of leaseholders
in 1863 was 7,827, and in 1872, 8,264,
being an increase in the number of holders
of 13,130, or about 68 per cent. With
regard to conditional purchases, the num-
ber of acres taken up by conditional pur-
chasers was, in 1863, 259,369 acres; in
1872 it was 749,586 acres the increase
being 490,217 acres, or about 190 percent.
The number of sheep depasturing in the
colony in 1863 was 7,790,969, and in 1872
it was 17,560,048 being an increase of
9,769,079 sheep, or 120 per cent. The
quantity of wool exported in 1863 was
14,791,849 fts., and in 1872 it was
50,233,453 Bbs. ; the increase in ten years
being 35,441,604 fts., or 239 per cent.
The value of our wool export was for
1863, 1,262,274 ; and for 1872 it was
3,342,900; theincrease being2,080,626.
The quantity of coal raised in 1863 was

434,000 tons; in 1872 it was 1,012,000
tons. With regard to agriculture, the total
quantity of wheat produced in 1863 was
809,000 bushels, and in 1872 the quantity
produced was 2,898,000 bushels. I wish
to draw the attention of the Committee
particularly to this, because it has been
said by some people that New South Wales
is not a wheat-producing country. I think
I may appeal to these figures as a refuta-
tion of any such notion as that. In 1863
the maize grown was 2,925,000 bushels ;
in 1872 it was 3,985,000 bushels. The
quantity of sugar-cane raised was, in 1863,
280 ft>s. ; in 1872 it was 1,622,662 cwt.
In 1863 the quantity of wine produced
was 136,976 gallons, and in 1872 it was
451,450 gallons. During the first half of
the present year, copper, the produce of
the mines of New South Wales, was ex-
ported to the value of 79,301. During
the first six months of this year, tin, the
produce of the mines of New South Wales,
was exported to the value of 114,251.
If additional evidence of the prosperity of
the country were necessary, I might refer
to the amount of the bank deposits. The
money in the Banks of the Colony, on de-
posit, on the 30th June, 1864, was
5,639,000, and on the 30th June, 1873,
it was 10,160,000 the accumulation
of deposits from 1864 to 1873 being
4,521,000, or 80 per cent. But, I take
it, the deposits in the Savings' Banks of
the Colony are a still more interesting and
important proof of the public prosperity, in-
dicating, as they do, the improved condi-
tion of the working classes. In 1863 the
number of depositoi's in the Savings' Banks
of New South Wales was 15,254 ; in 1872
the number was 25,561 ; increase in num-
ber, 75 percent. In 1863 the amount of
savings deposited was 760,500 ; in 1872
it was 1,029,000, to which must be
added deposits in the new Post Office
Savings' Banks, 128,000, making in all
1,157,000 showing an increase of sav-
ings deposited of 396,500, or 52 percent.
It is gratifying to be able to assure honor-
able members that the prosperity with
which the Colony has been blessed is not
of a temporary or partial character, but
there is good reason to hope that it will
be as permanent as it has been general.
I have taken considerable trouble to satisfy
myself on this point, and have had

[1873.]

MR. LLOYD.

prepared a statement of the revenue under
every head during the last three years. This
statement I shall be happy to lay upon the
table, and move that it be printed. It
will show that month by month the revenue
has steadily increased, not upon one item
alone nor upon half a dozen merely, but
in every important branch of revenue,
and as far as I can judge, there seems to
be no prospect of any serious diminution.
I might extend these preliminary remarks,
but it will probably be more satisfactory
to honorable members to be made ac-
quainted with the facts which represent
our financial position, and I will there-
fore abstain from any further observations
of a general character, and proceed at
once to deal with the Ways and Means.
Before referring to the accounts which I
have now to submit to the Committee, I
desire to make a few remarks with refer-
ence to the 1870 and previous years'
account, with which I think it advisable
not to encumber the Ways and Means
Statements, as it has been so frequently
before the House. It will be in the recol-
lection of honorable members that Parlia-
ment authorized the issue of Treasury
Bills to the extent of 334,600, to cover
the estimated deficit of 1870 and previous
years. These bills were issued by the late
Government, in April, 1872, and realized
348,105 3s., or a premium of 13,505
3s. With the exception of a few out-
standing appropriations for services of
1870, and two or three small items in-
cluded in the Supplementary Estimates
laid on the table yesterday, amounting to
17 10s. lid., all claims against the pro-
ceeds of these Treasury Bills are liquidated,
and there remains over and above a balance
of 20,403 7s. 6d., available towards the
payment of the bills themselves when they
mature in 1874. My honorable friend and
predecessor, Mr. Piddington, considered
that this balance could not legally be ap-
plied to the general service of 1871 or
subsequent years, and therefore reserved
it for the purpose mentioned. Concurring
entirely in this view of the matter, I have
carried this surplus balance to the credit
of the account for 1874. By turning with
me to No. 1 Account, that is, the one for
the year 1871, the Committee will find
that it remains in much the same condi-
tion as when last submitted. Then, the

deficiency was estimated at 14,057 Is.
8d. ; now, by the lapse of a few more
balances of appropriations which are not
required, the deficiency is mluctd to
9,747 3s. 4d. When it is borne in niiud
that 100,000 of the Deficiency Loan was
paid out of the revenue of 1871, this re-
sult cannot be considered unsatisfactory.
The result now shown cannot possibly be
much varied, as the appropriations retained
for expenditure, on the 30th September
last, only amount to 3,862 16s. Id., some
portions of which have since been paid.
Had it been possible to have written these
sums off now without inconvenience to
the public service, I should have done so ;
but on inquiry I find that such a course
would delay the completion of services
in progress, and necessitate the re-voting
of amounts which are claimed. Carrying
this small deficiency of 1871 forward, I
have now to invite the attention of the
Committee to the account of last year,
decidedly one of the most prosperous years
the Colony has ever experienced. The
revenue of 1 872 so far exceeded the expecta-
tions of my predecessor, Mr. Piddington,
as to enable the Government not only to
meet all its liabilities of an ordinary
character, but to pay off deficiency debts
to the amount of 389,900, and the first
instalment of 20,000 of the Million
Loan of 1867 for public works, besides
the small deficiency of 9,747 3s. 4d. on
the account of 1871. After doing all
this, I estimate indeed I may say I am
certain that we shall have a surplus
of 124,322 Os. 8A In other words, tho
net revenue of 1872, which it will be
seen by a reference to the account,
amounted to 2,794,224 7s. 7d., exceeded
the ordinary expenditure, which ainou
to 2,250,255 3s. 7d., by the large sum
of 543,969 4s. Out of this surplus wo
have, as already stated, been enabled to
pay off 1. The sixth and last instalment
of the short-dated debentures, 46,700 ;
2. The Treasury Bills issued under the
Act 34 Vic. No. 18, which fell due and
were paid off on the 9th May, 1872,
343,200. 3. The first instalment of the
Million Loan, 20,000. 4. And the de-
ficiency of 1871, 9,747 3s. 4d. In all,
419,647 3a 4d. Leaving after all
that, a surplus of 124,322 Oa. 8d, to
carry forward to the present yew

300

MR. LLOYD.

[1873.]

account. Before passing from this account,
some honorable members may desire to
know how the surplus is now shown to be
much larger than when my honorable
colleague the Premier made the Financial
Statement last year. That is a matter
easily explained. In the first place, the
two last months' revenue of 1872 ex-
ceeded the estimate by 23,718 lls. 4d. ;
then the amount of appropriations actually
written off under the Audit Act of 1870
exceeds the estimate made in November
by 61,735 19s. 7d. ; and the deficit brought
forward from the 1871 account is now less
than when last stated, by the sum of
4,309 18s. 4d. ; these three items amount
together to 89,764 9s. 3d. On the other
hand, however, there are also three addi-
tional charges against the revenue of 1872 :
1. The supplementary appropriations
for 1872 exceeded the amount of Supple-
mentary Estimate charged in the account,
by a sum of 5,765 3s. 9d. 2. There
have been additional special appropriations
to the extent of 23,004 10s. 6d. 3. And
there is now submitted a further Supple-
mentary Estimate for 1872, amounting to
24,560 Is. 8d.; making a total extra charge
of 53,329 15s. lid. ; which deducted from
the aggregate credit of 89,764 9s. 3d.,
gives a net difference in favour of this
year's account of 36,434 13s. 4d. which,
is the exact amount of the increase of the
present surplus over that previously shown.
When the Financial Statement was made
last year the savings on appropriations of
1872 were estimated at 130,000 ; but in
consequence of contracts not having been
taken before the close of the year for
various roads and bridges and other pub-
lic works which had been provided for by
Parliament, votes to the amount of
74,761 14s. lOd. lapsed under the 17th
clause of the Audit Act, thereby increas-
ing the amounts written off to 191,735
1 9s. 7d. As these services were, however,
re-voted, they have gone to increase the
expenditure of 1873 to a like amount.
Perhaps it may be interesting to the Com-
mittee to know how much better the
revenue of 1872 has turned out than was
expected by my predecessors : Mr. Lord,
who made his Financial Statement on the
6th December, 1871, estimated the revenue
of 1872 at 2,393,058, and the ordinary
expenditure at2,292,553 12s. 5d.,thereby

giving an estimated surplus of 100,504
7s. 7d. ;'Mr. Piddington, on the 20th June,
1872, estimated the revenue at 2,450,854
3s. 6d. and the expenditure at 2,353,588
12s. 5d., giving a surplus of 97,265 lls.
Id.; Mr. Parkes, on the 21st November
last, who had ten months' actual and two
months' estimated revenue to deal with,
stated the year's receipts at 2,770,505
16s. 3d., and the expenditure, including a
supplementary estimate of 30,182 8s. 7d.,
at 2,258,661 7s. 3d., the surplus being
511,844 9s. As the actual revenue of
the year has now been ascertained and cer-
tified by the Auditor General, and the
expenditure chargeable against it arrived at
with considerable accuracy, the statement
I have submitted gives a result which can-
not possibly be increased or diminished to
any great extent. That statement shows
that the actual net revenue amounted to
2,794,224 7s. 7d., and the ascertained
ordinary expenditure to2,250,2553s. 7d.,
leaving thereby a surplus of 543,969 4s.
as already stated. It will be observed
from these figures that, while the expendi-
ture is considerably less than first esti-
mated, the revenue has exceeded Mr. Lord's
estimate of December, 1871, by the sum
of 401,166 7s. 7d., Mr. Pidding-
ton's of June, 1872, by the sum of
343,370 4s. Id., and Mr. Parkes' of
November last, by 23,718 lls. 4d. We
now come to the account for 1873, which
I have no doubt will interest the Commit-
tee even more than that for 1872, satis-
factory as that was. If honorable members
will endeavour to follow me, I will explain
this account more in detail. Turning to
the credit side, it will be observed that I
have brought forward the estimated sur-
plus of 124,322 Os. 8d. from last year's
account. I next credit the account with
the actual revenue collected for the nine
months ended 30th September last, namely,
2,312,743 ; to that I add the amount of
the revenue which will probably be received
during the last quarter, and which is
estimated at 936,392 ; should this esti-
mate be realized, then the revenue of the
year would amount to 3,249,135, and
would thus exceed the net revenue of
1872, good as that was, by the large sum
of 454,911. On referring to the debtor
side of the account, it will be found that
the expenditure is also on the increase, but

[1873.]

MB. LLOYD.

301

not, I am glad to say, in the same propor-
tion. The first charge against the revenue
of 1873 is the amount of appropriations
made by Parliament during the last ses-
sion for general services, together with the
special appropriations. These amount to
2,713,117 10s. lid.; then there are a
few further special appropriations, to the
amount of 25,639 15s. 8d. ; deducting the
estimated savings on the appropriations of
this year, namely, 130,000, and adding
the supplementary estimates, amounting
to 109,419 Os. 4d., we find that the
charges proper to this year amount to
2,718,176 6s. lid., which deducted from
the actual and estimated revenue, as
shown on the other side of the account,
leaves a surplus of 530,958 13s. Id. To
this, however, we have to add the sur-
plus of the year 1872, 124,322 Os. 8d. ;
making together a net credit balance of
655,280 13s. 9d. In case there should
be any doubt in the minds of honorable
members as to this estimated surplus being
realized, I have had prepared a statement
of assets and liabilities on the Consolidated
Revenue Fund, as they existed on the 30th
September last, which, with the permis-
sion of the Committee, I will now read.
The assets were (1) The cash balance at
the credit of the Consolidated Revenue
Fund on the 30th September last 714,
152 12s. Id.; (2) Amounts due by Loan
Funds for advances made to them out of
the Revenue of 1873 pending the negoti-
ation of the Loans authorized, viz. : The
Railway Loan Fund, 36 Victoria, No. 17,
100,000, The Superannuation Act Re-
peal Act Fund, 36 Victoria, No. 29,
90,000; (3) Amount of estimated revenue
for the quarter ending 31st of Decem-
ber, 1873, 936,392, making together
1,840,544 12s. Id. The liabilities were
(1) Amount of unexpended appropria-
tions of Parliament on the 30th Septem-
ber last, viz. : 1870 and previous years
2,416 2s. 3d.; 1871, 3,862 16s. Id.; 1872,
25,971 9s. 2d.; 1873, 1,138,782 15s. Id.,
together giving a total of 1 , 1 7 1,033 2s. 7d. ,
deducting therefrom the estimated savings
on Appropriations of 1873, viz., 130,000,
there is left a charge of 1,041,033 2s. 7d.;
(2) Amount of the Supplementary Esti-
mates for 1873 and previous years, laid
on the table yesterday, 134,405 17s. 8d.,
less paid to the 30th September,

25,690 12* 6d, leaving an unpaid
amount of 108,715 5s. 2d. ; (3)
Amount of additional special Appro-
priations, as shown in the account for
1873, now submitted, 25,639 15s. 8d., less
paid to 30th September, 10,527 12s. 7d.,
leaving a sum yet to be paid of 15,112
3s. Id. These make the total liabilities
1,164,860 10s. 10d., which deducted from
the assets gives a surplusof 675,684 Is. 3d.
This surplus balance consists of the balance
on the account for 1870 and previous years,
already referred to, 20,403 7s. 6d., and
the balance shown on the account for
1873, 655,280 13s. 9d. Unless there-
fore some unforseen circumstance should
arise between this and the close of the
year, which would have the effect of dimin-
ishing our revenue, I feel satisfied that
this surplus balance will be fully realized.
It is in fact already realized, for the
revenue received during the first sixteen
days of the present month has amounted
to as much as the whole surplus which we
estimated for the remaining three months.
Perhaps, Mr. Driver, this may be the
fittest opportunity to draw the attention of
the Committee to the state of the Treasury
and bank balances as they existed on the
30th September last. Attached to the
"Ways and Means will be found, at page
69, a detailed statement of those balances.
On that date there was a cash balance at
the credit of the Consolidated Revenue
Fund of 714,175 12s. Id., and there was
and is still, due by the Railway Loan Fund,
36 Vic. No. 2, and the Superannuation Act
Repeal Act Fund of 1873, for advances
made out of the revenue of 1873 190,000,
making together a credit balance of 904,
175 12s. Id. This balance was however
chargeable with the interest on the Public
Debt paid in England on the 1st July last,
but not brought to account in the books of
the Treasury at 30th September which
amounted to 221,061 16s. 3d.; deducting
this sum there would still have been at the
credit of this fund a balance of 683,1 13 15s.
lOd. Taking, however all the Govmiim-nt
accounts together on the 30th September
last, the aggregate of the balances shown by
the books of the Treasury was 1,688,542
17s. 5A This large amount was repre-
sented by cash to the credit of the Public
Account at the bank of New South Wales,
Sydney, 7 17, 709 8s. 5d. ;cash tothe credit

MR. LLOYD.

[1873.]

of the Public Account at the Bank of New
South Wales, London, 486,861 18s. 4d. ;
cash to the credit of the Special Loan
Funds in the Bank of New South Wales,
Sydney, 225,141 19s. 8d., which made a
total bank balance of 1,429,713 6s. 5d.
Then there was in the hands of the
Receiver of the Treasury 21,829 Us., and
Government Securities in the Treasury
chest belonging to Trust Fund Accounts
to the amount of 237,000, which added
to the bank balance makes up the Treasury
aggregate balance of 1,688,542 17s. 5d.
While these bank balances are before us,
I may as well mention to the committee
that when I went into the Treasury in
December of last year I found that the
balances had accumulated to a very large
amount, and they were lying unproductive
in the hands of the bank, under an agree-
ment by which the bank was only ex-
pected to pay interest on 100,000. We
had the power of investing the surplus in
other banks, but at that time the money
market was so exceedingly easy that no
other bank was disposed to take any large
sum at interest unless we could deposit it
for a lengthened period, and that, of
course, it was not in our power to do.
The money in the hands of the Govern-
ment cannot be locked up for any
lengthened time, for no one can tell what
Parliament may decide to do with it. On
carefully perusing the agreement, however,
I found that the bank was under an en-
gagement to allow us interest on the daily
balances in London, at 1 per cent, below
the Bank of England rate ; and I there-
fore at once determined to remove from
the balance in Sydney to the credit of the
Government account in London half a
million of money, an amount sufficient
to pay the whole interest on the public
debt for the present year.

Mr. LEE : What was the exchange ?

Mr. LLOYD : I think 15s. per cent. At
all events, honorable members will be glad
to hear that the money has been fructify-
ing in England from that time to the
present moment, and we have already a
handsome amount to our credit for interest
on that account. I have since succeeded
in making an arrangement with the bank
by which we receive interest on 200,000,
and on a further sum of 350,000,
making in all 550,000, upon which we

are now receiving interest from our
bankers' in Sydney, in addition to the sum
at interest in London. It will therefore
be seen that the balance at our credit in.
the Bank of New South Wales is benefi-
cially employed while the money is not
required. Before I leave this subject
it may be desirable that I should
state to the committee the course which
the Government have taken with regard
to tl e Loan Bills which were passed dur-
ing last session. It will be remembered
that Parliament passed two Acts one
authorizing the Government to raise a
loan for railways to the amount of
1,901,500, to be issued in the shape of
debentures ; and the other a loan for
public works, amounting to 509,780, to
be issued in the shape of a funded stock.
A very small amount is charged for in-
terest on these loans, in consequence of
our not having negotiated the railway
loan, and only a portion of the funded
stock loan. It appeared to me that while
the Government had a large amount at
their credit, which they could temporarily
use for the purposes of these loans, it
would not be desirable to burden the
country with the payment of interest on
money which we do not actually require,
unless some special circumstance arose to
render that necessary. In the event of
the money market having gone up, I
should have been censured for not borrow-
ing when the time was favourable ; but I
preferred to run that risk rather than
borrow the money before it was wanted.
I saw no reason to anticipate that the
rate of interest would considerably in-
crease. No doubt the value of money
has fluctuated during the present year.
We have had money up to 7 per cent.,
and it has gone down to 3 per cent. The
wealth of the world is accumulating to
such an enormous extent that it appears
almost impossible that money can become
permanently dear, or that its value can
be considerably enhanced unless under cir-
cumstances of an exceptional character,
and then the rise would only be of short
duration. When the enormous debt due
from France to Germany was being paid,
and when for a short period there seemed
to be some prospect of the Germans hoard-
ing up this money and keeping it out of
circulation, the market tightened ; but the

[1873.]

MB. LLOYD.

303

moment the money flowed back into its
ordinary channels, and this fear was re-
moved, the tightness gave way, and the
market relapsed into its normal condition.
It was under these circumstances that the
bank rate went up for a few weeks of this
year to 7 per cent. ; but that rate was
maintained only for a short time, and if
we look back for years we shall see that
the price of money has not permanently
increased. On the 1st May, 1863, the
Bank of England rate was 3 per cent. ; on
the same day in 1870 it was 3 per cent. ;
in 1871, 2J per cent. ; in 1872, 4 per cent ;
and in 1873, 4 per cent. These are very
striking facts, and appear to me to fully
justify the conclusion at which I arrived.
The fluctuations on these day^, in the
years referred to, were only between 2
per cent, and 4 per cent. Honorable
members have no doubt observed, with
considerable satisfaction, the high position
which the debentures of this Colony occupy
both in these Colonies and the mother
country. Our 5 per cent, debentures are
now selling here at 108^, and are not ob-
tainable in any large number at that
price. In England they are eagerly
sought after at very satisfactory prices ;
and I am informed by our banker in Lon-
don that, if necessary, he could launch
without difficulty a million's worth of our
debentures at the full market rate in a
few hours.

Mr. J. ROBERTSON : At the lowest rate ?

Mr. LLOYD : I mean the best rate for
the borrower. I placed the funded stock
loan on the market because a large
amount of that money was required ; and
although some exception has been taken
by disappointed tenderers to the minimum
fixed by the Government upon that loan,
yet I have every reason to be satisfied
with the course pursued, and should adopt
precisely the same principle if the transac-
tion had to be done over again. It should
be borne in mind that we were launch-
ing an entirely new description of security,
and it was therefore impossible to say
exactly what it would realize. The
Government were not in urgent need of
the money ; and there was no necessity
therefore to depreciate the value* of our
securities by fixing a low limit, as the
Queensland Four per Cent Loan was
selling in our market at 95

Mr. GARRETT : No.

Mr. LLOYD : At 95. It went rapidly
up until it reached 95, and during the
week I launched the funded loan it could
not be got at that, because it was in the
hands of a few monopolists who would not
sell. The Adelaide Four per Cent In-
scribed Stock was launched on the very
morning that our tenders came in at
95 2s. 6d. It did not seem prudent
that this Government should fix a lower
limit than 95 for similar stock. We had
applications from the public for more than
the amount required, but not at the price
we had fixed. We accepted those tenders
which were within our limit, and left the
stock open at the same price for any
parties who chose to apply for it A
large amount has already been taken, and
we have a balance at the credit of the ac-
count at the present moment j and we
have also other funds which we could in-
vest in this stock if necessity arose. I
need not now stop to defend the action of
the Government in investing trust funds
at its disposal in these securities. The
honorable and learned member for East
Macquarie, Sir James Martin, has placed
a motion of censure on the paper in regard
to this operation, and I would therefore
prefer to reserve for the debate on that
motion any remarks which I have to make
upon this subject, I have no doubt I
shall then be able to defend the action of
the Government in regard to this matter.
Before leaving the subject of loans, I
desire to furnish the Committee with some
particulars respecting the Public Debt of
the Colony, which I think will be interest-
ing not only to honorable members but
to the community at large. I have had
this return prepared at very considerable
trouble, and it is very complete the
object being to show the entire amount of
the debt, and how it is represented. I
shall be glad if honorable members will be
kind enough to give their attention to
these points, because I do not think that
they have ever been brought befon- this
House previously. I am quite sure it will
be interesting to the House and to the
country to know exactly the amount of
our debt, and what we have to show for
it Our present debt may be said to con-
sist of two divisions. The main division
being loans for public works of a

304

MR. LLOYD.

[1873.]

permanent and, to a very large extent, re-
productive character ; the other, loans
for deficiencies in revenue. The latter
division I hope to see expunged next year,
entirely and for ever, from the public
ledger. The former, so long as the Colony
is advancing, must almost of necessity go
on increasing year by year. On account
of deficiencies in, the revenue, commencing
somewhere about 1863, and ending with
1870, we have issued Debentures and
Treasury bills to the amount of
1,283,100, but of that we have paid off
finally 984,500, leaving outstanding at
this date 334,600 of Treasury bills
which fall due next year. Our total issues
of securities on account of permanent
public works, &c., up to 30th September
last, excluding renewals to the extent of
1,083,100, amounted to 10,564,385.
Of this amount we have paid off out of
revenue the sum of 69,100, leaving out-
standing a debt of 10,495,285. So that,
by adding the unpaid Treasury bills
belonging to the deficiency debt, it brings
the total up to 10,829,885 at close of
last month, and on which we are now pay-
ing interest. We have authority, under
the two Loan Acts of last Session, to raise
a further sum of 2,211,684, for the
extension of our existing lines of railways
and other public works therein provided
for. But as there is such a large cash
balance at the credit of the Government in
the Bank, there is no immediate necessity
for raising this sum, which would only go
to swell our balance. Being anxious to
ascertain what we had to represent our
debt of 10,495,285 for public works, and
in what way the proceeds of our loans had
been used, I got a statement prepared, in
the form of a debtor and creditor account,
which so clearly gives this information
that I will, with the pel-mission of the
House, read it. I will also lay the papers
on the table and move that they be
printed. On the credit side I find that
the gross proceeds of debentures issued for
public works and renewals were
11,013,859 11s. 10d., and of funded stock
issued 199,595 19s., making the total pro-
ceeds 11,213,455 10s. lOd. Onthedebtor
side I find the distribution of this large
sum has been as follows : Debentures paid
off being renewals, 1,082,730 ; charges
on sale of debentures, 68,103 Os. Id. ;

amount over-raised under two recent
Acts transferred to the Consolidated
Revenue Fund, 16,278 10s. 3d. ; ad-
vances to the Commissioner for Railways,
not yet adjusted, 494 14s. 4d. ; and pay-
ments made to 30th September last, on
account of railways, telegraphs, public
works, and other services, an abstract of
which I will presently read, to the amount
of 9,585,809 9s. 2d. These disburse-
ments amount together to 10,753,415
13s. 10d., and the difference between that
sum and the proceeds, namely, 460,039
17s., was lying in the Bank to the credit
of the Government on the 30th of Sep-
tember. The details of the services paid
out of the loans are as follows : Rail-
ways, 6,719,262 8s. 3d.; telegraphs,
270,774 19s. ; immigration, 518,769
14s. 7d. ; sewerage and water supply,
Sydney, 400,000; compensation to Muni-
cipal Council of Sydney, for land resumed
under the Water Supply Act, 17 Viet.,
No. 35, 43,261 14s. 6d. ; public works,
Queensland, when it formed part of New
South Wales, 49,855 8s. 6d. Harbours
and rivers navigation : Improving the
navigation of the river Hunter, and im-
provements to the port of Newcastle,
195,409 15s. 9d. ; improving the naviga-
tion of the rivers Darling, Murray, and
Murrumbidgee, 76,909 16s. Id. ; harbour
works, Wollongong, 44,878 9s. 5d. ;
harbour works, Kiama, 50,176 14s. ;
improving the navigation of other harbours
and rivers, including the erection of
wharfs, &c., 78,030 Is. 7d. ; steam
dredges and punts, Sydney, 28,499 16s.
3d. ; improvements, Circular Quay,
6,474 3s. 4d. ; steam cranes, wharf, <fec.,
Darling Harbour, 45,320 4s. Id. ; dam
at North Rocks, Parramatta, 5,000 ;
dam at Hunt's Creek, Parramatta, 8,000;
Fitz Roy Dry Dock, 20,868 13s. lOd. ;
wharf, &c., Woollooniooloo Bay, 28,164
16s. lOd. ; reclaiming land at head of
Darling Harbour and Blackwattle Swamp,
12,381 Is. lid. ; Blackwattle bridge
and causeway, 10,000 ; Harbour defences,
183,793 10s. 8d. ; University of Sydney,
55,000 ; Affiliated Colleges, 34,523 5s.
5d. ; Grammar School, 25,000 ; Aus-
tralian- Museum enlargement, 26,954
lls. ; Parliamentary buildings, 15,000;
juvenile reformatories, 14,057 18s. 3d. ;
new General Post Office, 99,571 2s. 8d. ;

[1873.]

Mil. LLOYD.

305

new printing office, 6,000 ; receiving
houses at Redfern and the Necropolis,
12,548 13s. 7d. ; Free Public Library,
9,215 Os. 6d. ; Observatory, 7,000 ;
Asylum for Destitute Children, 5,000 ;
additions to the Sydney Infirmary, 5,000 ;
public works and improvements generally
in Sydney and suburbs, 27,329 12s. lOd. ;
Lunatic Asylum, 6,121 17s. 2d. ; Light-
houses, 44,052 7s. 2d. ; Glebe Island
Abattoir, bridge, &c., 55,866 lls. ; Gaols
and Penal Establishments, 12,864 16s.
6d. ; Court and Watch Houses, 9,827
15s. ; police barracks, Sydney and country
districts, 10,000 ; roads and bridges
bridges throughout the Colony, 287,044
9s. 6d. ; metalling the Mudgee Road,
22,000 amounting in all, as already
stated, to 9,585,809 9s. 2d. It will
thus be seen that, although our debt
is large, yet the money has been ex-
pended upon works of a most beneficial
character, many of them reproductive at
the present time, and, as the Colony
progresses and our railways extend into
the interior, they will become more so
every year. I do not wish to detain the
Committee too long, or I could show that .
the railways and the telegraphs are
paying better than they have ever paid
before ; that the revenue from the post
office is larger than it ever was before ;
and so on with other important depart-
ments of revenue. The question will now
very naturally arise what the Government
intend to do with the surplus which is so
far realized as to be almost certain,
indeed the whole of the surplus estimated
for the three months of this year is
already in hand by the revenue of the
few days of the present month ; and
before I go into the estimated revenue
and expenditure for 1874, which will
disclose our policy, I may as well state
what that policy will be.

Mr. J. ROBERTSON : Before the honor-
able gentleman goes into another branch
of his subject I should be glad if he would
answer one or two questions. I should
like to know what interest we are getting
for the 500,000 which the honorable
gentleman says he has transferred to the
Bank in London.

Mr. LLOYD : We are getting 1 per cent,
below the Bank of England rate, as
published from day to day. That is to
2x

say, if the rate is 7 per cent, we get 6 per
cent. ; if it is 6 per cent., we get 5.

Mr. J. ROBERTSON : Do you mean the
Bank of England rate of discount ?

Mr. LLOYD : Yes, the Bank rate of
discount as published from day to day.
There are three ways in which a surplus
may be disposed of : First, in payment
of our debts ; and here we have the
example of the mother country to assist
us, as, whenever the revenue exceeds
the expenditure, one-fifth of the surplus
is always paid over to the Commissioners
of the National Debt, by whom it is
appropriated in part liquidation of
that debt. Or, secondly, it may be
disposed of by removing burdens on
the people, by reducing taxation ; and
here again we have the advantage of
English example, as was lately illustrated
by the reduction of the income tax, and
other imposts of an oppressive character.
And thirdly, surplus revenue may very
properly be expended in the construction
of public works of a national character
which may be urgently required. The
Government propose to adopt each of these
modes. In the first place, I trust, it will
be a matter of gratification to the Com-
mittee and the country to know that the
Government propose to pay off the whole
of the deficiency debt This debt has
rested like an incubus on all successive
Governments, and has been the cause of
more bickering and annoyance, probably,
than any subject ever discussed in this
House. Treasurers have been accused of
all sorts of misrepresentation with regard
to it ; and although it could never have
been anticipated that the whole amount
of over 800,000 should have been
extinguished within the period of the last
three years, yet the finances of the
country have been so nourishing that I
am happy to say this can be done ; and
the Government intend to ask the Com-
mittee to let them do it The last of the
liabilities incurred to meet this deficiency
debt, amounting to 334,600, will be due
on the 1st July next, and the money is
now in the Bank by which the bills may
be paid. I need hardly say that thia will
place any future Treasurer in much more
favourable circumstances than have
hitherto existed for the management of
the finances of the country. If thi

306

MR. LLOYD.

[1873.]

Government remain in power, and I have
the honor to be its Colonial Treasurer
another year, I shall ask permission to
consolidate the Public Debt and to pay off
out of revenue ,100,000 per annum and
a certain portion of any surplus revenue
in each year ; but for the present I think
that, by paying 100,000 in 1871, and
409,900 in 1872, and 334, 600 in 1874,
we have done our share of reducing our
liabilities for these years. After paying
off the balance of this deficiency debt we
shall have a surplus of 320,000, part of
which we intend to ask for authority to
expend on surveying the lands to the
extent of 20,000 more than was
authorized for this year, and on important
public works, as shown in the Estimates-
in-chief, to the extent of 100,000 more
than this year, and the remainder we
shall ask the House to allow us to retain
in order that we may revise the tariff with
a view to the reduction of the burdens
upon the people. Amongst these reduc-
tions, when my resolution is submitted to
the House, will be found the repeal of the
ad valorem duties. These duties were
originally imposed to meet the deficit,
and they cannot reasonably be continued
after that deficit is disposed of. I feel
convinced that there are but few
honorable members of this House who
will not rejoice at the prospect of getting
rid of these obnoxious taxes, and the
Government make the proposal with the
greater satisfaction, because it will enable
so many honorable gentlemen to redeem
the pledges which they made to their
constituents before they entered this
chamber. The effect of these duties has
been to hamper our trade, and to drive a
large portion of it into other channels.
Every honorable member who has been
engaged in business knows that seven or
eight years ago we did a large trade with
New Zealand, but since the imposition of
these duties and other restrictions, almost
the whole of that trade has been * lost.
They have had a most baneful influence
on the mercantile community, inasmuch
as they have given rise to a system of
demoralization, the extent of which it is
hardly possible to estimate. If honorable
members had opportunities of knowing the
extraordinary means which have been
adopted by some houses to evade these

imposts, they would I am sure admit that
the existence of such duties is an evil only
to be tolerated under the most exceptional
circumstances. There have been instances
of men honorable in all other respects,
stating that if they did not resort to the
expedients unscrupulously adopted by
their fellow-tradesmen they must inevit-
ably be ruined, for it would be utterly
impossible for them to compete in business,
if they paid the duty honestly on the full
value, with others who succeeded, by
means of fictitious invoices and other dis-
reputable practices, to get their goods
through the Customs on payment of less
than half the duty. Among other
objectionable features incidental to this
system of collecting revenue, is the fact
that houses are compelled to give their
invoices up to the Customs authorities ;
and thus it is almost impossible for a
gentleman engaged in trade to conceal his
business. It is exceedingly undesirable
that if I find out the best house with
which to trade, and the cheapest market,
that publicity should be given, as is vir-
tually the case under this system, to my
business transactions. It is almost impossi-
ble for merchants to prevent their business
being disclosed in a way which may prove
most detrimental to their interests. I need
hardly say that these obnoxious duties
enter into every man's home and meet him
at every step ; they touch every article he
wears and most of what he consumes. I
need not enlarge upon this subject, as I
feel convinced that the Committee will
be only too glad to assent to their repeal.
It might be supposed reasonable that we
should stop here, and not ask for any
further alterations in our fiscal policy,
but on looking through the tariff, as it
would stand with the ad valorem duties
off, there are a number of specific duties
which produce no revenue, and which we
think may be very wisely excluded from
Customs interference. We have therefore
selected thirty-two articles which only pro-
duce 13,174, and we propose to strike
these off, and thus reduce our tariff to
about fifty articles, which we anticipate
will give us a revenue of 947,800, which
is more by 87,000 than the Customs
Revenue of 1871, and only less by 27,000
than the revenue of 1872. This will liber-
ate commerce to a considerable extent, and

[1873.]

MR. LLOYD.

307

make our Port more attractive than it has
been for some time. The most enlighten-
ed tariff ever introduced into this or any
other country was that established by Mr.
Deas Thomson, in 1852; it derived its
revenue from the smallest number of arti-
cles of the largest general consumption,
and most of these the luxuries of life. So
statesmanlike was it that England has
copied it, and it has continued, with very
trifling alterations, their tariff to the pre-
sent day. It is productive, inexpensive,
and expansive. The Customs revenue in
England, in 1840, from 1,200 articles,
was 21,784,499, and now the revenue,
from fifty articles, is 20,513,583. This
tariff would have been ours to this day
but for that wretched deficiency debt ;
and the one which we now propose to
adopt is the nearest approach to it which
we can venture upon at present. Honor-
able members will see that it is derived
very largely from the luxuries of life, and
may therefore be considered a system of
voluntary taxation, as no man need
drink wine or spirits, or smoke tobacco, or
use many of the articles, unless he please.

MR. ROBERTSON : The honorable mem-
ber has not told us the specific articles
which he proposes to exempt from duty.

MR. LLOYD : The tariff is being printed,
and it will be here shortly. I have a
list of the articles by me, and, with the
permission of the Committee, I will read
them. The following is a list of the items
on which it is proposed to abolish the
specific duties, and the amount of revenue
which we have derived from each article :
Alkali, 20; butter, 12; chalk, 16;
shingles and laths, 10 ; sashes, doors,
and shutters, 46 ; vermicelli, 64 ; zinc
manufactures, 28 ; acids, 200 ; arrow-
root, 196 ; zinc in sheets or rolls, 132 ;
iron chains, 260 ; iron tanks, 216 ;
macaroni, 288 ; common soap, 210 ;
tapioca, 294 ; palings, 276 ; iron pipes,
336 ; fancy soap, 356 ; whiting, 358 ;
grain, and pulse of every kind not other-
wise enumerated, 412; steel, 498;
picks, 526 ; lead pipe and sheet, 668 ;
com flour or maizena, 784 ; grain and
pulse of every kind not otherwise enum-
erated, when ground in any way, prepared,
or manufactured, 782 ; vegetables, pres-
erved, 766 ; galvanized manufactures,
972 ; soda, caustic, 936 ; axes, 1,264 ;

screws, including bolts and nuts, 1,080;
shovels and spades, 1,962 ; cider, perry,
plate and sheet iron, about 1,000. In
view of the loss of the revenue from the
Custom House we thought it exceedingly
desirable that we should replace it as far
as we possibly could. Several schemes
were proposed and considered by the Gov-
ernment, but we finally came to the con-
clusion that the best course to adopt was
to increase the duty on one article, and on
one article only. We did not think that
it would be desirable to impose any new
duties. The article in the present tariff
which we thought could most legitimately
be made to bear an increased rate of duty
is tobacco. We really thought that those
who indulged in the noxious weed should
enjoy the privilege of paying for the lux-
ury; and I regret to say that in my opinion
the duty which we propose to put on this
article will not decrease the consumption
by a single pound. We propose to ask
the Committee to allow us to put an addi-
tional duty of Is. on manufactured
tobacco, and Is. on unmanufactured to-
bacco, and that will make the duty on
manufactured tobacco 3s. per lb., and on
unmanufactured, 2s. Even at this in-
creased rate the duty in New South Wales
will be considerably less than it is in Eng-
land, where the rates of duty are, on un-
manufactured, 3s. to 3s. 6d. ; and on
manufactured, 4s. to 4s. 6d.

MR. HOSKINS : What is the duty in
Victoria ?

MR. LLOYD : It is the same as ours is
is now.

MR. HOSKINS : Then tobacco will be
smuggled over the Border.

MR. LLOYD : We will deal with that
when the time comes. The duty which
we propose is, I think, a very legitimate
tax. Its collection will not entail any
additional cost upon the Government, and
it will give us a revenue of 39,500.
By the abolition of the ad valorem duties
the loss of revenue would, on the
average of the last three years, be about
155,644 ; and the loss by the abolition of
all the specific duties, except those
retained in my new tariff, would probably
amount to 13,974, making a total loss
of 169,618, which, however, would be
reduced, by the proposed additional Is.
per pound on tobacco, by a sum of

308

ME. LLOYD.

[1873.]

probably .39,500, resulting in a net loss of
.130,118. But if we are to be guided by
the Collector of Customs' Estimate of ad
valorem Duties for this year, the loss
would probably be 190,000 ; to which if
we add the loss on specific duties as above
shown, viz., ,13,974, the loss would
amount to 203,974, which, reduced by
the increase on tobacco, 39,500, would
produce a nett loss of 164,474 on the
Customs revenue. These are the pro-
posals which the Government intend to
submit to the Committee, and I have very
little doubt but that they will commend
themselves to the judgment of honorable
members. In consequence of the proposed
abolition of the ad valorem duties, and the
few proposed modifications in the existing
tariff, to which I have just referred, there
will necessarily be a reduction in the whole
revenue of 1874 as compared with. that of
the present year. I am glad, however, to
say that, notwithstanding that reduction
which I estimate will only amount to
80,200, we will have sufficient to cover
our estimated expenditure for next year
and have a balance of 167,548 4s. 4d.
over and above. The heads of revenue
under which decreases appear are these
Customs, 137,012 ; duty on refined
sugar and molasses, 2,158 ; pilotage,
1,328 ; tonnage dues (now abolished),
2,337 ; postage, 2,786 ; licenses,
4,136 ; and five others amounting to-
gether to only 1,503 ; making for
decreases an aggregate sum of 151,260.
On the other hand, however, we have
increases under duty on spirits distilled
in the Colony, 8,618; gold revenue,
3,224; Mint receipts, 3,628; stamps,
1,882 ; land, 11,546 ; rents, exclusive
of land, 4,232 ; railways, the large
increase of 25,181 ; telegraphs, 7,693 ;
and miscellaneous, 5,056 ; total,
71,060. It only remains for me
to refer to the account of estimated
revenue and expenditure for the year
1874. That account will now be dis-
tributed, and from it honorable members
will see that I bring forward the estimated
surplus from the account for the present
year. The estimates of revenue show that
our income for next year will be
3,168,935, which is, as already stated,
slightly under that which we expect to
have this year. I have also credited this

account with the cash balance at the
credit of the account for 1870 and pre-
vious years, making a total credit of
3,844,619, Is. 3d. The charges against
this sum are, first, the estimated expen-
diture proper to the year, amounting to
2,991,386 15s. 8d. ; secondly, the first
instalment on account of claims under the
Superannuation Act Repeal Act of 1873,
which we estimate at 10,000 ; and
lastly, the Treasury Bills falling due on
the 1st July, 1874, 334,600, making a
total charge of 3,335,986 15s. 8d. This
amount deducted from the credit side
leaves an estimated surplus of 508,632
5s. 7d. after allowing for all the loss we
shall sustain by our reduced tariff. The
increase of expenditure over that of 1873
is at first sight large, being no less than
about 280,000 ; but it must not be for-
gotten that we have a Supplementary
Estimate for 1873 to the amount of
109,000, which would reduce the dif-
ference to 171,000. I will only mention
a few of the principal increases making
up this amount : Interest on the Public
Debt, 36,000 ; pensions under the recent
Act, 14,000; warlike stores, about
20,000 ; survey of lands, 20,000 ; rail-
ways, 25,000 ; postal and telegraph
services, 32,000 ; public works, about
20,000 ; roads and bridges, 26,000 ;
Treasurer's Advance Account, 30,000 ;
the present amount on this last account
not being sufficient to meet the require-
ments of the Public Service. I think I
have now said all that is necessary to put
the House and the country in full posses-
sion of our financial condition, and the
policy the Government propose with
regard to the future. The tariff which we
propose to ask the Committee to adopt is
a tariff framed for revenue purposes only.
It has no reference to protection in any
shape or form. If it happen incidentally
to have a protective tendency we cannot
help it ; our object in imposing duty being
as I have said solely for the purpose of
obtaining revenue. I have no doubt that
policy will be approved by a large major-
ity of this House and the country. It
will remove burdens on our commerce of
a highly obnoxious character, and leave
our trade comparatively free. The ad
valorem duties covered by the tariff 145
articles with all their ramifications. The

[1873.]

MR. LLOYD.

309

specific duties included about 100 articles.
To reduce this number, as we propose, to
55, and those mostly affecting the luxuries
of life, must be considered a step in the
right direction. It is as near an approach
to free trade as we can consistently make
at the present moment. The object is to
retain revenue, and if it should inci-
dentally protect a few articles we cannot
avoid it. With this view we have
selected only the articles which produce
revenue, and have excluded all those
articles which produce little or none. I
have little doubt that with such a tariff
our trade will expand, that ships will be
attracted to our coast ; and with our un-
limited coal-fields, and our increasing

exports of wool and other productions, we
shall see the flags of all nations floating on
our waters, our harbours crowded with
shipping, our people happy because pros-
perous and free, and that they will rise
to the importance of their destiny as one
of the great nations of the future, illus-
trating the language of the poet

" Art thrives moat

Where commerce has enriched the busy coast ;
He catches all improvements in his flight,
Spreads foreign wonders in his country's sight ;
Imports what others have invented well,
And stirs his own to match them or excel.
'Tis thus reciprocating, each with each,
Alternately the nations learn and teach ;
While Providence enjoins to every soul
A union with the vast terraqueous whole."

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE GEORGE
ALFRED LLOYD, made 19th November, 1874.

LEGISLATIVE ASSEMBLY.

19th November, 1874.

FINANCIAL STATEMENT.

Mr. DRIVER : I beg to move " That
to make good the supply granted to Her
Majesty for the service of the year 1873,
there be granted out of the Consolidated
Revenue Fund of New South Wales, the
sum of 20 12s. 2d., for sundry expenses
incurred in connection with the New South
Wales Infantry since the disbandment of
the Force." Thirteen months have passed
away since I had the honor of making my
last Financial Statement, in which it was
my privilege to congratulate the House
and the country on a tide of prosperity
which gave every evidence of permanence
and substantiality. I then showed the
remarkable increase in the wealth of the
Colony during the decade commencing with
1863 and ending with 1872, and proved
by unanswerable statistics that, whatever
might be said to the contrary, the Colony
of New South Wales was taking a position
not inferior to any dependency of the
British Empire. I am happy to say that
the Statement I shall now make will show
that the tide of prosperity is still flowing,
and so far as we can see into the future,
there is no reason to fear any sudden or
even gradual cessation. The revenue for
this year has increased beyond my most
sanguine anticipations, and if we may
judge from bank deposits, Savings' Bank
receipts, exports, imports, sales of land,
and other indications of national pros-
perity, there has not been a period since

the discovery of the Colony when it was
in a more flourishing and satisfactory con-
dition. The depression caused by the
collapse of most of the mining companies
established in 1872 has not yet entirely
subsided, but every week produces evidence
that this country contains mineral wealth
of inestimable value, and that patient per-
severance with labour skilfully applied
will ultimately be rewarded. A beneficent
Providence has favoured us with rain and
sunshine in such happy combinations that
we have had grass and water in abundance
for our cattle and sheep. The markets of
the world have given fair prices for our
produce, and with very few exceptions
every interest in the Colony is thriving.
If proof were wanted of our accumulating
wealth, it might be found in the fact that
other colonies are sending their loans here
to be floated, and large sums of money have
been thus withdrawn during the present
year. I need not say anything about the
land revenue here, because it will be more
fully dealt with further on in my speech.
It will however be gratifying to the Com-
mittee to know that the provision made
for our railway extensions from Goulburn
to Wagga Wagga, Bathurst to Orange,
and Murrurundi to Tamworth, will not be
exceeded. Contracts have been taken for
all these extensions, at an average cost per
mile of 5,374, exclusive of station build-
ings. There are now 284 miles of railway
under construction, and 402 miles open for
traffic ; and here I may remark that the
yearly increasing prosperity of the railway
lines opened for traffic fairly warrants the
expectation that increased railway com-
munication will prove to be a profli.il 1;

312

MR. LLOYD.

[1874.]

source of revenue. The statistics show
that, as the lines extend, the revenue per
mile of line open sensibly increases ; thus
In 1869, with 318 miles open, the earn-
ings were 833 per mile; in 1870, with
34 miles open, they were 903 per mile;
in 1871, with 358 miles open, they were
992 per mile; in 1872, with 396 miles
open, they were 1,073 per mile ; in
1873, with 396 miles open, they were
1,222 per mile ; and in 1874, with 402
miles open, the earnings will probably be
1,284 per mile. In five years, therefore,
the earnings have increased from 833 to
1,284 per mile, or over 54 per cent.
The working expenses at the same time,
pro raid, have decreased. In 1869, out
of every 100 earned, 66 was absorbed
by the cost of earning it. In 1873 the
rate was reduced to 48 18s., and for the
present year a further rechiction is ex-
pected. These figures compare very
favourably with those of English lines, the
chief of which expend 50 for every 100
earned. The following statement will
show the gradually improving rates of
interest which our railways are paying on
the capital invested on lines opened for
traffic. In 1869, the capital invested
was 4,691,234, the net receipts 88,613,
equal to 1 17s. 9d. per cent.; in 1870,
the capital invested was 5,576,559, the
net receipts 101,139, equal to 1 18s.
Id. per cent. ; in 1871, the capital invested
was 5,898,908, the net receipts 158,256,
equal to 2 lls. 7d. per cent. ; in 1872,
the capital invested was 6,388,727, the
net receipts 217,071, equal to 3 7s.
lid. per cent. ; in 1873, the capital in-
vested was 6,775,918, the net receipts
246,201, equal to 3 12s. 8d. per cent. ;
in 1874, with an invested capital of
6,820,918, the net estimated receipts
are 269,878, equal to 3 19s. Id.
per cent. Our postal and telegraph
operations are also extending. We had
last year 6,604 miles of telegraph wire
open, producing a revenue of 46,667
from 363,950 messages. We have now
7,523 miles open, producing, with a re-
duced tariff, a revenue of 40,000 from
550,000 messages. Our inland mails tra-
velled last year over 3,483,505 miles, and
letters to the number of 9,602,600 were
posted in the colony. This year our mails
run over 3,552 ; 800 miles, and it is esti-

mated that the letters posted in the Colony
will amount to 10,400,000. The opening
of the new Post Office in this city has been
an interesting event of the present year,
and when the Government have secured
the land by which they can open a new
street between George-street and Pitt-
street, by the side of the Post Office, the
building will occupy a much more promi-
nent position than it does at present. This
would have been done simultaneously with
the opening of the Post Office, but diffi-
culties exist in regard to the purchase of
the land which can only be overcome by
an Act of Parliament. The free trade
policy which I had the distinguished hon-
our of proposing last session, and which
this House adopted, has not only at-
tracted the attention of the neighbouring
Colonies, but the mother-country and the
United States have in their leading jour-
nals and in their Houses of Legislature
expressed their appreciation of the wisdom
displayed by this Parliament in releasing
commerce from its fetters as far as possi-
ble, and reducing the tariff to as few arti-
cles as is consistent with a due regard to
the revenue which must be obtained from
the imposition of Customs duties. The
tariff is not yet as perfect as we should
like ; but if this Government should remain
in office during another session, we shall
take a further step in the same direction.
We have the satisfaction of knowing that
the new Colony of Fiji has adopted our
tariff, and we can only desire that the
whole of the Australasian Colonies may
speedily be converted to a policy which
the mother-country has found more pro-
ductive of pixisperity than any other. To
show the enviable position of the inhabit-
ants of New South Wales in the matter of
taxation, I would point out that under
our free trade tariff there is not a single
tax on any necessary of life, whether of
food or clothing. Tea and sugar are the
only articles which can possibly be claimed
to fall under that category, and they are
taxed everywhere. Our Customs taxation
is entirely voluntary, and anyone, if he
pleases, can live in this colony and support
his family without contributing a penny
in the shape of taxes to the public Trea-
sury. The annexation of Fiji to the
British Empire cannot be otherwise than
an interesting event to this and other

[1874.]

MR. LLOYD.

313

colonies, standing as it does in the high-
way of our mail communication with the
teeming populations of the United States
and the old country. We may fairly an-
ticipate that an extensive trade will spring
up with these Islands of the Sea, and that
we shall share largely in its advantages.
The trade of Fiji, as shown by the imports
and exports, was, for the twelve months
ending 30 September, 1873, 170,479,
and for 1874, 199,255 more than half
of which was with this Colony. I must
not, however, prolong these introductory
remarks, interesting as it is to dwell upon
the advance which the Colony has made in
the short space of our own experience, and
the rapidity with which it is increasing in
wealth and importance. It is hardly pos-
sible to estimate the grand future that is
in store for this rising nation when the
noble public estate we possess is covered
with a wise and energetic population. Last
year, when submitting the Ways and
Means to the Committee, I found it neces-
sary to start with the year 1871, in order
to show what would be the probable result
of each year's transactions up to the close
of 1873. I am glad, however, to say that
I have been enabled to close the accounts
of 1871 and 1872 finally, and have there-
fore only to submit those for 1873 and
1874, together with an estimated account
of the revenue and expenditure for the
year 1875. It would have been much
more satisfactory to myself, as well as to
the Committee, if I could have now sub-
mitted a closed account for last year also,
showing the actual, instead of, as I must
still do, the estimated, surplus. This could
not, however, be done without great incon-
venience to the service, as many of the
contracts entered into before the 31st
December, 1873, on account of public
works, ai*e still in course of execution.
These outstanding contracts were carefully
ascertained on the 30th September last,
and the necessary funds reserved to meet
them. Funds have also been reserved to
meet claims known to be outstanding on
account of other services which cannot,
for various reasons, be settled at once. A
statement of all the appropriations of 1873,
which were thus reserved on the date
mentioned, will be found with the Ways
and Means, which will now be distributed,
and to which I desire to draw the special

attention of the Committee. In dealing
with the accounts, which I must do some-
what in detail, I have to request honora-
ble members to turn with me to the account
of Ways and Means for the year 1873,
which will be found at page 6, in order
that they may, by tracing the figures for
themselves, the more readily understand
my explanations, and the results at which
I have arrived. I will endeavour to show
now wherein this account differs from the
one submitted last year. When I made
the Budget speech on the 16th October,
1873, I estimated that we should have a
surplus of 655,280 13s. 9d. at the end
of that year, or rather when the account
for 1873 was finally closed. From the
account now submitted it will be seen that
I anticipate a surplus of 720,089 Is. 5d,
or 64,808 7s. 8d. in excess of my former
estimate. Then I had to submit an esti-
mate of the probable revenue and receipts
of the last three months of the year ; now
I can give actual results, and it affords
me much pleasure to be able to inform the
Committee % that the actual revenue of that
period, or I may now say of the year, has
exceeded my expectations by the large sum
74,094 19s. 6d. Although this increase
of revenue apparently accounts for the
increase of surplus, yet there are other
variations in this account, which I think
it right to point out. The first of these is
a larger surplus from 1872 than I formerly
estimated. This increased surplus, which
arises entirely from the lapsing of further
appropriations of 1872, gives an additional
credit to the year 1873 of 17,089 5s. lOd. ;
to this has to be added the revenue of
1873 in excess of estimate, as already ex-
plained, namely 74,094 19s. 6d. ; and as
I estimated the probable savings on the
appropriations of 1873 (exclusive of the
Treasurer's Advance Account) at 1 00, 000,
which now turnout to be 140,726 16s. 3d.,
there is of course a further credit on this
account of 40,726 16s. 3d., which, added
to the other two credits, makes an aggre-
gate additional credit of 131,911 Is. 7A
Had there been no further charge against
the revenue of 1873, this large sum would
all have gone to swell the surplus of last
year. However, since October, 1873, and
before the close of last session, the Sup-
plementary Appropriations of 1873 were
increased from 109,419 Os. 4d. to

314

MK. LLOYD.

[1874.]

164,071 13s. 5d., being a further charge
of 54,652 13s. Id. There have also been
a few additional special appropriations to
the amount of 8,749 15s. 5d., and a fur-
ther Supplementary Estimate now before
the House for 3,700 5s. 5d. These,
which together amount to 67,102 13s.
lid., deducted from the additional credits
referred to, leave a surplus of 64,808 7s.
8d., which is the amount to be carried to
the credit of the account for the present
year, over and above my former estimate
of 655,280 13s. 9d. Before leaving this
part of my subject, I will show the heads
uuder which the actual exceeded the esti-
mated revenue of 1873 : Customs ex-
ceeded by the large sum of 42,999 ; duty
on refined sugar and molasses, 1,800 ; duty
on spirits distilled in the Colony, 252 ;
gold revenue, 648 ; mint receipts, 1,015 ;
stamps, 6,512 ; pilotage and harbour and
light rates, 5,065 ; land revenue, 17,161 ;
rents (exclusive of land), 2,183 ; contri-
butions under the Sheep Disease Preven-
tion Act of 1866, 354 ; fees under the
Registration of Brands Act, 142 ; rail-
way receipts, 8,755 ; postage, 3,048 ;
commission on money orders, 109 ; fees
of office, 1,293 ; fines and forfeitures,
750 ; in all, 92,086, under sixteen heads
of revenue. This amount has, however,
to be reduced by over-estimates under the
three following heads, namely : Electric
Telegraphs, 5,640 ; licenses, 1,319 ; mis-
cellaneous receipts 11,032 ; together
amounting to 17,991, which, deducted
from the increases, leaves 74,095, the
amount to which I have already referred.
It must therefore be gratifying to the house
and the country to know that this large
increase which accrued during the last
quarter of 1873 was derived in a great
measure from sources which indicate that
the Colony was in a prosperous and pro-
gressive condition. As no portion of the
deficiency debt fell due in 1873, the en-
tire surplus of that year has been carried
to the credit of the account for 1874,
to which I would now invite the atten-
tion of the Committee. Starting that
account therefore on the credit side with
the 1873 surplus of 720,089 Is. 5d., I
add thereto the actual revenue and receipts
for the nine months ended 30th September
last, which, as will be seen from the account,
amounted to 2,376,822. This is 64,079

in excess of the corresponding period of
1873. Although a much larger amount
has been received from the sale of land in
1874 than was in 1873, I am glad to say
that under many important heads of re-
venue the increases have been considerable
for instance, duty on refined sugar and
molasses gives an increase of 6,875 ; stamp
duties, an increase of 3,558 ; pilotage and
harbour and light rates, an increase of
2,360 ; railway receipts, an increase of
20,105 ; licenses, an increase of 2,481 ;
and miscellaneous receipts, 17,398, of
which over 13,000 are for interest on
bank deposits, a subject to which I shall
again have occasion to allude. There is
of course, as was to be expected from
the abolition of the ad valorem duties, a
large decrease under the head of customs.
This decrease, which in the nine months
amounted to 175,813, does not, however,
arise altogether from the abolition of those
duties, as I find there is a falling off of
nearly 5,000 on sugar, 1,811 on wine,
3,817 on ale and porter, 3,758 on dried
fruits, and 660 on tobacco and cigars.
Were it not therefore that the manufacture
of these articles in the colony is steadily
progressing, the duties collected on them
through the Custom House should be
annually increasing in the same ratio as
our population. While it is thus a matter
for regret in one sense, it is a matter for
congratulation in another. The probable
revenue for the last quarter of the year
is put down at 1,081,155. This sum is
based upon the estimates furnished by
heads of departments, which have been
carefully examined and compared with the
actual receipts of the corresponding quarter
of 1873, for the purpose of seeing that they
are not excessive. I have every reason
therefore for expecting that the amount
will be fully realized. The actual and
estimated revenue and receipts for the
year 1874 amount together to 3,457,977,
which will exceed, if realized, the net
revenue of 1873 by 134,747 Os. 6d., of
which excess about one-half was received
during the first nine months of the year.
The third item on the credit side of this
account is 22,760 18s. 8d., being the
surplus balance from the account of 1870
and previous years. This credit is larger
by 2,357 11s. 2d., than that formerly
given. The increase is caused by writing

[1874.]

MR. LLOYD.

315

off certain appropriations which at the
time I made my last financial speech were
expected to be required for expenditure.
I now come to deal with the charges against
the revenue of 1874. These I estimated
in October, 1873, at 3,335,986 15s. 8d.
Now I find they will amount to 3,506,780
Is. 8d., which is 170,793 6s. in excess
of the former. It is therefore right that
I should show the committee in what way
this larger expenditure has arisen. In the
first place, the general services of the
colony that is, those which are embodied
in the Estimates-in-chief as originally
estimated, amounted to 2,175,807 6s. 8d.
Subsequently, however, the Government
found it absolutely necessaiy to bring down
two Additional Estimates, amounting to-
gether to 126,931 2s. 9d. 24,000 of that
sum were for re-votes of appropriations
of 1873, for roads, bridges, and other public
works that had lapsed under the 17th
clause of the Audit Act, in consequence of
contracts not having been entered into
until the present year. 50,000, or nearly
so, was for roads and bridges and various
other public works and buildings of an
urgent and important character, and the
remainder for services of a miscellaneous
nature. Under the Estimates-in-chief and
the Additional Estimates alluded to, the
house sanctioned an expenditure of
2,274,548 9s. 5d., being 98,741 2s. 9d.
in excess of my first estimate for these
charges. Then there are additional special
appropriations to the amount of 51,800.
The large sum required under the head of
revenue and receipts returned is chiefly
for refund of deposits to conditional pur-
chasers, whose selections my honorable
colleague, the Secretary for Lands, could
not approve. It will, I have no doubt, be
still fresh in the memory of most honor-
able members, that the Superannuation Act
Repeal Act of 1873 authorized the amount
required to pay arrears of pensions and
gratuities, and to refund to public officers
the deductions made from their salaries
under the original Act, to be raised by loan
10,000 of such loan to be paid off
anmially from the Consolidated Revenue
Fund. As, however, I had large balances
increasing from various soiirces, I have not
availed myself of the power to borrow, and
thus a saving of interest has been effected
during the last year to the extent, at least,

of 5,000. I intend now, with the approval
of the house, to make the whole of the
payments under that Act a final charge
against the surplus of last year, now brought
into the account for 1874. These disburse-
ments which, up to the 30th September
last, amounted to 96,660 5s. Id., are
accordingly charged in this account, instead
of the 10,000 referred to, and which was
all I had charged in my former statement
of estimated revenue and expenditure for
this year. This gives therefore an ad-
ditional charge of 86,660 5s. Id. for this
service alone, which will I trust meet with
the approval of the committee. Like all
other Governments, we find we cannot do
without Supplementary Estimates. During
the recess applications have come in from
all quarters urging us to provide for all
sorts of services which are represented to
be of the greatest importance to the districts
concerned. These applications have been con-
sidered by the Government, and only such
submitted as appear absolutely necessary.
The Supplementary Estimate for this year
amounts to 93,591 18s. 2d. The follow-
ing statement will show in a more concise
form the increased charges against 1874
since I submitted the account in October,
1873 ; the charges were then estimated at
3,335,986 15s. 8d., to which we have to
add additional appropriations for general
services, as already explained, 98,741
2s. 9d. ; further special appropriations,
5 1 ,8CO ; charges under the Superannuation
Act Repeal Act, further sum, 86.660
5s. Id. ; Supplementary Estimate, 9 3,591
18s. 2d.; making in all 3,666,780 Is. 8d
From this we have, however, to deduct the
amount of appropriations not likely to be
required, estimated at 160,000; showing
thereby a total estimated net expenditure
of 3,506,780 Is. 8d., which deducted
from the aggregate credits on the other
side leaves an estimated surplus of
694,046 18s. 5d., or an excess over my
previous estimate of 185,414 12s. lOd.
This result is so much beyond my own
expectations, and beyond the expectations,
I dare say, of the most sanguine member
of the committee, that I should like to
pause here for a few minutes in order to
review the financial operations of the last
four years. In doing so I intend to give
only the ordinary revenue and expenditure
of the years 1871, 1872, 1873, and 1871.

316

MR. LLOYD.

[1874.]

as also what may be termed the extra-
ordinary expenditure for the same period.
In 1871 the net revenue was 2,218,691
3s. In 1872 it rose to 2,794,224 7s. 7d.
In 1873 to 3,323,229 19s. 6d. And for
1874 I estimate it will reach 3,457,977
So that in four years there has been, or
rather will have been when the year is
completed, received into the Treasury no
less a sum than 11,794,122 10s. Id. an
amount more than equal to our present
public debt. The ordinary expenditure
In 1871 was 2,129,044 6s. lid.; in 1872,
2,232,559 17s. 2d. ; in 1873 (partly
estimated), 2,724,052 4s. 7d ; in 1874
(partly estimated), 3,052,994 16s. 7d. ;
making a total ordinary expenditure of
10,138,651 5s. 3d. ; which deducted from
the aggregate revenue of the same period
gives the enormous surplus of 1,655,471
4s. lOd. Out of this surplus the following
extraordinary payments have been made
In 1871 deficiency debt debentures were
paid off to the amount of 100,000 ; in
1872 similar debentures to the extent of
46,700 ; the first instalment of the Rail-
way Loan Act of 1867, 20,000; and
Treasury Bills, issued on account of the
deficiency debt, paid off on 9th May, 1872,
343,200 : in 1873, second instalment of
the Railway Loan Act of 1867, 20,500 ;
in 1874, third instalment of same loan,
22,525 ; Treasury Bills, being the last
of the deficiency debt, paid off on the 30th
June last, 334,600 ; and payments under
the Superannuation Act Repeal Act of
1873, to the amount of 96,660 5s. Id. ;
making an aggregate sum of 984,185 5s.
Id., for extraordinary payments during
these four years, leaving still a clear
surplus of 671,285 19s. 9d., which added
to the 22,760 18s. 8d. surplus on the
account for 1870 and previous years, now
brought into the account for 1874, makes
up exactly the surplus I expect to have in
hand at the end of the present year
namely, 694,046 18s. 5d. We have
therefore, in these four years alone, paid
off deficiency debts to the extent of
824,500 ; we have also paid off within
the same period 63,025 of the debt in-
curred for railways, and we have paid
96,660 5s. Id. to the Civil servants in
settlement of their claims under the
Superannuation Act of 1864. From this
synopsis of revenue and expenditure it

will be seen that while our revenue has
risen from 2,218,691 in 1871, to
3,457,977 in 1874, or at the rate of 55J
per cent. , our ordinary expenditure, which
in 1871 was 2,129,044, only rose to
3,052,994 in 1874, or at the rate of 43|
per cent. ; that is, our revenue has in-
creased 12 per cent, more than our ex-
penditure ; a state of prosperity of which
we may well feel proud. If time per-
mitted I could show the committee that
the greater part of our increased expendi-
ture during the period referred to has
been on public works of great utility and
absolute necessity all tending to foster
the industries and develop the unbounded
resources of the Colony. Having shown
how rapidly the revenue has increased
since the year 1871, I now desire to lay
before the Committee some particulars
connected with the revenue and expendi-
ture of the Colony during the last three
decades ; that is, the period commencing
with the year 1 843, and ending with the
year 1873, which cannot fail, I think, to
prove interesting if not instructive and
encouraging, inasmuch as they prove that,
notwithstanding our severe losses through
droughts, floods, diseases amongst cattle
and sheep, rust in wheat, &c., the Colony
has not only been progressing, but pro-
gressing at a very satisfactory pace. In
1843, when the population was 165,541,
including, it must be remembered, both
the Port Phillip and Moreton Bay Dis-
tricts, now the flourishing Colonies of
Victoria and Queensland, the revenue was
350,891 4s. 2d., or at the rate of 2 2s.
4|d. per head of the population. In
1853, after we had lost the Port Phillip
District, it had increased to 791,573,
with a population of 231,088, which
gives 3 8s. 6d. per head. In 1863,
when we had also lost the Moreton
Bay District, and when the population
had reached 378,934, the revenue was
1,534,187, a rate equal to about 4 Os.
ll|d. per head. In 1873, when the ad
valorem duties were in force, and with an
estimated population of 560,275, it reached
the large sum of '3,323,229 19s. 6d., or
5 18s. 7d. per head. So that in thirty
years our revenue has risen from 350,891
to 3,323,229, and our population from
165,541 to 560,275. With regard to our
expenditure, I find that throughout these

[1874.]

MR. LLOYD.

317

three decades it has kept close upon the
heels of our revenue ; indeed, at the com-
mencement of the last decade outstripped
it to such an extent that the ingenuity of
several Treasurers was severely taxed to
overtake and keep it within proper bounds.
In 1843 the expenditure was 369,490, or
2 4s. 7d. per head. In 1853, 693,957,
or 3 Os. 0d. per head. In 1863, which
was the first great deficit year, it was
1,869,486, equal to 4 18s. 8d. per head.
In 1873, although it had increased to
2,744,552, I am glad to find that the
rate per head is only 4 18s., which is
rather under that for 1863, and I have no
doubt that as our population increases in
like proportion will our expenditure per
head decrease. Let us now see what pro-
portion taxation proper bore to the popu-
lation of the colony during each of those
years : In 1843 the amount raised by taxa-
tion was 252,888, or at the rate of 1
10s. 6d. per head; in 1853 it was 443,381,
or 1 18s. 4d. per head ; in 1863 it was
819,718, or 2 3s. 3d. per head; and in
1873, which included what we may term the
deficit tax, it amounted to 1,428,231, or
2 10s. lljd. per head. Allowing, however,
for the deficit tax, that is the ad valorem
duties now repealed, that rate per head
would be reduced by 7s. 8|d., thus reduc-
ing the amount to 2 3s. 3^d., or within
a penny of what it was in 1863, a state
of matters more favourable than could
have been anticipated, when we consider
that there were no Stamp Duties in 1863,
while in 1873 we received under that head
94,630, a tax equal to 3s. 4d. per head.
The cost of collecting the Customs was
8 3s. Id. per cent in 1843, 5 15s.
10H in 1853, 3 19s. 3Jd. in 1863, and
3^ Os. 5|d. in 1873. This year it will be
considerably more, in consequence of there
being no ad valorem duties to collect ;
probably the charge of collection will be
somewhere about 3 15s. per cent., a rate
very much less than that of any of the
years I have been dealing with, excepting
last year. It may not be without interest
here to state that, at the close of 1873,
the total population of all the Australasian
Colonies was 2,136,129 ; the total revenue
11,174,887 ; the proportion of that
revenue raised by taxation, 5,626,881 ;
the rate of taxation per head of the popu-
lation, 2 12s. 7d. ; the total value of the

trade, as shown by imports and exports,
was 84,908,585, or 39 15s. l|d. per
head ; the rate of taxation in this colony
per head of the population was 2 10s.
Hfd., so that we are below the average of
the whole ; and the total value of our
trade 22,904,217, or at the rate of 40
16s. lOd. per head, or above the average
of the whole. This brings me to the most
important question, namely, the disposal
of our surplus. For many years past the
great difficulty with my predecessors was
how to provide for deficits, and how to
make ends meet. To dispose of our sur-
plus revenue, although not such an un-
pleasant task, is nevertheless one that is
surrounded with many difficulties. In
England the Chancellor of the Exchequer
would seize with avidity the opportunity
thus presented for remitting some of the
most obnoxious taxes ; but honorable
members must be aware that no fair com-
parison can be established between the
revenue of Great Britain and that of this
Colony. Here not one-half of our income
is derived from taxation there almost the
whole is raised in that manner. In Eng-
land the innumerable branches of indus-
tries which are supporting the great
masses of the people are permanent and
expansive, while in this Colony, as in all
other Colonies, our manufacturing indus-
tries are in their infancy. As our pros-
perity as a community, and of course our
national income, is to a great extent de-
pendent upon our seasons, it would be
worse than folly, in my opinioji, for any
Treasurer or any Government to propose
the remission of proper taxes so long as
more than one-half our income is derived
from sources other than taxation, which
are liable to fluctuate to the extent of hun-
dreds of thousands in a single year. Nor
must it be forgotten that only last year we
abolished the ad valorem duties, the postage
charge on newspapers, and the tonnage
dues, amounting in all to about 220,000.
We cannot, therefore, be charged with re-
taining unnecessary taxation. It may be
said, no doubt, that our increased revenue
is derived chiefly from the sale of our
lands, and that the time may come when
we shall have less revenue from that
source. Whilst admitting that a very
large amount has been received during the
last two or three years from our national

318

MR. LLOYD.

[1874.]

estate, it is a remarkable fact tliat the
expenditure fairly chargeable against the
land has been equally large. In connec-
tion with this subject I have taken the
trouble to ascertain the relation which
such expenditure bears to the land revenue,
the result of which is embodied in a
statement I will lay on the table and move
that it be printed. This statement shows
the land revenue of the Colony from
1860 to 1873, both years inclusive ; the
expenditure properly chargeable thereon
during each year of that period, and the
annual surplus or deficiency of such
revenue. In compiling this information
great pains have been taken to arrive
at correct results. The revenue, for
instance, given therein, is the net revenue
only that is the gross revenue reduced
by refunds for cancellations, &c. I have
also excluded the revenue derived from
the gold fields, as that would have rendered
the statement much too complicated. The
following are the amounts received under
each head during the fourteen years em-
braced in this return, namely : Sales by
auction produced 1,832,232 4s. 2d.;
selections after auction, 470,849 11s.
8d. Conditional purchases : deposits,
1,167,118 12s. 6d. ; balances paid up,
199,689 19s. 6d. ; interest, 244-,635 11s.
4d. ; rents and assessment on pastoral runs,
&c., 3,005,935 Os. 9d. ; making a grand
total of 6,920,461 6s. lid. The expen-
diture which I have included in the state-
ment as chargeable against this revenue is
of course of an arbitrary nature, that is,
it has been selected and arranged accord-
ing to my own judgment, and can there-
fore be received only as the approximate
charge. The survey, sale, and manage-
ment expenses are of course a primary
charge. To these I have added the expen-
diture out of the Consolidated Revenue
Fund for immigration purposes. Then I
have charged all expenditure connected
with the construction and maintenance of
roads and bridges, as by these works the
value of our public domain has been im-
proved and sales promoted. The last
charge is the interest on our public
debt, less the surplus revenue of our rail-
ways and telegraphs. The following are
the charges under each of those heads
during the period referred to, viz. : Sur-
vey, sale, and management expenses,

1,374,466 Os.6d.; immigration, 101,787
17s. lOd. ; roads and bridges, 2,258,663
13s. 2d.; interest on public debt (in part),
3,596,392 2s. Id. ; thus showing a total
expenditure during these fourteen years of
7,331,309 13s. 7d., as against a revenue
of 6,920,461 6s. lid., which leaves,
according to this arrangement, a deficiency
of 410,848 6s. 8d. It is not necessary
that I should take up the time of the
committee in stating the annual surpluses
or deficiencies which result from this
method of dealing ^with the land revenue,
as the statement which I shall shortly
place in the hands of honorable members
will enable them to ascertain these at a
glance. If the result shown by this docu-
ment is accepted as an approximation to
what I have been anxious to arrive at, it
will then be apparent that neither this
Government nor any former Government
can be charged with having used the land
revenue to meet expenditure which
rightly should be defrayed out of revenue
derived from taxation. If the land
revenue continues to increase at the rapid
rate it has been doing of 'late years, we
shall have instead of deficiencies, large
surpluses. In view of this I have had
another statement prepared, in connection
with which I intend to found a scheme
for creating a fund for the liquidation of
the public debt. This second statement
is with respect only to conditional pur-
chases under the Crown Lands Alienation
Act of 1861. That Act, which was passed
on the 18th October, 1861, may be said to
have come into operation at the beginning
of 1862. Under its provisions land can
be selected anywhere and taken upon the
payment of 25 per cent. The balance, 75
per cent., is not pay able until the end of the
third year from date of selection, and not
even then if interest at the rate of 5 per
cent, per annum be paid from and after that
date. These, I think, are the main
features of the clauses referring to con-
ditional purchases. Well, from this state-
ment, I find that between the 1st
January, 1862, and the 31st December,
1873, there was paid into the Treasury for
deposits alone the sum of 1,259,395 16s.
lid. During the same period, however,
deposits were refunded to the amount of
92,277 4s. 5d., which reduced these
receipts to 1,167,118 12s. 6d. The

[1874.]

MR. LLOYD.

319

balance of 75 per cent on this sum
amounts to 3,501,355 17s. 6d., of which
199,689 19s. 6d. was paid prior to the
close of 1873, leaving then the large
balance of 3,301,665 18s. yet to be paid
up by conditional purchasers. The inter-
est paid up to the same date amounted to
244,635 11s. 4d. Before stating the
nature of the scheme referred to, I desire
to make a few remarks with respect to our
public lands, as these bear materially upon
the subject. From a statement furnished
by the Surveyor General I find that the
whole area of the Colony as it now exists
is 192,410,000 acres, an area nearly
equal to that of France and Great Britain
together. Of that area there have been
alienated up to the presnt time, by free
grants, sales by auction, selections and
conditional purchases completed as well
as uncompleted 15,803,510 acres, or
scarcely one-twelfth of the whole, leaving
still unalienated the enormous area of
176, 196, 490 acres. Even at the great annual
rate at which sales of land have been going
on during the last two or three years,
our territory would not be wholly alien-
ated within the next hundred years. We
have thus in the public estate alone, after
all the necessary expenses of management
are deducted, sufficient to provide for the
payment of both interest and principal
of our public debt for at least half
a century to come, and leave to posterity
even then a very fair share of the waste
lands of the Colony to dispose of as
they think best. Of the alienated lands
7,339,000 acres were disposed of prior to
the present land law coming into force,
and 8,464,510 acres subsequently. With
respect to our present imalienated estate,
there are 151,420,000 acres under squat-
ting lease, at a total yearly rental of
186,545 4s. ; 10,800,000 acres are under
annual lease, the rents from which amount
to about 35,000 ; 545,000 acres is the
area of runs not let, the probable annual
value of which is stated to be 320 ; and
there are vacant Crown Lands in the
pastoral districts to the extent of 2,350,000
acres, the supposed annual value of which
is 1,430. Besides these vacant pastoral
lands, there is the large area of 11,491,490
acres in the nineteen counties of the
settled districts entirely unoccupied, that
is, neither alienated nor under lease. This

area embraces rocky mountain ranges,
and land under water, &c., but much of it
containing coal and other minerals of great
value. Taking our pastoral lands as a
whole, there appear to be 165,115,000
acres, producing at present an annual
revenue of 223,295 4s. Of this pastoral
property I am informed that 3,283 runs,
with an area of 109,140,000 acres, and
producing a rental of 160,024, are east
of the Darling ; and on the other side, or
west of that river, which many persons
believe to be the western boundary of the
colony, there are no less than 42,280,000
acres, divided into 961 runs, that give us a
rental of 26,521 4s. With such a magni-
ficent domain there does not appear much
cause for anxiety about the public debt ;
but as all prudent Governments should
provide for the eventual liquidation of
their engagements, I will now invite the
attention of the Committee to the scheme
or proposition for creating a fund for the
liquidation of the public debt, which I
intend to submit to the House, and it is
this that in the month of January of
every year the balances paid into the
Treasury by conditional purchasers during
the year preceding, whatever the amount
may be, shall be invested in the manner
deemed most advantageous for the public
interest, and most readily convertible when
money is required for the purposes in-
tended. In addition to future payments
of this nature I intend to ask authority
for appropriating out of the surplus of
this year the whole of the payments
made up to the 31st December, 1873,
which amount to 199,689 19s. 6d.,
together with the amount received and yet
to be received during the present year,
which I estimate at 41,539. These two
sums, amounting together to 241,228 19s.
6d., will form a very fair commencement.
As already stated, the balances on con-
ditional purchases at the end of 1873
amounted to 3,301,665 18s., but only
about one-half of that sum was then due,
as the balances are not payable until the
end of three years from the date of pur-
chase. The amount which my honorable
colleague the Secretary for Lands expects
we shall receive next year from free
selectors in the shape of balances is
40,000, which, with the amount already
referred to, would, at the close of 1875,

320

MK. LLOYD.

[1874.]

enable us to invest the large sum of
281,228 19s. 6<L In proportion to the
prosperity of conditional purchasers will
be the balances paid up, so that while we
may receive in some years a large amount,
in others there may be a considerable
falling off. During the nine years in
which these balances have been payable,
I find fluctuations which can only be
accounted for on some such grounds. For
example, in 1865, the first year balances
became due, the sum of 34,393 17s. Id.
was paid. In 1866 the amount fell to
22,994 6s. 6eL; in 1867, to 13,382 19s. ;
and in 1868, to 10,601 17s. 5d. After
that, the payments began to increase
gradually, but with the exception of last
year, when we received the sum of
38,354 Os. 4d., no year has equalled the
first. Some honorable members may say
it is absurd to create a sinking fund such
as that described so long as we are bor-
rowers. Why, say they, do you go into
the English market and borrow money,
which will cost you from four to five per
cent., when at the same time you are
investing hundreds of thousands in the
colony at a much lower rate of interest ?
Would it not be more economical to apply
your surpluses to the construction of rail-
ways and other public works for which we
usually borrow money than to invest in
the manner proposed ? Well, I admit
there is some show of reason in this view
of the matter, but we all know from
experience, private as well as public, how
prone we are to expend to the utmost
extent of our means, and that when
not actually compelled to save we will in
all likelihood never attempt to do so. I
am therefore very much afraid we should
soon find we had no surpluses to expend
upon railways or other works of a repro-
ductive character, as applications would
come pouring in from every quarter for
grants for services of but little general
benefit, which it would be difficult to refuse
so long as we had money enough and to
spare. We have not yet tried a sinking
fund, and unless done now such another
opportunity may not soon again occur ;
and it would, in my opinion, be such a
guarantee to the public creditor as could
not fail to enhance the value of our public
securities. In addition to setting aside
out of the surplus of this year the balances

paid up by conditional purchasers as a
fund for the liquidation of the public debt.
I intend to apply a sum of 261,000 for
the purpose of rectifying, now that we
have the means of doing it, a matter con-
nected with the payment of interest on
our loans, which I have long considered an
anomaly in our system of accounts. It
appears that, ever since the commencement
of our public debt, the interest payable on
the 1st January and 1st July has been
considered as the amount chargeable
to the year in which such payments
are made. So long as our loans were
for small amounts, and raised in the
Colony, no great inconvenience was ex-
perienced from this arrangement; but when
we began to raise large loans in the
English market, and had to make provision
for the payment of the interest there,
some months before it was due, it became
but two apparent that the system hitherto
in operation was not adapted to such
altered circumstances. Independent, how-
ever, of this, the principle upon which the
interest is now charged is decidedly wrong.
For example, under the present arrange-
ment, the interest payable on the 1st
January next is made a charge against
the revenue of 1875, although not one
penny will then have been received to
meet such a charge. But the interest due
on that date is not fairly chargeable to the
year 1875, inasmuch as it accrues during
the present half-year, and should therefore
properly form a charge against the revenue
of 1874. In accordance with this view,
and with a desire to have the question
settled upon a right principle for the
future, I purpose charging in the year
1875, three half-years' interest on the
public debt ; that is, the interest which
falls due on the 1st January next, and
amounts to 261,000, I will make a
charge against the surplus of 1874, which
I have carried, for sake of convenience,
into the account for 1875 ; the interest
which falls due on the 1st July, 1875, and
the first January, 1876, will then form a
charge against the revenue of the year
1875. There is yet another liability which
I intend to pay out of the surplus of this
year, and that is 51,500, the last instal-
ment of debentures issued under the Act
29 Victoria No. 5, which has to be paid
off on the 1st June, 1875. The debentures

[1874.]

MR. LLOYD.

321

issued under this Act, to the amount of
300,000, were for the purpose of retiring
Public Works Debentures to a like amount,
the previous instalments having been pro-
vided for by new loans as they became due.
In 1876 debentures fall due to the amount
of 735,800, nearly one-half of which
will, I hope, be paid from the Sinking
Fund, and the other half probably out of
the surpluses of 1875 and 1876. No por-
tion of the debt falls due after that for
twelve years, unless those issued by the
late Sir Stuart Alexander Donaldson in
1857 to the amount of 240,830, which,
although interminable, the Government
have the option of paying off in the year
1882. During these twelve years, there-
fore, I feel satisfied the Sinking Fund, if
carried out in the manner I have described,
will have accumulated to nearly a million
and a half of money, and that too without
any perceptible diminution of our income
or any sacrifice on the part of the public.
Some honorable members may have ex-
pected that I would propose even larger
sums than those mentioned for the liqui-
dation of the public debt, but it must be
borne in mind that until the close of the
year I cannot be quite certain that the
surplus will actually exist to the extent I
have estimated. As already stated, how-
ever, I have every reason to expect that
my estimate will be fully realized, but so
long as there exists the slightest doubt
with respect to it, I would not feel justified
in making any further proposition for its
disposal. Practically, we have been em-
ploying for some time past a large portion
of the cash balance at the credit of the
Consolidated Revenue Fund on public
works of a reproductive and permanent
character, for pending the sale of deben-
tures we have transferred temporarily to
the Railway Loan Fund, 36 Vic. No. 17,
215,000, and to the Public Works Loan
Fund, 38 Vic. No. 2, 150,000, or to-
gether an advance of 365,000. Of
course when the loans authorized by these
Acts have been negotiated this advance
will be repaid. In the meantime, how-
ever, we are saving a large amount of
interest by utilizing in this way a portion
of surplus balances. On the 30th Sep-
tember last the balances at the credit of
the following accounts, according to the
books of the Treasury, stood thus :

Consolidated Revenue Fund, 616,856
17s. lOd. ; Old Loans Account, 273,593
7s. lid. ; Special Loan Funds, 310,127
16s. lid. ; Trust Fund, 669,770 10s. ;
making an aggregate balance of 1,870,348
12s. 8d., which was represented by cash in
the Bank of New South Wales, Sydney,
1,021,691 6s. Id. ; cash in the London
Branch of that establishment, 477,894
3s. 5d. ; securities in the Treasury Chest,
370,763 3s. 2d. ; together amounting to
1,870,348 12s. 8d. For greater details
of these accounts, I beg to refer honorable
members to the statement of balances
with Ways and Means, from which
it will be seen that the amount which
should have been at the credit of the
Consolidated Revenue Fund but for the
advances made to the two Loan Funds I
have referred to, is 981,856 17s. lOd.
Before leaving this part of my subject, I
may as well inform the committee of the
agreement lately made with the bank with
respect to interest on the public account. The
question has been asked whether the Bank
of New South Wales has any right to a
monopoly of the Government business, and
the reply is certainly not, beyond the fact
that the business of the Government has
been.conducted very satisfactorily by that
bank for many years, and there are
advantages in dealing with a large institu-
tion which could not so readily be obtained
in those of less importance. When I became
Treasurer, I found in existence an agree-
ment with the bank under which it was
entitled to the whole of the Govern-
ment business, on condition that interest
would be paid on 100,000 of our cash
balances. That agreement expired on the
30th June, 1873, and I then continued it
for a further period of three years, with
this difference that the bank should allow
interest on 550,000, which was all that I
then estimated I could leave undisturbed
for any reasonable period, and that the
question of interest should be reconsidered
at the expiration of twelve months. When
that agreement for interest expired, on the
30th June last, I arranged with the bank
to allow 4 per cent, interest on 130,000,
and 3| per. cent on 550,000, which, with
the 200,000 upon which interest is paid
under the general agreement, makes a sum
of 880,000, upon which we are now
receiving interest in addition to interest

322

MR, LLOYD.

[1874.]

on the whole amount which we have in
London. I could, no doubt, have dis-
tributed a portion of this amount in June
last amongst other banks, but I might
have experienced some difficulty in placing
the whole on such favourable terms when
it is remembered that it is liable to be
called up at any moment. When our
loans are launched, which must be at an
early period, and which are not included
in the bank agreement, it is my intention
to offer whatever we can spare of these
funds to other banks, but I have not
thought it desirable to break up the agree-
ment with the Bank of New South Wales
for the general account, while the business
is so well conducted by that institution.
Having thus disposed of all matters re-
lating to the financial operations of 1873
and 1874, 1 would now direct the attention of
the committee to the account of estimated
revenue and expenditure for the year
1875, which will be found on pages 14
and 15 of Ways and Means, while I en-
deavour to explain it in as few words as
possible. Following the order I adopted
with the other accounts, I will commence
with the credit side. The first entry here,
it will be observed, is the estimated surplus
of 1874, namely, 694,046 18s. 5d. brought
forward. The next and only other item
on this side is 3,519,240, the estimated
probable revenue of the year 1875. As
this amount is only 61,263 in excess of
my estimate of the revenue of 1874, com-
ment is almost unnecessary ; nor would it
be any advantage were I to give the in-
creases and decreases under each head of
receipt, as by a reference to the Abstract
Revenue Statement, marked A, page 17,
honorable members can readily ascertain
what these are likely to be. In fact, ex-
cept under the heads of customs, land
revenue, railway receipts, and postage, the
amounts differ little from those of the pre-
sent year. It will be necessary to bring
in a bill at once to renew the Stamp Act,
which expires on the 31st December next.
This Act was passed in 1865, and for the
five years ending with 1870 it produced
about 63,000 per annum ; in 1871, the
revenue was 77,500 ; in 1872, 94,298 ;
in 1873, 94,629 ; and this year, up to
30th September, 75,732. The cost of
collecting this revenue is not more than 2
per cent. The stamp revenue has suffered

considerably by the Postage Duty Stamp
Act, which authorized the use of Id.
postage stamps for duty purposes. The
revenue from Id. duty stamps before the
Act passed was 2,300 per quarter, but
after that it fell to 300 per quarter. The
assessment on the bank note circulation
has produced within ten years 132,639
5s. 7d., and will this year reach 20,000.
On turning to the debtor side of this
account, it will be seen that I have charged
against the surplus of 1874 the various
sums I have just been explaining to the
committee. The first of these is 261,000
interest on the public debt for the half-
year ending 31st December, 1874, due on
the 1st January, 1875. The second item
is 199,689 19s. 6d., amount of balances
paid up by conditional purchasers from the
commencement to the 31st December,
1873, which I intend to appropriate, with
the approval of the house, towards the
liquidation of the public debt. The third
item is 41,539, the amount of such
balances I expect to receive during the
present year, and which I also intend to
appropriate for a like purpose. The fourth
and last item of these charges is 51,000,
the last instalment of debentures issued
under the Act 29 Victoria No. 5, which
falls due 1st June, 1875. After these
four charges, which amount to 553,728
19s. 6d., have been paid from the surplus
of 1874, there will still remain a balance
of 140,317 18s. lid. to be carried for-
ward. We now come to the charges proper
to the year 1875. These, it will be observed,
amount to 3,423,461 5s. lid. This
amount however includes a sum of 40,000
for balances expected to be received dur-
ing next year from conditional purchases,
which I purpose appropriating towards the
formation of the fund for the liquidation
of the public debt. The proposed expendi-
ture, deducted from the estimated revenue
of 1875, leaves a balance of 95,778 14s.
Id., which with the balance of 140,317
18s. lid. on the 1874 surplus will give us
at the end of 1875 an estimated balance
of 236,096 13s., as shown by the account
now under review. As the Estimates for
1875, laid on the table last night, are so
much in excess of those of 1874, I dare
say the committee will expect that I
should say something in justification of the
proposed increased expenditure. This I

[1874.]

MR. LLOYD.

323

willingly do, feeling confident there are no
items on the Estimates which cannot be
defended on the ground that the expendi-
ture is either for the improvement of the
public service or the advancement and
welfare of the Colony. It is not, however,
always right to reduce expenditure. There
are some claims which all Governments
are bound to recognize, and the claims of
the Civil Servants are fully entitled to con-
sideration. The Government have made
some increases in the present Estimates, but
in examining the cases submitted to them
they cannot help feeling that there are many
instances of hardship which can only be
satisfactorily dealt with by a Civil Service
Bill, and if this Government remain in
power such a Bill will be one of the first
measures submitted to the new Parlia-
ment. The expenditure of 1874, as sanc-
tioned by the house last session, amounts
to 3,090,127. The Estimates for 1875,
now submitted, amount to 3,383,461,
thereby showing an increase of 293,334.
In accounting for this large sum I shall
confine myself to the principal items of
increase, as it would take up too much of
the time of the committee to go into
minute details. The first large increase is
in the estimates of the Minister of Justice
and Public Instruction ; and there I find
that he proposes an increase on last year's
vote for Public Instruction of 60,000
an increase which I am satisfied the House
will cheerfully sanction. In the depart-
ments under my own charge there are no
increases of any importance ; in fact my
estimates, as a whole, for next year, are,
if anything, under those of 1874. On
coming, however, to the departments un-
der the charge of my honorable colleague
the Minister for Lands, I find the increases
are very considerable. This of course was
to be expected, as the large areas of land
which are now being alienated involve a
heavy outlay for survey. Indeed, I am
informed by my colleague that a much
larger staff would be employed if the men
could be obtained ; but as the demand for
surveyors and draftsmen is quite as great
in the neighbouring Colonies as here, he
has to be satisfied with those he now has.
The increases on this estimate alone
amount to 71,846, nearly 60,000 of
which are connected with the survey of
lands. Then the Mining Department,

which was not fully organized until about
the middle of the present year, shows an
increase, as compared with last year's ap-
propriations, of 11,797. The estimates
of the Secretary for Public Works show
an increase for the construction and main-
tenance of roads and bridges of no less a
sum than 57,536. In 1875 my honor-
able colleague intends to spend, with the
sanction of the House, of course, over half
a million of money on public works, in-
cluding the construction of a number of
bridges in all parts of the Colony. In the
railway estimates there is an inevitable
increase for working expenses of 23,000.
in the Post Office, an increase of 31,000 ;
chiefly for conveyance of mails and the
establishment of additional branch post-
offices ; and in the Telegraph Department,
an increase of 6,000, consequent upon
the extension of our lines. Then under
head of Special Appropriations there is
an increase of 29,000 for the refund
of land revenue. The various increases
to which I have referred amount to
290,179, all of which I feel satisfied
must meet the approval of honorable mem-
bers. I may, however, remind the com-
mittee that the increases under the heads
of lands, railways, Post Office, and tele-
graphs, will be covered, or nearly so, by
increased receipts from these departments.
On referring to the Loan Account, at page
74, it will be seen that I have not availed
myself of the power to borrow under the
Railway Loan Act of 1873 for 1,901,500,
or the Public Works Loan of 1874 for
806,200. The works provided for in
these Acts are proceeding as rapidly as it
is possible, and all the funds required have
been found from balances which the
Government had available on the Public
Account. The country has thus been
saved a heavy charge for interest, and it
will be my desire to operate under these
loans in such a way that we shall only pay
interest on the money as it is absorbed by
the works authorized, I cannot, however,
much longer delay, as we have accepted
very heavy contracts, which are now in
progress, and upon which considerable
amounts will fall due early next year.
Our funded stock has been taken up to
the extent of 445,468 8s. 5d., and there
remains only 64,311 11s. 7d. of the
loan unabsorbed. We have sufficient

324

MR. LLOYD.

[1874.]

money available in trust funds to take up
the whole of this balance, but I have
thought it better to leave the fund open
to the public, who are taking advantage
of it for trust purposes. It is hardly
necessary to add anything to the statement
now made the facts and figures speak
for themselves ; but before concluding
I desire to recapitulate the principal
features of my statement. I think I have
proved in various ways that, as a Colony,
we_are in a prosperous and progressive
condition that our resources are being
gradually developed that our wealth as a
community is rapidly increasing that our
railways, our telegraphs, and our postal
communication are steadily pushing their
way into the interior, and supplying the
wants of an enterprising and persevering
class of Colonists. That our public
revenue (the sure index of general pros-
perity) has exceeded not only my estimate
but my most sanguine expectations. That
during the last four years our ordinary
income has exceeded our ordinary expendi-
ture by the enormous sum of 1,655,000,
and that out of that we have paid off all
our deficit debt as well as 63,000 of our
railway debt, and a sum of 96,000 in
settlement of the claims of the Civil
Servants under the Superannuation Act
of 1864, and that at the end of this year
we shall still have a surplus of nearly

700,000. I have submitted a scheme
for the gradual extinction of our public
debt, without resorting to any of those
antiquated and unsuccessful plans so
repeatedly tried in other countries. I
have explained to the Committee in what
way I propose to place the payment of the
interest on our loans upon a sounder foot-
ing for the future, and that out of the
surplus of 1874 I intend to pay off public
works debentures to the extent of 51,500,
which mature in 1875. I have also, I
hope, accounted satisfactorily for the
additional expenditure proposed for 1875,
and shown that, after providing for that,
and all the necessary services of the
Government, I expect a surplus at the end
of next year of 236,000. I have to
thank honorable members for the patient
hearing they have accorded to what, at
best, is but a dry subject. It is fortunate
for me, however, that the results which I
have had the honor of submitting to the
committee disclose a state of financial
prosperity which requires no oratorical
embellishments to make those results
attractive to the house and the country,
and my only hope is that, whoever may
occupy the important position I now hold,
will be enabled to disclose a Btate of
affairs equally encouraging in years to
come.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE WILLIAM FORSTEU,

made 2nd April, 1875.

LEGISLATIVE ASSEMBLY.

2nd April, 1875.

FINANCIAL STATEMENT.

MR. FORSTER, in moving, " That
there be granted to Her Majesty the sum
of 20 12s. 2d, towards defraying sundry
expenses incurred in connection with the
Infantry Permanent Force, which has
been disbanded" said,

Mr. Chairman, honorable members
might well suppose that I have not been
in a very comfortable state of mind for
the last hour or two, and I may express
my regret at feeling myself compelled at
this late hour of the evening, under some
degree of impediment, to trespass upon
the attention of honorable members upon
a subject necessarily a diy one in a
speech which promises to be somewhat
long, as it is impossible for such a speech
not to be ; but I think it so important to
expedite the public business that the ex-
pediting of the business itself is of more
consequence than any information that I
may have to convey, so that I consider it
right to go on, in spite of these disadvan-
tageous circumstances. Honorable mem-
bers will pardon me in appealing to the
indulgence of the committee for any trivial
errors I may make from ignorance or inex-
perience in the somewhat novel road I
am walking along. I shall be probably
told that I am a very severe critic myself
upon others, and that I am not entitled
upon that account to much consideration.
I do not ask pardon or indulgence for any
gross errors, or incapacity, or gross igno-
rance, but I think it is desirable that

duties of this kind should not be confined
to a clique or to a class. Therefore when
they do devolve upon some one who, like
myself, appears to be exposed to the dis-
paragement of being told that I know
nothing about figures, it is to the public
interest and to the advantage of repre-
sentative institutions that every degree of
at least venial indulgence should be
allowed to any one who undertakes a duty
of this kind, under these circumstances.
The task I have to perform divides itself,
naturally, into two branches. One is what
may be called the financial statement
proper of the finances of the country ; the
other, of course, involves a statement of
some sort of policy or intentions on the
part of the Government. I am in the
happy position of having had the first
branch of this task already performed for
me in a considerable degree. My hono-
rable friend, if I may call him so, who
preceded me in this office, has already, in
a lucid speech, made the Colony acquainted
with the state of our finances, and all I
have to do with this branch is to supple-
ment the information which he conveyed.
The statement I have to make then is,
properly speaking, a supplementary state-
ment, that begins where my predecessor
ended. I find it necessary to enter into
details which are almost repetitions, be-
cause the circumstances under which the
statement is made have altered ; because
in the meantime a number of estimates
have been verified, and because a number
of appropriations and public requirements
have sprung up in the meantime. But at
the same time I hope that the House will
see that the position I am placed in is
that of one making a supplementary state-

326

MR. FORSTER.

[1875.]

merit. If I am required to make an inde-
pendent statement derived from sources I
have handled from the commencement, it
will be on another occasion, and in another
session, if the present Government should
be fortunate enough to remain in office
so long. I am about, in conveying the
information which it is my duty to
convey to the House, to introduce a
slight innovation upon the practice of
my predecessors, who indeed fell into a
practice which was itself an innovation
upon the practice which preceded them.
Some of my predecessors, for the last three
or four years, have got into the habit of
reading printed speeches to the Committee,
and I am willing to admit that a good deal
of advantage existed in that practice. No
doubt the information conveyed was
always of an important kind, and by the
printing of the speech beforehand it was
invested with a somewhat more deliberate
character than if entirely impromptu.
But it seems to me to have been an in-
fringement of the rules of the House, and
although I have never objected to the
practice, and have been perfectly willing
to leave them entirely to follow their own
courses as to their mode of communicating
information, I am still unwilling to follow
the practice in its extreme form. I do
not imply any kind of censure upon the
course taken by those honorable gentlemen,
and I am quite sure, from the eloquence
of the honorable gentleman who preceded
me, that it was not from want of powers
of expression or language that he adopted
that course. Those gentlemen were evi-
dently forced into that practice by the
circumstance that the greater part of the
information they had to convey at least
that which relates to the branch I am now
considering was derived from official
sources, and, although enlisted by the
Treasurer, and at his command to dispose
and arrange as he pleases, were still in
the strictest sense substantially official
information. I am quite sensible of the
advantage of putting this official informa-
tion in a printed form before honorable
members, and I have adopted the expe-
dient of having appended to the Ways
and Means a printed statement, which I
have termed an explanatory statement of
the public accounts of New South Wales,
as embodied in the Ways and Means for

the year 1875. This report or statement
will convey to the House, in conjunction
with the Ways and Means, an explanation
and analysis of the Ways and Means
themselves. It will in fact be placing
before the House pretty nearly the same
kind of information which was conveyed
in the first part of the printed speeches of
my predecessors. Of course I do not in
any way desire to avoid the responsibility
of placing this statement before honorable
members. I desire to be considered re-
sponsible for all the statements contained
in this explanatory report. But at the
same time I shall treat it as a public
document in the address I have to deliver ;
and although I do not propose to read
every portion of it, as it will presently be
in the hands of honorable members, they
will be able to supply any hiatus. I still
propose to read a very great portion of it,
and to refer to it as I would to any other
printed document, and enable it so to be
embodied in the address I have to make.
These are all the preliminary remarks
which it is necessary for me to make. I
now come to deal with the Consolidated
Revenue Fund. The statement submitted
to Parliament in November last, by the
late Treasurer, Mr. Lloyd, exhibited the
actual and estimated revenue and expendi-
ture of the Consolidated Revenue Fund
for three successive years under the fol-
lowing accounts, namely : 1st. Revenue
and expenditure for the year 1873.
2nd. Actual and Estimated Revenue
and Expenditure for 1874 ; and 3rd.
Estimated Revenue and Expenditure
for 1875. In consequence, however,
of the dissolution of Parliament a short
time after that statement was sub-
mitted, and the formation of another
Government immediately after the meeting
of the new Parliament in January last, it
has become necessary to carry the two
former accounts on to the 31st December,

1874, and revise the account for the year

1875. The present Ways and Means are,
therefore, simply a continuation, to a later
date, of those submitted in November
last. The account for 1873, which is
again submitted because many of the
services provided for in that year are
not yet completed, remains in much the
same condition as when submitted in
November, 1874. Then the surplus

[1875.]

MR. FORSTER

327

was stated to be 720,089 Is. 5cl. ;
now it is shown by the present account to
be 720,472 5s. 3d., or only 383 3s. lOd.
in excess of the former amount. This
difference is owing to the present supple-
mentary estimate for 1873 being to that
extent less than the estimate of November
last. In the detailed statement of appro-
priations and expenditure for 1873,
attached to the Ways and Means of Novejn-
ber, it was shown that the appropriations
for that year, exclusive of the Treasurer's
advance account, amounted to 2,881,578
15s. 5d. ; and the expenditure therefrom
up to the 30th September, 1874, to
2,638,644 16s. Id., leaving a balance on
that date of 242,933 19s. 4d. ; of this
balance, appropriations, estimated as not
likely to be required, were written off to
the extent of 140,726 16s. 3d., thereby
leaving for future issue 102,207 3s. Id.
The payments made out of this sum
between the 1st October and the 31st
December last amounted to 21,824 4s.
Id., leaving on the latter date a balance
of 80,382 19s. for issue as required dur-
ing the present year. This amount has
been retained, as will be seen by a reference
to the statement marked B, at page twenty-
one of Ways and Means, chiefly for expen-
diture on public works and buildings and
in the construction of roads and bridges.
Until these services are completed it would
be difficult to say what further savings
may arise on the appropriations of 1873.
It is however anticipated that by the time
the next financial statement is submitted
these additional savings will have been
accurately ascertained, and the account
for 1873 finally closed. The account
for 1874 submitted with the Ways and
Means of November last was necessai-ily
composed of both actual and estimated
revenue and expenditure. The charges
against the year 1874 as then shown
amounted to 3,506,780 Is. 8d. ; the
revenue for the nine months ending
30th September amounted to 2,376,822 ;
and it was estimated that the last quarter
of the year would yield 1,081,155, thus
making for the whole year a total of
3,457,977. To this was added the
surplus of the year 1873 brought forward,
viz., 720,089 Is. 5d. ; and the cash
balance at the credit of the Deficiency
Loan Account for 1870 and previous

years, reserved for the purpose of meeting
in part the Treasury Bills which fell due
in June, 1874, 22,760 18s. M., making
together a total available credit of
4,200,827 Id. ; deducting therefrom.the
expenditure above stated, viz., 3,506,780
Is. 8d., there was left an estimated
surplus of 694,046 18s. 5d. In the
account now submitted, actual instead of
estimated figures are given in all but two
instances. The authorized expenditure
for 1874, including the Treasury Bills
paid off in June last, and the payments
made under the Superannuation Repeal
Act of 1873, amounts to 3,574,084 2s.
5d. From this sum is deducted the
amount of appropriations now estimated
as not likely to be required, 200,000.
And the amount of the vote taken to
enable the Treasurer to make advances to
public officers and for other purposes,
which will not ultimately form a charge on
the revenue, viz., 60,000 making together
260,000, thereby reducing this expendi-
ture to 3,314,084 2s. 5d. Honorable
members will see by these remarks that
the accounts for 1873 are substantially the
same as those laid before the House by my
honorable friend the late Treasurer. To
this has however to be added the amount
of the supplementary estimate recently laid
on the table of the Legislative Assembly,
namely 129,888 5s. 2d., which brings the
expenditure chargeable to 1874 up to
3,443,972 7s. 7d. The net revenue of
the year was 3,506,123 10s. Id., or
48,146 10s. Id. in excess of the estimate
made in November. This shows to what
extent and in what way the revenue has
constantly increased. Of course as it
would be impossible for me or my honor-
able friend to estimate exactly the amount
of revenue to be received, it was perhaps
better to under-estimate than over-estimate
it. But taking my honorable friend to be>
as every one will admit he is, as good a
judge as any one could be under the cir-
cumstances, as to what the revenue was
likely to be, I take it that this increase
upon his estimate may be taken, not as
any censure upon him or want of judg-
ment on his part, but as a proof of the
increasing prosperity of the Colony. To
this revenue has to be added, as before,
the surplus from the account for 1873, now
ascertained to be 720,472 5s. 3d. ; and

328

MR. FORSTER.

[1875.]

the cash balance at the credit of the
account for 1870 and the previous years
as above explained, 22,760 18s. 8d.,
making a total credit of 4,249,356 14s.
If from this be deducted the authorized
and estimated expenditure above shown,
viz., 3,443,972 7s. 7d., there will remain
a surplus of 805,384 6s. 5cl., which is
111,337 8s. in excess of that previously
estimated. The following statement will
show how this difference arises : Ad-
ditional credits of 1874 Surplus from
account for 1873 in excess of that shown
in the Ways and Means of November
last, 388 3s. lOd. ; actual revenue of
1874 in excess of estimate then made,
48,146 10s. Id.; present estimate of
appropriations of 1874 not likely to be
required in excess of that previously made,
100,000 ; making together a total addi-
tional credit of 148,529 13s. 1 Id. Less
Further charges against the year 1874
special appropriations, 852 13s. lOd. ;
refunds under the Superannuation Act
Repeal Act of 1873, 43 5s. Id.; supple-
mentary estimate for 1874 in excess of
that submitted in November, 36,296 7s. ;
making together a total further charge
of 37,192 5s. lid.; which deducted
from the additional credits gives the
difference, 111,337 8s. above mentioned.
The larger estimate now made of ap-
propriations of 1874 not likely to be
required is rendered necessary in con-

sequence of so many of the votes of last
year having lapsed under the Audit Act
of 1870 before the services for which
they were granted were completed, or
indeed in some cases even before they
were commenced. Under that Act all
appropriations of Parliament lapse on the
31st December, unless contracts or agree-
ments have been entered into before that
date for their expenditure. The late
period of the year at which the Appro-
priation Act of 1874 was passed, and the
difficulty of obtaining suitable labour, are
the principal reasons why these conditions
have in so many instances not been com-
plied with. It has therefore become
necessary to place the lapsed votes of
1874, which in the aggregate amount to
over 100,000, on the Estimates-iii-Chief
for 1875, for the purpose of having them
revoted, in order that the services may be
carried out as originally intended. This
arrangement creates, of course, a charge
011 the year 1875, which properly belongs
to 1874, but by cancelling or writing off
appropriations of the latter year to a like
amount a larger surplus on that year is
produced, which, when carried into the
account for 1875, becomes available to meet
the expenditure under these revotes. The
actual revenue of 1874 having exceeded the
estimate of the late Treasurer by 48,146,.
the following statement is here inserted to
show in what way this sum was realised :

Former Actual

Estimate. Revenue.

Customs 926,414 951,233

Duty on refined sugar and molasses ... ... 33,633 33,883

Duty on spirits distilled in the colony 10,997 10,801

Gold revenue ..." 22,277 22,813

Mint receipts 12,454 14,115

.Stamps 98,733 100,871

Pilotage rates, harbour dues, and light rates ... 28,140 29,756

Land revenue 1,449,081 1,426,166

"Rents, exclusive of land 32,856 33,513

'Contributions under the Sheep Diseases Pre-
vention Act of 1866 11,512 11,299

Fees under Registration of Brands Act ... 1,291 1,359

Railway receipts 501,440 532,852

Postage 100,834 102,869

Commission on money orders ... ... ... 3,979 4,072

Electric telegraph receipts 43,425 42,768

Licenses 84,689 85,872

Fees of offices 26,853 26,822

Fines and forfeitures 7,260 7,437

Miscellaneous (less repayments credited to votes) 62, 1 09 67, 622

Under.
196

22,915
213

657
31

Over.

24,819
250

536
1,661
2,138
1,616

657

31,412

2,035

1,183

177
5,513

Totals 3,457,977 3,506,123 24,012 72,158

Deduct amount under from amount over estimate 24,012

Producing a net increase of

48,146

[1875.]

MR. FORSTER.

329

Notwithstanding the abolition of the
ad valorem duties, the tonnage dues, and
the postage charge on newspapers, the
revenue of the year 1874 is considerably
in excess, as a whole, of that of any pre-
vious year. It exceeds the revenue of
1873 by 182,893 10s. 7d., that of 1872
by 711,899 2s. 6<L, that of 1871 by
1,287,432 7s. Id., and that of 1870 by
1,443,788. Dividing the revenue into
two classes, namely, revenue derived from
taxation and that derived from other
sources, the following would be the re-
lative proportions under each of these dur-
ing the last five years :

Taxation. Other Receipts.

1870 .. 1,078,865 ... 983,470

1871 ... 1,115,915 ... 1,102,776

1872 ... 1,259,581 ... 1,534,643

1873 ... 1,428,231 ... 1,894,999
1$74 ... 1,244,504 ... 2,261,619

In 1870, Customs duties produced
833,816; in 1871, 860,121 ; in 1872,
974,857; in 1873, 1,127,811; and
in 1874 (the year in which the ad
valorem duties were abolished), 951,233.
I think these statistics show the im-
mense progress made in the prosperity of
the colony so far as that prosperity is in-
dicated by the receipts of revemie. There
may be something said upon that score.
It is quite possible that when we come to
consider the question of the surplus there
may be reason to doubt whether after all
an excess to the extent of a very large
amount of revenue has not its drawbacks,
although to a certain extent it is great
evidence of what we cannot help con-
gratulating ourselves upon -the increasing
prosperity of the country. Under the
head of " Other Receipts" are included the
land revenue, telegraph receipts, postage,
and a few other receipts of minor import-
ance. Under the four heads specified
the receipts during the period above men-
tioned were as follows :

Land
Revenue.

Railway
Receipts.

Telegraph
Receipts.

Postage.

1870 478,070 303,780 30,133 82,805

1871 497,978 361,426 31,769 84,028

1872 840,452 421,888 48,866 96,477

1873 1,137,915 483,574 46,667 107,834

1874 1,426,166 532,852 42,768 102,869

I think, upon the whole, every one must
admit that the general characteristics of
these increases is a proof of the continu-
ance of prosperity. They prove the con-

tinuance of the consuming power of the
colony, of the increase of incomes, and of
the power of the wealthy classes to spend
money upon the vai'ious modes of con-
suming money indicated under the head of
"public revenue." But I think it is not
altogether out of place to call the attention
of the committee to the circumstances
of the peculiar decline in the Telegraph
receipts. I do not suppose there is any
great difficulty in accounting for that. It
is probably owing to the introduction of
what in fact amounts to a reduced rate
the reduction to the shilling rate. I do
not allude to this as intending the least
blame to the Government that introduced
the alteration, because it is probable that
a benefit has been derived in some other
way from the alteration ; but it is a proof
that the class of financiers or politicians
who are always in the habit of arguing
that reductions of rates will inevitably
produce an increase of revenue are some-
times mistaken. And in regard to the
reduction of the Telegraph receipts there
is obvious evidence that whatever other
benefits have been derived from cheaper
means and greater facilities of using the
Telegraph that have been placed before
the public by the change, the result lias
not been increased revenue. It is possible
the time may come when the department
will recoup itself ; but it will be impossible
then to prove that the compensation will
be derived as the effect of the reduction of
the rate. It will possibly arise from that
increase in the prosperity of the Colony
which has affected a number of other
items to which I have alluded. The fact
remains that a certain amount of revenue
is lost. I make this remark to show
that some instances occur where the argu-
ment in favour of reducing rates, to which
I have alluded, will not apply. It is
possible in fact it is inevitable that
in reducing rates of any kind you coine
some time or other to a stage where
revenue is not benefited by the change,
whatever other benefits may occur. I
think it must be acknowledged that the
increased Railway receipts, notwithstand-
ing the late Government insisted on re-
taining the rates, and- I think very pro-
perly, at the height at which they weie
for although I have been accused of
opposing the late Governim-nt I always

330

MR. FORSTER.

[1875.]

thought they were right on that question,
and always voted with them on it must
show in a high degree the continued
prosperity of the country. And I am
happy on this occasion to be able to relieve
the very natural apprehensions of my
honorable friend opposite who very
naturally, and perhaps justly, may have
looked forward to some frightful catas-
trophe occurring when a new Government
was called to office I am happy to be
able to assure my honorable friend, whose
patriotism and public spirit will I am
sure enable him to bear the intelligence
with complacency, that the prosperity of
the Colony does not appear to have
declined in the least since the present
Government came into office. I now
proceed to a somewhat important state-
ment with reference to cash balances, and
I shall here follow the words of the ex-
planatory statement. ' ' Attached to the pre-
sent Ways and Means will be found a state-
ment of the cash balances at the credit of
the Government accounts in the books of
the Treasury on the 31st December last.
These were Consolidated Revenue Fund,
825,605 12s. 5d. ; Old Loans Account,
265,815 8s. 7d. ; Special Loan Funds,
314,667 Us. 5d. ; Trust Fund, 6 30, 399
6s. 8d. ; making an aggregate balance of
2,036,488 2s. Id., which was distributed
as follows : Cash in the Bank of New
South Wales, Sydney, 1,234,761 19s.
Id. ; cash in the Newcastle Branch,
6,029 19s. 7d. ; cash in London Branch,
321,114 Is. 6d. ; cash in the hands of
the Receiver, 51,187 7s. 2d. ; securities
in the Treasury Chest, 423,394 14s. 9d. ;
making together as above 2,036,488 2s.
Id. In addition to the balance on the
Consolidated Revenue Fund as above
shown, namely, 825,605 12s. 5d., there
has to be recovered from the Loan Fund
for advances made thereto from time to
pending the sale of Debentures the sum
of 515,000, thus making a total credit
balance on the Consolidated Revenue
Fund of 1,340,605 12s. 5d." I now
come to what appears to me to be an im-
portant synopsis of the Accounts of 1873
and 1874, which will perhaps show more
clearly the results of the financial opera-
tions of these years than the foregoing ex-
planations, which are principally intended to
reconcile the Ways and Means now sub-

mitted with those submitted in November
last : ".1873. Credit or Receipt side of
the Account : Surplus of 1872, brought
forward, 141,411 6s. 6d. ; actual net
revenue for the year 1873, 3,323,229
19s. 6d. ; making a total credit of
3,464,641 6s. Od. Expenditure or ap-
propriation side of the account :
Amount of expenditure out of authorised
appropriations for the service of the
year 1873, up to the 31st December,
1874, as per Statement attached to Ways
and Means marked B, page 34, 2,660,469
Os. 2d. ; amount of appropriations re-
maining unexpended on that date still
retained as liabilities as per same state-
ment, 80.382 19s. Od. ; amount of Sup-
plementary Estimates for 1873, requiring
to be voted, 3,317 Is. 7d. ; making
together a total charge of 2,744,169 Os.
9d., which deducted from the credit side
leaves a surplus of 720,472 5s. 3d., to
be carried into the account of the year
following. 1874. Credit or receipt side
of the account: Surplus of 1873, as
above stated, brought down, 720,472
5s. 3d. ; actual net revenue for the year
1874, 3,506,123 10s. Id. ; cash balance
at the credit of the account for 1870 and
previous years, 22,760 18s. 8d., making
a total credit of 4,249,356 14s. Od.
Expenditure or appropriation side of the
Account : Amount of authorised expen-
diture, 3,142,780 12s. 3d. ; Less-
amount estimated as not likely to be
required, 260,000; 2,882,780 12s.
3d. Amount of payments made up to
31st December, 1874, under the Superan-
nuation Act Repeal Act of 1873 : 96,703
10s. 2d. ; amount of Treasury Bills paid
off, 30th June, 1874, 334,600 ;
amount of Supplementary Estimates for
1874, requiring to be voted, 129,888
5s. 2d., making together a total charge of
3,443,972 7s. 7d., which deducted from
the credit side leaves a surplus of
805,384 6s. 5d., to be carried into the
account for the present year." Honorable
members will observe that the Supple-
mentary Estimate for 1874 which requires
to be voted is a very large amount, and
that it is in excess by 36,296 of the
estimate formed at an early period of the
year. This is a matter honorable mem-
bers will have to consider when the
items come before them. A number of

[1875.]

MR. FORSTER.

331

additional requirements sprung up before
the end of the year, and several of the
items were found to be insufficient for the
purposes intended. I now come to the
most important account of all, that for
1875. "The account for 1875 is and can
only be an estimate of probable revenue
and expenditure. It is opened on the
revenue or credit side by bringing forward
the estimated surplus from the account of

1874, namely, 805,384 6s. 5d., to which
is added the estimated revemie of 1875,
3,630,240, making a total credit of
4,435,624 6s. 5d." Itwill not escape the
glance of my hon. friend the late Treasurer
that the re venue, as we estimate it, is largely
in excess of the estimate the honorable
member proposed. Admitting that it is
always best to on the safe side with these
accounts, I think this increased estimate is
justified by the circumstances of the large
increase of revenue upon the first two
months of this year as compared with the
two corresponding months of last year.
It is upon the information afforded by this
increase of revenue that we have thought
ourselves justified in increasing our esti-
mate to the amount now laid before the
Committee. On the debtor side of the
account are charged the proposed expendi-
ture, as detailed in the Estimates-in-Chief
for_1875, amounting to 3,526,818 13s.
9d. ; aud the last instalment of deben-
tures issued under the Act 29 Victoria
No. 4, due 1st June next, 51,500 ;
showing a total estimated expenditure of
3,578,318 13s. 9d. ; which deducted
from the credit side leaves an estimated
surplus of 857,305 12s. 8d. It will
thus be seen that the estimated revenue of
1875 exceeds the estimated expenditure by
the sum of 51,921 6s. 3d., notwithstand-
ing that appropriations of 1874 and pre-
vious years, under the head of re-votes,
are charged against the year 1875, to the
extent of 118,279 18s. Id. Excluding
this sum for re-votes, which is fairly
chargeable to the surplus of 1874, the
estimated revenue would in tkat case
exceed the estimated expenditure by the
sum of 170,201 4s. 4d. Before insti-
tuting a comparison between the account
of estimated revenue and expenditure for

1875, submitted in November last, and
that now submitted, it may be desirable to
show to what extent the proposed expendi-

ture of this year exceeds the actual appro-
priations for 1874, which were as follows :
For general services, 2,274,548 9s. 5d. ;
for services provided for by Constitu-
tional and Colonial Acts, 53,031 9s. ;
special appropriations, 762,548 ; special
supplementary, 52,652 13s. lOd. ; making
in all 3,142,780 12s. 3d. The proposed
expenditure for 1875 is as follows :
General services as per Estimate-in-Chief,
2,685,975 18s. Id. ; services provided
for by Constitutional and Colonial Acts,
50,842 15s. 8d. ; special appropriations,
790,000; making in all 3,526,818 13s.
9d. ; which is 384,038 Is. 6d. in excess
of the appropriations of 1874." On page
8, honorable members will find a state-
ment of the heads under which the prin-
cipal increases occur, but I will not now
trespass upon the time of the Committee
with these details. The expenditure now
proposed for 1875 as exhibited by the
Estimates before the House exceeds that
proposed in November by the sum of
143,357 7s. lOd. I shall not trouble
honorable members with the list of these
increases, for they are mere details, and
may be referred to at any time. The
present estimate of revenue for this year
exceeds that made in November by the
sum of 1 1 1 ,000. The estimate then made
amounted to 3,519,240, to which have
since been added the following sums, viz. :
Customs spirits, 15,000 ; Murray River
Customs, 10,000 ; pilotage, harbour
dues, light rates and fees, 1.000. Land
revenue Deposits on conditional pur-
chases, 130,000 ; balances of conditional
purchases, 10,000 ; interest on con-
ditional purchases, 5,000 ; in all
171,000. These additions bring the
Estimates up to 3,690,240. Pending,
however, the renewal of the Stamp Act,
which expired on the 31st December, 1874,
it is estimated that there will be a reduc-
tion under the head of stamp duties of
50,000 ; the previous estimate of
revenue has also been reduced by interest
on city debentures 10,000, thus making
a total reduction of 60,000, which leaves
the Estimate for 1875 at the amount now
shown, viz., 3,630,240. Under the
head of trust funds there is a great deal
of information given at page 10, which no
doubt will be interesting, but which it
does not seem to be necessary to read on

332

MR. FORSTER.

[1875.]

the present occasion. I therefore pass on
to the Loans Accounts, and I must take
the liberty of asking the House to follow
me pretty nearly through the statement.
The usual accounts and statements
relating to the services authorized to be
provided for by loan will be found at
pages 35 to 70 of Ways and Means. The
principal objects in view in appending
these documents are to show how the
loans have been raised ; how the expendi-
ture is progressing ; that no portion of
the funds have been used for services
other than those authorized, and that the
balances were at the credit of the Govern-
ment in the Bank on the date to which
the accounts are made up, and therefore
available for the purposes intended. The
first of these statements is what is termed
the General Loans Account, which is
simply a summary of the assets and
liabilities, more fully detailed in the
separate Loan Fund Accounts which
follow. From the debtor side of this
account it will be seen that on the 31st of
December last the liabilities amounted to
3,308,908 10s. 4d. Of this sum
2,793,908 10s. 4d. was the amount of
appropriation for railways and other
public works of a permanent and repro-
ductive character not yet made use of ;
and 515,000, the amount due to the
Consolidated Revenue Fund for advances
made to the Railway Loan Fund, 36 Vic.
No." 17, and the Loan Fund, 38 Vic. No.
2, pending the negotiation of the loans
authorized by these Acts. Honorable
members will remark what a different
position our revenue is now in as com-
pared with the time when the Loan Fund
was continually borrowed from by the
current revenue. We find the tables
turned now, and the current .revenue
enables us to make advances to the Loan

Clergy and School Estates Fund
Government Savings' Bank . . .

Do.
Public generally

Do.

Funds, which is a position of very great
advantage. "The creditor side shows
that the sum of 577,186 13s. 2d. was in
the Bank of New South Wales on the 31st
December, 1874, at the credit of the
several Loan Funds therein mentioned ;
that 2,731,401 4s. lid. of the loans
authorized had not been negotiated up to
that date, and that there were advances to
the Commissioner for Railways remaining
unadjusted to the amount of 320 12s. 3d.
These sums, which together amount to
3,308,908 10s. 4d., correspond exactly
with the amount of the liabilities referred
to." " The loans which were not negotiated
up to the 31st December last were : 1st.
The Railway Loans, 36 Vic. No. 17, for
1,901,500; 2nd. Balance of the loan
for Public Works and other purposes, 36
Vic. No. 21 Funded Stock Act of 1873
23,701 4s. lid. ; 3rd. The loan for
Public Works and other purposes, 38 Vic.
No. 2, 806,200 ; in all 2,731,401 4s.
lid. These were the first loans autho-
rized to be raised by the issue of 4 per
cent, securities. With the exception of a
few of the earlier loans, which were
negotiated for small amounts at an inter-
est of 2|d. and 3^d. per cent, per diem,
the loans of this Colony have hitherto
been raised by the sale of 5 per cent.
Debentures with a currency generally of
thirty years. The first deviation from this
rate took place in 1873 under the Funded
Stock Act, which authorized a permanent
loan of 509,780, at a rate of 4 per cent,
per annum. Of this loan, which is being
negotiated in the Colony, there was raised
up to the 31st of December last, a sum of
486,.078 15s. ld. f leaving then a balance
unraised of 23,701 4s. lid. as above
shown. The following abstract of sales
under this Act will show the amount of
stock taken up and the prices realized :

Stock.

90,000

30,000

257,894 14

1,980

200

Proceeds.

at par 90,000
at par 30,000
9 at 95
at par
at 95J

245,000

1,980

191

125,166 10 at 95 118,907 15

In all

... 505,240 15 7

486,078 15 1

" During the present year sales of stock
have taken place to the amount of 7,220
19s. lid., at 95 per cent., thus realizing

a further sum of 6,859 19s., and leaving
still to be raised 16,841 5s. lid. With
respect to the Railway Loan, Debentures

[1875.]

MR. FORSTER.

to the nominal value of 1,000,000 were
forwarded to our financial agents in Lon-
don by the mail of July, 1874, for
negotiation there. The minimum price
then fixed by the late Treasurer was 92
per cent., but as Mr. Larnach, the London
managing director of the Bank of New
South Wales, reported that there was not
the slightest prospect of their sale at that
price, the minimum was on his recom-
mendation reduced to 90. He also recom-
mended that the minimum should be
published when the loan was advertised,
which, owing to the unfavourable state of
the money market, was not done until the
26th December last. The tenders were
opened on the 5th January by Mr. Lar-
nach, in the presence of Sir Daniel Cooper,
Messrs. William Walker, William Ranken
Scott, B. S. Lloyd, F. S. Dutton, W.
Westgarth, T. J. Clarke, and a number of
gentlemen connected with the Stock Ex-
change, when it was found that there
were seventy-nine applications for an
aggregate of 565,800, at an average price
of 90 2s. per cent. On the following
day the balance of the million was taken
up by the Stock Exchange at the mini-
mum price. Mr. Larnach considers the
result of this loan highly satisfactory, and
he recommends that debentures for the
remainder of our loans be forwarded early
so that they may be brought out at the
end of June. The balance of the railway
loan is 901,500, and the amount of the
Public Works Loan, 38 Vic., No. 2, no
portion of which has yet been issued, is
806,200; these together would make
a loan of 1,707,700. On the 31st
Decembei-, 1874, the public debt of
the Colony amounted to 10,516,370
15s. 7d., which consisted of terminable
debentures, 1875-1902, 8,831,100 ;
ditto, by annual drawings, 937,000 ;
interminable debentures, 243,030 ; Fun-
ded Stock interminable, 505,240 15s.
7d. Total, 10,516,370 15s. 7d.
The loans authorized but not nego-
tiated on that date amounted to
2,731,401 4s. lid." "As already stated,
however, in connection with the accounts
for loan services, railway debentures were
negotiated in London in January last to
the nominal value of 1,000,000, and
funded stock taken up in the Colony
during the present year to the amount of

7,220 19s. lid. These two sums added
to the debt as it stood on the 31st Decem-
ber last make the actual debt at the
present time 11,523,591 15s. 6d. From
the statement at page 76 of Ways and
Means, showing the due dates of our out-
standing securities, it will be seen that
during the present year debentures fall
due to the amount of 71,500, which sum
is made a charge against the revenue of
1875, and that in 1876 debentures issued
under various Acts mature to the large
amount of 755,800. After that none of
our securities, excepting those that are
drawn for annually to the extent of
20,000, mature until 1888, when half-
a-million of debentures become due. In
every year but one, from 1888 up to 1902,-
larger or smaller amounts of the public
debt fall to be paid. The following are
the amounts and due dates of the deben-
tures which mature during 1875 and 1876,
viz. : In 1875 On 30th June, 51,500 ;
on 31st December (annual drawings),
20,000 ; total, 71,500. In 1876 On
1st January, 363,700 ; on 1st July,
372,100; on the 31st December (annual
drawings), 20,000; total, 755,800.
Now I think honorable members will join
with me in the congratulation which I
venture to offer to the Colony upon this
statement of our position. It is after all
simply a continuance of the position which
was ably exhibited by my predecessor in
November last. But it must be gratifying
to know that the prosperity is going on
increasingly. At the same time I am not
quite sure that a very large surplus is
altogether a matter of unmixed gratifica-
tion. Of course it is very gratifying as
compared with what occurred in former
years when we were constantly dragging
along, not having got rid of the deficiency
at the end of every year. Every one must
agree unhesitatingly that the present state
of things is a great advance upon that
time. But at the same time we must take
into consideration that a surplus is made
up of money which might be more profit-
ably used than when it is in the hands of
the Government. It is drawn from the
pockets of the people, as all taxation is,
and this large surplus if it were in the
hands or pockets of the people it is very
possible almost certain that it would be
invested in various ways and turned into

334

MR. FORSTER

[1875.]

better directions than by the Government.
There is also another reason why we have
some grounds for looking with some cau-
tion at any rate, and hesitation upon this
surplus, and that is the nature or the charac-
ter of the surplus itself. We cannot shut our
eyes to the fact that all money drawn from
such a source as this the landed revenue
of the country is a part of the capital of
the country, and it behoves us, taking
these points into consideration, the general
character of the surplus and the source
from which it is drawn, to endeavour as
far as possible to apply et least a portion
of it, if not a considerable portion, to the
improvement of the land of the Colony
itself. There is another reason, perhaps,
why a surplus should be looked upon with
suspicion, and that is that it shuts our
eyes to the indebtedness of the country.
With this increasing and progressing sur-
plus from year to year this fact remains
that our public debt also goes on increasing
from year to year. There was a time when
matters were worse, when in former years
there was a deficiency at the end of every
year, when the current revenue was not
equal to the current expenditure, and the
current expenditure was reduced to what
would be considered ludicrous in the
present day. Then we were actually bor-
rowing money to pay the interest on
debentures to a certain extent. That
state of things does not exist now
in any great degree. I will trouble the
House by reading a statement I have had
prepared, showing the outstanding public
debt from the 31st of December, 1864,
to the 31st of December, 1874, inclusive,
in order to show how this matter has gone
on increasing up to the year 1874 :

Works and other

v M r Services authorized Deficiency -,,,

***' to be provided for Loans,
by Loans.

1864 5,802,980 270,200 6,073,180

1865 5,351,130 398,500 5,749,630

1866 5,516,930 901,100 6,418,030

1867 6,124,130 793,500 6,917,630

1868 7,870,530 694,300 8,564,830

1869 8,952,030 594,000 9,546,030

1870 9,087,630 493,500 9,581,130

1871 10,218,230 396,100 10,614,330

1872 10,438,630 334,600 10,773,230

1873 10,507,814 16 4 334,600 10,842,414 16 4

1874 10,516,370 15 7 10,516,370 15 7

Looking at the prosperity of the Colony,
and the way in which the railways are

progressing, I do not think this need
alarm us, but it is desirable that we
should look it in the face constantly, and
understand exactly the way in which we
are going. And now, sir, I come to the
important question which is the second
branch of the statement I have to make,
namely, what the policy of the Govern-
ment is in respect to this state of our
public finances, and in particular, in
dealing with the surplus itself. I may
say, at once, that I have not adopted,
either in the alteration of the accounts or
in the proposal for the reduction of the
debt, the system that was intended to be
established by my honorable predecessor.
That honorable gentleman, in the account
for 1875, charged the first half-year and
the next year's interest against the surplus.
I do not quarrel with that mode of
accounts. It is really a mere matter of
alteration of keeping accounts. Every
surplus at the end of the year is only
nominal in its total amount. Substan-
tially it ought to be, and is practically,
diminished by the amount of interest
upon our debt that is accruing during the
concluding portion of the half-year. But
as a matter of account I have thought it
proper to place it under the head under
which it was put. I do not say the time
may not come when I may have a further
opportunity of considering a better mode
of placing accounts before honorable
gentlemen. But it seems to me, with my
admitted inexperience in these matters,
that it is better to take the old method of
keeping the accounts, which practically
comes to the same thing. I make no ob-
jection to the honorable member's method
of keeping accounts, and honorable mem-
bers will see at once the difference between
my predecessor and myself is merely a
nominal one. Secondly, I do not the
Government do not propose to take the
plan which was denominated the sinking
fund. I will not say that it is an
absurdity. It is a method of reducing a
debt which commended itself to far greater
financiers than I can pretend to be. It
may be that I am wrong, but I prefer a
simple method of dealing with the surplus.
I look upon the principle of a sinking
fund as ai'bitrary. In the first place, a
sinking fund does no more than may be
done without. A drunken man may be

[1875.]

MR. FOUSTER.

335

got to make a resolution that he would
not drink any more, but it would be far
better that he should be able to control
his drinking propensities without making
any resolution at all ; and it seems to me
that it is possible for the Government of
the country to accomplish this method
withoujb locking up our money in a parti-
cular and arbitrary method. If we make
up our mindSj we can liquidate a debt
through various modes of appropriating a
surplus. I am told that a certain check
is placed upon extravagant Governments
by the operation of the law ; but no one
can doubt that if a minister were in power
with a majority at his back who was of
opinion that a great emergency existed,
that he would be able to persuade the
Assembly of the emergency, and perhaps
with reasonable arguments, and it is
obvious that a law of that kind would not
then remain in existence very long. In
other words, the result of a sinking fund is
to do something of great moment no doubt
when its assistance is not required, and to
fail to give assistance when assistance is
most required. I take exception to my
honorable friend's proposal, secondly, be-
cause it seems to be more arbitrary than a
sinking fund generally. We take a parti-
cular amount from a particular account
due on a particular day, and we appro-
priate this sum towards the reduction of
the public debt. It is quite right that the
public debt should be reduced to that
amount, but it may be that by locking up
this particular fund we may find ourselves
hampered in the disposition of it by pre-
venting us from taking other modes of
disposing of it. Why are we to take this
particular sum ? If we want to reduce the
debt by 50,000 or 500,000, why not, if
we have a surplus of that amount, so
appropriate that surplus? Why confine
ourselves to the particular amount in the
proposal of the honorable member ? For
these reasons I have not thought it my
duty, nor have my colleagues thought it
their duty, to adopt the proposals of the
honorable gentleman. I shall be asked in
what way the Government propose to deal
with the surplus. I may go back to an
eminent authority on finance, and I do it
without any intention to ridicule my
honorable friend, I go back to an ex-
pression of opinion of the late Colonial

Treasurer himself, in the budget speech he
made on the 16th October, 1873. There
the honorable gentleman did not reach the
idea of a sinking fund, and he laid down
a method a proper method and principle
upon which a surplus might be disposed
of in the following words : " There are
three ways in which a surplus may be dis-
posed of, first, in payment of our debts ;
and here we have the example of the
mother country to assist us, as whenever
the revenue exceeds the expenditure, one-
fifth of the surplus is always paid over to
the Commissioners of the National Debt,
by whom it is appropriated in part liqui-
dation of that debt ; or secondly, it may
be disposed of by removing burdens on
the people by reducing taxation. And
here again we have the advantage of
English example, as was lately illustrated
by the reducing of the Income Tax and
other imposts of an oppressive character ;
and thirdly, surplus revenue may very
properly be expended in the construction
of public works of a national character
which may be urgently required. The
Government proposes to adopt each of
these modes." I have veiy little objection
to take to the opinions and principles laid
down in that statement ; but I may
explain my views, consistently with these
views, in a briefer form. I would say,
then, that the surplus may be reduced in
three ways ; first, by the reduction of the
loan account ; secondly, by the reduction
of the outstanding liabilities ; and thirdly,
by the reduction of taxation. By the re-
duction of the loan account I mean that
instead of using borrowed money for
public works, we should as far as possible
employ current revenue, to avoid the
accumulation of debt in many ways to
which our loans are applied. That is one
of the methods by which the present
Government propose to apply the surplus.
I am again very happy to be able to refer to
the course taken by the honorable gentle-
man and his colleagues as an illustration of
the method to which I refer. The late Go-
vernment had by law authority to raise
money for the payment of revenue under
the Superannuation Act, but instead of
using the Loan Account they used current
revenue to the amount of 96,000 in
round numbers. I instance this as an
illustration of the method which the

MR. FORSTEE.

[1875.]

Government propose to apply in the framing
of the next Estimates, and as far as
possible was applied in the framing of
the present Estimates. The next method
I spoke of was the reduction of outstand-
ing liabilities which had been illustrated
in the Ways and Means. When deben-
tures fall due at certain times, if the cur-
rent revenue be sufficient it will be unne-
cessary to renew in many instances. That
is another method in which they would
employ the surplus. But no doubt the
most important part of this financial pro-
posal is that which relates to the reduction
of taxation. The Government propose to
apply the surplus to the reduction of tax-
ation, or to the modification at least of
that legislation by which the taxing power
is conferred upon the Government. I will
endeavour to explain briefly the direction
in which the Government propose to go,
by endeavouring to lay down the principles
of action upon which we shall proceed.
But at the same time I beg to be tho-
roughly understood as not indicating the
least intention of making any such altera-
tion as I intend to foreshadow, during the
present session. The Government do not
pretend to dictate to the House whether
they shall have a long or a short session,
but we think it right to recommend to the
house that the session shall be shortened
so that we may be able to bring the House
together at such an early period as will
enable us to sit in Parliament at a more
convenient part of the year than is usually
the case. I believe that honorable mem-
bers will concur with the Government that
we should confine the business to the Esti-
mates, and a few necessary measures. I
do not desire honorable members to
understand me as intending to propose any
alteration in financial legislation during
the present session. I propose to give my
attention to it upon the first opportunity,
and to proceed with it as speedily as I find
it possible to do. I shall be asked what it
is we propose to do. We have taxation
in two important forms in the form of a
Stamp Act, and in the form of Customs
Revenue, not to speak of a number of
minor ways which it is scarcely necessary
to allude to at present. I fancy I shall
be echoing the sentiments of a large ma-
jority in this House if I say that we intend
to advance further in the direction of free

trade principles. I have no desire to cavil
at that portion of the policy of the Colony
which my predecessor has been instru-
mental in establishing. But I must be
permitted to say as one who has opinions
upon the question of free trade, and who
has held them a long time under the belief
that I was a much more advanced free
trader than others who had been more
glorified as free traders that I do not
think our financial legislation has done
much as yet towards the establishment of
free trade principles. I do not say that
the abolition of the ad valorem duties has
not been of benefit, but it was not much
of a step in the direction of free trade.
I do not understand that the ad valorem
duties are in their essence protective.
There is a number of specific duties far
more protective. Then why were the ad
valorem duties abolished ? They were
abolished for the public benefit. The ob-
jection to them is that they are demoraliz-
ing in. their operation and involved a
most unjust and iniquitous interference
with the operations of trade an inter-
ference between, the skilled and the un-
skilled trader. The operation of these
duties is to put the skilled trader at a dis-
advantage as compared with the unskilled.
I repeat that this was not much of an ad-
vance towards free trade. Again, another
of our advances towards free trade has
been the abolition of the tonnage dues.
That involves a small item taken from the
revenue, but it is an item that involves some
important principles. Now, I contend the
tonnage dues are in their character far
more consistent with free trade principles
than any sort of specific duty that you
can impose. I am not at this moment
proposing to abolish the specific duties, and
to propose tonnage dues in their place, be-
cause I know that the revenue would not
afford it, which is one reason among others.
I have no intention to allude to it more
than to illustrate the subject. But let us
ask ourselves what it is that makes these
specific duties so objectionable. If we
could abolish duties altogether that is free
trade if you like. But we cannot do with-
out some taxation, and the most convenient
form of taxation under our present circum-
stances is the Custom House. The objection
to that form of taxation is that the trader,
when lie comes into the port, is boarded

[1875.]

MR. FORSTER.

337

by a Custom House officer, has his boxes
ransacked, and their contents desti-oyed,
and himself perhaps subjected to delays,
and perhaps to impertinence. All these
annoyances are the result of Customs
duties in any form, and could not altogether
be helped. You must follow the trader,
because nobody can be trusted in matters
of revenue it is not the principle of re-
sponsible Government to trust any body.
Now, what is the case with the tonnage
dues 1 Suppose you could obtain a certain
amount of revenue by specific duties, and
a similar amount by means of tonnage
dues, is it not obvious that the tonnage
dues is the simpler and less obnoxious
way 1 You put it upon the same articles
practically, though in a different form, be-
cause the articles brought into the harbour
have this amount paid upon them, and the
inevitable result must be to enhance the
price of the articles when landed. What-
ever method is adopted of making the
charge, the consumer will have to pay a
portion of it. Tonnage dues represent
free trade more than any specific duties
can. In abolishing tonnage dues, arid re-
taining specific duties, you do not advance
free trade. Another objection is that the
enhanced price of the article will fall upon
a different class of persons. My belief is
that the result will be to throw the greater
part of the burden upon the consumer.
We have done much that is beneficial, but
to make our tariff thoroughly free trade
some alteration in the nature of the duties
will have to be effected. I think the rea-
son why our tariff is of the character I
have described is to be found in the pecu-
liar circumstances of the case under which
most of our tariffs have been established.
They were nearly all emergency tariffs,
imposed when cither there was a deficiency,
or a deficiency was apprehended, and it
was necessary for the Government to secure
all the money they could in the face of a
state of things that appeared likely to lead
to public insolvency. This led Govern-
ments to adopt a course prejudicial to
any tariff. The emergency always com-
pelled the Government to strain their tax-
ing power to the utmost, whereas I think
it is desirable that no kind of duty should
be levied to its utmost extent. W'e should
stop short of the amount which we could
possibly levy with a view of rendering the

tax less oppressive. Governments were
unable to take into consideration what
taxes were best, but they had to place
taxes upon the articles most accessible.
We are now in a better state of circum-
stances, which will enable us to look about
us, and to proceed by cautious arid proper
steps towards that result which will place
our tariff upon the best footing, and make
it more consistent with what we all desire
free trade. What are the motives to any kind
of taxation 1 They are the protection of
life and property. As regards the pro-
tection of life, it is reasonable that every-
body should pay a certain amount to the
revenue, and some taxes shauld fall equally
upon everybody. If protection of pro-
perty be the object aimed at, it is not un-
reasonable that property should be made
to pay in proportion to its value. I
might be asked whether we intend to pro-
pose a property or an income tax. I
must say that we do not see our way to
the imposition of either tax. I do not lose
the hope of introducing the principle of a
property tax ; but as regards an income
tax, which is the more equitable of the
two, it would be infinitely more difficult
to carry out here ; and I do not see what
means could be devised which would be in
any way equitable, and which would en-
able us to avoid the evils complained of in
regard to the ad valorem duties. All
means of evasion would be attempted,
and the evils complained of in Eng-
land would be largely increased here.
From what source then should the
revenue of the country be derived?
From the profits of undertakings. The
greater number of them must be profit-
able, or they would not be carried on. If
that be the case, it follows necessarily
that we should endeavour to derive our
income from those articles that would be
paid out of the profits to which I refer.
If our taxation fall upon the unproduc-
tive undertakings, it is evident that a
large proportion of it must come out of
the capital invested in such undertakings.
I think it is quite possible to levy Customs
duties upon a number of articles so as to
avoid any of the injurious effects I have
alluded to. If you tax capital you take
away from the producing power of the
community, if you tax property you take
away superfluity that would be probably

338

MR. FORSTER.

[1875.]

spent in some otlier way. This brings us to
the conclusion that it is desirable to levy
Customs duties upon luxuries as far as
possible. I suppose no one would object
to the Government raising the duties upon
wine and spirits, if they would get
revenue by it. No one would care much
if we tax wine, spirits, tobacco, and other
articles of pure luxury. Tea, I think, is a
very fair article to tax, and on this point I
have altered my opinion entirely to what
I formerly held. Tea is not an article of
absolute necessity, but to a certain extent
a luxury. Salt is not an article that it is
desirable to tax. Salt is one of those
articles that is used in a very important
industry, whether that industry be profit-
able or not. If the sheep farmer has a
number of bad seasons, or meets with
accidents or misfortunes, and for a number
of years his investment does not pay, he
must still contribute to the revenue. If
you tax salt he must still go on buying
it, because it is necessary to his undertak-
ing. And in that case he will have to
pay out of the capital invested in his
undertaking. It is the same with some
of the taxes upon timber, which operate
injuriously upon the manufactures of the
country. I have laid down what prin-
ciples occur to me on the moment by way
of illustration, and to show the house in what
direction the Government think of going.
The Government propose to modify the
taxation of the country in such a way as
to render it less objectionable to take off
some of the more objectionable items, and
to surrender a certain amount of revenue.
I shall be asked what we propose to
do with the Stamp Act. We propose to
introduce an altered Stamp Act. I re-
gret that the Act lapsed. As it has lapsed,
and as my views are not in accordance
with that Act as it stood before it lapsed,
I have not considered it my duty to hurry
in introducing a new one. We propose,
however, to introduce a modification of
the Stamp Act which will retain its
feature of a tax upon property, and we
shall surrender a certain amount of
revenue in regard to those duties which
operate prejudicially upon the trading
classes. Our proposal, then, is to modify
the tariff and the Stamp Act; and
although, as I have stated, it is not the
intention of the Government to introduce

a measure embodying all these proposals
this session, I give the House my word
that I will apply myself to these portions
of our legislation as early as possible. In
addition to this the Government also
propose to surrender the gold duty. It is
unnecessary to offer any arguments now
in favour of such surrender. A great
many arguments might be used in favour
of the gold duty, if it could be levied upon
all classes. But the best reason for tak-
ing off the duty is that it has been taken
off in the neighbouring colonies. On that
account I think it is inexpedient that
we should retain it. However, a great
deal that has been said against it
was borne out by sound reason. A
proposal has been made by the Go-
vernment of Tasmania in the matter of
free trade between the two colonies. I
am prepared to say that the Government
look favourably upon the proposal, but
we have not been able to mature a mea-
sure which would satisfactorily carry out
our views. With the large amount
of pressing business we have had
upon our hands we have not been
able to do more than consider the ques-
tion in a somewhat favorable light.
I now have to thank the committee for
the patience with which it has listened to
me, and for the indulgence with which I
have been treated. I hope the proposals
I have made will be found satisfactory to
the committee and the country generally.
It will of course be for honorable mem-
bers to keep the Government up to what
at present are no more than promises. I
admit that what I have said amounts to
little more than promises. But at the
same time I do not think it at all extra-
ordinary that a Government that has only
been in office a couple of months should
begin by making promises. It would be
for the House and the country to see that
we fulfil our promises. It is, I think, a
great advantage to the House and the
country that we have in our honorable
friend, the late Treasurer, a vigilant
sentinel of the public interests. What-
ever promises I may make I am sure I
shall be reminded of them if we do not
fulfil them ; we shall no doubt be re-
minded of them by the House and the
countiy in an unpleasant way. We only
hope that we may be allowed at least

[1875.]

MR. FORSTER.

339

some short time to be tried. We have
notgot into office from any sort of planning
or plotting of our own. We came in
under circumstances not of our own
creating. I think I am only stating an
historical fact when I say that the circum-
stances that brought us into office were
not of oxir own creating. We are in
office I do not say by no wish of our
own, but by no fault of our own.

And I am sure that from the legis-
lature and from the country we shall have
a certain amount of fair trial. Let the
promises I have made then be only pro-
mises for the present. I hope the time
may come when we shall be able to fulfil
them. If we do not, I know the consequences.
We shall deserve to give place to others
who will carry out their promises.

a j

I i

j HE HONORABLE JOHN J^.OBEI\TSON,

(Now THE HONORABLE SIR JOHN ROBERTSON, K.C.M.G.)

tf W*
>. ;

=*'

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE JOHN ROBERTSON,
Colonial Secretary, acting for the Colonial Treasurer, made 8th
December, 1875.

LEGISLATIVE ASSEMBLY.

8th December, 1875.

FINANCIAL STATEMENT.

Mr. DRIVER : In attempting to make
a statement of the financial condition of
the country, I feel that I am bound to
offer an apology for the position I have
assumed. It was considered necessary by
the Government of which I am a member
to send the Colonial Treasurer to England
upon business which we thought to be of
sufficient importance to necessitate that
course of action. From the time of the
Colonial Treasurer's departure I have per-
formed the duties of Colonial Secretary,
and, in addition, the duties of Colonial
Treasurer. Those duties I have performed
to the best of my ability, and I shall now
endeavour to proceed with this part of my
duty the Financial Statement which is
more than commonly difficult of course to
one, like myself, unused to anything of
the kind. I shall endeavour, however, to
perform it as best I may, trusting that
those honorable gentlemen who are better
acquainted with figures than I am will
grant me such an amount of indulgence
as I may fairly hope for. Like those who
have had this duty cast upon them since
the year 1870, I have to report to the
House continual financial prosperity
that kind of prosperity, at any rate, which
springs from an overflowing exchequer.
This state of things first exhibited itself
in 1871, during the time of the treasurer-
ship of my honorable friend, and then

colleague, the member for The Bogan, Mr.
Lord, who predicted in 1871 that the
revenue for 1872 would, beyond the years'
requirements, enable the Government to
pay off 334,600 worth of Treasury Bills
which would fall due in the next year. It
was not believed by some that this could
be done, but it was done. The bills were
paid out of the revenue which my honor-
able friend predicted was coming in, and
the necessary expenditure for the year was
also met. It will be remembered that
during the time the honorable member for
Newcastle conducted the business of the
Treasury, the revenue increased with
rapidity, and that in the last year of that
honorable gentleman's stewardship it
amounted to 3,500,000. This prosperity,
I am glad to say, has steadily continued
during the treasurership of Mr. Forster.
Ten months' actual and two months'
contemplated revenue will produce
4,044,000, and I am told that that is a
very low estimate. In order to exhibit
that more fully, as I think it ought to be
exhibited, I will read from the report I
have from the officer charged with that
' branch of the public business : " The
account for the year 1874 submitted
by Mr. Forster showed an estimated
surplus of 805,384 6s. 5d. In the
one now submitted it will be seen that
the surplus has increased to 895,055
16s. 10d., that is, 89,671 10s. 5d. in
excess of the former estimate. This in-
creased amount arises chiefly from the fol-
lowing additional credits, 1. Increased
surplus from the year 1873, as already
stated, 5,102 9s. lOd. 2. Appropria-
tions of 1874 written off under the

342

MB. ROBERTSON.

[1875.]

provisions of the Audit Act, in excess of the
estimate made in April last, 95,221 14s.
2d. ; making together a gross increase of
100,324 4s. From this amount there
have however to be deducted a few addi-
tional charges against the year 1874, viz. :
1. Supplementary, appropriations in ex-
cess of the estimate submitted in March
last, 3,142 Os. 3d. 2. Additional special
appropriations, 2,360 11s. 6d. 3. Amount
of a further Supplementary Estimate,
5,150 Is. lOd. ; in all, 10,652 13s. 7d.,
which leaves the increased surplus already
stated of 89,671 10s. 5d. As many of
the services of 1874 are not yet completed,
it is probable that this surplus will be
.still further augmented by the lapsing of
some of the appropriations which have
been reserved to meet them. The appro-
priations thus reserved on the 31st Octo-
ber last will be found detailed in the
Statement marked B, page 21 of the
Ways and Means. In the aggregate they
amount to 92,291 15s. lOd. The
account for the year 1875 is still to a
certain extent only an estimate. In the
one last submitted the ordinary expendi-
ture for 1875 was estimated at 3,526,818
13s. 9d., to which there was added a
charge for debentures falling due on the
1st June, 1875, to the extent of 51,500,
thereby making together a total estimated
charge of 3,578,318 13s. 9d. against the
revenue of this year. After the Financial
Statement was made it was however found
necessary to bring down an additional
Estimate, which, with the appropriations
by the Assembly under the main Esti-
mates for 1875, increased the charge for
ordinary expenditure to 3,623,449 2s.
lid. To this sum there have now to be
added Debentures paid off on 1st June
last, 51,500; special appropriations,
further sum, 31,174 14s. 5d. ; amount of
the Supplementary Estimates now before
the House for services of this year,
69,494 16s. lid., thereby increasing the
estimated charge against the year 1875 to
3,775,618 14s. 3d. As it is however esti-
mated that appropriations of various kinds
for services of this year will lapse, under
the provisions of the Audit Act, to the
amount of 260,000, that charge will
be reduced to 3,515,618 14s. 3d. Turn-
ing now to the credit side of the ac-
count for 1875, it will be seen that the

first item is the surplus on the account of
1874 brought forward, viz., 895,055 16s.
lOd. This surplus is, as already explained,
89,671 10s. 5d. in excess of that given
in the Ways and Means of April. The
actual revenue from 1st January to 31st
October last amounts to 3,179,829, which
is 510,743 12s. 9d. in excess of the
corresponding period of 1874. The esti-
mated revenue for the remaining two
months of the year is 864,779, or only
19,551 in excess of the revenue of
November and December of last year.
These together will give for the year 1875
a revenue of 4,044,608. Although this
amount is 530,294 in excess of the
revenue of 1874, it is only 414,368 in
excess of the estimate made in April by
Mr. Forster, who then anticipated that the
revenue of this year would not exceed that
of 1874 by more than 124, 000. Deduct-
ing the expenditure from the revenue of
the year 1875 as above stated there would
remain a surplus of 528,989 5s. 9d.,
which added to the surplus of 895,055
16s. lOd. brought from the account for
1874, will give a cumulative surplus at
the end of 1875 of 1,424,045 2s. 7d.
At page 83 of the Ways and Means
a statement will be found of the Cash
Balances at the credit of the several
public accounts on the 31st October
last, as exhibited by the books of the
Treasury. These were as follows :
Consolidated Revenue Fund 1,086,690
17s. 6d. ; Old Loans Account 230,227
9s. Od. ; Special Loan Funds 442,103
11s. 3d. ; Trust Fund Accounts 922,790
4s. lOd.; in all 2,681,812 2s. 7d.
Accounted for in the following manner :
Bank of New South Wales, Sydney :
Public Account, 365,081 18s. lid.;
Special Loan Funds 442,103 11s. 3d.
London Branch (including remittances on
the way and not yet brought to account),
880,781 17s. 8d. Fixed deposits : Bank
of New South Wales, 300,000 ; Oriental
Bank, 150,000 ; City Bank, 100,000, in
all 550,000. Securities in the Treasury
Chest belonging to the Trust Fund
Accounts, 443,844 14s. 9d. total same
as above, 2,681,812 2s. 7d. It is right
to explain here that the actual Cash Bal-
ance in London Branch of the Bank of
New South Wales on the 31st of October
last would be considerably less than that

[1875.]

MR. ROBERTSON.

343

above stated, owing to the payments made
in England on behalf of the Government
for the quarter ending 30th September not
ha ving then been passed through the books of
the Treasury. From the very nature of
the London account discrepancies of this
kind must necessarily exist. The interest
received on public moneys deposited in
Banks in 1874 amounted to 25,613. To
the 30th September of this year 24,112
had been received for interest on such
deposits, and it is estimated that a further
sum of 8,000 will be received for the
quarter ending 31st December, thus mak-
ing for the whole year a sum of 32,112,
or 6,499 in excess of that received
during 1874. Besides the cash balance of
1,086,690 17s. 6d. at the credit of the
Consolidated Revenue Fund on the 31st
October last, there was a sum of 815,000
due by the Loan Funds for advances
thereto, pending the sale of debentures.
The actual balance therefore at the credit
of the Consolidated Revenue Fund on the
31st October last was 1,901,690 17s. 6d.
I have mentioned, in the account I have
read, that the accumulated surplus for the
years 1874 and 1875, above and beyond
all appropriations and claims of what kind
soever, amounts to 1,424,045. I think
that exhibits, so far as the receipt of money
is concerned, that the country is in a pros-
perous state. It is indisputable, I presume,
that the other industries are in a flourish-
ing condition. [MR. DIBBS : It does not
follow.] It does not follow ; but so far as
the receipt of money is concerned, no one
will dispute it. Then with regard to the
other industries, I believe that there is no
business in the country that is not in a
highly satisfactory state. And as for our
commercial business, the exports of coal
have been far higher this year than ever
before ; and the general exports and im-
ports have been largely increased above
the year preceding, or any other year in
the history of the Colony. Now as to the
question so far as our revenue indicates our
prosperity. I think I shall show it indicated
here. The principal items of increase in
1875 over 1874 are on the Customs,
18,385 ; land sales, 538,434 ; rent and
interest on land sales, 15,860 ; postage,
1,330; railway receipts, 53,077; electric
telegraph receipts, 4,455. There is, of
course, on this estimate a very important

item of decrease of 96,002 for stamps,
and I apprehend that honorable mem-
bers are already aware that we have no
Stamp Act in force during this year. The
net increase under the head of revenue is
530,294. It will be seen by account
No. 1 of Ways and Means, that the expen-
diture for 1874 was 3,359,403, and for
1875 it will be seen, by account No. 2
of Ways and Means, that the expenditure
of the present year, so far as it can be
ascertained, will be 3,515,618. I shall
now invite the attention of the Committee
to the account for the year 1876. It will
be seen by account 3 of the Ways and
Means that the revenue for 1876 is esti-
mated at 4,166,900. I think I maybe
pardoned if I say when I first took office
as Minister of the Crown it was about
one-fourth of that amount, notwithstand-
ing that at that time the lands now form-
ing the great Colony of Queensland formed
a portion of our Colony. It will be seem
by the estimates that the estimated expen-
diture for 1876 is 3,917,007, leaving an
estimated surplus for the year 1876 alone
of 249,892. I will now read from the re-
port which I have had prepared certain
details connected with that part of the
public finances : " On referring to the
account of estimated revenue and expendi-
ture for next year, it will be observed that
the surplus shown on the account for 1875,
viz., 1,424,045 2s. 7d., is brought forward.
The revenue for 1876 is estimated at
4,166,900, which is only 122,292
in excess of the actual and estimated
revenue for 1875. The expenditure
for the services of 1876 is, according
to the Estimates-iii-Chief now before
the House, estimated at 3,917,007
18s. 2d. Deducting this amount from the
estimated revenue for the year, there
would remain a surplus of 249,892 Is.
lOd. on the year 1870 over and above the
surplus brought from the account of 1875.''
It will be seen on page 1 of the Estimates-
in-Chief for 1876, that it is contemplated
that there will be an increase of expendi-
ture in that year over that of l87- r > <!'
293,558. That, no doubt, appears a lar-v
sum; but in reality it is not so imuh
an increase actual as apparent. It EU
principally from an exchange from tin;
Loan Fund to the Consolidated Revenue
Fund. Large sums of money heretofore

MR. ROBERTSON.

[1875.]

charged to Loan Fund- will be found this
year charged to Consolidated Revenue.
We thought the present an opportune
time for affecting so very desirable a change.
The additional amount required for in-
creases to public servants amounts to
29,000. I saw an article in a news-
paper the other day, no doubt written by
a person technically informed, but it was
calculated to mislead ordinary people, as
it tried to make us believe that increased
salaries were the cause of the increase of
293,558, or the most of it, in the Esti-
mates for 1876. But the whole of the
increases in the salaries only amounted to
29,000. Now let us see how these in-
creases arise : The highest increase proposed
to be given to any public servant is 250.
There were only two put down for so
large an increase as that, and they were
professional men of high ability. It was
a wonder they remained in the public ser-
vice at such a small salary compared to
what they might make by practising pri-
vately. He supposed that no one would
deny that the Crown Solicitor was worth
1,250 ; and that was all the Government
proposed to give him. Then four of the
Under Secretaries, who were at the head
of large departments, in which were in-
volved to a large extent the interests of
the country, had been put down for an
increase from 800 to 1,000 each. These
officers were men of very great ability ;
they have been long in the Public Service ;
and I am sure that no man who has been
a Minister of the Crown in this country
will deny that they are placed in difficult
and responsible positions. I do not desire
to rely upon that only, but I do think that
when the receipt of 1,000 a year is the
highest position a Civil Servant may expect
to attain to, whatever his success and
ability, it is little enough as an induce-
ment to young men of ability to enter the
service. Considering what banks, mer-
chants, and squatters, give to their
managers, I think 1,000 a year is not
too much to give to the Under Secretaries.
Other highly efficient public officers have
been put down for small increases. We
have a number of men in our Public Ser-
vice who would be a credit to any service.
I do not think any Government in the
world is more faithfully served than the
Government of this Colony, and it is well

there should be graduating steps by which
men of ability and long service may rise.
It has been said that the Government has
only increased the higher salaries ; that is
not true. The Government has thought
carefully and anxiously for every grade of
the Public Service. There are a number
of people in the Public Service, such as
constables, warders, boatmen, railway
mechanics and labourers, who cannot, as a
rule, rise very much in emolument by pro-
motion, and the Government since it came
into office has provided a reasonable in-
crease in their pay in view of the increased
cost of living. It is in this way that the
salaries have been increased by 29,000.
Of course it will be for the House to
determine upon these matters for itself,
when Estimates are submitted to them in
detail. Now, if honorable members will
turn to No. 3 of the Estimates of Ways
and Means for 1876, they will find that
the estimated surplus on the account for
the year 1875, brought forward, amounts
to 1,424,045. Old debentures falling
due on the 1st January, 1876, amount to
434,200. That sum this Government
has arranged to pay out of the surplus
just alluded to, and since the 1st of July
last, 400,000 in all have on public
account been remitted to England towards
it. On the 1st July next there will be a
further amount of old debentures falling
due to the extent of 301,600. By that
time our surplus will have grown again to
1,100,000. We think it will be wise to
clear off all the old loans and thus clear
the way for our proposed new loans. The
two sets of debentures of which I have
spoken amount to 735,800. and they fall
due, as I have said, next yeai\ Seeing
that we shall then have no more deben-
tures falling due for twelve years, and
seeing that we have abundance of money
that we shall have up wards of 900,000
still laying as surplus after this 735,800
is paid I think it would be a stupid
course not to pay off that amount. We
should then be in a position of having met
all our engagements over and above the
ordinary expenditure of the Government
in the last three or four years, reaching
the amount of more than a million and a
half sterling met them as they became
due, out of Consolidated Revenue and
shall have 900,000 lying in the Bank to

[1875.]

MR. ROBERTSON.

345

our credit as a clear surplus. Under such
circumstances I think we shall be able to
go into the world's money market and
obtain loans on as favourable terms as
any country existing. I know it has
been whispered about the town that this
Government have been sending money
away and thereby restricting the trade
of Sydney. Those who circulated such
reports are under the impression that the
Government did send money to England
to pay the interest on the public debt.
Because the Bank of New South Wales
sent large sums in gold to England it is
assumed that it was sent on the public
account. But no other sum than 400,000
has been or will be sent to England, if this
Government remains in office, up to the
end of the year, for any Governmental
purposes whatever. No money will in fact
require to be sent. Our commercial affairs
in this country would be bad indeed, if out
of 1,400,000 of our surplus lying in the
Banks on public account, we could not
send 400,000 in 100,000 drafts month
by month, to meet engagements as they
fell due. That is all that we have done in
that way. Now, with regard to paying off
the 301,600, there will be no necessity
to send money to England for that pur-
pose, because we have still two authorized
loans to the amount of over a million
which we can negotiate in England, and
thus not only save the exchange, but also
the withdrawal of coin from the Colony.
I am as well convinced as the keenest
merchant in Sydney of the undesirable-
ness of sending money out of the Colony,
if it is fairly avoidable. But when we
go into the London market for new
loans, will it be nothing to be able to say
that within the last three or four years we
have met every obligation, notwithstanding
that our liabilities that fell due other than
those for current expenditure extended to
more than a million and a half sterling,
without renewals of any kind, but out of
clear surplus revenue 1 I have had enough
to do with Banks to know that a man
who goes to renew an obligation has to
pay a little more for the loan than the
man who goes for a new transaction and
is able to show that he has met his old
obligations, and still has assets to an
almost unlimited extent, as this Colony
certainly has, in her 175,000,000 of acres

of public land and in her great public
works largely productive as they are. I
desire to call attention to the fact that
we will have, according to the Estimates
I have submitted, an accumulated sur-
plus in the Colony, at the end of 1876,
notwithstanding that the old debentures,
amounting to 735,800 to which I have
alluded, will have been paid, with no
liabilities against it, of 938,137. Presently
I shall have to speak of the matter of the
disposal of this surplus ; but although it
has been raining this afternoon, we cannot
hide from ourselves that in the county of
Cumberland and other districts we have
some cause to look out lest we may
have a dry time. And although we
have by no means the same cause for alarm
as regards the interior of the country,
which I am glad to say is not suffering, I
think we shall be wise in keeping some
of this money a large proportion of this
money unexpended, so as to meet diffi-
culties should they come in the future. I
wish to be understood that we are perfectly
aware that we shall not always have
times quite so rosy as those of the last
four or five years. Like the last Govern-
ment, this Government is desirous in
every way in its power to facilitate the
trade and commerce of the country. It
will always be remembered to the credit
of the last Government that they abolished
the ad valorem duties ; that they abolished
the harbour dues at Newcastle. I think
it will ever be a matter to stand to their
credit, but I desire to remind them that in
both those propositions they had my
cordial and \varm support. I supported
them even against the speech made by the
honorable "and learned gentleman lately at
the head of the Government my friend
and colleague, Sir James Martin, who
made an attack upon these propositions,
and it was I who replied to him, and de-
fended, as far as I was able, the action of
the Government in this regard, although
its unmistakeable opponent otherwise.
Before I sit down I shall make some pro-
positions in the same direction ; they will
not be so small as to be unimportant to
the commercial community, and through
them therefore to the whole of the people,
but they can by no means be so large as
those made by the previous Government.
1 submit that what is for the benefit of the

346

MR. ROBEETSOK

[1875.]

mercantile people who supply the general
population is for the benefit of the general
public ; for the competition between the
mercantile people will ensure that they do
not get more than a fair share of the profit
springing from any relaxation of duties.
I have said that, like the last Government,
this Government have endeavoured to deal
with and mitigate the restriction on
trade, and facilitate the commerce of
the Colony. My honorable colleague,
the Colonial Treasurer, for whom I am
acting to-day, put into execution in July
last a plan for expediting the discharging
of ships, and changing favourably to the
mercantile community the practice regard-
ing what is called "overtime." Every
one knows that that has been a
great advantage to the mercantile
community. The ship's are more speedily
discharged, which is of itself a
great benefit, and which has this colla-
teral advantage, that the wharfs our
Circular Quay in particular have been
less crowded, because the quicker ships can
be discharged the more accommodation
there is to give. I think in this matter
my honorable colleague has shown a dis-
position to facilitate the commerce of the
port and of the Colony. On the 1st of
this month we established a steam pilot
service. I think that for many years past,
and indeed it has been universally ad-
mitted, our pilot service has been a dis-
credit to this port. If there was any
one thing more than another in which
we were behind the age it was in our
pilot service. Time after time, de-
bate after debate, during many years,
when I have heard these pilots assailed
for want of seamanship, for want of pluck,
or for want of gallantry, I have always
defended them, because I knew them to be
able and gallant men. But as to the effi-
ciency of the service, I have never defended
that, and have now established a steam
pilot service, approved of, I believe,
by nine-tenths of the maritime people
connected with this Colony. I hope
it will succeed ; it is now in opera-
tion, and I know while I continue to act
for my friend the Colonial Treasurer, the
man who is the cause of its failure in any
regard may expect to come speedily to
grief. Well, sir, we have put oui'selves in
communication, with the neighbouring

Colonies to obtain more favourable inter-
course, .including, of course, and mainly,
the Border duties on the north and on the
south I mean, the borders of Queensland
on the one hand and Victoria on the other.
I am glad to say I have received from each
of those Colonies letters expressing a strong
desire to carry out arrangements of the
sort, and I think it is very likely we shall
be able to propose something for the
approbation of Parliament before very
long. I should have taken the oppor-
tunity, when I was lately in Victoria,
although not on business, of conferring
with the leading Members of the Govern-
ment upon this matter ; but as honorable
Members read the papers they must know
the state of politics in Victoria, and they
must be aware that there was hardly any
one to approach with regard to it. No one
knew who was likely to be at the head of
affairs. However, being on tolerably
friendly terms with all the principal men
of all parties there, I found all of them
were desirous of being friendly and
desirous of making the best bargain
they could for themselves. However,
the Government will do nothing in regard
to this matter without the approbation
and countenance of our own Parliament.
We will not involve the country at all with-
out the approbation of Parliament. Besides
these things I have mentioned, this Govern-
ment have acted with Victoria in testing the
natural strength of Australian wines, with
a view to obtaining a reduction of the
English duty. I suppose it will be ad-
mitted that wine-growing and wine-mak-
ing is likely to be a matter of the greatest
importance to this country ; and it having
become known, by the means which the
Government of Victoria and the Govern-
ment of this country adopted, that our
wines are stronger than the wines of other
countries, it is hoped that an arrangement
will be made in England more favourable
for the introduction of our wines into that
Country than before. The Colonial Trea-
surer is in England, armed with all the
papers and documents necessary to effect
this purpose, and he will do all in his
power to get such an arrangement made.
Much fun has been made about the
Circular Quay, but in a few days tenders
will be invited for some improvements
desirable there. The plans of these

[1875.]

MR. ROBERTSON.

347

improvements will be laid before Parlia-
ment, because, before any tender can
be accepted the House must be asked to
vote more money, and when the Secretary
for "Works asks for more money he will
submit the plans, so that the House will be
able to see what the Government are doing
in regard to the matter. "Well, sir, the
late Government having obtained the re-
peal of all ad valorem duties and many of
the specific duties, we now propose, with
the same disposition to facilitate commerce,
to reduce the number of lines of
specific duties now remaining in our
tariff by twenty-two leaving only
thirty-five. I do hope and trust,
whether we are in office or whoever may
be in office, that next year a still further
reduction may be made, so as to bring the
collection of duties at this port to a mini-
mum as to the number of items, though I
do not say so much as to the amount.
Thus we shall rid ourselves of the expense,
the worry, the trouble, the delay, and
general inconvenience of passing entries
for articles the duty on which is
insignificant. The items and amounts
we propose striking off and giving up are
these: Bacon and hams, 2,025; gunny
bags, 94; biscuits, 878; blue, 7 24; cord-
age, 717. I may take the opportunity to say
that, although the items of cordage, rope,
and timber are for a large amount in the
aggregate, I think we are entirely defen-
sible in advising the House to do away
with those items, for every one of these
articles enters largely into consumption
for the purpose of shipbuilding. Now,
the present state of the shipbuilding trade
is this : If a man brings a new ship here,
ready built, and it may be with two suits
of sails, cordage and rope, she comes in
duty free ; whereas if our own people
build a ship, they must import and
pay duty on much timber, and in an
eminent degree for the cordage and rope.
I think, if we are to say to our ship-
building people, as we do say to them.
" You must put up with free trade, because
we want to be a free trade country and
because it is for the interest of the general
community as well as for your own," we
ought to be able to say to them, when
they remonstrate though I do not know
that they have remonstrated we ought
to say to them, " We will put no duties on

those articles which you consume for the
purpose of carrying out the business on
which you are working, and thus in that
way we bring work to your hands." I
think it is indisputable that we ought at
least to give our workmen a fair field and
no favour in regard to this. Next comes
doors, 275 ; ginger, 560 ; maizena
and corn flour, 200; mustard, 1,348;
oilmen's stores sauces and pickles,
2,320 ; paper writing and fancy, 654 ;
pepper, 702 ; rope, 935 ; sago, 634 ;
and salt, 10,800. This last is a very
large item, but I think it is defensible.
We have between our seaboard and our
i*ich inland plains, I think, about thirty
millions of acres of land. That land is
public land, in the hands of no man, and
lying worthless. In order to utilize that
land nothing is so valuable as the intro-
duction of salt upon it ; for every man
who knows anything of sheep-farming or
of country life knows that inferior land can
only be used to ad vantage, if used to ad vant-
age at all, by large supplies of salt being
given to the animals grazing thereupon.
Removing the tax from salt is, therefore, on
the part of the Government, an endeavour
to utilize this immense public estate, so
that it may be brought within the means
of revenue ; and I venture to say that far
more revenue will be received from the
now unoccupied land than will compensate
for this duty on salt. It may be that the
Committee will think otherwise, and that
for this item there will require some de-
fence. I do not desire to say more upon
it now. I know it has been said that to
take off this duty on salt will lie greatly
in favour of the squatters. I should
not object to it on that account. But
I happen to know better, and to know
something about these interests. I know-
that salt is used now ; but the quantity is
infinitesimally smaller than that which
will be used when this duty is taken off.
It is the large amount of salt which I hope
to see used, and the utilization of these
poor lands now unused and lying so near
the seaboard, which make me desirous of
seeing this proposal carried out. The
pastoral lands of the squatter* aiv usually
rich lands; the salt is wanted for poor
land. I have made no proposal to reduce
the charge on wire for fencing. If I had,
that would be a MTV luru'e redm-tion in

348

MR. ROBERTSON.

[1875.]

favour of pastoral interests ; but I happen
to know that the runs fenced in are the
richest runs, and the owners of them can
well afford to pay the tax on wire ; there-
fore I have made no proposal to reduce
that item. "VVe propose to strike out the
item of window-sashes, which brings in
43 ; and shot, which brings in ,552 ;
shutters, which seem to bring in nothing ;
spices, 638; timber (dressed), 938;
timber (rough and undressed), 3,047 ;
and vinegar, 2,034. Well, if the House
agree to this reduction, of twenty-two
articles out of fifty-one, yielding, I think,
a revenue of 1,200,000, or something of
that kind, and these twenty -two yielding
only 30,000, I think the House will do
well ; and if the House do this it will
mean that we shall reduce our revenue
from Customs by 30, 1 1 8. I need scarcely
say to any one who knows the trouble one
has with regard to passing entries for small
amounts, that a tremendous amount of
trouble will be saved by striking off these
twenty-two items. I venture to say that
those people who import goods under those
twenty-two lines spend twice as much
money in running up and down to the
Custom House, battling with the Collector
and otherwise, as these duties yield. I do
not propose to make these reductions
without making another proposition in the
way of augmenting our duties. I propose
to ask the House to consent to an increase
of six pence a pound on unmanufactured
tobacco, and of threepence a pound on
manufactured tobacco, the two yielding a
revenue of 17,500, which deducted from
the 30,000, leaves 12,500 a loss on the
Customs.

MR. PIDDINGTON : What is the amount
of the increase on tobacco ?

MR. ROBERTSON : 17,500.

MR. PIDDINGTON : It appears by the
Ways and Means about 40,000.

MR. ROBERTSON: 17,500 is the in-
crease.

MR, PIDDINGTON : If the honorable
gentleman will look at page 18 of the
Ways and Means, he will see it is
40,000.

MR. ROBERTSON : It is anticipated that
there will be a large increase this year
other than that ; and I will show the
honorable member how that arises. It
will be remembered that some years ago

the late Government made a proposal to
increase the duties on tobacco one shilling
all round. A large amount of tobacco
was taken out of bond, in anticipation of
those duties being put on a large amount
was taken out of bond beyond the neces-
sities of the year. So it turned out. In
that year the duties on tobacco went up to
59,000, and the next year they came
down nearly one-half. We hope now and
believe the results of that have worn off,
and that during the next year we shall
have our fair and usual amount of tobacco
brought under the Customs, and duty
paid upon it. That is how that matter
stands.

MR. PIDDINGTON : Look to the figures.

MR. ROBERTSON : That is precisely how
it stands. I went through the matter with
great care. Well, the new tariff will then
stand, according to the paper I have in my
hand : Spirits as heretofore : wines as
heretofore ; sarsaparilla as heretofore ;
beer, ale, and porter as heretofore ; in fact,
with the exception of those articles I have
mentioned, the new tariff will stand as
the present does, as honorable gentlemen
will see in the paper now handed round,
showing the tariff as it is proposed to
modify it. The loss to the Customs by
taking off the twenty-two items and
putting the extra duty on tobacco will be
12,382. Putting a duty on tobacco is
putting a duty on an article which is
largely consumed by the working people
of the country, and I may show that in
taking off other duties I have not forgotten
that fact. Bacon and hams working
people use, biscuits they use, blue they
use, ginger they use, of mustard they use
a great deal ; oilmen's stores and pickles
they use very extensively ; paper, for
writing, they use ; pepper, they use ; sago,
they use ; salt, the people of the country
and the free selectors use as much as any
class does; shot, I suppose they fire shot;
spice and vinegar they use largely. Resolu-
tions will be submitted in due course, for the
purpose of carrying out these proposals.
Now as to the amount of the duties on
tabacco and the mode of its distribution.
The honorable gentleman opposite (Mr.
Lloyd), when in power, proposed an equal
increased duty all round of Is. It cannot
well be said that 6d. on one sort of tobacco
and 3d. on another is too much. No one,

[1875.]

MR. ROBERTSON.

349

I think, will say that it is too much.
Now as to the mode of distribution. I
know something about this tobacco busi-
ness, because I was a Minister of the
Crown at the time when the law was first
made favouring the leaf tobacco. Every
one who knows anything about tobacco
knows that there is from 25 to 33 per
cent, waste on leaf properly so called,
through the manufacturers having to take
out the midribs, &c. That being so, the
Government of which I was a member in
1861 divided the charge, leaving 2s. on
the one and Is. on the other. We thought
that was a liberal allowance between the
two sorts, and that it was but little more
than fair, and so it was at the time ; but
now, instead of the leaf being imported
as it was then, with all that waste to come
out, it is imported without those stalks or
midribs. The Americans found out that
they could get the clear stuff in at the same
charge as the grosser sort, and so, for a
long time past, the leaf tobacco has been
coming in free from waste. I submit,
therefore, that the difference of 9d.
between manufactured and unmanufac-
tured tobacco now coming is an ample
and liberal allowance. It is all very well
for gentlemen who have made their
thousands and tens of thousands a year
out of this trade to complain of our taking
away this protection to their monopoly
for monopoly it is. At the time I speak
of tobacco manufacturers were not wealthy
men, but men who were struggling to
make their way in the world. I think it
is time now that the public should have
their share of this money, and I am sure
no one can show that the allowance we
have made is not fair or sufficient. With
regard to the difference of duty on manu-
factured and on unmanufactured tobacco,
I may mention that when I was in the
Upper Chamber of the Legislature in 1861,
in charge of the Bill under which a differ-
ence of Is. per Ib. was provided in favour
of leaf tobacco against that manufactured,
the Government of which I was a member
was charged that they allowed too large a
difference ; and it was with very great
difficulty that we got the Bill through,
because the difference was so high ; but
as then the leaf had one-third of waste in
it, which it has not now, I presume the
loss of 3d. difference by the manufacturers

will not be considered unfair. I do not
know if honorable gentlemen are aware of
the manner in which they deal with these
things in the mother country. I am not
much in the habit of referring to the
mother country, because I think that men
who have devoted their lives to the con-
sideration of subjects in this country are
as capable of forming a sound opinion
upon them as men in any other country.
But to-day a gentleman called my atten-
tion to what the duty is in the mother
countiy. There, the duty on unmanu-
factured tobacco is 3s. per Ib. ; on quanti-
ties containing less than lOlbs. of moisture,
3s. 6d. The duty on manufactured tobacco
is 4s. 6d. per Ib. for cavendish and negro-
head, and 4s. per pound for other tobacco,
The rates I propose are Is. 6d. on un-
manufactured, and 2s. 3d. on manu-
factured, which is precisely the same propor-
tion as that in the mother country ; that is
rather a remarkable fact. [MR. NELSOJT :
They do not grow tobacco in England.]
I see what the honorable member
means. He thinks it may come to
be protection. It may be that our
tobacco-cultivating industry will largely
increase. It may be so. At any rate,
we have nothing to fear from that now.
But, supposing it does happen, does the
honorable member know the meaning of
the word excise ? Whenever tobacco is
manufactured here to any great extent,
we will know how to obtain duty from it.
When the honorable member interrupted
me I was about to show that our rates all
round are just half of the English rates
all round. It will be seen from the Loan
Estimates that the Government propose
to ask Parliament to sanction the raising
of money by loan for Public Works to the
amount of .3,300,000, and that upwards
of 2,900,000 of that sum is intended to be
raised for railway purposes. I apprehend
that at this time of day there are few persons
who will deny that it is proper to expend
money largely for the construction of rail-
ways. If we are to hold our place with the
rest of the world, I suppose that the mat-
ter of internal communication by means
of railways is one of the greatest possible
moment to us. The first item is 740,000
for a railway from Sydney to Wollongong.
That is a very large sum. The honorable
member (Mr. Lloyd) says "hear." It

350

MR. ROBERTSON.

[[1875.]

was the Government of which the honor-
able gentleman was a member that caused
the survey to be made ; and I should
have thought that he would feel compli-
mented at our making provision for carry-
ing out that which his Government so
well began. But I suppose he was too
busy with other matters to attend to what
the Government was doing, and it may be
that he was not aware of the more ad-
vanced plan of his honorable friend and
colleague, the late Minister for Works
(Mr. Sutherland). The surveys for this
line were made to a large extent under
the auspices of the Government in which
he was Treasurer, and the honorable mem-
ber advanced the money out of the Trea-
surers Advance Account before it was
voted for doing the work ; or at any rate
the work was in the course of being carried
out before the money was voted by Par-
liament for it. But may I inform the
honorable gentleman of another step his
Government took, that they left in their
Draft Estimates a provision for this work
signed I think, "G. A. Lloyd."

ME. LLOYD : I will guarantee that it is
not so.

ME. ROBEBTSON : I will be able to show
the honorable gentleman. His proposal
went about two-thirds the length of ours.
It was I think an estimate for 300,000.
Ours is for 740,000.

ME. LLOYD : I shall believe it when I
see it.

ME. ROBEETSON : I will take good care
that the honorable gentleman does see it.
I do not mean for a moment to say that
we put this sum on the Estimates because
the honorable gentleman opposite did so.
I should be ashamed of myself if I had no
better reason.

MB. PAEKES : I must certainly say we
never placed any sum on the Estimates.
Nor did we consider it. I defy any one
to produce proof of it

ME. ROBEETSON : I find it upon the
Estimates, and I find also what Minister
authorised it to be done. [MB. PAEKES :
Who authorised it?] I will not go into that
now ; but I hold the paper in my hand
signed by his colleague, and the honor-
able member can see if he pleases. How-
ever, it is no use bothering about it,
because I do not rely on it. I rely upon
this Estimate because I think we can

defend it, and because a large number of
people in this community press upon the
the Government to have the work done
people representing every class and
every interest. [Ms. DIBBS : You will
make a job ] Whether that be so or not,
I am going to show reasons which
induced the Government to put this
money on the Estimates. This railway to
Wollongong along the southern coast,
not only would bring into Sydney a
large amount of produce, as other dis-
tricts do, from agricultural industry
and other pursuits, but would be a
means of enabling the people of Sydney
to make residences for themselves in the
country. Beyond all that, too, there
would be, as we believe, a large amount of
coal brought to the deep waters of Sydney
harbour. The reasons I have submitted
are sufficient to induce the Government to
give the Parliament an opportunity of
determining the matter by a specific vote.
I have said that this Government is
desirous of facilitating the trade and com-
merce of the Country, and I say in the
hearing of mercantile men here, that
nothing would so facilitate the trade and
commerce of this Colony, and of Sydney
in particular, as that great ships should
be able at all times to discharge their
cargo, and without going outside the
Heads receive a full cargo of coal. The
freight to this port would then be infinitely
lower than it is now either to Sydney or
to the port of Melbourne, and we should
do much to make Sydney the great entrepdt
of these seas for the purposes of trade and
commerce. It may be said, why cannot
these ships be loaded in Newcastle 1 But
shipowners will not allow their ships to go
from here to Newcastle without a very high
charge. [ME. DIBBS: Don't make state-
ments that are not correct.] His friend was
making a mistake. There is increased risk
in empty vessels going from Sydney to New-
castle, and the Insurance Companies will
soon realise that fact ; at any rate we have
submitted the proposal to be dealt with by
Parliament as one that we did not think
should be refused by us other than through
the Parliament. It has been asked why we
have made no provision for a railway to
Newcastle. Surveys are being carried
out. You cannot make provision on
Estimates until you ascertain the cost.

[1875.]

MR. ROBERTSON.

351

That is an answer to that inquiry. We
propose to extend the railway from Red-
fern into Sydney, at a cost of 170,000,
if carried out according to the plans pro-
posed, which will be laid on the table, and
the House will be asked to vote a loan for
that amount. There is one item which I
hope will secure the support of the honor-
able member for Orange that is the sum
of 619,000 to extend the railway from
Orange to Wellington and Dubbo. [Mr.
NELSON : The best paying line in the
Colony.] I was the first who recom-
mended to Parliament that we should lay
our running so that the Western Railway
should strike the Darling at a suitable
place below Fort Bourke, and thus utilize
the navigable waters of that river. So
long ago as 1861, when I was a member
of a Government consisting of a body of
gentlemen with whom I had been long
associated, and with whom I desired
to continue to be associated, that Cabinet
desired that we should carry a resolution
in Parliament to extend the Southern line
only, for the purpose of securing what is
now called the Riverine trade. That may
have been wise or not wise, but the fact
remains ; I refused to move in the Upper
House a resolution of that kind, which
would indicate that we were going on to a
far greater distance with that line than
any other line in the Colony. I have
always thought the most important and
valuable line was the Western line. That
line passing away into the interior may be
said to be likely to receive tributaries as
waters fall into a great river. On the
one side and on the other side would
traffic fall into a line like that. Whereas
from the Northern and Southern lines no
such great advantage could spring. So
strong was my conviction at that time
that I was right, that I would not commit
myself to a policy of a line going south
beyond Goulburn until a line was carried
to something like an equivalent distance
in the West and that would be found
reported in my speech at the time, though
speeches in the Upper House then, as
now, were not reported so fully as those
delivered in this Chamber. The extension
of the line to Dubbo will be a large in-
crease of distance in a westerly direction.
The distance from Orange to Dubbo, I
think, is about 84 miles. It will aid our

people very much indeed in bringing their
produce to the harbour of Port Jackson.
Then we propose to spend 384,000 on
the extension of the Southern line from
Junee to the deep waters of the Murrum-
bidgee, at Narraiidera. If that be done,
it will enable all the great waters of the
western interior of this country to be used
by vessels in bringing produce to the rail-
way for transport to Sydney. No doubt
it will be desirable to carry the railway
further in that direction. But what we
propose now is to go from the point to
which the extension was sanctioned by the
late Government to the south to the deep
waters of the Murrumbidgee a proposi-
tion which was made many years ago by
the Government of which Sir James
Martin was Premier and I think Mr.
Parkes Colonial Secretary. Our cheaper
coal than that which can be used on the
Victorian lines will do much to counter-
balance the disadvantage of greater dis-
tance from Sydney, especially when it is
remembered that coal can be put on the
train 100 miles south of Sydney. Then
we propose to carry a railway from Tam-
worth to Armidale. Any one who knows
that country knows that some of the best
of our land lies along the table-land of New
England, and that it is a country capable
of producing cereals to almost any extent.
And we hope some day the line will be
extended further. I suppose no one who
knows the district would dispute that
Armidale is one of the most important of
our inland towns, and equal to any at the
same distance from Sydney to the south or
to the west. Well, then again on the
north we propose to carry a railway line
from Werris Creek to Gunnedah on the
Namoi River, and thus tap that great
river, one of the finest of our inland
rivers. Having lived many years, in my
early days, on that river, I think I am
quite well enough informed of its capabili-
ties to know that a large amount of pro-
duction would spring up there. Another
tiling is that the railway will be carried
out at the low rate of 5,000 per mile.
It would be through a country of soft
black soil where it is impossible to make
macadamized roads. There is no material
for the purpose of making ordinary roads.
The cheapest road^would be the railroad.
And we are doing something more, which

352

MR. ROBERTSON.

[1875.]

I dare say very few people are aware of.
In 1836 I travelled between the Namoi
and the Castlereagh Rivers, looking for
sheep land. I passed through a great deal
of bad country, but the only forest I have
ever seen worthy of the name of forest
such forests as we hear of as existing in
other lands lies between those two rivers.
For miles and miles the country is thickly
studded with the finest iron-bark timber,
and in my opinion it is from there that
we shall have to get sleepers for our rail-
ways and timber for our public works. I
regret we are not in a position to lay
before the House a proposal for a railway
through one of our best and most thickly
populated districts the Clarence. I was
very anxious that we should make a pro-
posal for a railway there. But according
to the surveys made it would cost
1,800,000 to carry it 120 miles on to
the table-land, and then it would be 120
miles from the Queensland border. It
would, after the railway had been con-
structed to the table-land, cost .7,000 a
mile to carry it to Tenterfield and Mary-
land. It will, therefore, be seen that a line
by the route surveyed would be very
costly. But surveys are now being made
for a line from Grafton to Tenterfield, by
a route 60 miles nearer the Queensland
border than the present surveyed route,
and we hope at a far less cost, to the table-
land than would be the cost to Glen Innes.
I think the Government would have been
culpable if they had brought down any
proposition for a railway from Grafton to
the New England table-land until we had
seen what could be done with a route
nearer the Border a direct line from
Grafton to Tenterfield. The Clarence is a
district with which I am well acquainted,
and which I have twice represented. And
I hesitate not to say that there is no part of
the country where public money might be
better expended for the purpose of a rail-
way than there. In 1860, the Government
of which I was a member was anxious to
do what it could for the district, and it
proposed a tramway as a means of facil-
itating an interchange of the produce of
the Clarence district and the New England
table-land country. Perhaps the House
did wisely in not accepting the proposal.
For as yet tramways do not seem to
have been very beneficial in this Colony.

But it seems to me that the time has now
come when, as soon as plans exhibiting
the best way of using public money for
the purpose are prepared, the Government,
either the presenter any other Government,
should deal with this matter. I have
shown by the proposals in the Loan
Estimates that the Government is asking
Parliament to authorize the raising
of 3,303,900 by loan ; and this seems to
me to be a convenient time for looking into
our public debt. If honorable gentlemen
will look at the Ways and Means now
before them, they will find that at the end
of 1875 the public debt will be 11,473,
437. We shall have at that time in the
banks, beyond requirements, 1,424,000 ;
the balance outstanding on conditional
purchases will then amount to 4,828,080
in all, 6,252,000 of cash or security
for money. Deduct that from the 11,
473,437, and the whole of our indebtedness
will be found to be 5,221,437, and we
have as public assets Railways and other
Public Works and 175 millions of acres of
public land. But let us look at our posi-
tion from another point of view. We have
rent and interest from Crown Lands, other
than from sales, amounting to 378,500.
I have never been reported correctly by
the press on this matter. The press will
persist in mixing up the produce of sales
Avith rents of Crown Lands. I hope I shall
be reported correctly this time. Then we
shall receive from our railways, clear of
working expenses, 317,000. We shall
therefore receive from these two items
alone an income of 695,500 irrespective
of taxation. Under such circumstances I
do not think the small addition to our
public debt which we propose is at all an
unwise addition. As I have said, we have
independently of taxation, a revenue of
695,500, a sum sufficient to pay the
interest on a debt of 14,000,000 without
drawing one farthing raised by taxation.
It may be said, in fact it has been said a
thousand times, that the conditional pur-
chasers do not pay their balances. Well,
they have already paid a large amount of
their balances, as well as the 25 per cent.
deposit. It hasbeenputforwardinthepress,
and in this House, that the conditional
purchasers would not pay interest on their
balances. They have been traduced in the
most unwarrantable manner. Now let us

[1875.]

MR. ROBERTSON.

353

see about that. I hold in my hand a state-
ment showing the amount received for in-
terest on conditional purchases from 1865,
the first year that any interest was due,
down to 1874. In 1865 they paid 6,548 ;
in 1866, 12,456 ; in 1867, 15,002; in
1868, 18,129;in 1869, 24,360; in 1870,
30,057; in 1871, 38,001 ; in 1872, 45,
676; in 1873, 54,402; and in 1874,
63,344 ; in all there had been paid as in-
terest 307,979. Now honorable members
will probably want to know the deficiency
debt for interest owing by these people,
who had been traduced from one end of the
country to the other. And how much do
honorable members suppose remains unpaid
compared with the enormous sum paid by
those people ? 5,501 9s. 9d. not 2 per
cent, on the aggregate amount due by them
from the first payment to the present
time. The interest has been paid so
regularly that there is scarcely 2 per cent,
in the aggregate remaining unpaid. J
wonder that some of the new land reform-
ers have never made this discovery. That
is a feather in the cap of those people.
[MR. NELSON : They made the discovery
long ago.] Then they kept it all to
themselves. No one ever heard it
exhibited before, either here or else-
where. They know a good deal like the
wise parrot ; they think more than they
express. But they never gave expression to
that. I have no doubt that before I sit down
it will be expected of me to say what course
the Government will pursue with regard
to the banking business. On the 30th
June next our arrangements for the bank-
ing business with the Bank of New Sotith
Wales will terminate, and the time will
come when the Government will be called
upon to take some action with regard to
this matter. We shall have a large amount
of this business, which has grown to an
enormous extent, and a large amount of
surplus money which it has become of the
greatest possible importance to deal with
satisfactorily in regard to the affairs of the
Country. I have given some considerable
attention to this matter, and it is my in-
tention before the close of this Session to
submit to Parliament the course we pro-
pose to pursue with regard to this business.
I think it is a matter of such great mag-
nitude that no Government should enter
upon it behind the back of Parliament, or

without the approbation of Parliament.
And that is the course we will take
with regard to the banking business
and the surplus money. It has been fre-
quently said, and one of our newspapers
seems to devote its leading columns to
make it appear that our Colony is living,
as far as expenditure is concerned, upon
sales of Crown Lands. I shall venture to
give expression to my views upon this
matter, and to explain to the House and
to the country what it seems to me is the
true state of this business. The honora-
ble member for Newcastle, when Colonial
Treasurer, on dealing with our finances on
the 19th November last a little more
than a year ago in a veiy able and elab-
orate and conclusive speech, as it seemed
to me, demolished, up to that time at any
rate, the allegation which had before been
put forward. I commend honorable
members to the perusal of the documents
appended to the printed speech of the
honorable member for Newcastle, Mr.
Lloyd, delivered on the 19th November,
1874. There will be found an elaborate
and carefully prepared exhibit of the whole
question up to that time ; and although I
did not concur in the honorable gentle-
man's remarks entirely, I did so, and I
told him so at the time, in all the substan-
tialities he put forward. I have spoken
on this subject many times, and I have
taken the same line of argument as the
honorable member for Newcastle. I spoke
upon it as long back as 1859, and I have
obtained an extract from a speech I made
in 1861, with which the views propounded
by the honorable member for Newcastle
are at any rate very much in accord of
course, making allowance for the inaccu-
racy of the report, for I was not charged
with the finances 'of the country at the
time, and I could not expect to be fully
reported but my words as reported were
these : " It was not true, as alleged over
and over again" and that newspaper has
from that time to this hammered away at
this, I do not know with what object, but I
do know that it has done infinite injury to
this Colony " It was not true, as had been
alleged over and over again, and particu-
larly by the honorable member for East
Sydney (Mr. Parkes), that the Govern-
ment were using the proceeds of the land
for improper purposes. Those proceeds

354

MR. ROBERTSON.

[1875.]

were applied for permanent public im-
provements, for education, and other appro-
priate purposes, and not one farthing was
applied to any matter to which objection
could fairly be taken. This would be seen
when he informed them how the money
really was expended. The interest on
outstanding debentures, and new loans,
endowments of public institutions, and
municipalities was .206,500. There
was also another small item which
was with equal fairness chargeable
upon the land revenue that was
2,011 for pensions to gentlemen
who had retired from the land service
(consisting chiefly of those who had been
in connection with the Survey Depart-
ment. The schools of the Colony re-
ceived 57,022. It would not be
denied that that was a fair charge
upon the land revenue. Then there were
18,000 for lunatic asylums. He be-
lieved that in America benevolent
asylums and charitable institutions of
every kind were endowed with grants of the
public land. Here we parted with land
for money and gave the society a share of
that money. There was also 2,550 for
grants in aid of public institutions. The
land department in all its branches
amounted to some 200,000 a year.
The management, construction, and main-
tenance of the main roads of the Colony
were set down at 98,623, public build-
ings of a permanent character at 59,702.
Those items, with some smaller matters,
gave a total of 643,188, chargeable on
the land revenue of 1861, and he thought
it could not be denied that they were fairly
chargeable upon that revenue. The in-
come from the public lands as estimated
for 1861 was 455,800. So that every-
thing derived from the lands, and
219,000 besides, raised from taxation,
were expended on matters which were fairly
chargeable on the land revenue. What
then became of the statement honorable
members so frequently and so flippantly
made, that the Government were expend-
ing the proceeds of the land for mere
Governmental matters." Well, sir, I shall
proceed to show in what way these esti-
mates now before Parliament are charge-
able with the use of the proceeds of the
sales of land beyond what it is fair
and reasonable these proceeds should

be expended upon. And I would
here desire to say that suppose this,
land belonged to an individual and
he desired to make it marketable, how
could he do so better than by in-
troducing immigration, by making roads,
by making railways through it, by
cariying postal services and telegraphic
services through it, building court-houses,
and of establishing police for the protection
of those who reside there 1 How could the
land be made more valuable than by these
expenditures ? Many years ago, and the
honorable member for East Sydney, Mr.
Parkes, will well remember, this chamber
had on its benches some of the ablest men who
ever sat here, such men as the Right
Honorable Mr. Lowe, Mr. Wentworth,.
Mr. Richard Windeyer, and a host of
other shining lights. In those days how
many times has Mr. Wentworth, who
ought of all others to know this Country,
how many times has Mr. Wentworth
stated that much of the land in the in-
terior of this country were not worth two
pence per acre. It was true then ; but it
was by these expenditures, of which I
have spoken, that the land has become
habitable by respectable families, and
centres of population have sprung up in
them, and now these lands are sold to an
enormous extent 1,500,000 was re-
ceived this year for land sold at a pound
per acre. I say then that I am quite
warranted, and the honorable member for
Newcastle was quite warranted, in saying
that this large estate was in the
hands of those who would augment the
value of it by the means to which I
have alluded. Now, I will endea-
vour to go through some of these
matters in detail as they stand 011 these
estimates, but before I do so I want to
point out how this land revenue has
grown. I take the time from twenty
years ago, and there is not only a steady
increase of land revenue by way of sales,
but there is also a steady increase in rent.
The income from the sale of lands has
gone on steadily increasing from year to
year. [Mil. NELSON : it has not reached
the maximum yet.] I have never said it
has. I hope it has not. I hope the
honorable gentleman's great grandchildren
will never see the maximum. I hope it
will go on for many years to come. I

[1875.]

MR. ROBERTSON.

believe, arid always have believed, that the
sale of territory, to the extent that we can
sell it, will not reduce our rent in the
aggregate, although doubtless it will re-
duce the rent of particular stations. The
rent steadily increases. The sale of land
takes people into the interior, and they
increase the value of the public estate by
way of rent as well as by way of sales. I
am not so far away in opinion from the
honorable gentleman, only I fancy I have
more experience in the matter, and am
more likely to be cautious with regard to
this land question, so as to keep my foot
on firm ground and avoid the necessity to
retrace my steps. In 1856, when we had
the Colony of Queensland as a part of our
Colony, our land sales were .245,000, and
our land rents 1 25,000. I am speaking
in round numbers. In 1857, still while
Queensland was a part of this Colony, our
land sales were 210,000, and our land
rents ,104,000 ; and that was the last
year's income before I took charge of the
land question. In January of 1858, now
nearly eighteen years ago, I became
Secretary for Lands and Public Works,
and I brought in a bill to augment the
rents to have a fair sent from the public
land ; and in that year we received for
rents 172,000 as against 104,000 in
the year before. We received for sales
in 1858 240,000. In 1859, still with
Queensland attached, we sold land to the
amount of 252,000, and we had rents
232,000. At the end of that year
Queensland was cut off from us. In 1860
we had sales of land amounting to
155,000, and rents 167,000. That
was for the single Colony. In 1861 we had
sales 222,000, and rents 171,000. In
1862 we had sales 212,000, and rents
212,000. In 1863 we had sales
186,000, and rents 187,000. In 1864
we had sales 106,000, and rents
192,000. In 1865 we had sales
202,000, and rents, &c., 323,000. In
1866 we had sales 242,000, and rents,
&c., 295,000. In 1867 we had sales
235,000, and rents, &c., 292,000.
In 1868 we had sales 238,000,
and rents, &c., 290,000. In 1869
we had sales 287,000, and rents,
&c., 285,000. In 1870 we had sales
211,000, and rents, <fcc., 252,000. In
1871 we had sales 2 16,000, and rents, etc.,

264,000. In 1872 we had sales
380,000, and rents, &c., 446,000.
That was during the mineral lease mania.
In 1873 we had sales 774,000, and
rents, &&, 338,000. In 1874 we had
sales 1,000,000, and rents, &c.,
324,000. In 1875 we had sales
1,588,000, and rents, &c., 341,000.
In 1876 we estimate sales 1,495,000,
and rents, <fec., 378,000. Thus after
these twenty years, having received
nearly 7,000,000 for land sold, we
have a rental, &c., from land of
378,000, against a rental of twenty
years before (of the whole country, includ-
ing Queensland), of 125,000. Now
what becomes of all those puny anxieties
put forward day by day that we are
wastefully selling our public land and
destroying our rental ] Our rental is go-
ing on and there is no fear of its
not going on. Our rental is based
now on the fairest principal that ever a
rent was based upon in the world. Dis-
honest men may deal with it, but that
does not afiect the principle of it. It is
all very well for the newspapers and
others to talk of what they have in Vic-
toria ; how much an acre, or how much a
sheep, or something of that kind. Those
who talk like that know little about the
matter. The Colony of Victoria is not to
be compared to our great territory, none
of it is more than 180 miles from the sea-
board, while our lands extend to 800
miles back, and all who think must be
aware that the position of land forms a
great element in determining its rental
value. It is to bring the profits of our
distant land sometimes 800 miles from
Sydney to our sea-board that we desire
to carry the railways further into the in-
terior. It is by these means by roads and
by electric telegraphs by postal service
by the establishment of police of courts
of gaols and last but not least, of schools
that we induce people to go out into
those distant lands and reside, and thus
increase the value of the Crown lands,
not only for the purpose of sale but for
the purpose of rent. I have shown how
the rent has been increasing with the sales
during the last twenty years. I digrooaod
from that part of the matter which I was
discussing, and in which I substantially
agreed with the honorable member for

356

MR. ROBERTSON.

[1875.]

Newcastle, to go into this question about
the sales of our public land, because it is
impossible to continue this discussion in
the manner in which I would like to lay
it before the House without branching
from one part of the subject to another.
It will be found by our Ways and Means
that our gross estimated expenditure for
1876 is 3,917,000, which includes re-
votes for public works 75,200, and refund
of land revenue 50,000, or together
125,200, which, in dealing with the
matter as I propose to do, fairly comes off
the expenditure of 3,917,000 of the
year 1 876, leaving it at 3,791,807. The
estimated revenue, as shown at page 17 of
Ways and Means, will be found to be
4,166,900. If out of this we take
the land sales revenue, viz., 1,545,000,
there will be left a sum of 2,621,900
which is our revenue other than that
derived from land sales. Deducting this
amount from the reduced expenditure of
3,791,807, there remains a difference of
1,169,907, which would require to be
accounted for were land sales revenue
separated from taxation and for revenue
for use of public property. Before show-
ing the expenditure which, in my opinion,
is fairly chargeable to the estimated
receipts from land sales revenue, in conse-
quence of our landed estate, and of
course its selling price, being enhanced
thereby, I desire to read an abstract state-
ment showing the estimated revenue and re-
ceipts for 1876, exclusive of sales of Crown
Lands : Customs, 1,001,600 ; duty on
refined sugar and mollasses, 30,000, duty
on spirits distilled in the Colony, 9,000 ;
gold revenue, 17,100 ; Mint receipts,
14,000; stamps, 50,000; pilotage rates,
harbour dues, and fees, 30,000 ; land
revenue (exclusive of sales), 378,500 ;
rents (exclusive of land), 29,600 ; con-
tributions under the Sheep Diseases Pre-
vention Act of 1866, 12,000 ; fees under
Registration of Brands Act, 1,500 ;
railway receipts, 675,000 ; postage,
112,000; commission on money orders,
4,300; electric telegraph receipts,
48,000 ; licenses, 88,400 ; fees of office,
32,850; fines and forfeitures, 7,200;
miscellaneous, 80,850. Our whole in-
come, therefore, irrespective of land sales,
is thus 2,621,900. Our land sales proper
will be 1,480,000, and balances of

conditional purchases 65,000, or together
1,545,000. Now, in dealing with the
difference of 1,169,907 alluded to, I
have had prepared a rough statement of
certain expenditure included in the Esti-
mates-in-Chief for 1876, which I have
already stated I "considered fairly charge-
able to the estimated receipts from land
sales during same year, as calculated to
to increase the value of our landed estate
and of course its selling price, and from
which I will now read the particulars :
Expenses of the Lands Department, other
than the Occupation Branch, 275,000.
Then there is a provision of 50,000
for immigration; for agricultural societies,
4,000 ; police (one third of the
whole), 52,000 ; gaols ( expenditure
beyond settled districts), 5,200 ; ad-
ministration of justice (ditto), 36,500;
purchase of sites and erection of perma-
nent buildings for public schools, 100,000
I think it is a good exchange to employ
some of the money gained by land sales
on buildings for education not trifling
shanties, but good permanent public build-
ings. For postal services, difference between
revenue and expenditure, 87,000 ;
for the difference between the revenue
and expenditure on telegraphs, and
interest on capital, 48,000; for rail-
ways, construction expenses, 12,448.
With regard to railways I take precisely
the same view as the honorable member
for Newcastle (Mr. Lloyd). I think that
the loss upon railways may fairly be made
a charge upon the land, because the rail-
ways largely increase the value of land.
I have therefore taken 100,000 as in-
terest on loans for railways in excess of
surplus earnings beyond working expenses.
Interest on loans already raised for public
works and buildings, immigration, and
other services of a national and permanent
character less interest, 10,885, saved
on the debentures to be paid off in 1876
to the amount of 735,800 117,353 ;
Public Works and Buildings, Colonial
Architect's Department, 163,220;
Harbours and Rivers Navigation, Public
Works, 35,700 ; and Roads and Bridges,
60,000. These together amount to
1,146,421, which is only 23,486 less
than the difference I have been trying to
account for. Over and above this expen-
diture the land sales revenue gives us the

[1875.]

ME. ROBERTSON.

357

surplus of 249,892, which we estimate
to have at the end of the year 1876, and
that is independent of the balance on the
cumulative surplus of the years 1874 and
1875, which after paying oft' the deben-
tures falling due in 1876 to the amount of
735,800, will be 688,245, By the
Constitution Act it is determined that all
the revenue, including land revenue, shall
form a Consolidated Revenue Fund for
the Colony. I am aware that there are
some persons who take a different view of
the matter, and maintain that our land
revenue should be kept distinct from
revenue derived from taxation and other
receipts fairly chargeable with the ordinary
expenditure of the Government. If
honorable members care however, to refer
to the time when the Honorable Robert
Lowe was a member of the Legislative
Council which occupied these walls, they
will find that he was chairman of a com-
mittee on which were some of the most
distinguished men this Colony has seen ;
and* that committee made it a point to
bring the land sales revenue, and all the
revenue of this Colony, into one Consoli-
dated Revenue Fund ; and any Govern-
ment who, for any fanciful reason, would
go back from that system would take a
very wrong course indeed. Therefore I
say that this land sales revenue can fairly
and properly be expended upon permanent
public works in the Colony, and for
immigration. If the money cannot be
expended in that way, I should like to
know what is to be done with it. It has
been said that I am opposed to immigra-
tion, but that is untrue ; I never was
opposed to immigration. The best regu-
lations that ever we had in this
country, and the only regulations that
ever worked well, were drawn by my
hand, but they were destroyed through
a feeling of wretched bigotry. It
is a scandal upon me, therefore, to say
that I am opposed to immigration.
While I desire to see the population
of our country largely increased, I shall
refuse, as far as ever I have the power, to
use any of our public money for the pur-
pose of bringing down the price of labour,
or for aiding employers to battle against
employed. I have always been opposed
to doing that, and I am not the man to
turn round now upon those opinions. I have

brought forward a bill for the purpose of
making agreements binding in this Colony
wheresoever they may be made, for it has
been held that agreements made out of the
Colony are not binding here. Those there-
fore, who wish to employ people from
abroad can bring them from any place
they please, when that bill passes, pro-
vided it is a place where the Government
has an official, whose duty will be to
certify to the agreements ; and provided
that that officer duly certifies that the
employee was properly informed of
the state of wages in the Colony,
the rates of living, &c., and that
no such agreement shall be for a longer
period than two years. The Government
will not appoint any official to any coun-
try without the knowledge of Parliament;
and it will only be from places where there
is a duly authorized official to certify to
the agreements that people can be brought.
Then those who want to employ men may
make agreements with them and pay to
bring them over here. If employers want
labour they will send for it; if they do not
want it they will not send for it. Then also
we will have the best men coming here,
because employers will not pay the pass-
ages of inferior men. In proposing
.50,000 for immigration, it is not the
object of the Government to interfere
between employer and employed, but to
aid in the colonization of the country. I
think that when married men come to this
country, leaving their wives and families
behind them, the Government might
assist them to come out ; and the same
thing might be done in other cased where
persons came here leaving friends behind
them, or whether or not. My honorable
friend, the Secretary for Works, received
a letter from the chairman of a large
meeting of workmen at Dunedin, in New
Zealand, stating that work could not be
got there, and asking this Government to
give facilities to enable the men to come
here. How can this Government do that?
If agreements such as those I speak of
were legalized, an employer of labour
could bring them here, to the mutual ad-
vantage of employer and employed. When
I was in Melbourne, the other day, I was
beset by people wanting passages to New
South Wales, but I would not interfere
between employer and employed in that

358

MR. ROBERTSON.

[1875.]

way. If agreements made in Victoria
held good here, any one could send for
them. Only the other day Amos Bros,
brought navvies over from Queensland
for their works. But when the navvies
came, they left them and went to work
for other people. I think that is not
right. Wakeford, another railway con-
tractor, brought a number of railway
labourers from Melbourne, and they also
as soon as they came engaged with other
contractors. I suppose they thought they
could do it under the law ; but it is not
fair. It is by the expansive provisions of
such a Bill as the Government have pro-
posed that we shall be able to carry out
all the works in the country, whether pub-
lic or private, by importations from Eng-
land and elsewhere, without doing injustice
to any one. It is by such a measure that
we shall be able to provide for the im-
provement of our country without any
difficulties whatever. No doubt it will
be said advantage will be taken of people
in making these agreements. But as
there will be a Government official ap-
pointed especially for the purpose of
informing them, and certifying on the
agreements that he did so, and as the
agreements will not last more than two
years, I do not think there will be any in-
justice. We must not lag in the race of
progress. We must do all we can to in-
crease our population, and with it our
prosperity. I feel I ought to apologise
for having occupied the attention of the
House at so great a length as I have felt
it my duty to do. I have taken a wider
range in dealing with this question of the
finances than has hitherto been the prac-
tice. I will doubtless be pardoned, from
having so much other work, for not having

managed this deliverance so as to condense
it as it might, if I had possessed ampler
leisure, no doubt have been condensed.
But I have done what I could under the
circumstances in which I have been placed.
I apologize to the House for my deficiencies,
and offer my thanks for the kind considera-
tion honorable members have given me on
one side and on the other while making this
statement of our finances.

MB. PIDDINGTON : Before the honorable
gentleman sits down, I would like to re-
mind him that I have not heard any
explanations with regard to a proposition
for new Stamp Duties.

ME. ROBERTSON : I am very glad the
honorable member mentioned the stamps.
The honorable gentleman, doubtless, alludes
to the 50,000 for 1876 for stamps. There
is, I am informed, 100,000 due to the
Government in connection with the busi-
ness that occurred during the period of
the last Stamp Act. It is the opinion of
the Crown Law Officers that this money
can only be recovered by the Commissioner
for Stamps. All therefore that will be
necessary to recover that sum would be to
pass a law authorizing the appointment of
a Commissioner of Stamps. Now, I am
not about to pretend that that is the kind
of Stamp Act that we talked of introducing,
in the Governor's speech at the opening of
the Session ; but I think, in view of the
strongly expressed opinion of a large num-
ber of members of Parliament that the
Session should not be unnecessarily pro-
longed, that we shall be obliged in spite of
ourselves to do without passing a Stamp
Act this Session. If there is the least
indication that it is the wish of the House
to go on with the Bill it will be proceeded
with.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE ALEXANDER STUART,

made 24th. January, 1877.

LEGISLATIVE ASSEMBLY.

24 January, 1877.

FINANCIAL STATEMENT.

MR. FARNELL : I beg to move that
there be granted to Her Majesty, out of
the Consolidated Revenue Fund, the sum
of .1,733, to meet expenses in connection
with the establishment of His Excellency
the Governor for the year 1877. In
making this motion, sir, I wish to embrace
the opportunity afforded me of making to
the Committee a statement on the financial
position and prospects of the Colony. I
am aware that I may be open to the
adverse criticism of having to some extent
departed from the ordinary practice of
making the Financial Speech before the
close of the year preceding that to which
the Estimates refer ; and yet I would
remind those who feel inclined to take this
view that we are not without precedent
for the course I have adopted several
times since the advent of responsible
Government the Financial Speech has
been delivered as late as the month of
February. Each occasion 110 doubt has
been justified by peculiar circumstances,
and I claim like justification at the present
time. It is not my duty now to delay
you by defending the policy of calling
Parliament together at the late period of
the year at which it commenced its sit-
tings ; that has already been justified to
the satisfaction of the House and I
believe of the country at large ; that very
lateness however has made it a matter of

necessity that the Financial Statement
should be delayed until after the Christ-
mas recess. The Estimates were laid on
the table prior to that recess in order that
the Committee might understand the
amount and specific nature of the supply
which they would be asked to grant for
the expenses of the year, but it would
have ill become me to have forced on the
discussion upon these Estimates before
honorable members had had an opportunity
of maturely considering them. Having
then been thus led by circumstances to
the beginning of the new year, I have
postponed my address until the present
day, irrorder that 1 might have the advan-
tage of dealing with the accounts for 1876
in their entirety, instead of being obliged
to content myself with an estimate only
for the last few weeks of December. This
course, thoiigh it may not satisfy the eager
desire of some, will nevertheless I think
be satisfactory to a large majority of the
Committee. Before entering in detail
upon .the accounts specifically connected
with the years 1876 and 1877, I trust
that the Committee will bear with me
while I take a somewhat wider review of
the general position of the finances of the
Colony, even at the risk of detaining the
Committee for some time. Much has
been said and written 011 the subject
views very opposite in their character
have been promulgated with regard to the
soundness or otherwise of our position
for while some have asserted that we are
only opening out a long vista of bound-
less prosperity in the course of which we
can launch out into whatever extravagance
our prurient fancy may prompt us to

360

MR. STUART.

[1877.]

indulge in, others have not hesitated to
characterize our course as one of a peril-
ously downward character, leading us to
financial ruin, all the more certain because
unheeded, as the poor Canadian boatman
floating onwards in the easy ripple of the
river awakes not to his danger until,
drawn within the whirling vortex of the
rapids, he is unable to stem the tide of
destruction that has set in upon him, and
is engulphed by the mass of waters which
he can no longer control. I hold neither
of these extreme views, but while seeing
before us a future of immense wealth still
to be derived from our valuable Crown
Lands, I am deeply impressed that that
wealth can only become ours by a wise
administration of that which is being
realized, and by a constant watchfulness
against undue expenditure of a useless
and unproductive character, while we
hesitate not to open the hand with a
ready liberality whenever a beneficial
result may be expected to flow from such
a course. I have therefore felt not only
that it was my duty, but that this Com-
mittee had a right to expect of me that,
in laying these matters before you, I
should not confine my remarks to the
present year, but should endeavour to take
a comprehensive review of the whole
situation. Statistics are proverbially dry
and uninteresting, but as I am exceedingly
anxious that every member of this Com-
mittee (as well as many of the public
outside), whether agreeing with me or not
in the deductions which i make, should
clearly understand the national accounts,
which somehow or other, although in my
opinion clearly enough stated in the form
in which they are issued from the .Trea-
sury, are so often garbled, confused, or
misunderstood by those who will not take
the trouble to master them, or who will
not seek the explanation or advice of those
who do understand them, it will be my
endeavour to place these accounts before
you as clearly and intelligently as I can,
and to relieve my statement as much as
possible from being a set of mere dull
statistical tables. As a help towards this
desirable end, I will, in dealing with the
figures, speak of them by the nearest
thousand or hundred, instead of cumber-
ing my speech and confusing the Com-
mittee with the smaller pounds shillings

and pence, which will, however, as a matter
of course, appear in the accounts to be laid
before you. If the total amount of money
received into the Treasury during the past
year were really the annual produce of the
national estate (whether of land or of the
right of taxation, or charge for services
rendered) my task would be comparatively
an easy one. The complex character,
however, not only of the income but also
of the expenditure, surrounds the whole
subject with considerable difficulty ; nay,
I might go farther, and say that the diffi-
culty is immeasurably increased by the
complex nature of the very functions of
the Government itself, being not only the
governing body charged with the adminis-
tration of law and preservation of peace,
but being, in virtue of its ownership of
the Railways, the grand purveyor for the
travelling convenience of the public and
the caterer for its pleasure excursions ; and
being, over and above all this, the owner
and administrator of an enormous domain,
which not only yields a large annual income
or revenue, but comprises an estate eagerly
sought for by willing purchasers, and
which brings by its gradual alienation a
large sum annually into the Treasury of the
Colony. I regard the national income
(and here I do not use the word income
in the restricted sense of annual profit,
but as comprising the whole of the money
which annually finds its way into the
Treasury for the public benefit) as being
derived from several entirely distinct
sources, and in this view it is to be re-
gretted that the necessary adherence to
our Constitution Act compels us to call it
all by the generic name of " Consolidated
Revenue," in place of apportioning it
under its distinct heads, to each of which
might have allotted its specific expendi-
ture. Could such a course have been
adopted, the tendency to confused notions
upon the position of our finances might
have been to a great degree avoided, and
we should have better understood the
exact position of the national resources,
assets, and liabilities. Kor is it the in-
come alone that is thus complex in its
character, but the expenditure follows the
same rule, and requires to be as carefully
examined and sifted before we can arrive
at a correct appreciation of the true posi-
tion of our finances. We must endeavour

[1877.]

MR. STUART.

361

to ascertain or estimate what portion of
that expenditure is due to the ingathering
of our extraordinary, or what I may per-
haps more conveniently call our abnormal
income, and how much would still be
justifiable and necessary were we confined
to those sources of income which are more
ordinarily classed under the general title
of revenue, as in the mother country and
elsewhere. I purpose now so to analyse
the accounts as to bring the main features
into such prominence as will enable all
who choose to examine for themselves, to
see them cleared of much of what appears
to many persons the mystification which
now surrounds them. With this view I
would divide the revenue into two main
divisions or heads, viz. : 1. The revenue
proper, or ordinary income, derived from
(1.) Taxation ; which embraces (a.)
Customs and other taxation of an indirect
character, (b.) Stamps, licenses, and other
taxation of direct character. (2.) Charges
for services performed, which embraces
receipts from (a.) Railways. (6.) Post-
age, telegraphs, pilotage, fees of office, &c.
(3.) The annual return, from, or usufruct
of, the great landed estate of the nation ;
and this I would also subdivide into
(a.) Rental, grass right, and mining occu-
pation of the unalienated estate. (6.) In-
terest on credit pqrtions of conditional
pur-chases, which really is only another form
of grass right, and is pure annual income.
(4.) Receipts of a miscellaneous nature.
2. The extraordinary revenue, or proceeds
of land sales which, though the Constitu-
tion Act provides that it shall be included
in the consolidated revenue, is, strictly
speaking, not revenue at all, but the
realization of part of the national capital.
To have a clear understanding of this
head it is requisite to subdivide it thus :
(a.) Sales of land made for cash, in which
the operation is at once completed. (6.)
Sales for a cash deposit with credit,
limited or unlimited, for the remain-
der, but subject to annual payment of
interest, whether alone as under the Land
Act of 1861, or amalgamated with the
principal as under the Amendment Act of
1875. But even this analysis, although in
the main representing one of the grand
divisions of our annual revenue, requires
some modification before it can be received
as a settlement of the position, otherwise

we would be led to a conclusion from
which the error has not been entirely
eliminated, and Avhich therefore would be
no safe or trustworthy guide for a com-
prehensive summary of the financial
condition of the Colony. I therefore press
upon the Committee the following con-
siderations with regard to land sales :
"We have been continuously selling land
from the introduction of responsible
government, and even long anterior there-
to, to the present time. Up to the end of
1873 these land sales averaged about a
quarter-of-a-million annually, although
liable to considerable fluctuation. Com-
mencing in 1856 with 245,000, receding
in 1864, a year of general depression, to
106,000, recovering in 1869 to 287,000,
and in 1872 reaching 380,000. Since
then a rapid development of land sales
has taken place amounting in 1873 to
774,000, 1874 to 1,048,000, 1875 to
1,627,000, 1876 to 2,250,000. This
rapid increase in the sales of land demands
our most grave attention ; for it is evident
to the veriest tyro in finance that if the
whole of this money were to be absorbed
in the ordinary expenditure of the country
we must sooner or later arrive at the miser-
able condition of that man who, having
inherited a noble patrimony, regulated his
expenditure on so extravagant a scale as
not only to absorb the annual income of
his estate but to necessitate his palling
with his ancestral domain, and then when
reduced to a state of beggary, looking for
commiseration found only condemnation
for his folly. On the other hand, those
who contend that the whole of the realiza-
tions should go in reduction of the
national debt, or be invested in sinking
fund, or in reproductive works, while not
erring so widely as the others, would in
my opinion be throwing too heavy a bur-
den on the present generation for the
benefitof thefuture. In thisasinmany other
things, it appears to me that the via media
between these extreme views affords the
most just solution to the question, and
that it is necessary to make certain fair
and reasonable deductions from the gross
amounts received, and then having found
what the surplus from these extra land
sales really is, trace out how it has been
spent, and how far, in pui-Miing siu-h
course of expenditure, a departure has

362

MR. STUART.

[1877.]

been made from those wise axioms which
govern the science of political economy.
And first, as I once before observed when
I had an opportunity of speaking on the
finances of the country, we are justified in
deducting from the annual land sales an
amount equivalent to the average sales
which have taken place ever since the
commencement of Responsible Govern-
ment, and which having been actually in
operation for a long course of years, were
foreseen and provided for in the Consti-
tution Act, and were thereby intended
and directed to form part of the
general or consolidated revenue of the
Colony. Such sales we have seen averaged
nearly a quarter of a million annually be-
tween the years 1856 and 1873; but in
applying them to subsequent years it is
more in accordance with the nature of our
inquiry that we ascertain what proportion
these sales bore to the population. We
may divide the period into two intervals
of nine years each. For the first nine years
the population averaged 346,315, and the
land sales 205,500, or about 12s. per
head per annum ; in the second nine years
the population averaged 485,450, and the
land sales 320,000, or 13s. 4d. per head ;
applying therefore a medium rate (say
12s. 6d.) to the population of 1874, '75,
and '76, we get the following result as
that which we may call the normal amount
of land sales such as would have in the
ordinary course without having such ex-
traordinary sales become merged in the
ordinary revenue without note or com-
ment, and strictly in accordance with the
provisions of the Constitution Act, viz. :

Population.

At rate of 12s. Gd.
per head gives a
land sale of

1874 584,278 365,000

1875 606,652 379,000

1876 628,000 392,500

1877 probably 650,000 406,250

amounts which we might naturally expect
would have been realized even if there
had been no extraordinary demand for
land, and which, without question or
comment, would have passed the consoli-
dated revenue fund, and have been ab-
sorbed in the ordinary expenditure. In
arriving, therefore, at a conclusion as to
the surplus or excess of land sales during
these three years, we must deduct from
the net sales the above as the ordinary

measure of sale ; nor is there anything
unreasonable in this, for it is just about
equal to the sum annually spent in open-
ing up the country by preliminary sur-
veying, pushing on roads and bridges, and
other means of communication, of which
not only we but those who succeed us
will reap the benefit. It is unnecessary to
pursue the inquiry into the actual amounts
thus expended, but they will be found fully
equal to this portion of the land sales. I
desire not to be misunderstood with regard
to this 12s. 6d. rate; I do not mean to
say that such rate is to be always main-
tained, I merely say that as yet nothing
has occurred to render it necessary or
desirable to make a rate different from
that which has obtained for twenty years
and more. I can easily understand that
a sudden development of our population
might render it necessary to review this
rate, but as yet I do not see that any
such contingency has arisen ; it may be-
come a question for the future whether a
fixed sum instead of a population propor-
tionate sum be taken as the representative
of the normal land sale of the year. In
further elucidation of the subject, I would
say that I look upon the public estate in
much the same light as the estate of a
private individual ; to a great extent the
same laws are applicable to its governance,
and when these laws are applied corre-
sponding results will be produced there-
from. The owner of a large private estate
in some part of a country remote from the
busy haunts of man, desirous of attracting
population to settle on his land, and of
realizing ifc to the best advantage, must
needs lay out large sums of money on its
improvement, and especially in roads,
bridges, and other means of opening up
the country and rendering it attractive in
the eyes of those whom he desires to allure
as purchasers. This he may do either by
borrowing, with the intention of repaying
at some future time, when his estate shall
have been rendered productive, or by an-
nually selling portions of the property,
and spending the proceeds in the improve-
ment of the remainder ; and although such
outlay may not always bring in direct or
immediate money returns, it may never-
theless be in the highest degree reproduc-
tive, inasmuch as the estate, although
smaller, may yet be rendered more

[1877.]

MR. STUART.

363

profitable, and become more attractive in
the eyes of purchasers, and the remainder
actually of itself more valuable. In one be
respect, and that a very important one,
however, the parallel fails. The vendor
of a private estate ceases to have any
further interest in or obligation in respect
of the property which he has alienated ;
not so the Government : it has still duties
to perform in connection with the alienated
land, and it has still an income to be de-
rived from it indirect it may be, but not
the less positive, inasmuch as the increased
population furnishes the most thoroughly
reproductive return that can be devised,
a return which marches onward in an end-
less series of progression, owing to its
capacity for taxation, a capacity which it
possesses in proportion to the attractive-
ness and productiveness of the country,
and to the facility of transport by good
roads or other means of communication,
as well as by post, telegraph, and other
appliances, which, as the blessings atten-
dant in the train of civilization, follow a
people contented, prosperous, and free.
Again, before we can ascertain the actual
proceeds of the land sales, we must deduct
the increased expenditure in the Lands
Department, rendered necessary by these
very sales, and without which the money
we have obtained from the property could
not have been realized. I find that in
comparison with the year 1871 (and I
have taken that year because it was the
last that was wholly undisturbed by the
increasing demand for surveys, which began
to set in about the end of 1872) the ex-
penditure of the department has year by
year increased as the sales have progressed,
until in the year 1876 that increase stands
at the large sum of 212,000. The chief
item of increase is in the surveying of the
land, and of the roads thereto, which
either precedes or follows the sale, and
which amounts to no less a sam than
154,000, while the greater part of the
remaining increase arises from the com-
mission on the larger sales, and from the
necessary expense of examining into the
fulfilment of conditions and the valuation
of improvements. These latter expenses
will in some degree be met however by
forfeitures by reason of the non-fulfilment
of conditions, which, though they formed
part of the money received, do not add to

the acreage of land alienated. In applying
these principles I am fortunately not
obliged to go back many years in my
investigation, for the honorable member
for Newcastle (Mr. Lloyd) submitted a
tabular statement, made up to the end of
1873, showing what, in his opinion, wa&
the position of the land revenue at that
date in reference to the entire revenue of'
the Colony. That honorable gentleman
made out that, in his opinion, the land
revenue, embracing the period from the
year 1860 to the end of 1873, was in debt
to the general revenue of the Colony in
the sum of 410,848. While I am thus
indebted to my honorable friend opposite
for the valuable aid which his compilation
has afforded me, I regret that I am unable
to agree with him in the result at which
he has arrived. I think that, in endeavour-
ing to separate the two funds, he has charged
against the land revenue items of expendi-
ture which were a fair charge against the
ordinary revenue ; of course the effect of
that would be to bring the land fund into
debt to the general revenue. I am not
going to weary you with the details of"
these amounts ; but I think the honorable
gentleman misconceived the nature of the
inquiry in this respect, as he included in
the statement which he submitted to the
House the annual rental of the public lands
as well as the proceeds of sales during the
period embraced in the return. His state-
ment, therefore, not only shows what was
the amount of our Land sales, but the
annual revenue derived from the rental or
grass rights. I think, however, that the
amount of grass rental is as fair an item
of annual income as any other item of our
ordinary revenue. It is no part whatever
of the corpus of the estate : it is only
that which is given off from it which we
have a right to use. I look upon the land
as an endowment given to us by a pater-
nal Government when it was considered
we could walk, alone. We have therefore
a perfect right to use for ordinary expendi-
ture the entire annual yield of that endow-
ment I care not by what name it is called,
whether grass right, rental, interest upon
balances due by conditional purchases, or
interest upon the proceeds temporarily
lodged with the banks. If we choose to
deposit the proceeds of Land sales in a
bank, and get interest upon them, that

364

MR. STUART.

[1877.]

interest is just as much a part of the usu-
fruct of the estate as any other part, and
we have a perfect right to spend it. More
than this : I say we have a right to use
these proceeds for the purpose of defray-
ing expenditure in connection with the
land itself. We have also a right to spend
any portion of our Land sales revenue
upon the permanent improvement of the
country. I will give a single illustration :
A part of the country far removed say
out westward would acquire greater
value if roads and bridges were made
through it. It may be an exceedingly
valuable piece of land of great fertility,
with great powers of production but by
its position cut off in every possible way
from communication with the rest of the
country ; or it may be of such a nature
that, although it may grow magnificent
herbage, still cattle and sheep could not
be kept there for want of water. In either
of these cases, if the Government of the
day were to expend money in making
roads to and through the land and in con-
structing bridges or in making wells or
tanks for supplying stock with water, then
I say the Government would have a per-
fect right to sell a portion of that land
and apply the proceeds in payment of
these improvements which had rendered
it available for occupation, and had made
the remainder more valuable than the
whole was before it was thus improved.
Thus we have a right to take such portion
of our Land sales as may be found requisite
for carrying out works of a character which
render the country more habitable, and
which open up a larger area of land more
suitable for settlement. These are the
very arguments which were so ably
used by the author of the Wakefield sys-
tem. I am not going into the merits or
demerits of that system now ; although it
may have had its weak points it had this
merit : it recognized and appreciated the
principle that wherever you take a piece
of waste land and expend money to make
it more valuable, you have a right to
charge that land in some way or other
with the expense. According to this
theory a price or charge may be put upon
the land in order to recoup the expense of
making roads, bridges, and other improve-
ments through it. That portion of Mr.
Wakefield's system showed great wisdom,

and it is that which we have a right to
carry out. When we sell our lands we
have a right to put aside a portion of the
proceeds, either to make roads and bridges,
or to repay the country for making them
if already made. Applying therefore
these principles to the investigation of the
statement of the honorable member for
Newcastle, to which I have alluded, and
by which he made out that at the end of
1873 the land fund was indebted to the
general revenue in the sum of 410,000,
I have come to the conclusion that if the
honorable member for Newcastle had re-
versed his position he would have been
nearer the truth. If instead of tellingus that
at the end of 1 8 7 3 the land fund was indebted
in that amount to the general revenue
he had told us that the general revenue
was indebted to the land fund he would
have been, in my opinion, nearer the mark.
Though affording an interesting matter of
investigation, it is not worth while our
now pausing to pursue that inquiry further.
My chief object in alluding to it was to
obtain a starting-point, and it is compara-
tively immaterial whether at that particular-
date Mr. Lloyd's view of the Land fund
being indebted to the general revenue is
correct, or whether mine of the exact re-
verse is the more accurate representation.
Inasmuch, however, as we both are agreed
that we had a surplus of about three-
quarters of a million on one account or
the other, or in combination of both, it
appears to me to be more prudent for us
to assume as the basis of our further in-
vestigations that at the close of 1873 half
a million of that surplus had arisen from
the sales of land, and is therefore respon-
sible for the burdens which it may be con-
sidered that such land fund should bear.
It will therefore be my endeavour to trace
out as nearly as I can the subsequent
realizations and expenditure incident to
that fund for the years 1874, '75, and '76,
with a view to ascertain the net amount
brought to the accretion of the Consoli-
dated Revenue Fund from the realizations
of the alienated portions of the national
estate. With regard to the necessarily
increased expenditure in the Lands de-
partment, the following table shows, for
the period under review, the growth of that
expenditure in excess of the year 1871,
leaving out the items under the heads of

[1877.]

MR. STUART.

365

Of which there
belongs to the
Occupation and
other branches.

4,376
12,583
15,298

miscellaneous, gold, and coal fields ; the
first having no relation to the subject of in-
Total increase of the
Year. Department above the
Expenditure of 1871.

1874 79,828

1875 164,378

1876 211,823

It does not at present fall within my pro-
vince to inquire whether these expenses
were all absolutely necessary, or whether
any more rigid economy might have been
practised in regard to them, or whether
they are in any or what degree excessive.
I have no doubt that when the adminis-
tration of land comes under discussion my
honorable colleague in charge of that de-
partment will be able to satisfy the com-
mittee on these points. All that I need
now say is that I am not at all surprised
that it .should be so, for it is exactly what
one would have predicted concerning it,
and indeed from the very nature of things
it could not be otherwise, since we have had
to survey nearly 3,000,000 acres in 1876,
as against 440,000 in 1 871. It may be true

vestigation, and the two latter having been
transferred to the Department of Mines:

Leaving 1 as appli-
cable to the
sales of Land.

Of which the in-
crease in the
Survey alone
represents.

63,778
133,322
154,261

75,452
151,825
196,535

increase is shown in proportion to the lands
sold, but the explanation is simple ; for in-
stance, in Queensland, although the Go-
vernment department conducts the survey,
the purchasers are by statute compelled to
pay for it. In other words, the Government
of Queensland charges a lower price per acre
for the land, and compels the purchaser to
pay the cost of survey, while in this Colony
we charge a higher price and include the
survey, and thus it is that there is no such
apparent increase tothestaff of theirdepart-
meiit as appears in ours as a charge against
the Consolidated Revenue. In proceeding
with the analysis of the revenue derived
from the sales of land, I commence with the
amount which I have thus assumed as hav-
ing been realized prior to 31st December,
1873, viz., 500,000, and I add thereto:

that in the adjoining colonies no such

Net Land Sales of 1874 ... 1,047,696

Less that which I have explained as representing; the

equivalent of the Normal Sales 365,000

and the additional Departmental Expenses ... ... 75,482

441,482

Net Land Sales of 1875 1,627,613

Less as before

Normal Sales 379,000

Additional Departmental Expenses ... ... ... 151,825

530,825

Net Land Sales of 1876 2,250,457

Less as before

Normal Sales 392,500

Additional Departmental Expenses 196,535

589,035

606,214

1,096,788

Thus we find that including the half-
million brought from 1873 the sum of
3,864,424, or nearly four millions, have
been added to our Consolidated Revenue
Fund during these three years from land
sales, outside the ordinary or normal pro-
portion of revenue derived from that
source for the prior portion of the twenty
years which have elapsed since the intro-
duction of responsible government, and, as
might be shown, if we pursued the subject
further, long anterior thereto. The ques-

1,661,422

3,864,424

tion arises, what have we done with this
large sum of money ? Have we frittered
it away and, if so, how much of it in
the annual current expenditure of an
ordinary character for keeping the State
machine in motion ? Or have we made a
profitable use of it in. paying oft' our debt,
or in the formation of works of a repro-
ductive character ? Or have we any, and
how much, of it still on hand available for
any of these purposes 1 Although some-
what intricate, it is by no means impossible

366

MR. STUART.

[1877.]

to trace out with a tolerable degree of
accuracy the proportion in which these
objects respectively have had a share in
the absorption of this surplus, and I will
now endeavor to show how much has been
allotted to each. 1. As to the debt paid
off there has been under the Super-
annuation Act Repeal Act of 1873,
98,400; of Treasury Bills finally ex-
tinguished in 1874, 334,000.

ME. LLOYD : Why, we paid them.

MR. STUART : I am now showing
Mr. Farnell, what the country has done,
not what any particular Government has
done. It is the country that has realized
this money by land sales. I suppose the
honorable member will next claim the
land sales also. I am surprised at the
remark of the honorable member, for I am
investigating what the country has done
with the money realized during the three
years I have alluded to the years of
large land sales, and I care not who held
office during the period. Neither the one
Government nor the other is entitled to
the credit of them. These land sales were
the result of circumstances far beyond the
mere question of holding office. They are
indications of the progress of events in
which the Colony has participated, and still
continues to participate, irrespective alto-
gether of the Government in power, now
or formerly. "Well, sir, I was saying that
there were Treasury Bills paid off in 1874,
amounting to 334,600, and debentures
under the Act 29 Victoria, paid off in
1875, to the amount of 51,500; old
debentures under various Acts in 1876,
735,800, and sundry small purchases of
debentures, under a special Act in con-
nection with a subject that formed matter
for discussion some time ago I mean the
Mudgee road amounting to 9,000.
Then there have been three years redemp-
tion of debentures under the Railway Loan
Act, payable by annual drawings of 20, 000,
amounting to 69,500. Thus, by an
expenditure of 1,302,800, we I don't
mean by we the particular Government of
which I am an individual member but
we the country have during those years
made the best use of our money a use
which no one can say is frittering it away.
It is true that the first item, 98,400,
never existed as a debenture debt. The
Act authorized the required amount to be

raised by loan, but my predecessor, Mr.
Lloyd, finding himself with a growing
Treasury, very wisely determined to pay
the obligations at once, and thus obviate
the necessity for issuing debentures or
otherwise borrowing the money. The
Treasury Bills constituted a floating debt
which was also, I think, wisely redeemed
out of the growing revenue accruing from
sales of land. It must be noted, however,
that Avhereas I have assumed the balance
of land sales on 31st December, 1873, to
have been 500,000, the total balance
was 725,574, so that the difference, viz.,
225,574, although forming part of what
might be called the ordinary revenue,
was equally liable to be taken for payment
of the then existing debt, such as Treasury
Bills, and falls therefore to be deducted
from the total amount of debt paid off,
which leaves 1,077,226 as the proportion
paid out of land sales. The next thing
that we have done with our money is,
that we have postponed the borrowing of
certain loans for purposes authorized under
various Acts, while at the same time the
works themselves have been carried out
and paid for to a considerable extent,
although they have not yet entirely
exhausted such advances. We have thus
advanced to the following Loan Funds :
38 Victoria No. 2, 600,000 ; 39 Victoria,
No, 18, 125,000; 40 Victoria, No. 12,
50,000; in all 775,000. If at any time
the House should determine to make a
permanent investment or appropriation of
these funds, the above amount would be
recouped by the sale of the debentures
which have been authorized. It is how-
ever a very convenient way of temporarily
using our funds, as it saves interest
and improves our credit by showing
our power of abstention from borrow-
ing large sums for considerable periods.
Again, we have large cash balances on
deposit with our bankers, or otherwise in-
vested, amounting to no less a sum than
2,938,089. There is no item in our
finances more persistently misunderstood
and misrepresented than this large cash
balance ; the very possession of it has
been by some deemed almost criminal, or
at least highly injurious. Now, even
were it all surplus revenue or proceeds of
land sales, I would fail to look upon it as
injurious. On the contraiy, inasmuch as

[1877.]

MR. STUART.

367

no portion of this money has sprung from
taxation, I consider that next to having no
debt at all, it would be a most desirable
thing to have so large a sum of money in
reserve, and invested for the purpose of
paying off some portion of the debt, or
ready to stave off the necessity for further
borrowing, or to be appropriated for the
carrying out of public works of a national
character. In reality, however, this large
temporarily invested sum is composed of
many distinct elements, some of which we
have no right to use for any permanent
purpose. For instance, 708,687 of it
belongs to various loan accounts, awaiting
the completion of contracts, or otherwise
carrying out the works authorized Of
course it may not have been wise to
borrow these moneys so long before they
were required, but former Governments
and Parliaments doubtless acted for what
appeared then to be for the best, for no
one could have foreseen the wonderful
extent and rapidity of the increased
demand for land ; but once having bor-
rowed that money, there can be neither
sin nor harm in lending it at interest
pending its being required ; 011 the
contrary, it would be very injudicious
indeed as well as highly improper were we
either to spend these moneys on other
objects or wrap them in a napkin unpro-
ductively. Then, again, 283,595 belongs
to various trust funds, which are merely
held by the State in safe custody, and
which are in effect in precisely the same
position as the deposits in a bank. They
may be used properly enough to bring in
an annual income or interest, but they
ought not to be used for any other
purpose, and therefore they form proper,
though in some degree permanent, funds
1. Roads and Bridges :

Year.

1871
1874
1875
1876

Population.

519,182
584,278
606,652
628,000

Expenditure.

164,636
283,414
366,062
442,814

2. Public Works and Buildings :

1871 49,106

1874 155,532

1875 181,449

1876 510,722

for loan to, or deposit with, the Banks of
the Colony. Again, there are the appro-
priations which are as yet unspent, or
which are in the course of being spent, as
the various works or services for which
they were voted approach completion, and
which cannot be used for any other pur-
poses: These are for 1874, 7,633; 1875,
67,761 ; 1876, 889,791; supplementary,
1876, 76,705; debentures not yet pre-
sented, 6,000 ; total, 1,046,890. De-
ducting these three sums, which together
make 2,039,172, from the total cash
balance of 2,938,089, we find that only
898,917 of that cash balance belongs to
the surplus proceeds of land sales. Tabu-
lating the sums thus accounted for, we
find that of the net proceeds of the land
sales realized during these three years, viz.,
3,866,574, we have paid off debts to the
amount of 1,077,226 ; we have advanced
to loan account and thus deferred bor-
rowing, 775,000 ; we have in the Banks,
as part of the cash balance, 898,917 ;
total, 2,751,143 ; leaving still to be ac-
counted for 1,115,431. It becomes now
our duty to investigate whether any and
how much of that sum has been invested
in works of a character for which, without
these large land sales, we must have
borrowed, and which, following out the
practice of former years, and of other
colonies, we would have been justified in
borrowing. The following are the heads
of expenditure to which we naturally turn
for some explanation : 1, Roads and
Bridges ; 2, Public Works and Buildings ;
3, Public Instruction; 4, Immigration.
I take again as my unit, or standard of
expenditure, the year 1871, in comparison
with which I find the expenditure of the
three last years to have been as follows :

Relative Expenditure

to Population
would have been

Excess of actual
Expenditure over
such relative rate.

185,278
192,373
199,142

55,263

57,378

409,399

98,136
173,689
243,672

515,497

100,269

124,071
401,323

625,663

' 50,000 has been added to the relative expenditure under this item to bring these items more in accord with the
general progress of the ordinary revenue.

368

MR STUART.

[1877.]

3. Public Instruction
1871

1874

1875

1876

4. Immigration :
1876

110,000
120.000
180,000
250,000

123,792
128,532
'183,055

Total.

47,676
66,945

114,621

50,000

1,305,781

I do not lay it down dogmatically that
every penny of this 1,305,781 excess on
the expenditure under these four heads has
necessarily been paid out of the proceeds
of the land sales, but I do maintain
most emphatically that the greater por-
tion of it has been, and that had we
not had these large land sales we would
not have imposed an annual taxation upon
ourselves for the payment of these services,
but would either have left them undone or
would have raised the money by loan to
enable them to be carried out. It is diffi-
cult, and at the best but arbitrary, to fix
exactly which works are to be defrayed
from revenue and which from loan; but if
any one will examine the schedule I hold
in my hand, which specifies on the one
hand some of the works that in former

years were provided for by loan, and on
the other those for which provision has been
made on the General Estimates of the last
three years, he cannot fail to be convinced
that we have been defraying out of the
Consolidated Revenue Fund in other
words, out of the excessive land sales
large amounts which under the condition of
things that formerly obtained would have
been defrayed from loans. This is perhaps
made still more clear if we examine the
years 1871, '72, and '73 (during the last
of which increased expenditure was begin-
ning to make headway) with the three
subsequent year sunder the same four heads.
The gross land sales during these two
periodswere first three years, 1,370,532 ;
second three years, 4,886,525. The ex-
penditure under the four heads was

First three years. Second three years.

Roads and Bridges
Public Works
Public Instruction
Immigration . . .

575,741
220,090
340,000

1,080,443
770,288
550,000

Excesa during
second period.

504,702

550,198

210,000

50,000

showing that we have spent, or are in pro-
cess of spending, 1,314,900 on account
of the second three years more than during
the first under these four heads of ex-
penditure. I may be asked why include
public instruction in your list"? It may
be said we can understand roads, bridges,
public works, and even immigration being
fair subjects for loan, and that the burden
of them may be in some measure thrown
upon the future ; but surely if we are
bound to educate our children, we are
bound to do so out of current revenue, and
not out of either loans or land sales? This
would be perfectly true if the expenditure
represented only the education of the
children of the present generation, but
seeing that it includes also the purchase
of sites, and the cost of building teachers'

dwellings and school-houses in which our
children have not in many cases as yet
been taught, but in which both they and
the children of yet unborn generations
may be taught for many years to come, it
is only reasonable that, to the extent, at
the least, of the cost of these buildings
and sites, either these future generations
should be burdened as by loan, or that the
cost of such buildings should be defrayed
from that Land Fund which is the common
heritage of all. Without further occupy-
ing the time and patience of the Commit-
tee, I claim to have conclusively shown
that the ordinary expenditure, other than
such extra expenditure as has been ren-
dered necessary to obtain or to retain the
very sales themselves, of these three years,
has not materially encroached upon them

* 50,000 has been added to the relative expenditure under this item to bring these items more in accord with the
general progress of the ordinary revenue.

[1877.]

MR. STUART.

.369

except to the same average extent that it
has done ever since the introduction of
responsible Government, or, as I have said,
for a period long anterior thereto. If it
be contended that even to this extent we
have no right to intrude our expenditure,
b\it that we oxight to increase our taxation
to replace it, then it seems to me that there
is no halting ground on which such theorists
can stop, short of imposing a taxation to
cover the whole amount of land sales from
1856 to 1873, or about four and a half
millions ; for assuredly if it be wrong so
wrong as to call for a refund from fresh
taxation for us to use for ordinary ex-
penditure 379,000 of land sales in 1875,
it must have been equally wrong to make
the same use of 252,000 in 1859, or of
287,000 in 18G9, and for these sums, and
all similarly appropriated eveiy year, resti-
tution should be made ; and yet I think
that even those who are loudest in their
denunciations against the Government for
their conduct in spending the one, will not
be found bold enough to advocate the posi-
tion to which I have thus incontestibly
shown that their ai-gument must lead them.
I think that members of the Committee
who have followed the argument which I
have endeavoured, however feebly, to place
before them, will be convinced how unjust
it is to this great colony, how unnecessarily
detrimental to its good credit, for persons,
without bestowing due care on the analy-
ses of the accounts of our income and ex-
penditure, to be persistently crying out
out that we are recklessly spending for
our ordinary daily wants the proceeds of
our National Estate, which we are thus,
they say, wantonly casting to the winds,
when, if they will but honestly investigate
I mean by honestly, without endeavour-
ing to force the proof of a foregone conclu-
sion by leaving out or misplacing certain
terms in the equation they must see that
the whole of the excess of our land sales
have been used 1. For the extra expen-
diture necessarily connected therewith, and
which would gradually disappear from our
Estimates if the land sales themselves
were to disappear. 2. For payment of
our debts ; for postponing the necessity
for contracting new debt ; and for works
of utility and public character, for which
heretofore we have invariably been obliged
to borrow. I have said enough with

regard to the general review of the past,
and I will now beg the patient hearing
of the Committee while I take up the
accounts which more immediately concern
us in considering the Ways and Means
for the present year. These accounts
necessarily embrace a period of three years.
I will run shortly over the first two. The
first, as you will notice, is an account of
revenue and expenditure for 1875. My
honorable friend at the head of the Gov-
ernment, when acting as Colonial Trea-
surer, placed before the Committee an
account "for 1875 which was to some ex-
tent, only an estimate for that year, as it-
included the actual receipts up to the 31st
October only, and estimated the revenue
for the remaining two months. I now
place this account before you, corrected by
actual results. In the first place, the
balance brought over from the year 1874
is 15,557 8s. lOd. more than had been
previously estimated, which arises chiefly
from the lapsing of appropriations that
had then been reserved for expenditure. The
actual revenue of the year 1875 exceeded
my honorable colleague's estimate by
77,387 11s. 3d. Then again, certain
appropriations have been written off
finally, amounting to 340,913, which my
honorable friend had estimated at only
200,000, Therefore, 140,913 13s. 6d.
comes in to swell the balance. The fol-
lowing additional charges have however to
be deducted : 1. Supplementary appro-
priations in excess of the amount esti-
mated in December, 1875, 32,096 10s.
2. Further special appropriations, 4,607
Os. 4d. 3. Amount of a further supple-
mentary estimate for 1875 and previous
years, 4,242 Is. 3d., together amount-
ing to 40,945 11s. 7d. The result of
this corrected account is, that instead
of a surplus of 1,424,045 2s. 7d., as
estimated by my honorable friend, there
is now one of 1,616,958 4s. 7d. I
think, then, that 1875 may be con-
sidered tolerably well closed. I have just
one word more to say with regard to that
year : I wish to apply the test as to how
much of the money derived from land sales
has been spent. As I said before, the
land sales for 1875 were 1,627,000. I
stated that of this I considered 1,096,000
as reasonably coming to the accretion of
the Consolidated Revenue Fund. How

370

MR. STUART.

[1877.]

was that spent"? It was spent in this
way : The surplus is thereby rendered
706,000 more than it otherwise would
have been. Debentures were paid off in
that year to the extent of 74,700 ; Roads
and Bridges, Public Works, and Educa-
tion absorbed 345,436 over and above
our average expenditure of past years, so
that the total expenditure (inclusive of the
balance of 706,000) for purposes not
chargeable to the ordinary revenue was
1,126,000, or 29,000 more than the
amount received for the land sales. Con-
sequently, the investigation of that year's
account proves that no portion of the
excess derived from land sales has been
spent on any purpose of a merely tem-
porary or ephemeral character. I now
proceed to deal with the account for the
year 1876. If you will turn with me to
No. 2 account on the next page, you will
see that 1876 commenced with a balance
from the previous year of 1,61 6, 958. The
revenue for that particular year was esti-
mated by Mr. Robertson at 4,166,900.
It has, however, actually turned out to
be 5,037,661, being 870,761 in excess
of his estimate. Then, on the other side,
there are appropriations to the amount of
322,203 more than Mr. Robertson esti-
mated. The adjustment of the various
accounts show this : that whereas Mr.
Robertson estimated that at the end of
1876 there would be a surplus of
938,137, the surplus is now found to be
1,679,608, or 741,471 in excess of the
estimate then made. Of course, not
having increased our taxation, this large
increase is the result of the continuance
of land sales to an extent far beyond
what any one considered to be possible.
The gross land sales amounted to
2,414,075, of which there has been
refunded 163,600, leaving the net
receipts at 2,250,475. The additional
expense for survey amounted to 194,385,
and what I call the normal sales that is,
the amount which I consider may be
fairly taken from that particular year for
the purpose of ordinary revenue to
392,500. This reduces the total to
1,663,590 as the amount of benefit-which
the revenue derived from the excess land
sales. How then is this sum accounted
for 1 In this way : There is an increase
in the balance to the credit of the account

of 62,650; 760,100 of debentures have
been paid off; for new bridges, 243,672
has been spent in excess of previous
average'; for Public Works. 401.323;
for School Buildings, 66,945 ; and for
Immigration, 50,000; which, together
with a balance from 1875 of 29,692,
makes a total of 1,614,382 ; thus show-
ing a sum within 49,000 of the amount
got from the land sales of that particular
year. Therefore, again, we find that the
accounts of the year 1876 show that the
proceeds of our large land sales have been
spent in paying off our debts, or on works
of public utility for opening up the vast
resources of the country. To show that
the works were of a permanent character,
I have jotted down a few of them, and it
will be seen that they are works which
should not be met out of the ordinary
revenue. For the navigation of the River
Murrumbidgee, 10,000 ; south dyke at
Clarence River, 10,000; Trial Bay,
Harbour of Refuge, 10,000 ; draining
Blackwattle Swamp, 9,000 ; steam
dredge, Clarence River, 8,000 ; Darling
River improvements, 7,000 ; Moruya
River improvements, 5,000 ; Rushcutter
Bay, reclaiming 23 acres, 5,000 ; Darling
Harbour, 5,100. There are other minor
votes on the Estimates for Harbours and
Rivers Navigation, amounting to 27,000.
Then there is a sum of 12,000 for a
bridge over the Shoalhaven River ; bridges
at Balranald, 10,000; Muswellbrook,
15,000; Munginda and Goondiwindi,
5,000, Queensland paying like sum ;
Denman, Merriwa, 6,500 ; Bundarra,
6,000 ; Gostwyck, 4,000 ; Cambewarra,
2,000 ; Sooly Ponds, 2,000 ; Molonglo,
2,000; Namoi, 2,500, water supply
to Gulgong, 3,000 ; Balranald Road,
2,000 ; Lachlan Road, 2,000 ; bridge,
Lachlan to Darling, 9,466 ; Karouah,
3,440; Bega, 2,967 ; and so forth. I
mention thes& to show the nature of the
works that are being constructed. The
expenditure on many of them will
necessarily be spread over a period of
years, and they are all of a character
which in former years would have
demanded that they should be paid from
money raised by loan. We are, however,
fortunately in this position : we no longer
require to carry out these works by loan,
as they can now with propriety be defrayed

[1877.]

MR. STUART.

371

from the proceeds of our land sales, and
yet must not be confounded with our
necessary ordinary expenditure. I now
pass from the year 1876, and take up the
Estimates for the present year. We start
with an estimated surplus brought forward
of 1,679,608 17s. 7d., and I estimate the
revenue for 1877 at the sum of 4,908,410,
the details of which I will go into imme-
diately. You will observe, in turning to
the expenditure side of the account, that
the estimated charges for general services
amount to 3,357,234 ; those provided by
constitutional and Colonial Acts, to
47,718 ; and the special appropriations
to 837,000, making a total of
4,241,952. Included, however, in this
amount is the 60,000 for the Treasurer's
advance account ; deducting that sum, as
it is not for final outlay, the total esti-
mated expenditure for 1877 amounts to
4,181,952, which taken from the credit
side leaves an estimated accumulated
surplus at the end of the year of
2,406,606 lls. lid. If honorable mem-
bers will now turn to page 17 of the
Ways and Means, they will find the
particulars of the revenue which I put
down as 4,908,410. Of that sum I
estimate the Customs and other revenue
to be raised by taxation, at 1,240,250, as
against 1,161,406 in the previous year.
Then of land revenue the sales last year
were 2,414,075. They are estimated
this year at 2,080,000, and I confess it
is exceedingly difficult, nay, almost im-
possible, for any one to estimate with any
degree of exactness what the lands sales
will be. Of course, to a certain extent,
we -may be able to form some idea, but
there are so many causes affecting these
large land sales, over which we have com-
paratively little control, that it is im-
possible for us to place that degree of
reliance upon the Estimates of this part of
our income which we can do upon the
estimates of Customs or any other ordinary
source of general revenue. For instance,
with regard to land sales, the amount
which is coming in during the present
month is larger than we have ever had
before. The amount received as proceeds
of sales for the first three weeks of this
year is 130,000 more than the amount
received in the corresponding period of
last year. The land sales estimate

embraces, of course, sales of every kind,
but nothing but sales. If you turn to
page 18 you will find the details of this
portion of the land revenue for 1877. We
estimate the auction sales at 1,250,000 ;
selections after auction, 100,000 ; pro-
visional pre-emptive right sales, 150,000 ;
deposits 011 conditional purchases,
500,000 ; instalments of conditional
purchases which include both principal
and interest, but for this purpose we only
take that portion which appertains to
principal we estimate at 15,000;
balances of conditional purchases, 65,000;
making a total of 2,080,000. One word
more on the subject of these land sales :
None of us can estimate with anything
like certainty the amount which they will
realize, nor can any one say at what period
these sales will have attained their maxi-
mum, when they will begin to recede, or to
what extent they will recede. But we may
say this : that if it be the case, as I believe I
have shown that it is the case, that we are
not using the proceeds of our land sales in
meeting our ordinary expenditure or in
supplying our daily wants, then we are in
a good position to bear the reverse when
it does come. If we are spending the
whole proceeds in paying off our debts, or
in staving off borrowing for public works,
or on works which are necessary to open
up the land itself, then we have the very
best provision made for meeting the re-
verse when it does arise ; because we can
then drop back into the position that we
were in formerly ; we need no longer pay
off the debt, nor make advances in order
to postpone the borrowing of money which
we have already authorized to be bor-
rowed ; and we shall have recourse again,
as we have had before, to raising loans for
works of utility and permanent improve-
ment. But while no one can predict the
amount our land sales will reach, nor
when they will cease, so no one will I
think maintain the position that they will
suddenly fall Should it be, as I believe
it will be, a gradual reduction a falling
away by degrees then by having all these
provisions between us and the land sales
we shall be able to meet the fall without
involving the country either in new taxa-
tion or pecuniary difficulty. That at all
events is my opinion on this important
matter. I come now to the annual land

372

MR. STUART.

[1877.]

revenue, which you will find on page 17.
This is estimated for 1877 at 408,825,
as against 358,925 last year. In this
estimate you will observe the increase is
chiefly in the interest upon conditional
purchases. Every year is adding largely
to that item. The amount we received in
the year 1875 was 65,000; last year it
reached 99,000 and some odd hundreds.
For this year we estimate it at the in-
creased sum of 130,000. In the follow-
ing year I believe it will amount to a very
much larger sum, and for this reason :
that in 1878 the interest on the sales of
1875 begins to come in, and the balances
on the sales of that year amount to
1,200,000, which at 5 per cent, would be
60,000. I have only added, it will be
observed, 30,000 for interest on the
balances for 1877, because it is in the
power of any of those purchasers to pay
up their balances. Balances have already
been paid up to the extent of about
370,000 altogether, and they continue
to come in every year to a considerable
extent. This year we estimate to get
65,000 ; last year we got 61,700 from
this source. Pastoral occupation we esti-
mate will bring in 237,225. While, on
the one hand our pastoral tenants are
having their runs in part taken away by
selection on the other their leases are
gradually falling in. A good many will
fall in this year ; and we anticipate an in-
creased rental under the new appraise-
ments which must take place, and without
any undue pressure upon that very valu-
able portion of our community, owing
largely, no doubt, to the keen competition
amongst themselves, and their just appre-
ciation of the great benefits they receive
in their holding the lands of the Colony.
The next group to which I shall refer is
that of receipts for services rendered,
which we estimate at 1,039,000, as
against 965,328 last year. This in-
crease is chiefly in the item of railway
receipts. We estimate that we shall get
77,000 from railways over and above the
receipts from that source during 1876 ;
and I think that, notwithstanding the
reduction in rates which recently took
place a reduction for which in some
quarters the Government has been very
much blamed notwithstanding that re-
duction, I say no one can look at the

increased freights on the railway without
feeling convinced that we are justified in
expecting this additional sum of 77,000
from this source. And here I desire to
make a few remarks on the subject of rail-
ways : We estimate the sum of 745,000
as receipts from railways ; and the ex-
penditure we put down at 429,000 ; but
it will be found that this expenditure in-
cludes 30,000, which, although on capital
account, we propose to pay out of our
ordinary revenue, instead of borrowing
the amount. This sum, and 11,121 for
the engineering establishment of works in
progress, which is clearly a charge on
capital account, although for years past
paid from revenue, reduces the actual ex-
penses to 388,272, and leaves 356,728
as the estimated net return from railways
in 1877. Now the amount spent upon
railways up to the present time is
8,596,000 ; but about 600,000 of that
has been expended upon works not yet
opened. No doubt these works will be
opened some time during the present year;
at least it is to be hoped so. But the
revenue for 1877 cannot in any great
degree gain by these extensions which
will be to Tarn worth on the north, Wagga
Wagga on the south, and Orange on the
west. As therefore the money spent
upon these lines cannot contribute much
to the revenue of 1877, I am, I think,
near the mark in assuming eight millions
as the actual cost of the lines, which will
be reproductive during this year ; and, in-
asmuch as our estimate of free income is
arrived at after deducting all the probable
working expenses including provision for
the maintenance of the permanent way for
the whole of the lines, and for keeping in
an efficient state all the rolling stock
this net revenue of 356,000 is a clear
return upon the capital invested. Well,
eight millions at 4| per cent, would be
360,000 ; so that we are within a frac-
tion of paying a return of 4^ per cent,
upon the capital invested in our railways.
I only mention this because I consider it
a very satisfactory result of our railway
system up to the present time. And
more than this, we find that every addi-
tion to our lines, whether to the south,
the north, or the west every addition I
say, adds to our income from railways.
Even if a particular extension, say 20 or

[1877.]

MR. STUART.

373

50 miles, does not pay of itself, yet, as
nearly the whole of the produc passing
over it would also pass over say 150 or
200 miles of a .completed line, it adds to
the free income of the whole, and, of
course, to the interest we are likely to
receive from this great national under-
taking. I therefore look upon our railway
system as a most hopeful one, and the
faster we can extend our railways in the
directions we are now pushing them, the
sooner, I think, we shall receive 5 or
even 6 per cent, on the capital invested,
instead of the 4i per cent. I have shown
they are now paying ; or what may be
considered an equivalent, we should be
able to reduce the fares still further. Of
course I am not advocating a reduction of
fares to the exclusion of a fair interest on
the money invested ; but in one way or
the other the community will benefit by
the extension of our railways, and when
they are further extended I believe that
the increase in their revenue will be large
in proportion to the additional mileage.
I will now apply the same test to these
estimated accounts of 1877 that I have
applied to all the others. The gross
land sales are estimated to amount to
2,080,000; from this have however to
be deducted 1. Estimated amount of re-
funds, 100,000 ; 2. Normal land sales on
population basis, 406,250 ; 3. Additional
expenses of the Lands Department con-
sequent on the larger land sales, 245,000 ;
total, 651,250 ; leaving an estimated net
revenue of 1,328,750, which we propose
to appropriate in this way : On immi-
gration, 100,000 ; on public works,
446,000 over and above those in pro-
gress ; 70,000 on further buildings for
education, and those two small sums I have
referred to in connection with railways,
amounting to 41,121. Thus we propose
to use 657,000 for purposes, not for our
day to day expenditure, or to keep the
machinery of Government moving, but for
immigration, public works, and public
schools, besides carrying forward a balance
of 672,000 to meet our debt as soon as
we can induce our creditors to accept pay-
ment. In this way we account for the
whole of the proceeds that we expect to
receive from the land sales of 1877.
Now, I will just apply another test to show
that we are not spending the proceeds of

land sales on our ordinary requirements.
There are certain divisions of revenue
which leave a large amount from which to
defray the general expenditure after pro-
viding for their own special expenses.
These are 1. Taxation direct and in-
direct, 1,240,250, less expense of collec-
tion, 49,526, leaving a net sum of
1,190,724. 2. Annual land revenue, in-
cluding the interest on conditional pur-
chases, 408,825 ; less cost of collection,
52,404 ; total, 356,421 ; to which have
to be added the normal land sales on popu-
lation basis, 406,250, making together
762,671. 3. Railway receipts, 745, 000;
less working expenses, 429,393 ; but from
which falls to be deducted a charge on capi-
tal account, 30,000, and engineer's estab-
lishment for works in progress, 11,121
41,121 388,272, showing thereby a
net balance of 356,728. 4. Fees" of
office, 39,975. 5. Miscellaneous receipts,
including bank interest, 139,835 ; mak-
ing together a clear revenue from these
sources of 2,489,933 available for gene-
ral expenditure. On the other hand there
are several departments whose revenue
does not pay the expenses necessary to
their maintenance. The Post Office de-
partment, for instance, does not pay. It
will cost, according to the Estimates for this
year, about 94,000 more than our post-
age will come to. In a country like this,
of such vast interior, the twopenny post-
age, say for sending a letter from here to
Bourka, does not pay in a money point of
view, but we consider that it pays in
another way. I believe that the greater
the postal facilities of the country are the
greater the benefits that follow, and there-
fore I think that, as a community, we may
justify the direct loss. Then there is the
Telegraph department, with an income of
60,000 and an estimated expenditure of
84,000 ; but there is another aspect with
regard to telegraphs : their construction
cost a large sum of money, which has been
raised by loan, while the Post Office con-
tracts are annually paid out of our ordi-
nary revenue. Our telegraphs cost inte-
rest on the capital invested, which is close
upon 400,000, so that we not only get
no interest on that, but are actually sup-
porting GUI- present telegraphic system at
an expense to the country of 24,000
more than it brings in, and yet there are

374

MR. STUART.

[1877.]

few people who would like to see the de-
partment abolished because it does not
pay. There are some other departments
and services that very nearly pay ex-
penses, but I am sorry to say that neither
the Mint nor the gold escort have done so
for the last two years. The Mint very
nearly pays. It costs annually ,15,000
and returns in fees about 12,000, and
the escort costs 5,200 and returns
.3,000. In addition to the fees paid in
by the Mint, the unexpended balances of
the annual endowment of 15,000 are
always returned by the Imperial Govern-
ment. These balances average 2,500 a
year. Our gold-field friends will not, I
presume, object to place the gold duties
against the losses on these services. The
pilotage for the last year and apparently
for this year also, does not pay : the ex-
penses of the Marine Board are 36,000,
and the receipts pilotage, &c., 30,000.
The assessment 011 sheep and the registra-
tion of brands, I would impress upon the
minds of my squatting friends, show a
deficit. [Several voices : Abolish them
altogether.] Well, at all events, it is of
no use carrying them on at a loss to the
country as at present. Those services
that do not pay show a loss in the
aggregate of 133,954, which, deducted
from the amount of taxation and receipts
for services rendered, leaves 2,355.979
to meet the proposed expenditure which is
not otherwise provided for. The total
estimated expenditure as shown by the
account for 1877 with Ways and Means
is 4,181,952. Deducting therefrom the
expenses already included in the specific
items which I have given amounting
to 1,880,410, there is left 2,301,542
of expenditure to meet which the items
of revenue before stated are available.
This leaves 54,436 of a surplus, which
added to the surplus of 672,021 from
the excessive land sales, makes 726,457,
which is the estimated balance shown by
the Ways and Means account to be added
to the balance at the end of 1877 by the
operations of that year. Except such sums
as are required for the proposed Civil Service
Superannuation Fund and the Police Fund,
it is the intention of the Government
pending the opportunity being opened for
paying off any portion of our debt, to de-
vote this balance (by way of advance) to

the payment of those public works which
have been authorized by Parliament to be
defrayed from loans, and thus postpone
the necessity for borrowing the money.
With regard to the surplus on the ordi-
nary revenue there is one item which we
propose to submit to you, and that is the
increases to the Civil Servants in connec-
tion with the Bill now before the House
an increase which I estimate at 36,000,
and which can be met out of the 54,000
of surplus which I have shown to exist
upon the ordinary revenue. There is
another amount connected with the Civil
Service Bill : I find that the estimated
amount of deductions alluded to in one
of the clauses of the Bill, and which it
is proposed to transfer to the Superannua-
tion Fund, comes to 65,000. In. addi-
tion to that there were deductions made at
the same time from the pay of the Police
Force amounting to 15,000. I purpose
submitting a Bill to remodel the Police
Superannuation Fund, which has been
going back so much for years past as to
render it doubtful whether it is now sol-
vent. In the Bill I propose to submit it
will be provided that the 15,000 de-
ducted from the Police Force shall be
transferred to the credit of that fund.
These two sums, which together amount
to 80,000, I propose shall be paid out of
the surplus on the Consolidated Revenue
Fund. Then again there will be a large
additional expenditure required if the
Municipal Bills are carried. Of course
these Bills which have yet to come under
discussion may be modified, but it is
my duty to deal with them now as if
they had passed in their present condition,
and leave the modification or upsetting of
them to be a matter to be decided here-
after. The amount payable to the muni-
cipalities will probably increase the pre-
sent annual charge on the revenue by the
sum of 35,000, which is provided for
in the Estimates, but there will also be
a considerable sum to pay in order to
equalize the old with the new Munici-
palities. That amount it is impossible to
ascertain with accuracy until the various
Municipalities send in their accounts.
Whatever it be, I propose that it form a
charge on our surplus balance. I will not
take up the time of the Committee by going
into the various loan accounts, as I will

[1877.]

MR. STUART.

375

place in the hands of honorable members at
the close of my speech an explanatory
statement not only of those accounts we
have been considering, but of the whole of
the loan and Trust Fund accounts, which I
commend to their careful study. I pass
on to the consideration of the items under
the head of taxation. It must be appar-
ent to every one who considers the subject
of taxation at all, and who has been
watching the progress of our taxation
through the Customs that the time is com-
ing if it has not already arrived, it is at
all events coming when the consideration
will be forced upon us either of subjecting
various items from which we have hitherto
derived a revenue through the Custom
House to some other kind of taxation, or
of giving up or abandoning the practice of
looking to the Customs duties for so large
a portion of the revenue as that which
they now yield. I take the particular
items in the order in which they stand in
the account : The item of spirits is the
only one in the whole of the list which
continues to pay the same revenue in pro-
portion to population that it did five years
ago. The duty on spirits in 1872 was
368,000. The population has increased
one-fifth since then, and in proportion the
revenue from spirits ought to produce
442,300, and we find that it actually pro-
duced in 1876 442,000. So that spirits
have given us an increase proportionate to
the increase of our population. In like
manner, if there were no counteracting
influence at work we should have had the
same rate of increase on other articles, be-
cause I am not aware that any theory can
be advanced of a lessening consumption of
any other article in the present tariff. I
could have understood that owing to the able
advocacy of those gentlemen who consci-
entiously and persistently advocate the
abandonment of intoxicating liquor, the
consumption of spirits might have decreas-
ed ; but when we find every other item of
Customs taxation falling off, then we must
look for the causes to which that falling off
can be traced. Sugar has enormously de-
creased. I find that whereas we got in
1872, 46,800 of revenue from sugar, we
are now getting only 40,000, although
our population having increased one-fifth
we ought to have got 56,000. The
reason is that sugar is rapidly taking its

place as one of the products of the country
and Colonial grown sugar pays as yet no
revenue. Then in regard to ale and beer :
Whereas in 1872 we received 38,000 of
Customs revenue, we now receive only
35,000 ; and tracing it out I find that
during the last six months we have not
been receiving at a rate of over 30,000 a
year, when we ought to be receiving
46,000, taking the population as a basis.
We have only to look around, and we see
that every here and there large buildings
are going up as Colonial breweries. I am
not sorry to see Colonial industry pro-
gressing in various ways ; but I feel it to
be my duty as the Minister charged with
the revenue of the country to point out to
the Committee that causes are at work
which are undermining our revenue from
those articles which heretofore we have
always considered as those we have a fair
right to look to as a support of part of the
revenue of the country.

An HON. MEMBER : You get a little
more on malt.

MR. STUART : We get about 3,000 on
malt and about 2,000 on hops. Then I
find respecting the revenue on tobacco,
that whereas we received in 1872 74,369,
we are now only receiving precisely the
same amount. Well, of course the reason
of that is obvious. The Colonial growth,
which is very considerable, is taking the
place of the other. Manufacturers are
also so anxious to convince smokers that
nothing but the pure American can eman-
ate from their factories that we find it
difficult to trace what becomes of the
Colonial. But I have compiled from the
Statistical Register a return of the tobacco
said to have been grown in the Colony
during the last ten years, and I find that
though it is liable to fluctuations there
have been two years during the last ten
when the crops have been very low the
average of the ten years gives a growth of
436,000 Ibs. per annum. I suppose that
was expended in smoke j but at all events
none of it has found its way to the enrich-
ment of the revenue. Well, it will be in
the recollection of the Committee that last
year when my honorable friend at the head
of the Government made his Financial
Statement he proposed, and intended to
make, an alteration in the tobacco duties.
That alteration was strongly opposed by

376

MR. STUART.

[1877.1

some, and when I had the honor of taking
a seat in the. Government of the Country,
I had a, meeting with the manufacturers
and found, upon looking into the matter
closely, that it was a subject that demanded
more attention and thought than could be
given to it at that particular moment. It
will be remembered that in reply to a
question on the subject I stated that it
was not the intention of the Government
to proceed with the proposed alterations
in the tobacco duties that year because we
felt that it was a matter which required
more consideration, and we consequently
withdrew the proposed duties with the
expressed intention of bringing the matter
forward again on the present occasion.
Well, if honorable members will look at
the particulars under the head of Customs,
they will find .15,000 added to the duty
on tobacco, which just brings it up to the
proportion of our population, taking the
year 1872 as a basis. The proposal which
I have now to suggest, and which I intend
to bring forward with regard to this item,
is that tobacco manufacturers should carry
on their operations under bond in precisely
the same way as the Colonial distillers
carry on theirs that there should be a
duty of 9d. per Ib. levied at the Custom
House upon all foreign leaf cleared from
bond, that is, transferred from the bonded
warehouse to the factories, and then that
there should be a duty upon the manu-
factured weight of 6d. per Ib. levied upon
all manufactured tobacco leaving the
factories, and as a necessary consequence,
because I do not propose to disturb the
present differential rate between manu-
factured and unmanufactured tobacco,
that there should be an additional duty of
3d. per Ib. upon all manufactured tobacco
imported. Imported manufactured tobacco
at present pays 2s. per Ib. I propose that
the duty should be 2s. 3d. Imported leaf
pays Is. per Ib. ; I propose that it should
pay a Customs duty of 9d. for leave to
transfer it into the manufacturing bond,
and that 6d. per Ib. should be paid upon
everything that comes out of these manu-
facturing bonds in the shape of manu-
factured tobacco. We heard last year a
great deal about the weight of tobacco
being increased in the process of manu-
facture. A very large amount was stated
as the increase, but upon investigation

that increase dwindled down very consider-
ably. Whatever the increase may be,
however, the Government will, under the
present proposal, get the 6d. a Ib. upon it.
Many of the manufacturers, however, tell
us they never touch Colonial tobacco. If
they insist that they do not, then my reply
to them is we do not tax Colonial tobacco ;
but if they do use it, as I believe they do,
then it will pay perhaps not 6d. a Ib., but
such proportion as 6d. per Ib. on manu-
factured tobacco bears to the unmanufac-
tured weight.

ME. DIBBS : Then it will increase the
valtfe of manufactured Colonial tobacco
sold as such.

ME. STUAET : Then I will be very glad
to see Colonial tobacco sold as Colonial to-
bacco. I think one of the most disgraceful
things we have heard in this House was
the exposure of the practice which exists
here of selling goods under false brands
that have been registered under the Trades
Marks Act of this Colony.

ME. McELHONE : Some of our merchants
have made fortunes at it though.

ME. STUAET : We are not here to
speak of what our merchants do. I sup-
pose the merchants of this community are
just as honorable in their avocations as
other men are in theirs. To return to my
proposals : they are, I believe, founded on
justice. A slight portion of the duty may
fall upon the manufacturer, a certain por-
tion on the producer, and a certain portion
on the consumer, so that if the duty be
divided amongst those three classes it will
be, I think, a very equitable tax. But the
day is fast approaching when, whoever
may hold the office of Colonial Treasurer,
will have to consider not only what shall
be done with the tobacco, but what shall
be done with the sugar, the beer, and the
wine manufactured in the Colony, and
also with respect to kerosene, of which an
honorable member reminds me, for there
can be no doubt that the duty on that
article is a clear instance of protection.
Our Colonial-manufactured kerosene is
protected to the amount of 6d. per gallon.
I am not now considering whether that
ought or ought not to be ; I am merely
pointing it out as a subject which must
shortly be taken into consideration. I
have now to make a few remarks on the
other portion of the subject brought

[1877.]

MB. STUART.

377

forward last year by my honorable colleague
at tlie head of the Government, namely,
the duties which he proposed to remit. I
propose to submit nearly the same list,
comprising fifteen or sixteen articles, the
duty on which amounts to about ,20,000.
I consider that when I withdrew the
tobacco-duties last year, I also withdrew
the list of articles which he proposed to
exempt from duty ; and as I now re-
submit the tobacco proposal in a modified
form, so also I re-submit the list of other
articles in a modified form. The chief of
those articles is salt. I cannot recapitu-
late all the arguments used in favour of
the remission of this tax, but there are
many persons in the community who hold
the free use of salt to be a blessing and a
necessity for the preservation of cattle
and sheep on poor country, and they con-
sequently desire to have it free of taxa-
tion. The list I propose is as follows :
Bacon and hams, biscuits, blue, maizena
and corn-flour, cordage and rope, ginger,
gunny-bags, mustard, paper (writing and
fancy), sago, salt and saltpetre, sashes,
shot, soda crystals, and spices.

MR. PIDDINGTON : Have you not in-
cluded shutters?

MR. STUART : No ; but I think they
ought to be included, as no revenue is
derived from them, and therefore the name
of the article ought not to encumber our
statute book. The only articles in the list
prepared by my honorable friend which I
have not seen my way to agree to are oil-
men's stores, vinegar, and timber in-
cluding, of course, doors, for we could not
be so unjust as to take the duty off doors
while we allowed it to remain on the raw
material timber. These items amount to
11,000, and I cannot see that there would
be any gain to the community commensu-
rate with the loss of that revenue ; there-
fore I have allowed the duty to remain.

MR. FITZPATRICK : What will be the
increased revenue from tobacco ?

MR. STUART : I estimate it at 20,000
a year, but I have put 15,000 in my
Ways and Means, because we cannot col-
lect all the duty this year.

MR. WATSON : When will you take off
the duties 1

MR. STUART : I propose proceeding with
the question of duties at the earliest
possible moment. The only other matter

on which I would say a word is one to
which I have given a great deal of con-
sideration I mean the consolidation of
our public debt. The public debt of the
Colony amounts to 11,759,000; about
nine millions of which bear interest at the
rate of 5 per cent., and the remainder at
4. Our 4 per cent, debentures are at the
present time quoted at 98 to 99 in London.
Of course, if we had the power of paying
off our 5 per cent, debentures, there would
be no hesitation about immediately paying
them off and taking a loan at 4 per cent.,
even if we had to consent to some reduc-
tion on the recent quotation. But with
- the exception of a small amount of inter-
minables which we have the option of
paying off in 1882, we cannot pay off our
5 per cent, debentures without the consent
of the holders until 1888, and then only
by degrees. But it would be profitable
for this country if we could prevail on
the holders of our 5 per cent, debentures
to take 4 per cent, debentures, with a
bonus added, in exchange. I have been
in communication with persons in London
who are well acquainted with the state of
the money market there, and I believe
that before long I may be in a position to
place before this House for its approval a
scheme by which holders of our 5 per
cent, debentures will have the option of
taking 4 per cent, debentures in lieu at a
rate that will be a considerable benefit to
the Colony. There are portions of our
5 per cent, loan which at the present
moment do not realize a very high pre-
mium in London. For instance, the
holders of the loan known as the Million
Railway Loan, owing to the uncertainty
of the term of investment for honorable
members may remember that the amount
is being gradually extinguished by annual
drawings would exchange for a 4 per
cent, loan on terms favourable to this
Colony. The scheme which I have en-
deavoured to foreshadow would have this
effect : although we cannot force the
holders to exchange their present bonds
for others, yet every year there will be a
greater desire on the part of the holders
of our 5 per cent, securities to exchange,
because, as the time approaches for their
payment, they will only get the net
amount, and it will be easier therefore to
deal with them. But I think the time

MB. STUART.

[1877.]

has arrived -when -we ought to give them
an opportunity of changing their invest-
ment. We would, of course, have to give
more of the 4 per cents, in exchange for
the 5 per cents. ; but if the holders of
.90 of 5 per cents, would exchange for
100 of 4 per cents., then this country
would be a gainer throughout the forty
years supposing the loan extended over
that period of nearly f per cent, per
annum ; and f per cent, on a debt of
eight millions would amount to about
60,000 a year. Having, I am afraid,
wearied you almost to exhaustion, I have
only in conclusion to thank you

ME. T. G. DANGAR : What about the -
stamps ?

MR. STUART : I am glad the honorable
member has reminded me, as I had for-
gotten to refer to the stamps. The esti-
mate of Stamp Duties is precisely the
same as that entered upon last year's ac-
counts. It is not new taxation, but
simply a question of debt alleged to be
.due by certain parties or certain estates to
the Colony ; and I consider that I would
have been extremely negligent in my duty,
as custodian of the finances of the country,
if I had allowed any portion of that sum
to be written off without the consent of
Parliament. Of course Parliament has
the right to forgive this debt or that due
by Queensland, or any other debt due to
the Government under any circumstances,
but I feel that in again bringing it for-
ward I have only discharged my duty. I
have now only to thank you for the very
patient hearing you have given me.

MR. WATSON asked the Colonial Trea-
surer if it was his intention to have these
new duties collected to-morrow. If so, it
would be a great hardship. Some time
should be allowed for those who have
large stocks to get rid of them before the
duties are altered.

MR. LORD said it would be contrary to
law to make this change to-morrow.

MR. STUART : The honorable member
has misunderstood me. I said I would
take the earliest opportunity of submitting
the matter to the House.

MR. PIDDINGTON and MR. HOSKINS
asked the Colonial Treasurer if he would
have the details of the appropriations he
had referred to printed and distributed
among honorable members.

MR. STUART : What I stated was
that there were appropriations of Parlia-
ment amounting to 1,046,890 for certain
services which had not yet been spent, and
that this sum formed a portion of the
2,938,000 which on the 31st December
last was in the banks. In the papers
which I have laid before the House the
particulars of the outstanding liabilities of
1875 are given in the Statement marked
C, page 25. For* the year 1874 there are
appropriations still retained for expendi-
ture to the amount of 7,633. There
were also appropriations of 1876 to the
extent of 1,149,791 not yet expended, of
which it was estimated 260,000 would
not be required. The particulars of these
sums I will have printed and distributed
as a supplement to the Ways and Means.

MR. LLOYD desired to ask the Colonial
Treasurer what he proposed to do with the
surplus of 2,406,000 at the end of 1877.

MR, STUART : There are certain de-
ductions proposed to be made from that
amount, and I propose to apply the rest
to those public works for which loans have
already been sanctioned such works
chiefly railways as are provided for in
the Loan Act of last year, to the amount
of nearly three millions, which loan I do
not propose to place upon the market as
long as we have anything like the surplus
we now have. I propose to utilize the
surplus in this way, inasmuch as we can-
not at present pay off much of the debt.
I propose that the surplus should be used
to postpone the borrowing of money for
these works. I take this opportunity of
stating, with regard to the interminable
debentures, that they were originally
issued with twenty years coupons attached
and that as the Government has not the
option of paying them off until 1882, I
issued new debentures with coupons for a
further period of five years only, because
I hope that the Colony will then be in a
position to pay them off. But inasmuch
as the coupons of a portion of those deben-
tures, now in London, would be used up
on the 1st of January last and on the 1st
of July next, I gave the holders of the old
bonds, when I sent home the new deben-
tures referred to, the option of taking pay-
ment in London at the present time. They
are payable only in Sydney, but I thought
that some of the holders might be glad to

[1877.] MR. STUART. 379

receive their money in London at once, option. He has suggested a repetition of
rather than have the trouble and expense the offer by the 30th of June, when, he
of receiving it five years hence in the thinks, a considerable number will accept
Colony. Out of 35,000 of debentures, it. The Government would be glad to
payments have been made in London to pay the whole of these interminable deben-
the extent of 8,000, and Mr. Larnach, tures, which amount to 240,000, out of
in a telegram, has stated that if longer the surplus, but they cannot force the pay-
notice had been given a larger number ment ; it is only to those who agree that
would have availed themselves of the payment can be made.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE WILLIAM
EICHMAN PIDDINGTON, made 2nd May, 1877.

LEGISLATIVE ASSEMBLY.

2nd May, 1877.

FINANCIAL STATEMENT.

Mr. FARNELL : In moving that there
be granted to Her Majesty out of the
Consolidated Revenue Fund the sum of
.1,733 towards defraying the expenses of
the establishment of His Excellency the
Governor for the year 1877, I hardly
know whether it is necessary that I should
make any observations to the Committee
on the present occasion, seeing that the
Government have adopted the Estimates
of their predecessors, and have only made
some few additions in an Additional Esti-
mate. But I cei-tainly feel a degree of
astonishment which I can hardly express,
at the extraordinary state of the public
revenue. One quarter's revenue now ex-
ceeds the revenue for the whole year at the
time when I first became a member of
this House. The month of April, which
has just closed, is an instance of the great
increase in the revenue of the Colony,
inasmuch as it exceeds that of April, 1876,
by about 150,000. As the Government
have taken office so recently, they do not
intend to propose any change in the fiscal
policy this session. Any change neces-
sary in that direction will be deferred
until the next session, if we should have
the honour to remain in office. My duty,
therefore, is a very simple one, and as I
have to deal entirely with figures honor-
able members will not have to listen to

3 I

any long speech from me. It will be
recollected that when the late Treasurer
(Mr. Stuart) made his financial statement,
it was the intention of the Government
to introduce a Bill to amend the Audit
Act of 1870, chiefly for the purpose
of extending the period within which
votes of Parliament would be available
for the Services for which obtained.
Under the present law all grants of public
money for the expenditure of which con-
tracts or engagements had not been entered
into before the close of the year for which
they were given lapse, and cannot be
used again unless under a fresh vote of
Parliament. This provision has been
found, more especially of late years, very
inconvenient and even detrimental to the
public interests; for the late period at
which the annual Appropriation Acts have
frequently been passed has precluded con-
tracts for the numerous public works,
therein provided for, being taken within
the time prescribed. Where it has been
found necessary that these works should
be carried out, the sums originally pro-
vided for them have been re-voted, but
much delay has arisen in consequence of
this course having to be adopted. The
re-votes for this year amount to 415,924,
and this large amount is due to the
circumstance that the Appropriation Act
for last year was not passed until
August, thus making it impossible t'->r
the whole of the amounts voted for
public works to be expended by March
in this year, the limit fixed by tl,<-
Audit Act. The late Treasurer did in-t
include in his Estimates-in-chief for 1*77

382

MK. PIDDl^UTON.

[1877.]

any of the appropriations of 1876 which,
for the reasons above stated, may be con-
sidered to have lapsed on the 31st Decem-
ber last, because it was his intention to
insert a clause in the Bill to amend the
Audit Act (which he subsequently intro-
duced) that would apply to such appro-
priations and have the effect of keeping
them alive until the end of the present
year. In other words, the Bill was to
have a retrospective as well as a prospect-
ive application. It has, therefore, become
necessary to recast the accounts submitted
by Mr. Stuart with his Ways and Means,
provision having been made in the ad-
ditional Estimates for 1877, now before
the Assembly, for those Votes of 1876
which actually lapsed under the 17th
clause of the Audit Act. The Additional
Estimates, therefore,' include this sum of
415,924, for re-votes. I think it is far
better that they should appear with all
the inconvenience of re-votes than that
they should be kept alive by a provision
in the Audit Act, because the more
honorable members are made acquainted
with the difficulties caused by the prolong-
ing of a session, and the consequent delay
in carrying on public works, the more
they will be disposed to concur in any
course of procedure that will tend to secure
the passing of the Appropriation Act at
an early period of the year. That is one
reason why the Government urged upon
the Assembly to confine the business of
the session to passing the Estimates for
this year, which ought to have been passed
six months ago, with a view to bringing
our financial year into its normal and
proper condition. The accounts now sub-
mitted are in many respects similar to
those submitted in January last, although,
for reasons which will be stated in con-
nection with each, the results are some-
what different. The first account of the
present Ways and Means is for the year
1875, and shows a surplus of 1,615,525
17s. 3d. In the corresponding account
submitted with the Ways and Means of
January last the surplus at the close of
1875 was estimated at 1,616,958 4s.
7d., being 1,432 7s. 4d. greater than
that now shown. This difference is caused
by the addition of a few items to that part
of the Supplementary Estimates which
relates to the Services of 1875 and

previous years. 4/242 Is. 3d. was the
amount of these Services in Mr. Stuart's
Estimate, while 5,674 8s. 7cl. is the
amount in the present one, being an
increase of 1,432 7s. 4d., a sum which
of course reduces the previous surplus to a
like extent. Honorable members will find
the account for 1876 at page 10 of the
Estimates of Ways and Means. In this
year there is a considerable alteration.
In the account now submitted for 1876,
the estimated surplus at the close of' that
year, including the surplus of 1875, is
shown to be 2,059,586 4s. lid., while in
the one submitted by Mr. Stuart it was
only estimated at 1,679,608 17s. 7d.,
being a difference of 379,977 7s. 4d.
This large increase in the estimated surplus
of 1876 is to a certain extent accounted
for by the lapsed appropriations of that
year, which will be re- voted as 1877
Services, while at the same time the larger
balance thus carried forward to the pre-
sent year will meet the amount of such
re-votes. The following statement will
show more clearly how the increase of
379,977 7s. 4d. in the surplus of 1876
arises : The votes of 1876 which have
lapsed under the 17th clause of the Audit
Act, but which the House will be asked to
re-vote on the Additional Estimates for
the present year, amount to 415,924 16s.
8d. This additional credit of 1876 is,
however, in effect, reduced by the increase
in the Supplementary Estimates for Ser-
vices of 1875 and previous years already
mentioned, viz., 1,432 7s. 4d. ; and an
increase in the same Estimates, for 1876
Services, over those submitted by Mr.
Stuart, of 34,515 2s. ; together amount-
ing to 35,947 9s. 4d. ; which deducted,
leaves the sum stated, viz., 379,977 7s.
4d. When the late Treasurer laid the
Supplementary Estimates for 1876 before
the Legislative Assembly the year had not
expired ; consequently it was not then
known to what extent the votes of that
year would prove deficient. Since then,
however, the deficiencies have been ascer-
tained with more exactitude*, and provi-
sion made for them accordingly in the
present Estimates. Compared with for-
mer Supplementary Estimates, the present
one is not excessive. The following are
some of the principal items included
therein : Forage for police horses, 4,000;

[1877.]

MR. PIDDINGTON.

383

conveyance of prisoners, 1,000 ; Asylums
for the Infirm and Destitute, 2,630 19s.
lid.; fees to prosecuting barristers and
presiding Judges, 1,979 15s. 6d. ; print-
ing, bookbinding, &c., 4,488 17s. 5d. ;
stores and stationery for the Public Ser-
vice generally, 3,221 17s. Id. ; adver-
tising for same, 1,961 7s. 8d. ; interest
on Government Savings' Bank Funds in
the Treasury, uninvested, 1,184 17s. 9d. ;
inspection of conditional purchase, 2,343
14s. 5d. ; commission to land agents,
5,000; fees to licensed surveyors,
14,000 ; harbours and rivers navigation
works, 7,450 ; works and buildings,
15,515 ; roads and bridges, 6,540 13s.
4d. ; railways working expenses, 5,500 ;
purchase of land at Duck River, near
Parramatta, as site for railway workshops,
3,429 10s. ; conveyance of mails, &c.,
7,025 ; and charter of the Ly-ee-Moon,
1,195 19s. 4d. If honorable gentlemen
will turn to the next balance sheet they
will find the estimate of revenue and
expenditure for 1877. Excepting in the
Estimate of the Minister for Lands, in
which there is a reduction of about
67,000, no material alteration occurs in
the Estimates-in-chief now submitted for
1877. It has been deemed expedient to
make as few alterations in these Estimates
as possible, and rather than encumber
them with new items to submit an Addi-
tional Estimate at the same time. The
Additional Estimate amounts to 728,275
7s. 4d. ; but of this the re- votes of 1876
amount to the large sum of 415,924 16s.
8d., leaving for new Services, 312,350
10s. 8d., and making the estimated expen-
diture for the year 4,843,937. Now,
upon the credit side of the account, honor-
able gentlemen will see that the estimate
of revenue for this year is an exceedingly
large one, larger, I suppose, than any ever
before submitted. The estimated receipts
are 5,308,410, whereas our predecessors
estimated an income of 4,908,000. The
large increase in the credits of 1877 arises
from an increase of 379,974 in the sur-
plus brought from the account for 1876,
which, as I have already explained, arises
from the lapsing of votes which were not
charged against that year. It is now carried
to the present year, and it is against that
surplus that these re-votes can fairly be
charged. And then there is an increase in

the estimated revenue of 1877, under the
head of land sales, amounting to 400,000.
The revenue we anticipate from land sales
this year is 2,480,000. That is a grati-
fying circumstance. In order to show
that this is by no means an over-estimated
amount, I have had prepared the following
statement showing the amount of land
revenue received on account of the under-
mentioned heads for the four months
ended 30th April, 1876, and 30th April,
1877, respectively showing the increase
or decrease under each head thereof.
Under the head of auction sales, the
amount received in the first four months
of 1876 was 380,373 Os. 3d. ; for the
same months of 1877 the amount received
was 830,797 6s. 7d., the increase from
this one source being 450,424. Selec-
tions after auction yielded 30,059 6s. 7d.
in the four months of 1876, and 40,709
Us. 2d. in 1877, showing an increase of
10,650 4s. 7d. The next item, provi-
sional pre-emptive right sales, is the only
one in which there is a decrease, the
amount in 1876 being 50,081 10s. and
in 1877 as 36,726 17s., the decrease
being 13,354 13s. Under the head of
deposits on conditional purchases the
amount in 1876 was 143,883 19s. 9d.,
while in 1877 the amount was 148,603
19s. 10d., showing a small increase of
4,720 Os. Id. for the four months of this
year. Instalments of conditional pur-
chases produced 2,088 13s. 6d. in 1876,
and 5,861 Os. 2d. in 1877, being an
increase this year of 3,772 6s. 8d.
Under the head of balances of conditional
purchases, 27,622 5s. 7d. was received
in 1876, and 31,937 17s. lid. in 1877,
being 4,315 12s. 4d. in favour of the
four months of this year. The total of
the land receipts under all the headings
was, in 1876, 634,108 15s. 8d., and in
1877, 1,094,636 12s. 8d., showing a
total increase of 460,527 17s. for the
four months of this year, as compared with
the corresponding four months of last
year. These figures show conclusively
that we have really under-estimated the
probable receipts from land, although we
have added to them the sum of 400,000,
as compared with the estimate of my pre-
decessor. These two items then the
increase in the surplus brought from the
account for 1876 and the increase in the

384

MR. PIDDINGTON.

[1877,]

revenue likely to be derived in 1877 from
land sales by auction bring the total
additional credits up to 779,977 7s. 4d.
From this has to be deducted 661,984
18s. 4d., the amount of the Additional
Estimate for 1877 (728,275 7s. 4d.),
less a reduction in the Estimates-in-chief
for 1877 as compared with those submitted
by the late Government of 66,290 9s.,
producing an increase in the surplus of
117,992 9s. The Additional Estimates,
as I have explained, amount to 728,275
7s. 4d., of which 415,924 16s. 8d. is for
re- votes of 1876, leaving for new ser-
vices 312,350 10s. 8d. The principal
items embraced in this amount are the
following : Refund to the City Corpora-
tion of the grant of 1876, 10,000;
harbours and rivers navigation works,
52,291 ; public works and buildings,
142,406 18s. 2d. ; roads and bridges,
53,545; electric telegraphs, 37,800;
railways, 1,200 ; for services of hydraulic
engineer, 3,000 ; and expenses connected
with small-pox hospital ship, 5,686 Is.
Although the lapsed appropriations of

1876, which it is proposed should be re-
voted, are charged in the account for this
year, they do not on that account form a
legitimate charge against the revenue of

1877. They are chargeable rather against
the surplus brought from the account of
last year. The object in view in treating
them as appropriations of 1877 is to secure
for them a longer currency than they
would have if treated as appropriations of
1876 an arrangement which will doubt-
less obviate the necessity for having them
again re-voted in the event of its being
found impracticable to undertake at once
the works for which they were originally
obtained. To ascertain, therefore, the
correct estimated charge against the
revenue of 1877, it is necessary to deduct
from the proposed expenditure the amount
of the re-votes included therein, thus :
Expenditure as per Estimates-in-chief, less
the vote of 60,000 for the Treasurer's
Advanced Account, 4,115,661 16s. 8d. ;
expenditure as per Additional Estimates,
728,275 7s. 4d. ; amounting together to
to 4,843,937 4s., which honorable
members will find in the balance-sheet for
this year at page 14 of Ways and Means.
Deducting from this the amount of re-
votes included in the additional Estimates

viz., 415,924 16s. 8d., there is left an
estimated expenditureof4,428,0l 2 7s. 4d.
against' the revenue of 1877. The re-
venue of 1877, as now estimated, amounts
to 5,308,410 : deducting therefore, from
this the estimated expenditure properly
chargeable thereon, as above shown, viz.,
4,428,012 7s. 4d., there remains an
estimated surplus, on the year 1877 alone,
of 880,397 12s. 8d. If to this sum
be added the accumulated surplus
brought from the year 1876, viz.,
2,059,586 4s. lid., less the amount of
re-votes, which is in reality a charge
thereon, 415,924 16s. 8d., then there is
produced the estimated accumxilated sur-
plus shown in the account for 1877, of
2,524,059 Os. lid. Now, I do not think
such a statement was ever made in New
South Wales before as that in the trans-
actions of one year there is an estimated
income over expenditure of 880,397 12s.
8d. Therefore, I think that Members
will feel little or no anxiety in covering
by a vote in Ways and- Means a formal
vote that is always taken in Committee of
Supply in order that the Colonial Treasurer
for the time being may make a statement
of the position of the finances of the
Colony. That position is a most flourish-
ing one. No doubt it is attributable in a
great degree to the large sums received
from land sales. But how could we
distinguish, so far as the Consolidated
Revenue Fund is concerned, between
every pound received from taxation of a
direct character and every pound received
from the sale of public land 1 In both
cases the receipts, by our Constitution
Act, go into the Consolidated Revenue
Fund, and the Treasurer for the time-
being must deal with the money so derived
as part of the public revenue of the
country. And I for one believe that
although we are selling our lands to a
very large extent, we are, by expending a
large amount of the public revenue in
railways, re-investing the capital in re-
productive works which will be of infinitely
more benefit to the State than the
existence of this land in the hands of the
Crown. I have always been an advocate
for diminishing the price of the public
lands of the Colony, because I have always
thought that it was infinitely better for
the community that they should be in the

[1877.1

MR. PIDDINGTON.

335

hands of individuals rather than held by
the Crown. I am a decided advocate for
the unequivocal ownership involved in fee
simple rather than in keeping it in the
possession of persons having a lesser
interest in it. However, with the aid of
the honorable gentleman opposite, I hope
the Government may succeed in securing
the support of the House to the extension
of the railways, and also to any scheme
that may be submitted for establishing a
system of immigration by law. However,
this forms no part of the proposition of
the Government, inasmuch as we wish to
bring this session to a close speedily. Still
I think that a system of granting money
on the Estimates for immigration is not so
satisfactory as a system which would
secure an annual appropriation under the
authority of law. I may say that it is not
considered necessary to make any allusion
to the Loan Accounts, inasmuch as no
fresh loans have been negotiated since the
late Colonial Treasurer made his Financial

Speech, three months ago. As already
stated, I merely intended to supplement
the elaborate statement of my pr<-<l< r
by alluding only to the changes which the
progress of events has necessarily produced
since then, both in the estimates of revenue
and expenditure. I presume that it is the
earnest desire of all honorable members to
bring this session to as speedy a close as
possible, with the view of convening Par-
liament again at the early period to which
the Government has pledged themselves,
so as to take the course that the Colonial
Secretary has foreshadowed. I am quite
sure the Government will redeem their
pledge as soon as this session is prorogued,
by advising his Excellency to convene
another session within a month thereafter,
in order that the Estimates for 1878 may
be dealt with at a more satisfactory period
than the present Estimates are being pro-
ceeded with. With this explanation I
propose, sir, the formal motion that I have
already submitted in Committee.

3 K

THE HONORABLE fiENRY ^MANUEL

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONOIIABLE HENRY
EMANTJEL COHEN, made 31st January, 1878.

LEGISLATIVE ASSEMBLY.

31st January, 1878.

FINANCIAL STATEMENT.

MR. GARRETT : I beg to move that
"There be granted to Her Majesty, out of
the Consolidated Revenue Fund, the sum
of 1,733, to meet expenses in connection
with the Establishment of His Excellency
the Governor for the year 1878." In sub-
mitting to the Committee this item as the
formal initiation of the Financial State-
ment, I have to appeal to honorable
members for the indulgent exercise of
their forbearance whilst I discharge the
arduous, and to me, novel task in which I
am now engaged, an indulgence I the
more earnestly and perhaps justifiably
claim by reason of the very limited period
permitted to me for preparation, in view
of the necessity of proceeding as early as
possible with the business of the Session,
and the desirability in the interest of the
Country of obtaining as speedily as practi-
cable the necessary Supplies for the year
1878, which, in the normal condition of
things would have been granted by Par-
liament anterior to the close of 1877. The
system which has obtained during the
past three years, of periodically making
temporary provision for the Public Service
by monthly Supply Bills, is one which
stands emphatically condemned upon Con-

stitutional grounds, and also by reason of the
serious delay and inconvenience which fol-
low in the prosecution of public works, the
votes for which are not finally appropriated
by Parliament until late in the .year for
which the expenditure is authorized. The
present Administration deeming it to be
one of their paramount duties to provide
the proper remedy for this unsatisfactory
state of things, have decided upon asking
Parliament to grant the necessary Supplies
for the year with all convenient speed.
Considering the overflowing Exchequer,
which has of late years released the Fi-
nance Minister for the time being from all
anxiety as to the sufficiency of his re-
sources to meet the requirements of the
Country, and which now substantially
exists in the shape of " Special Deposits"
and advances to " Loan Funds," it might
be assumed that there existed iio difficulty
in guiding or managing the financial affairs
of the State ; but the rational desire of all
right-thinking persons, imbued with an
anxiety to see our annual income "proper"
co-extensive with our annual expenditure
" proper," and the equal desire, not to say
solicitude of any Colonial Treasurer, alive
to his official responsibility, to equalize the
revenue and expenditure "proper," still
impose upon him the duty and care of
fully providing the Ways and Means
required for the year with which he is
dealing, irrespective of any moneys accumu-
lated from previous years and available
for the necessities of the State, and I

388

MR. COHEN.

[1878.]

trust I shall before resuming my seat
satisfy the Committee that I have not
failed in this respect. I claim no indul-
gence or freedom from criticism for views
which do not commend themselves to the
approval of honorable members though
I venture to hope that mine will not be
unacceptable to the Committee but I
uimply ask for indulgence personal to my-
self in consideration of the limited
experience I am able to apply to the im-
portant duty in which I am now engaged.
It is not my intention to elaborate or
burden my speech with voluminous sta-
tistical comparisons to demonstrate the
progress of the Country ; that, for the
time-being, is best and sufficiently indicated
in a general way by the large annual
returns now being made to the public
coffers, and, inter alia, in a more specific
mode by the substantial increase in our
Customs Revenue, in the earnings of our
Railways and Telegraphs, and in the re-
ceipts from the Post Office, these estab-
lishments being amongst the most im-
portant parts of our national revenue-
providing machinery, relying for support
upon the improved social condition of the
people and the general expansion and
development of our large commercial,
agricultural, pastoral, and mining interests.
Statistics I can understand being used as
a basis and proof of Budget calculations,
but for any other purpose they appear to
me to be scarcely apposite to a Financial
Statement in Committee of Ways and
Means. With these prefatory observa-
tions 1 shall now apply myself more
immediately to an exposition of the
financial accounts of the Country, and may
here conveniently remark that when here-
after using the unqualified term " Reve-
nue," I wish it to be understood as meaning
the entirety of our income or receipts, of
whatever nature they may be, as distinct
from the narrower designation, "Revenue
Proper ;" and further, that to a large ex-
tent, in mentioning amounts, I shall for
convenience sake state them in round
numbers as they appear in the accounts,
since the exact figures will be seen by
those accounts and by the Explanatory
Statement which will be placed in the
hands of honorable members during the
evening. It will no doubt be in the re-
collection of honorable members, that the

Administration which, on the 2 2nd De-
tember, 1876, through its then Colonial
Treasurer, the honorable member for
East Sydney, Mr. Stuart, laid upon the
Table of the House the Estimates for
1877, retired from power in March of the
following year, before those Estimates had
been considered, and that the succeeding
Government of which the late honorable
member for the Hawkesbury, Mr. Pid-
dington, was Finance Minister, found it
expedient to submit fresh Estimates for
the approval of Parliament. In conse-
quence of that and other changes of
Government during last year, additional
Estimates were brought forward, both
then and at a later period, which resulted
in so materially altering the public ac-
counts as to render it desirable, nay
necessary, that an explanation of these
alterations should be given, with the view
of conveying a clear and definite under-
standing of their present position. The
honorable member, Mr. Stuart, who
made his Financial Statement on the 24th
January, 187 7, estimated that the revenue
of that year would amount to 4,908,410,
the expenditure to 4,181,952, and the
accumulated surplus at the end of the
year to 2,406,066. Mr. Piddington,
who made his statement on the 2nd May,
and had therefore the actual revenue of
four months to guide him, estimated the
Revenue at 5,308,410, or 400,000
in excess of Mr. Stuart's, the expendi-
ture at 4,843,937 (inclusive of re-votes
of 1876 to the amount of 415,924),
and the accumulated surplus at the close
of the year at 2,524,059. Subsequently
Mr. Piddington submitted two additional
estimates for 1877, amounting together
to 2,626,395, which included 2,023,550
for railway works, such as had on pre-
vious occasions been provided for by
Loans. This large additional expenditure
would have more than absorbed the
surplus, but for the circumstance that at
the time it was submitted the revenue
was largely exceeding the estimate of
May, which, taken in connection with the
probability of there being large savings on
the appropriations of 1877, would still
have left a considerable credit balance.
The Government which came into power
in August last, of which the honorable
member for Parramatta, Mr. Long, was

[1878.]

MR. COHEN.

389

Treasurer, withdrew that portion of the
additional estimates of their predecessors
which had not been dealt with by the
Assembly in Committee of Supply,
and submitted others from which were
omitted all the items included in Mr. Pid-
dington's for the construction of rail-
ways, which were however embodied in a
separate Loan Estimate. By this arrange-
ment the estimated surplus at the close of
1877 was not interfered with to any great
extent. From the Ways and Means,
which I will submit at a later period of
the evening, it will be seen that the
actual revenue of 1877 amounts to
5,751,879, and the expenditure, which
is still, to a certain extent, only an esti-
mate, to 5,530,056, and the estimated
accumulated surplus on 31st December,
last to 2,317,343. The revenue of last
year has therefore exceeded Mr. Stuart's
estimate by 843,469, and Mr. Pidding-
ton's by 443,469. The accounts which
will be submitted in elucidation of the
present and prospective condition of the
Consolidated Revenue Fund are of the
usual character, viz. : An account of
revenue and expenditure for 1876 ; an
account of revenue and expenditure for
1877 ; an account of estimated revenue
and expenditure for 1878. With respect
to the account for 1876, very little
explanation is necessary, as the result
now shown differs from that previously
given to the extent of only 36,735. In
the Ways and Means submitted in May
last the accumulated surplus was esti-
mated at 2,059,586. In consequence of
certain changes which took place last
year, but mainly from the lapsing of
additional appropriations, the surplus for
that year is now estimated at 2,096,321.
Full particulars of all the changes in this
account will be found in the explanatory
statement which I will at the close of my
speech lay upon the table for the infor-
mation of honorable members. Coming
now to the account of revenue and expen-
diture for 1877, I have to point out that
the one now submitted differs essentially
from that submitted by Mr. Piddington
in May last ; then it was necessarily an
entirely, an estimated account ; now it
shows more definitely the actual results of
the year's operations, especially so far as
the revenue is concerned. The revenue,

which was at that time estimated to yield
5,308,410, actually reached 5,751,879,
that is 443,469 in excess of the estimate.
Taking now the actual result of each year,
it will be seen that the revenue of 1877
exceeded that of 1876 by the very large
sum of 714,217; and while there, can
be no doubt that the larger part of tliis
increase has arisen from the sale of Crown
Lands, a very fair and gratifying propor-
tion has been derived from other sources,
which indicate in a more marked and, I
think, in a more satisfactory degree, the
general advancement of the Colony and
the continued even flow of that tide of
prosperity which first made its presence
known through the finances of the country
in 1872. Comparing a little more in
detail the revenue of 1877 with that of
1876, it may be interesting to note the
more salient items of increase, and for a
few moments to give our attention to
them. First, then, we have " Customs "
with 62,861 increase, the total receipts
from this source being 1,011,872 in
1876, as against 1,074,733 for 1877.
This outcome for 1877, apart from the
monetary benefit which has accrued to
the public exchequer, tells with undeniable
cogency that our commerce, or in other
terms, the consuming power of the popu-
lation, is increasing, which in its turn
signifies the greater aggregate ability of
the people to spend, even in face of a
succession of seasons which have been of
late of the most trying character to all
our great interests. Under this special
branch of revenue, spirits show an increase
as between 1876 and 1877 in favour of
the latter year of 34,000 ; tobacco and
cigars, an increase of 19,500 ; sugar and
molasses, an increase of 7,000 ;
dried fruits, an increase of nearly 8,500;
and specific duties, an increase of nearly
28,000. These results must on the
whole be very assuring to the country ;
for whether such additions to our revenue,
springing as some of them do, from what
has been termed " voluntary taxation,"
arise from the more ample means of in-
dividual consumers, or additions to our
population, or from botlx causes, they bear
testimony to the steady growth of our
community, and its power to provide
itself with many of the luxuries of life.
Licenses show an advance of 7,373, to

390

MR. COHEN.

[1878.]

which retail fermented and spirituous
liquor licenses contributed 6,300. The
receipts of the years I am comparing as
they stand in chronological order, being
respectively 80,302 and 86,602.
Whether this in itself is a proof of true
and substantial progress upon which the
country may be congratulated is a question
upon which opinions may differ ; but the
figures as they are "will point a moral
and adorn a tale," according to the pro-
clivities of the individual mind that may
study them. The "sales of land" for 1877
have overleapt those for 1876 by 427,128,
having realized for the later period
2,841,203, the particulars of which are
given in the detailed revenue, attached to
the Ways and Means, which will be dis-
tributed amongst honorable Members. The
great and apparently irrepressible desire to
purchase Crown Lands by auction which
prevailed at the commencement of the
year has since given unmistakeable signs
of having been brought under restraint ;
and apart from other extra-Governmental
causes that have produced this downward
tendency in this branch of income, the
present Administration has determined to
place some restriction upon the alienation
of our waste lands by this particular
method. " Interest upon conditional pur-
chases" for 1877 shows an advance upon

1876 of 27,325, having attained a total
of 126,654, as against an estimate of
130,000, an approximation of figures
which speaks favourably of the calcula-
tions made upon available official data by the
officers to whom this duty is entrusted.
Bearing in mind that a year of unusual
severity, by reason of the absence of rain,
has been experienced by the class of per-
sons by whom this sum has been paid, it
testifies strongly to their readiness to
liquidate their public liabilities when we
find them meeting this claim of the State
with so much prompitude and complete-
ness. "Railways" to which I shall here-
after refer more fully, have returned for

1877 121,500 above the earnings of
1876. This is a fact which must
commend itself with a welcome to
every colonist, interested as each one
is in the success of this the greatest
of all our national undertakings. The
Post-office, which includes the Tele-
graph Department, has during 1877

yielded 33,567 over and above the yield
of 1876, and to this I need only direct
the attention of the Committee as evi-
dence of the growth and onward march of
our young country. Bank deposits have
in 1877, for interest, given us 31,773
more than in 1876 ; but as I purpose deal-
ing hereafter somewhat more amply with
this feature in our finances, I shall
now pass from it with this bare reference.
Having thus briefly alluded to some of
the main features of last year's revenue,
I will now as briefly direct the attention
of the Committee to its expenditure. As
originally estimated by Mr. Piddington,
the expenditure of 1877 amounted to
4,843,937, which included appropriations
of 1876 for public works to the amount
of 415,924, which had to be revoted as
charges against the year 1877. Subse-
quently further additional estimates were
submitted by Mr. Piddington, only a small
part of which was voted prior to the
change of administration that took place in
August last. On the re-assembling of
Parliament after that change the addi-
tional estimates then before the Assem-
bly were withdrawn, excepting such as
had been dealt with in Committee of
Supply, and others substituted for them.
These changes resulted in appropriations
by Parliament for general services, under
the Act 41 Vic. No. 8, to the amount of
4,696,249, to which have to be added the
appropriations under Constitutional and
Colonial Acts, 47,947; special appropri-
ations, 837,000 ; further special appropri-
ations as shown in the account now under
review, 159,253 ; making a total author-
ized charge of 5,740,449. To this there
has also to be added the amount of the
supplementary estimates now before the
House, viz., 100,407, which brings the
charge against the year 1877 up to
5,840,856. As on former occasions,
however, there must be deducted from
this sum the amount of appropriations not
likely to be required, which are estimated
at 310,000, thereby reducing the esti-
mated expenditure to 5,530,856. De-
ducting this expenditure from 5,751,878,
the revenue of last year, there is left a
surplus of 221,021, which added to the
surplus brought from 1876, viz., 2,096, 322,
produces an estimated accumulated sur-
plus on the 31st December last of

[1878.]

MB. COHEN.

391

2,317,343, which is less than that
estimated by the late honorable member
for the Hawkesbury (Mr. Piddington) by
the sum of ,206,716, a difference which
will be found more fully accounted for
in the explanatory statement already re-
ferred to. It will be seen on reference to
the explanatory statement that the years
1872 to 1877, both inclusive, have each
yielded a portion of the surplus which at
the close" of 1877 amounted in the aggregate
to 2,317,343. The surpluses of 1875
and 1876 necessarily differ to a consider-
able extent from those previously given,
because since then the estimated expend-
iture of the former year has been reduced
by further lapsed appropriations, and the
latter by the transferto 1877, under the head
of " Re- votes," of a large amount of ap-
propriations for public works which could
not be carried out in the year for which
they were provided. As the expenditure
of these six years, that is from 1872 to
1877, includes a number of payments of
an extraordinary nature, it is only right
to state them as they occurred, so as to
give a clearer idea of the extent of the
revenue over the ordinary expenditure of
the country. Thus, in 1872 we paid off
Treasury bills and debentures to the
amount of 409,900 ; in 1873, debentures
to the amount of 20,500 ; in 1874,
Treasury bills and debentures to the
extent of 357,100, and payments were
also made under the Superannuation Act
Repeal Act to the amount of 98,403,
making together for that year 455,503.
Then in 1875, debentures, pai-t of the
Public Debt, were paid off to the extent
of 74,700 ; in 1876 further payments of
a like nature were made to the extent of
760,200, and during 1877 to the amount
of 3 3, 200, besides a transfer under Parlia-
mentary appropriation of 175,838 from
revenue to Loan Fund, 36 Vic. No. 17,
to make good the amount short-raised
under that Act. These payments, which
aggregate 1,929,842, of course form part
of the excess revenue of these years, as
much as the surpluses shown above do.
In other words, that sum is part of the
surplus devoted to special services, with
the sanction of Parliament. During the
period over which this large surplus has
accumulated, the amounts realized by the
sale of Crown Lands have increased from

a comparatively^ small sum to one that is
now considered out of all proportion to the
ordinary income of the country. Excepting
in 1872, when the ordinary revenue was
slightly in excess of the ordinary expendi-
ture, the land sales have u nquestionably been
the source from which the surpluses
have sprung. The tabulated figures in
page 8 of the explanatory statement of
the public account will prove this, but they
are so voluminous that I will not now
weary the patience of honorable members
by reading them. Before passing to the
account for 1878, for which I am more
immediately responsible, and in which I
am naturally more interested, I desire to
furnish the Committee with some informa-
tion regarding the state of the public
accounts generally, on December 31st last,
as exhibited by the books of the Treasury.
On that date the balances to the credit of
the various public accounts of the Govern-
ment stood thus : Public account Con-
solidated Revenue Fund, 2,351,073 15s.
8d. ; Old Loans Account, 178,915 2s.
lid. ; Trust Fund, 1,006,425 8s. 8d. ;
total, 3,536,414 7s. 3d. Special Loan
Funds, 530,975 9s. lOd. ; Superannua-
tion Repeal Fund, 3,757 13s. 7d. ;
in all 4,071,147 10s. 6d. This amount,
which exceeds the aggregate balances
of 31st December, 1876, by the sum
of 562,081 18s. 4d., was distri-
buted in the following manner, viz. :
Bank of New South "Wales London
Branch: Balance as shown by statement
made up to 31st August, 1877, 16,125
9s. Id. ; remittances since that date,
750,000 together, 766,125 9s. Id.
Head Office, Sydney: Public Account,
394,676 17s. 3d. ; Special Loan Funds,
409,733 3s. 3d. making together,
804,410 Os. 6d. ; total in Bank of
New South Wales, 1,570,535 9s. 7d.
Special deposits in the undermentioned
banks, in accordance with the banking
arrangements of May, 1876, viz. : Bank
of New South Wales 350,000, City Bank
250,000, Oriental Bank 250,000, Aus-
tralian Joint Stock Bank 200,000, Bank
of Australasia 175,000, English, Scot-
tish, and Australian Chartered Bank
175,000, Union Bank, 175,000, Lon-
don Chartered Bank 175,000, Mercantile
Bank 175,000 in all, 1,925,000; total
cash balance 3,495,535 9s. 7d. ; to which

392

MR. COHEN.

[1878.]

have to be added Securities in the Trea-
sury Chest to the amount of 575,612 Os.
lid. ; making a total as above shown of
4,071,147 10s. 6d. Having now finished
with the accounts down to the close of
1877, 1 will ask the attention of the Com-
mittee to the Estimates of the present
year. The estimated surplus brought
forward from 31st December last, and
appearing on the credit side of the account
for 1878, is 2,317,343, and I estimate
the revenue for this year at 4,873,750.
These two sums together make 7,191,094.
Deducting from this the estimated expen-
diture for the year, namely 4,723,689,
there is left an estimated surplus at the
end of 1878 of 2,467,405. It will, how-
ever, be observed that the revenue as esti-
mated for the year is 150,000 more than
the estimated expenditure. The expendi-
ture is made up of charges for general
services, 3,879,506, which is exclusive
of the vote of 30,000 for the Treasurer's
Advance Account a sum that does not
ultimately form a charge on the Consoli-
dated Revenue Fund special appropria-
tions, 797,000 ; and sums provided by
Constitution and Colonial Acts, 47,133.
It will, I am sure, not be required of me
to point out each item in the proposed ex-
penditure upon which substantial increases
or decreases have taken place as compared
with last year. The Estimates placed in
the hands of honorable Members will at once
give this information; but I may perhaps
be pardoned for trespassing upon the time
of the Committee in referring more specifi-
cally to the vote for immigration and one
or two others. In the Estimates of Ex-
penditure the Government have included
75,000 for the purposes of immigration
a sum which they deem suflicient, con-
sidering that a small portion of the year
will have elapsed before it can be legally
available for disbursement, and that it is
about the amount actually expended for
1877. We are of opinion that a judicious
and continued stream of immigration is
highly desirable in the interests of the
Colony ; each individual added to our
population representing a consumer and
taxpayer, and in many cases a producer
also. It is not our object or desire to
bring labour to the Colony to compete with
that already here, but the experience of
the past year or two affords abundant

evidence that a steady flow of judiciously
selected .labour may be imperceptibly and
advantageously absorbed into and blended
with our population. It has been the
care of the Government to inform them-
selves of the trades which are full-handed,
and to instruct the Agent General by
telegraph not to assist members of such
trades to emigrate. My colleagues, as
well as myself, are impressed with the
folly of bringing to these shores any class
of persons who it is obvious could not,
without the greatest difficulty, if at all,
find occupation upon arrival ; but at the
same time we feel convinced that there is
ample room and opportunity within our
boundaries for the employment and
advancement of numbers of willing and
industrious people, who by thrift and per-
severance may make homes and compe-
tences for themselves and kindred, and
contribute to the making of a happy and
thriving nation. We feel confident there-
fore that the Committee being informed
that all previous votes have been exhausted
will cheerfully grant the sum now asked
for this special service. With regard to
Public Instruction, for which provision is
sought to the extent of 320,000, being
40,000 in excess of the sum appropriated
for 1877, I am sure it needs no effort
from me to recommend the proposal to the
unanimous approval of Parliament. All
persons seem agreed upon making adequate,
nay liberal provision for this important
feature in our internal polity ; and I am
certain therefore that this Assembly will,
like its predecessors, willingly accord a
generous support to the Public School
system, and give its cordial approval to
our proposal. In view of the general and
long sustained demand, almost universally
acquiesced in, for legislation to provide
(amongst other things) for increased
endowments to municipalities, and an in-
creased revenue for the Corporation of
the City of Sydney, and the probability of
no such measure passing into our Statute
Book before the year is well advanced, the
Government have decided to make pro-
vision for temporary assistance as well to
all municipalities in the country as to the
Corporation of the metropolis, and will
therefore ask the House to grant 10s. for
every pound received by the former for
rates during the municipal year ending

[1878.]

MR. COHEN.

393

the 4th February, 1878, and by the latter
during the year ending 31st December,
1877. The sum required for this pur-
pose is estimated at 56,500. With
these special references to items of ex-
penditure I shall now take up the esti-
mated revenue for the year, which is
4,873,750, being less than the actual
revenue of 1877 by 878,129, the dif-
ference being substantially accounted for
by our making the estimated receipts for
1878 from auction sales nearly a million
pounds less than the actual receipts for
1877. As already intimated by my
honorable colleague, the Premier, the
Government have determined to take up
the question of amending the Land Laws,
and after having laid their proposed Bill
upon the table this session, to deal with it
during the next, and therefore, in consider-
ing the financial position and prospects of
the country for the present year, I take the
law as it exists. We calculate that auc-
tion sales will realize 1,000,000, which
includes 250,000 of balances due on auc-
tion purchases made in 1877 ; improved
purchases, kc., 200,000 ; selections after
auction, 160,000 ; deposits on condi-
tional purchases, 425,000 ; instalment
on conditional purchases, 10,000 ; bal-
ances on conditional purchases, 60,000 ;
thus aggregating for the year under land
sales 1,855,000. It will thus be seen
that the sum calculated to be realised in
the present year from auction sales is
1,000,000, of which 250, 000 represents
balances due on auction purchases made
in the last quarter of 1877, leaving
750,000 to be raised from actual sales
during 1878. But as it is the purpose of
the Government not to fix a uniform up-
set price of 1 per acre upon land dis-
posed of by auction, but to raise the price
according to the quality of the land put
up and the demand for it, this 750,000
does not necessarily represent 750,000
acres ; for as the average upset price in-
creases, the total area sold to yield a given
sum will decrease in corresponding ratio ;
thus, if the average price be 30s. an acre,
the area disposed of to produce 750,000
will be 500,000 acres, and if 40s., the
area will be 375,000. In thus managing
the auction sales, the object of the
Government will be to get for the State
the full value of the land parted with,

and to prevent it passing in wholesale
quantities into the hands of single pur-
chasers, without an accompanying settle-
ment corresponding to the acreage and
nature of the land alienated. Under
" Annual Land Revenue" we anticipate re-
ceiving for interest upon land conditionally
purchased, 155,000 ; for pastoral occupa-
tion, 237,450 ; for mining occupation,
13,000; for miscellaneous land receipts,
28,500 ; making a total of 433,950.
Honorable members will observe that the
amount of interest on land conditionally
purchased calculated to be received this
year is 155,000, being little more than
28,000 in excess of the actual revenue
from this source last year. I would here
point out that it is practically impossible
to make an exact calculation of the in-
terest that will be paid in any given year,
in consequence of the number of condi-
tional purchases that lapse or are from
time to time forfeited or cancelled or upon
which the balances may be paid ; it can at
best be but an approximation based upon
departmental data, but I have every
reason to believe that the estimate will be
realized. The yield from " Customs" this
year, inclusive of the " Murray River
Customs," is estimated at 1,094,700, or
20,000 beyond the actual receipts for
1877. Honorable members will observe
that I have calculated the " Murray River
Customs" revenue at 80,000, as against
82,000 received last year and 120,000
received in 1876. This large difference
between the actual receipts for 1876 and
1877, which has guided me in fixing my
estimate for the current year, and on the
surface would indicate a considerable de-
crease in our Murray River or south and
south-western border trade, calls for ex-
planation, which will show that it is the
result merely of the diverting of the col-
lections from one point of our Colony to
another. In order to make this perfectly
clear it must be remembered that the
bonds which have hitherto been regarded
by the Customs Department as the " Mur-
ray River" bonds are those at Moama,
Albury, Corowa, Went worth, Euston,
Swan Hill, Tocumwall, and Howlong;
and the receipts from these, added to the
commutation paid by South Australia un-
dor the Convention with New South
Wales, have been classed as "Murray

394

MR. COHEN.

[1878.]

River Customs" receipts. During the
years 1876 and 1877 the collections

from these different places have been as
follows :

Moama

Albury

Corowa

Wentworth

Euston

Swan Hill

Tocumwall

Howlong ...

South Australia (cash payments)

Total

in 1876

'd.

54,012

11 as against

23,198

5 in 1877

32,740

31,650

11,556

10,225

13,017

5,112

1,145

1,091

480

491

1,336

638

1,364

1,143

4,406

8,489

120,061 7 3

82,042 6 11

This shows a falling off in 1877 as com-
pared with 1876, at Moama, of 31,000,
and at Wentworth of 8,000, these being
the only places to which by reason of the
great decrease in receipts I need refer,
although there have been slight decreases
at all the other Bonds except Swan Hill,
where there was a nominal increase. To-
wards the latter end of 1876 the year, it
will be seen, in which Murray River Cus-
toms gave us .120,000 bonds were
established at Deniliquin, Hay, and Wil-
cannia, which not being classified as Mur-
ray River Bonds, the collections at these
places have been included in the general
and not in the Murray River Customs'
receipts. Deniliquin, for the four mcrnths
of 1876 that the Bond was open gave us
,4,642 ; Wilcannia, for four and a half
months, XI, 833 ; and Hay, for one month,
391. But coming to 1877, we find that
these bonds contributed to the revenue
24,319, 5,667, and 7,573 respectively,
making a total of 37,559. With respect
to the cash payments just shown to have
been made by South Australia in 1876
and 1877, it is essential to observe that
they were made direct to us by the
Government of that Colony, and represent
a portion only of the whole sum payable
by that to this Government, under the
Conventions in existence in those years.
Under these Conventions, all duties col-
lected on importations from South Aus-
tralia by New South Wales, at the bonded
warehouses on the Murray or its tribu-
taries coming within the Treaties, were to
be accounted for by New South Wales, or
in other words were to be regarded as
payments on account of the Treaty com-
mutation. It is the difference between
such collections and the total sum payable
by South Australia under agreement,

which is represented (wholly or partly, as
the case may be) by these cash payments.
These collections, which embrace the
amounts received at the Wentworth, Wil-
cannia, Hay, and Bourke Bonds, being
those covered by the Convention, though
credited to South Australia in our account
with her, have been treated in the Trea-
sury books as ordinary Customs receipts.
The 4,406 paid in 1876 represents the
whole difference between the collections
by New South Wales on behalf of South
Australia and the entire sum payable
under the Convention by South Australia
to New South Wales for the 1876 Treaty
year. The 8,489 paid in 1877 is only
portion of the difference for that year, there
having been a balance of over 11,000
due by South Australia on 31st Decem-
ber last, under the Convention for 1877.
Seeing then the geographical positions of
the townships to which I have thus
pointedly drawn attention, and connecting
them with the concurrent decreases and
increases of duty collections just detailed,
it is patent that there has been no actual
decrease in the amount of the Murray
River Customs generally, but that the
collections have merely drifted from some
of the old to other and more convenient
points. For the purpose of demonstrating
more succinctly the conclusion at which I
have thus arrived, I will state the figures
in form of account : In 1876 the Customs
Collections at the Murray River Bonds as
defined were 120,061. Add to this
The amount collected at Deniliquin (4
months, 4,642 ; the amount collected at
Hay ( 1 month ) 392 ; the amount
collected at Wilcannia (4| months) 1,833,
together 6,867 ; thus making a total of
126,928. In 1877 the Customs Collec-
tions at Murray River Bonds as defined

[1878.]

MR. COHEN.

395

were 82,042. Add to this The amount
collected at Deniliquin, .24,319; the
amount collected at Hay, 7,573 ; the
amount collected at Wilcannia, 5,667,
together 37,559 ; thereby bringing the
amount up to 119,601. And if we add
to this latter sum the 11,367 (portion of
which has since been paid) due by South
Australia on the 31st December last under
the Convention, we will have 130,969
for 1877, as against 126,928 for 1876.
I hope I have now made it apparent, at
least so far as this collation of figures can
do so, that our trade in the direction
referred to has not declined. The result
of this explanation is to prove that the
general customs receipts for the year have
been increased by the collections at certain
inland bonds at the cost of reducing the
Murray River Customs receipts under the
old classification of stations, without the
trade connected with the one in any degree
affecting the trade connected with the
other. Having in the course of my in-
vestigation into this matter discovered
that some confusion in the accounts had
arisen since the establishment of additional
bonds in the interior, I have issued such
instructions as will I think show in future
the Customs collections in a clearer and
more intelligible shape. I have deemed
it my duty to enter thus lengthily into an
examination of this subject, because of the
general interest which has been manifested
regarding it. Our income from "Receipts
for services rendered" is estimated at
1,203,400, as against 1,119,359 for
1877 ; and on ^reference to the Ways and
Means it will be seen _ that the receipts
from railways are estimated at 875,000
being 75,000 in excess of the sum actu-
ally received for 1877, which in turn was
55,000 more than the estimated receipts
for that year. At the close of 1877 we
had open for traffic 597 1 miles of rail-
way, which cost 8,850,000, the net earn-
ings being approximately calculated at
402,900, or 4 11s. per cent, upon the
capital invested ; but as there were several
extensions opened when the year was
more or less advanced, on one of which
traffic was carried for two months only,
we may conclude that had there been a
full year's net earnings of these extensions
to set off against their cost, which is in-
cluded in the 8,850,000, the net return

upon the entire expenditure would have
been somewhat larger. There are now
under construction the following lines :
Orange to Wellington, 85 miles ; Coota-
mundra to Wagga Wagga, 51 miles;
through Wagga Wagga, 4 1 miles ; Wagga
Wagga to Albury, 77 miles ; Quirindi to
Tarn worth, 38 miles ; Weriss Creek to
Gunnedah, 41 miles : making in all 297
miles ; and jwe anticipate that the exten-
sion from Quirindi to Tamworth will be
completed in August next, and that from
Cootamundra to Wagga Wagga in Sep-
tember next. The extension of railways
into the interior, resulting as it does in a
corresponding growth in their earnings,
must be highly gratifying. Considering
the destructive drought which for some
time past has been asserting itself with
serious effects upon those great interests of
the Colony to which the railway must look
for support, we have in the large actual
return for 1877 an all sufficient demonstra-
tion of the greatness of the inherent
resources of the country, and their wonder-
ful elasticity and power of expansion, as
well as an ample warrant for expecting the
full realization of our estimate of railway
revenue for the current year. The opening
of the line to the south as far as Coota-
mundra has already had the effect of
bringing to Sydney a large number of
wool clips which had not previously
found their way thither, and of making
this the buying market for customers
whose purchases had been previously made
elsewhere. In these facts we have
further foundation for the long-entertained
belief that the nearer we approach the
southern boundary of our Colony, the
greater will be our carrying and general
trade in that direction, and the sooner
will we witness the fulfilment of the pre-
diction that, by the construction of the
line to Albury (for which my honorable
colleague the Minister for Works has
recently accepted tenders), we will secure
for ourselves the greater part of the large
and important trade of Riverina, which
has been heretofore enjoyed by Victoria.
The completion of the line to the west as
far as Orange has had a most beneficial
effect in developing the trade in that
direction and in giving producers in that
rich and fertile district a market for their
produce in Sydney, of which they could

396

MR. COHEN.

[1878.]

not previously, so easily, or to so great an
extent, if at all, avail themselves. Apart
from the broad national policy which calls
for the opening up of the interior by the
construction of railways, we have the
fullest encouragement given to us to pro-
ceed rapidly with their extension, in the
knowledge that already they are producing
a net return almost equal to the percentage
of interest payable on the loans raised for
their construction. This, in a community
of about 650,000 persons, scattered over
an extensive area of country, is a result
of the most gratifying character. In
this young Colony the rapid extension
of railways is of great importance ;
primarily because they promote settle-
ment upon the lands of the interior,
and give an impetus to the efforts of the
producer, who is brought thereby into
speedy and easy communication with the
great central market of the metropolis
and the other markets of the large towns
of the interior ; and secondly, because, as
it fortunately happens, they are a great
revenue-producing machinery, producing
revenue in perhaps that most acceptable
of all forms, compensation for valuable
and important services rendered, the bene-
fit of which is not limited to the indi-
vidual for whom they are directly per-
formed but is spread indirectly and
unseen far and wide throughout the
length and breadth of the land ; and
thirdly, because they impart a higher
value to that splendid territorial heritage
of which we are the temporary guardians.
I may here, in passing, express my regret,
which is I am sure only the echo of the
general feeling both within and without
the walls of this Chamber, that the Great
Northern Line, which is now yielding a
net return of 5| per cent, upon the
capital invested in it, should not have
reached beyond Quirindi one extension
only of 25 miles having been opened
during the past six years ; but I may
venture to assure the Committee that
under the administration of my honor-
able friend and colleague, the Member for
Paddington, a little more vigour will be
infused into the operations of the con-
tractor, and that the whistle of the iron
horse will ere long be heard in Tamworth.
The recent changes made by the present
Government in the management of our

railway system, which is assuming such
enormous proportions, will, it is hoped
and we ourselves believe, have the effect
of remedying many if not all of the
grievances in connection with the ti'affic
which have of late been so much and so
loudly complained of. From " General
Miscellaneous Receipts" AVC expect to
derive 128,700, but from this grouping
there disappear this year " Tolls and Fer-
ries," which last year produced 18,552.
This is consequent upon the resolution of
the late Assembly abolishing all tolls on
roads, bridges, and ferries. I have also
excluded from the Estimates of revenue
the item of stamp duty, as it is too pro-
blematical whether any, and if so what,
payments will be made to warrant me in
inserting any amount in the Estimates of
Ways and Means. It does not follow
from this omission that the Government
is renouncing any of its rights in respect
of arrears of stamp duty ; all that is done
is simply to abstain from taking them into
account in making our financial calcula-
tions for the year, pending the Govern-
ment obtaining the necessary authority to
enforce such payments as were due when
the Stamp Act lapsed. Having now spe-
cially dilated as fully as I purpose upon
the Estimated Revenue for 1878, I shall
recur once more to the proceeds of " Land
Sales" by auction or otherwise (which are
not revenue strictly speaking, but the
State capital converted from its original
form), and to the expenditure these pro-
ceeds should provide for ; and for the
purpose of determining what are " Pro-
ceeds of Land Sales," I will adopt substan-
tially the test and subdivision of my
honorable friend the member for East
Sydney, Mr. Stuart, viz. : 1. Sales for
cash, in which the operation is at once
completed. ' 2. Sales for a cash deposit,
with limited or unlimited credit for the
remainder, but subject to the annual pay-
ment of interest, whether alone, as under
the Land Act of 1861, or amalgamated
with the principal, as under the Lands
Acts Amendment Act of 1875. Various
opinions exist as to what expenditure is
fairly chargeable against the proceeds of
land sales as above defined. I think that
any expenditure upon any permanent
public work, whether or not reproductive,
upon any work which tends to improve

[1878.]

MB. COHEN.

397

or render more valuable the public estate,
and encourages and facilitates the intro-
duction and settlement of population upon
it, is fairly chargeable against them. The
employment of portion of the capital in
these ways enhances the value of the
capital remaining, so that whilst upon the
one hand we may be diminishing the
" quantum" of that capital, on the other,
so long as the intrinsic value of the
lessened quantity remains equal to if not
greater than the original larger quantity,
no loss can be sustained. It is the popu-
lation of a country that makes it great,
prosperous, and wealthy, for without popu-
lation there would be no produce obtained
from the land the origin of all wealth ;
there would be no local consumers, and
no enterprise to give value to that pro-
duce, even when yielded, by introducing
it into foreign countries and creating and
stimulating an external demand for it ; in
effect, the land would be comparatively if
not absolutely valueless. But with that
population in existence, every facility
should be afforded to reach the markets
for the produce it may raise ; and to
achieve this object, expenditure in the con-
struction and repair of our public high-
ways, whether these be the ordinary roads
or the railways, or the bridges necessary
to make them traversable, may, in my
opinion, be legitimately made from this
source. I further think that money ex-
pended upon our other permanent public
works and upon our public buildings
(which are too voluminous in character to
be detailed), upon immigration, and upon
public instruction, at least so far as the
Parliamentary vote includes the cost of
sites and school buildings, may be justi-
fiably taken from this fund. Over and
above these, a large proportion of the
departmental expenses of the Lands Offices
being rendered indispensable in conse-
quence of the largely increased staff re-
quired to manage and administer the
national estate by reason of these sales is,
in my opinion, properly provided for from
their proceeds. Any items which would
not come strictly within the principles I
have thus laid down, but which have been
usually made the subject of loan votes,
it will be readily conceded, may also be
chargeable against these proceeds ; and
that the public debt may be paid off with

them I do not think any person will
venture to dispute. There is no necessity
for me to enter upon a justification of the
past expenditure of this special income ;
that has already been done with more or
less completeness by ministers who have
preceded me, but I deem it my duty not
to avoid showing specifically how I pro-
pose justifying the absorption of such por-
tion of the estimated proceeds of land
sales for the current year as may be re-
quired for the services of the year : The
estimated expenditure for the general ser-
vices of the year is 4,723,689 ; the
estimated revenue exclusive of land sales,
3,018,750; thus leaving to be provided
for by proceeds of land sales 1,704,939 ;
against which I think I can fairly and
justly set off the following items included
in the general services : 1. Public works
and buildings, excluding 33,950 for
annual repairs, 221,192; 2. Roads and
bridges, 512,771 ; 3. Miscellaneous rail-
way construction and building services,
125,000 ; 4. Construction of telegraphs,
58,800 j 5. Harbours and rivers im-
provements, 98,408 ; 6. Immigration,
75,000; 7. Public instruction purchase
of sites and erection of school buildings,
125,000; 8. Departmental expenses of
Lands Office (in part), 255,000 ; ^ 9.
Endowments and assistance to munici-
palities, 86,500 ; 10. Aid of buildings of
Schools of Arts, and hospitals, and Agri-
cultural Societies, 22,000; 11. Portion
of the million railway loan of 1866 to be
paid off this year, 27,000 ; 12. Refund
of land revenue, 100,000 ; which to-
gethermakea total of 1,707,671. An
amount embracing items which I trust
the Committee will agree with me in con-
sidering fair and legitimate charges against
the proceeds of land sales ; but over and
above this absorption of so much of the
land fund there will remain an estimated
surplus of 1 50,000. But apart from our
own economic views as to the proper or
improper application of this special branch
of our income, it may not be uninteresting
to inquire what the public creditor who is
deeply concerned in the management of
our affairs thinks of our administration in
this regard. I think it may be reasonably
presumed that they in England, who have
lent money to the extent of millions of
pounds to this distant part of the Empire

398

MR. COHEN.

[1878.]

make themselves acquainted with its inter-
nal condition and management, or, at any
rate, take care to inform themselves of its
sources of revenue or income, out of which
either the annual interest upon, or the
corpus of the national liability is to be
defrayed. If this be so and it is by no
means a violent presumption I think we
may flatter ourselves, considering the high
price of our debentures in London, that
the English investors, whose great
central market is the crucial test of a
nation's credit, entertain little if any
doubt of the soundness of our adminis-
tration, or of the wisdom of the course we
have been pursuing in alienating our lands
and applying the proceeds of their sale as
we have done. Leaving now this feature
in our finances, I would take up another
to which much attention has been and is
still naturally directed, viz., the large sur-
plus which, representing sales of land, has
accumulated during the past four or five
years, and which at the end of December
last was estimated to amountto 2,317,343.
The possession of so large a surplus
at the credit of the Consolidated Revenue
Fund, and unappropriated by, but at the
command of Parliament, I regard under
the circumstances of the Colony, as neither
an unmixed good nor an unmixed evil ;
for it is prone to produce a laxity in the
control of the public expenditure, and
tends to weaken that rigid economy which
is exercised by a wise governing body in
voting supplies, when all the ways and
means necessary to cover them are derived
from revenue cotemporaneously raised.
Let us see however if any and what bene-
ficial use has been made of the public
moneys which from time to time were not
required for the current needs of Govern-
ment. It will be remembered that my
honorable friend the member for East
Sydney, Mr. Stuart, when Minister of
Finance and Trade, deeming it desirable to
terminate the then existing arrangements
for the conduct of the public banking
business, entered into negotiations with the
bank of New South Wales for the future
management of the public account, and
subsequently, in May, 1876, submitted to
Parliament his draft proposals, which,
after amendment by the Assembly, were
accepted by the bank as the basis of its
relations with the Government of this

colony. By that agreement, which was
entered into for three years (but is termin-
able upon notice by the bank or after
resolution by the Assembly and notice by
the treasurer therein stipulated for), the
Government is empowered and authorized
to place any portion of the public moneys,
when the balance to the credit of the
general banking account exceeds 350,000,
on special deposit with the bank of
New South Wales and other banks in
Sydney, at a rate of interest not exceeding
4 per cent, per annum ; and acting upon
this authority, my predecessors have made
special deposits with nine of the banks,
including the bank of New South Wales,
to the aggregate amount of 1,925,000 ;
but in addition to this we received under
that agreement interest at the rate of 3 per
cent, upon the daily credit balance of the
general banking account in excess of the
sum of 50,000, which is free from inter-
est. The interest accrued under our bank-
ing arrangements during the years 1873 to
1877 is as follows : 1873, 11,432; 1874,
25,613; 1875, 38,269; 1876, 52,
629; 1877, 89,130; making a total of
217,073, which I admit has not been
altogether derived from our accumulated
surplus, as the public moneys deposited
with the banks included Trust and Loan
Funds. This amount of interest having
been applied towards meeting the annual
expenditure of those years, assisted the
taxpayers of the country to that extent to
meet the current expenses of Government ;
and this use of it I consider perfectly justi-
fiable and defensible, it being a recurring
annual profit made out of that fund which,
in part, represents the capital of the
country, and in no sense or in the slightest
degree does it affect or reduce that capital.
Passing temporarily from that govern-
mental action which affirmatively assisted
the people of the country to meet the pub-
lic demands, let us inquire what course was
taken to utilize these moneys and avoid
the imposition of further liability upon the
people. The late member for Newcastle,
Mr. Lloyd, when at the treasury, initiated
the wise practice in 1873 continued by
his successors as opportunity offered of
making advances from the consolidated
revenue surplus, on account of the different
funds established by the Loan Acts passed
since then, authorizing the borrowing of

[1878.]

MR. COHEN.

399

moneys for the prosecution of the various
public works therein provided for. It
must be patent to every one with the
slightest knowledge of these matters that,
in seeking a loan in the great money
markets of the world, it would be necessary,
as well for the national credit as for secur-
ing the most advantageous terms, that the
loan should be floated in large amounts,
and necessarily at a comparatively long
period prior to that when the money would
be actually required for disbursement. It
would certainly have been impossible to
have advantageously procured these
moneys by loan in such small sums or at
such opportune times as those when the
whole of these various advances took place ;
and hence it is clear that a large saving
has been effected by these operations. But
to place something more definite before
the committee, let us compare what the
position of the colony would have been, as
regards the interest upon loans, in the
absence of this surplus, and the position
she has been in with it. It is obvious that
in the former case we would have been
compelled toborrowat least the 1,600,000
advanced to the Loan Acts; and by a
statement which 1 have had prepared,
showing these various advances, with inter-
est at 4 per cent, per annum calculated
upon them from their respective dates
down to December 31st, 1877, 1 find that
the interest amounts to 94,895, and
that is the sum which the country would
have had to pay in the shape of interest
had the moneys been borrowed at a like
rate on the days when, and in the amounts
in whiph these advances were severally
made. But being in possession of the
surplus, the country has not had to pay
this 94,895. If, therefore we add this
sum to the 217,073 of actually earned
interest already alluded to, we have a total
definite money gain to the State of
311,968, which, however, would have
been subject to reduction to the extent of
any small increment of interest arising out
of the temporary banking of borrowed
moneys under the present Bank agree-
ment, since that increment might have
been applied to part payment of the in-
terest due on those moneys, and thus have
reduced "pro tanto" the amount of in-
terest to be provided for from other
sources. Let us proceed now to other

considerations showing advantages spring-
ing out of our " embarras de richesses"
We cannot forget and pass by as trivial
the beneficial effect upon our credit in the
great investing markets produced by our
abstention from borrowing whilst still
carrying on our great public works ;
indeed this is practically shown by the
unprecedentedly high prices our securities
command in the mother country. Our
credit has become strengthened, our repu-
tation for wealth heightened, and our
importance in the family of colonies, if not
of nations, advanced in a degree that may
well make us proud and gratified as a
people, scarcely emerged from the infant
stages of national growth and advance-
ment. Peering a little into the future, we
may reasonably assure ourselves that when-
ever the time arrives for our having re-
course to borrowing, to reimburse our
Consolidated Revenue Fund the sums
advanced for the completion of our rail-
ways (if our bonds maintain the high
standard they have now reached an anti-
cipation we are justified in relying upon )
we shall not seek to pledge our credit for
some speculative or uncertain undertaking;
but we shall ask to be entrusted with
money to pay wholly or partially, as the
case may be, for the construction of a
completed reproductive work, yielding a
net profit almost equal to, if not exceed-
ing, the rate of interest payable on the
loan we may be seeking. This is a position
of stability to be envied indeed, a position
but rarely if ever attained by any colony
or nation, and one which, from a financial
point of view alone, may in all justice
entitle us to the designation of the
" Mother of the Australias." And let it
be observed that the surplus, or in other
words, the proceeds of these land sales,
whilst employed with incalcuble advantage
in these directions, are also at the same time
assisting in opening up and improving our
great national territory. Adverting again
to the large special deposits made with the
Sydney Banks, I should like to make
reference to, and comment upon, the ob-
servations that have been made from time
to time, questioning the soundness of the
policy that sanctioned these transactions.
As to whether it was wise to part with
such enormous areas of the public domain,
as resulted in the realization of the princely

ME. COHEN.

[1878.]

surplus from which these deposits were
partially and to the greatest extent made,
I have now nothing to do, but will confine
my remarks to the position of a Govern-
ment which finds itself the trustee of an
immense sum of money not needed for the
current Governmental outlay. I am con-
vinced in my own mind that the distribu-
tion of this large sum of 1,925,000 under
these circumstances amongst the banking
institutions of the city was wise and pru-
dent ; and to draw a parallel which is
certainly strong, though it may not be
thought quite complete, was exactly what
a private individual, careful of his own
interest and welfare, would have made
with his own moneys, and surely a multi-
plicity of debtors with a division of risk is
preferable to their unification. But some
persons have raised the objection that the
money having been deposited in the Banks
was lent by them to the pastoral tenants
of the Crown to enable them to purchase
and monopolize large areas of the public
estate. Well, assuming, for the sake of
argument, that the money was so lent, I
take it that it would have been, impossible
for the Government, in placing this cash
on deposit at interest, to impose upon the
receiving Banks any conditions as to their
use of it. Having reliance on the institu-
tions in which the money was placed, and
being satisfied as to their stability, the
duty of the Government, so far as the
Banks were concerned, was in my judg-
ment completed. To have prohibited any
particular use of the deposits by the Banks
would in all probability have resulted
in their refusal to accept them, and the
Government Bank the Bank of New
South Wales would have had in that case
exclusive charge of these enormous sums.
Without for one single moment reflecting
upon the soundness and thorough relia-
bility of this institution, I think few per-
sons, if any, will say that it would have
been more discreet or better in the general
interests of the public to have confined the
disposal of the Government funds to it
alone ; and it certainly strikes me that to
have kept this immense sum in the Trea-
sury, or to have insisted upon its being
kept unemployed in the Bank's strong
room, at the Treasurer's call, which would
have been tantamount to the withdrawal
of so much capital from circulation,

would have been an act of folly of
which no Treasurer at least would care
of his own motion to take the responsi-
bility. The injurious effect of such an
arrangement upon the commercial and
monetary interests of the country, I am
sure, could not be foretold. And yet
it appears to me that this was the only
alternative course open ; pending however
the future permanent appropriation by
Parliament of the surplus we are making
advantageous use of it, by allowing it to
fructify in the manner described. Al-
though the sum of 1,600,000 has been
advanced from this surplus to Loan ac-
counts, and the greater part spent on rail-
way construction, I do not propose asking
Parliament to interfere with the Acts
authorizing the loans to which the ad-
vances have been made ; thinking it better
to allow matters in this respect to remain
in statu quo, so that the Acts may be put
into operation when the necessity arises.
A very important matter in connection
with our finances is the consolidation of
out public debt, and making our securities
uniform ; i\d the Government propose
giving their earnest consideration as early
as practicable to a scheme for effecting
these objects, which may not alone prove
of substantial pecuniary advantage, but
would in all probability improve our posi-
tion as a borrowing community. As to
the " Loans Accounts," I deem it unneces-
sary to do more than refer honorable
members to the statements accompanying
the Ways and Means and explanatory
statements for information concerning
them. I have now, Mr. Garrett, ap-
proached the conclusion of the important
duty imposed upon me by my official
position, having striven to place clearly
before the Committee the exact financial
status and prospects of the Country, and I
tender them my warmest thanks for having
so patiently borne with me. The dis-
astrous drought which still lingers in
our midst and fills the mind with
anxiety has converted large areas of our
finest pasture lands into barren wastes
and decimated our flocks and herds in
untold numbers ; but I trust that the
" windows of heaven " may soon be opened,
and the parched earth be once more
blessed with an abundance of genial rain,
so that her now sterile surface may be

[1878.]

MR. COHEN.

401

again enriched with the grasses, and her
dried-up rivers and brooks be filled with
the waters which give sustenance and life
to the stock now tortured with the agonies
of thirst and starvation ; and painfully
sensible as we may be, and no doubt are,
of the seriousness of this visitation, we
should not despair of the future, for a
retrospect of the past must generate hope
and courage. We have a territory happily
blessed with a variety of resources unsur-
passed if riot unequalled by those of any
other country. Our progress has been
such as to excite the wonder and admira-
tion of all nations who obtain a true and
impartial knowledge of our affairs ; and
with this enlightenment diffused amongst
them, from picturing us as a small and in-
significant community, they begin to regard
us as an enterprising, advancing, and im-
portant Colony. Living under the power-
ful sceptre of a Sovereign whose imperial
splendour radiates towards and shines
upon us, we at the same time, by the
position we are assuming as the chief of
the Australian group, contribute our small
share of lustre and importance to the
British throne. Connected with the great
centres of civilization by an electric belt,
which was ere while looked upon by us as
the hopeless realization of a wild and
chaotic dream, we now esteem its pos-
session as a necessity. Fleets of magnifi-
cent steamers now vie with each other in
their efforts to secure our trade, and are
converting the once uncertain and pro-
tracted voyage between here and Europe
into a pleasure excursion, the length of
which can be reckoned to a nicety. The
merchants of all parts of the world
are competing for New South Wales

commerce, which has, with giant strides,
at length reached almost incredible dimen-
sions. Our sheep, horses, and cattle, re-
duced as they have been by famine, are
still numbered by millions, and in quality
of breeding take their place with the
finest strains in Europe. Our wool has
become a most important staple in the
great manufactories of the globe. We
possess a soil which " if you tickle it with
a hoe it laughs with a harvest." The
mineral wealth we obtain from the earth,
from its variety and richness, seems to vie
in splendour with the star fretted heavens
that o'er-canopy us. It has influenced,
and still influences, in no inconsiderable
degree, the money and metal markets of
the world. We have called science to our
aid, and have cheerfully expended millions
of pounds in piercing with the locomotive
engine the mountain ranges, which with
their heavy frown seemed to effectually
defy the encroachments of man, and to
forbid communication between the coast
the first scene of settlement in the
Country and the almost illimitable terri-
tory now covered with our flocks and herds.
And these are our advantages, and* the
momentous interests with which we have
to deal, whilst yet in the earliest stages of
national existence. Determined sincerely
to devote ourselves to the public business
of the State, our earnestness should be co-
ordinate with our responsibilities. With a
high and patriotic sense of duty pervading
the Parliament, and with wisdom and
prudence guiding its counsels, our young
Colony so beneficently favoured by a benign
Providence must become great, and its
people gradually mature into a contented,
prosperous, and influential Nation.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the Honorable HENRY
EMANUEL COHEN, made 6th November, 1878.

LEGISLATIVE ASSEMBLY.

6tli November, 1878.

FINANCIAL STATEMENT.

MR. CAMERON : In rising to move,
which I now do, " That there be granted
to Her Majesty, out of the Consolidated
Revenue Fund, the sum of ,9 for Fitzroy
Dock Contingencies, 1875 Further
sum," I have to ask for the kind forbear-
ance of the Committee, .vhilst I endeavour
to place before them the present and pros-
pective financial position of the Country.
In January last, when I had the honor of
making my first Financial Speech,the Colony
was unfortunately suffering from a severe
and long unbroken drought, the effects of
which were then keenly felt and are not
ven yet quite exhausted ; but happily since .
that time the country generally has been
blessed with rains which, under a benefi-
cent Providence, have checked the contin-
uance of a great calamity, and greatly
restored confidence to all classes of the
community. It is to be hoped, now that
a series of propitious seasons has set in,
that the serious losses incurred during the
last three years may be speedily retrieved,
and the country be favoured once again
with long-continued unchecked prosperity.
I may here premise, that in pursuance
of the course I think most convenient, I
shall when si ating money results or calcu-
lations give the round sum in pounds,
excluding all mention of shillings and pence,
referring honorable members for more
precise information to the Explanatory

3 M

Statement and the Accounts which will
be placed in their hands during the
evening. This will allow of a sufficiently
accurate treatment of the accounts, so far
as my personal utterances are concerned,
without unnecessarily overburdening them
with figures, or rendering me more tedious
to the Committee than I am afraid I per-
force must be, even with the adoption of
this rule as a relief. Accounts were sub-
mitted with the last Ways and Means
showing the revenue and expenditure for
the years 1876 and 1877 respectively and
the probable revenue and expenditure of
the year 1878. As the account for 1876
has since been closed no necessity now
exists for again submitting it, the more
especially as the final result differs but
little from that previously shown. In the
last account submitted for that year the
accumulated surplus at the end of 1876
was estimated to amount to 2,09 6, 32 2,
but on closing the account finally the
actual surplus was found to be 2,112,199,
a sum only 15,877 in excess of that pre-
viously stated. This excess arises entirely
from the unused appropriations of 1876
having turned out more than was estima-
ted in January last. The present Ways
and Means contain the following accounts
relating to the Consolidated Re venue Fund,
viz. : An account of revenue and expen-
diture for 1877, marked No. 1 ; an ac-
count of actual and estimated revenue
and expenditure for 1878, marked No.
2 ; an account showing the proposed ex-
penditure in relation to the estimated
Income for the year 1879, marked No. 3.
In order to show clearly wherein the two
first-mentioned accounts differ from those

404

MR. COHEN.

[1878.]

formerly submitted it will be necessary to
refer to them separately and somewhat in
detail. The first of these is the Account for
1877, from which it will be seen that the
accumulated surplus at the close of 1877
is now estimated to amount to 2,331,610,
whereas in the account formerly submitted
it was estimated at 2,317,343, thereby
showing a small increase of 14,267,
which is accounted for in the following
manner : to the larger surplus brought
from the account of 1876, as already ex-
plained, viz., 15,877 has to be added an
increase on the amount of appropriations
for Services of 1877 estimated as not
likely to be required, viz., from 310,000
to 360,000, equal to a further credit of
50,000, which gives a gross additional
credit of 65,877 ; from this, however,
have to be deducted the following addi-
tional charges, since found necessary, viz.,
Debentures paid off, further sum 500 ;
charges on collections, furthersum, 3, 192 ;
Pensions under the Superannuation Act
Repeal Act, further sum 1,049 ; amount
of Supplementary Appropriations during
the last Session of Parliament in excess
of the amount charged in the last account
submitted, 28,476 ; amount of the further
Supplementary Estimate for 1877 and
previous years, now before the Assembly,
18,673. Total, 51,890 Less premium
on Debentures since transferred from the
1877 to the 1876 account, to which it
more properly belongs 280, in all
51,610, leaving the difference just stated,
viz., 14,267. The new clause inserted in
the " Appropriation Act for 1877," giving
a currency of two years to all the Par-
liamentary appropriations for that year,
renders it impossible to state at the pre-
sent time, with absolute accuracy, the
probable savings which will finally accrue
thereon. Although the votes and balances
of votes for that year remaining unexpended
on the 30th September last (the latest date
up to which they could readily be ascer-
tained) amount to the large sum of
1,030,053, it has not been deemed
advisable to estimate these savings at
this time at more than 300,000 (exclu-
sive of the Treasurer's advance vote of
60,000), which is only 50,000 in excess
of the estimate last made. It is however
anticipated that at the close of the year,
when all the unexpended appropriations

must be written off, except those in con-
nection with which contracts exist, the
savings will be found to amount to a sum
considerably larger than that now estP
mated. With this brief reference to the
account for 1877, I will now refer to that
for 1878, which is necessarily composed of
both actual and estimated revenue and
expenditure, as three months of the year
had to run from the time embraced by the
accounts now placed before the Committee.
In the account submitted with the Ways
and Means of January last it was esti-
mated that the accumulated surplus would
amount to 2,467,404. In the present
account it is only estimated at 2,306,526;
thus showing a decrease of 160,878,
which is the result of certain necessary
alterations in the account since the last
Financial Statement was made. These
alterations are as follows : 1. Additional
charges Under the Additional Estimate
submitted after the Financial Statement
was made, appropriations were sanctioned
for the services of 1878, in excess of the
amount charged in the last account sub-
mitted for this year, to the extent of
144,610 ; special appropriations, as per
account now submitted, further sum,
103,100 ; amount of the Supplementary
Estimates, for 1878, now before the
Assembly, 218,819; total additional
charges, 466,529. 2. Additional credits:
Increase in surplus from the year 1877,
as already explained, 14,267 ; revenue
as now estimated for 1 878 in excess of
former estimate, 41,384 ; amount of esti-
mated savings on appropriations for 1878
(exclusive of the Treasurer's advance vote
of 30,000 taken credit for in last ac-
count), 250,000; total additional credits,
305,651. Deducting the additional
credits from the additional charges, there
is left a debit balance of 160,878, which
is the amount of the reduced surplus for
1878, as already stated. The accounts
for 1878 as now submitted include the
actual revenue receipts up to September
the 30th, and the estimated receipts for
the remainder of the year ; and having
carefully examined the figures comprised
in the accounts, I have reason to believe
that actual results will justify them. It
will be obsei*ved that I now calculate
the total revenue for the year 1878
as 4,915,134, as against my original

[1878.]

MR. COHEN.

405

estimate of January last of 4,873,750,
being an increase of 41,384. If hon-
orable Members refer to table A, page 17
of the Ways and Means, they will see the
main sources, from which there has been
or is likely to be, any material increase
upon the yield of 1877, and on comparing
it with the like table included in the
"Ways and Means of January last, they
will see how far niy original Estimates for
the year vary from those now circulated.
Taking "Customs" as a whole, the actual
receipts for 1877 were 1,074,733. My
original estimate for the current year was
1,094,700, but the collections up to
September the 30th totalled 860,007,
and the sum I anticipate receiving under
this heading for the remaining three
months of the year is 302,820, thus
aggregating 1,162,827, or 88,094 more
than the revenue for 1877, and 68,127
more than my original estimate of Customs
receipts for this year. The articles which
chiefly yield this increase, in the partly
received and partly estimated Customs
revenue of 1878, over the actual revenue
for 1877, are spirits, which will, it is
believed, contribute 43,250 ; tobacco
and cigars, 8,500 ; sugar and molasses,
14,560 ; and cash payments by the
Government of South Australia, 19,300.
This evidence of the expansiveness of our
trade, and the growing resources of the
Colony cannot fail to be satisfactory. In
January last, when dealing in my Finan-
cial Statement with the Customs Revenue,
I dwelt at some length upon the Murray
River Customs receipts, and succeeded, I
think, in demonstrating that these receipts
as a distinct classification or sub-classifi-
cation of revenue, with the then existing
system of keeping the accounts in the
Customs Department, were somewhat
misleading, in consequence of the diver-
sion of our Border trade, since the first
adoption of the " Murray River Customs"
as a separate and independent head of
income. I then intimated to the
Committee that instructions had been
issued by me to alter the mode of
keeping these accounts, under which
change I believe they will be found
more intelligible and satisfactory. I
would here remark that from the "Way*
and Means as now laid before honorable
members, I have eliminated " Murray
River Customs' receipts as a distinct

item of income, having included the amount
of duty under each article imported into
the Colony across the Murray or the Bor-
ders, in the total amount stated in the
General Customs Estimate to have been,
received or expected to be, received
for the same article. The cash paid direct
by the Government of South Australia to
this Colony under the existing Border
Duties Convention must still specifically
appear in the accounts as a cash payment,
since it is obviously impossible to make
any distribution of it. The accounts, how-
ever, are now so kept that the duty col-
lections upon goods imported into New
South Wales across the Border from any
of the neighbouring Colonies can be easily
ascertained, and the extent of our inter-
colonial inland trade with any one or more
of them be gauged accordingly. As, how-
ever, the Committee may desire to be in-
formed of the state of our commerce across
the Murray and its tributaries, I may
mention that from t January the 1st to
September the 30th of this year, the duties
collected at the Murray River stations and
inland bonding warehouses, which embrace
those situated at Albury, Howlong, Corowa,
Tocumwal, Moama, Swan Hill, Euston,
Wagga Wagga, Brewarrina, Deniliquin,
Hay, Wentworth, Wilcannia, and Bourke,
amounted to 94,088, of which sum,
7,444 was levied upon New South Wales
goods, 11,256 upon South Australian
importations, and 75,388 upon Victorian
importations into this Colony. The direct
cash payments made by the Government
of South Australia to this Government
during the period named, under the agree-
ment between the two Colonies aggregated
21,800, and adding this sum to 94,088,
the total of the collections upon New
South Welsh, Victorian, and South
Australian merchandise at the Murray
River and inland bonds just named, we
have 115,888 as the actual receipts for
the first nine months of the current year ;
but, inasmuch as the 21,800, which forms
part of this sum of 115,888 included
11,367 due at the close of 1877 on
account of that year, the sum strictly
representing the entire Border collections
for the whole of that trade for that portion
of the year under investigation would be
reduced to that extent, and therefore onlj
amount to 104,521. In order, how.
to show the Border Customs

406

MR. COHEN.

[1878.]

tevied and paid during that period upon
goods imported from Victoria and South
Australia only, and which I will designate
" Intercolonial Border Customs Revenue,"
we must further reduce this last-mentioned
sum by 7,444, the amount of duty shown
to have been collected upon New South
Wales goods, which leaves 97,077 as the
" Intercolonial Border Customs Revenue "
in hand and strictly proper to the nine
months of 1878, terminating on Septem-
ber 30th. But a few moments ago I
showed that the whole of our Border trade
for the first nine months of 1878 even-
tuated in a total revenue through the
Customs (including the amount levied on
New South Wales goods) of 104,521, a
result which indicates that this particular
ramification of our revenue shows no sign
of retrogression, as compared with last
year; for taking 10 4,521 as the actual
product of the Border Customs duties
collected during the first nine months of
the year, and increasing it by one-third of
itself, viz., 34,840, as the proportionate
payments that should be made for the
closing three months, we will then have
139, 361 as the actual and prospective
yield from this branch of our income for
.1878, as against 130,969, the total of
Murray River Customs receipts in respect
pf 1877, as shown in my Financial State-
ment of January last. In consequence of
the system now adopted in keeping and
preparing the Murray River Customs
accounts, the separate amount of 120,061,
which appeared in my previous Budget
Statement as " Murray River Customs
Receipts for 1877," as I have already in-
timated, has been struck out of the present
^accounts, and distributed through the
various items which realized it ; conse-
quently, while there is a difference between
the detailed figures of the actual Customs
.Revenue of 1877, as stated in the Ways
,nd Means placed before Parliament in
January last, and those now submitted,
yet the aggregate is alike in both cases.
Jt will be convenient here to state that the
Border Duties Convention between this
Colony and South Australia has been
extended to December, 1879, the Go t vern-
ment of that Colony having agreed to
.continue the payment of the annual
commutation rate of 35,000 up to that
period. Taking up now the Land Revenue,
I will first direct my attention to " Auction

Sales," from which, in January last, we an-
ticipated receiving 1,000,000 during the
current year, inclusive of balances due on
sales effected in 1877, but which will
according to my present anticipations pro-
duce 930,902 only, of which sum
616,902 had been actually received up to
30th of September last. I may observe
that my previous estimate under this
heading for 1878 was about one million
less than the actual income for the pre-
ceding year, the present administration
having determined to place some restriction
upon the enormous alienation which had
been prevailing prior to their assumption
of power. True, climatic and financial
causes may have gradually engendered a
disinclination, and perhaps in some cases
an inability on the part of Crown
tenants and others to purchase as exten-
sively as they had theretofore been doing ;
but these causes w^ere not apparently ex-
erting themselves to the extent of pre-
venting large auction purchases when this
Government succeeded to office, for up to
the close of the past year the auction
system was in anything but a state of
inactivity, 321,735 acres having been dis-
posed of under it, in the October-December
quarter. I think then I may venture
to assert that the first material check upon
the wholesale parting with the public
domain " under the hammer," consisted
in the action of my honorable colleage, the
Premier, who raised the upset price of the
lands offered for sale from 20s. to 25s. an
acre, and refused to submit them to public
competition in the large areas that had
been previously authorized. The declared
intentions of the Government in this re-
spect, as announced to Parliament, have
thus been faithfully carried out and con-
sistently adhered to,' for, as will be gathered
from the figures just quoted, our original
estimate of land auction sales will pro-
bably fall short of realization by about
70,000. " Selections after auction" will
only return 122,258 in lieu of 160,000
originally estimated ; the failure in reach-
ing the larger sum being attributable to
the administrative action of the Minis-
ter for Lands, who has practically with-
drawn the public lands from after-auction
selection, for reasons already declared by
him, and which I need not now enter upon.
" Improved purchases " will in all proba-
bility fully realize my former estimate,

[1878.]

MR. COHEK

407

viz., 200,000, whilst "provisional pre-
emptive right sales," which are more popu-
larly known as improvement purchases
under the 31st clause of the Lands Acts
Amendment Act of 1875, will bring to
the revenue, it is anticipated, 24,967,
though the Ways and Means for this year
did not contemplate any receipts whatever
from this source. Already, up to the end
of September, we have received 16,967,
and 8,000 further will, it is calculated,
be obtained from it by the 31st of Decem-
ber. " Deposits upon conditional pur-
chases " have fully realized the proportion
of estimated income for the first three
quarters of the year, for which the receipts
are shown in the Ways and Means now
submitted. My entire estimate for 1878
was 425,000, and the amount paid into
the Treasury for the nine months up to
the end of September was 322,929. I
reckon upon receiving from the 1st of
October to the 31st of December a further
sum of 107,000 for conditional purchase
deposits, so that if the actual results sup-
port my expectations, the original esti-
mate for the year will be overleapt by
about 5,000. From " instalments on
conditional purchases" 1 estimated to ob-
tain 10,000, but already up to the close
of September there has been paid into the
Treasury the sum of 14,140, or 4,140
more than my estimate, and this excess I
am led to believe will be increased by the
further sum of 5,500 by the end of De-
cember next. The payments into the
Treasury, for the first nine months of this
year, as " balances on conditional pur-
chases" aggregate 39,555 ; and I expect
a further yield by the 31st December of
17,000, making an anticipated total of
56,555, as against 60,000, the amount
stated in my budget thus leaving a con-
templated deficiency of about 3,500.
When in January last I was considering
the financial prospects of the Colony for
the now current year, I referred in terms
of congratulation to the satisfactory liqui-
dation by the conditional purchasers of
their liabilities to the State, and expressed
a confident anticipation that their future
engagements would be promptly met,
although at that date the Coiintry was
still suffering from protracted drought.
I then estimated that the 1878 receipts
for " interest upon conditional purchases "
would reach 155,000 as against

126,000 for 1877; and it must indeed
be assuring to know that the depressing
influences before adverted to have not
prevented the fulfilment of this pre-
diction ; the actual payments up to the
end of September being 157,226, or
2,226 above the estimate for the entire
year, before the expiration of which it is
computed that a further sum of 8,000
will be received. Having thus referred to
our income for 1878 from the Crown
lands of the Colony, I feel some satisfac-
tion in inviting your attention to the evi-
dence of the attractions of our ports for
the commercial world, as contained in the
enlarged amount of "pilotage, harbour
and light rates and fees " expected to be
collected this year, viz., 34,797, of which
sum 25,297 had been paid up to the 30th
of September. This branch of revenue
will, if my present expectations for 1878
be fulfilled, exceed by 6,000 the point at
which it arrived last year, which was
28,795. Coming now to the salient
feature in our revenue, included within
the classification of " receipts for services
rendered," namely, "railway receipts," I
confidently expect that they will fully
bear out my Ways and Means for 1878,
in which they were put down at 875,000.
Although the first nine months of the
year have not produced the full average
for that period, yet, as the remaining
three months form the busiest season, they
will no doubt, with the extensions to
North Wagga Wagga and Tamworth, now
contributing to the earnings, yield the
balance necessary to complete this estimate.
Before closing with the accounts for 1878,
and by way of general reference to the
expenditure upon public works throughout
the Colony, I would inform the Committee
that during the expired three-quarters of
the current year an expenditure of
604,955 has been incurred and directly
charged against the Consolidated Revenue,
as follows : For harbours and rivers
works and improvements, 71,279 ;
public works and buildings under the
Colonial Architect, 188,341 ; roads and
bridges, 345,335. Under the different
Loan Acts there has been an outlay during
the same period of 597,377 for railways,
telegraphs, and other works. Adding this
last-mentioned sum to the 604,955 for
public works defrayed from Consolidated
Revenue, we have a total expenditure of

MR. COHEN.

[1878]

1,202,302 upon these great branches of
the public service for the first nine months
of 1878. During the corresponding period
of 1876 the expenditure for like services
from Consolidated Revenue was ,418,655,
and from loans, 497, 411, making together
916,066 ; and the same classes of dis-
bursements for the analogous three
quarters of 1877 were respectively
477,751 from Consolidated Revenue, and
722,066 from Loan Funds, or together
1,199,817. These comparative statements
show that the entire moneys expended
upon the public works of the Colony as
just particularized, during the first nine
months of 1878, were slightly in excess of
the like expenditure for the corresponding
period of 1877, and 286,000 more than
that for 1876.. As it is usual before
entering into any explanation respecting
the proposed expenditure of an ensuing
year, in relation to its estimated income,
to furnish a synopsis or abstract of the
balances which stood at the credit of the
various public accounts, according to the
books of the Treasury, at the close of the
month immediately preceding the delivery
of the financial statement, these balances
have been made up, as indeed all the other
statements with the present Ways and
Means have, to the 30th September last,
time not having permitted of their being
brought up to the 31st October, and will
be found detailed in the statement com-
mencing with page 113, of which the fol-
lowing is an abstract, viz. : Public
Account Consolidated Revenue Fund,
1, 986,714; OldLoans Account, 171, 924;
Trust Fund, 1,042,975 together,
3,201,613 ; Special Loan Funds,
318,083; making in all, 3,519,696.
This amount was distributed as follows,
viz. : Bank of New South Wales Lon-
don Branch : Balance in London on 30th
June, 1878, 556,003; amount of remit-

tances prior to that date not then brought
to account, 100,000 ; total, 656,003.
Head Office, Sydney : Public account,
164,797; Special Loan Funds, 193,083;
making a total in Bank of New South
Wales of 1,013,883. Special deposits in
the Local Banks, viz. : -Bank of New
South Wales, 350,000 ; City Bank,
250,000 ; Oriental Bank, 250,000 ;
Australian Joint Stock Bank, 200,000 ;
Bank of Australasia, 175,000; English,
Scottish, and Australian Chartered Bank,
175,000; UnionBank, 175,000; London
Chartered Bank, 175,000 ; Mercantile
Bank 175,000 ; in all, 1,925,000 thus
showing a total cash balance in the banks
of 2,938,883, to which has to be added
the amount of the securities in the Trea-
sury Chest, viz., 580,813, which gives a
total of 3,519,696. The cash balance in
the London Branch of the Bank of New
South Wales, as just stated, was the
balance according to the accounts of the
Treasury, which was, however, 140,923
in excess of the balance shown by the
bank's own statements. This difference is
the amount of certain payments made by
the bank, which had not been adjusted in
the Treasury books on the 30th Septem-
ber last, and to which I will again have
occasion to refer. On the 1st July inte-
rest on debentures fell due in England to
the amount of 237,452, so that the true
balance in London at the present time is
probably not quite 250,000. While
dealing with these balances it may be con-
venient to refer also to the position of the
Consolidated Revenue Fund as a whole, in
order to show what are its present and
prospective assets and liabilities, with a
view to arrive at the estimated surplus at
the close of the present year, as shown in
the account for 1878, marked No. 2. This
information comes properly, however,
under the head of

ASSETS AND LIABILITIES.

The Assets are as follows :

1. Cash in Banks on 30th September, 1878 1,086,714

2. Amount due at same date by different Loan Funds to the Consolidated Eevenue

Fund for advances pending sale of debentures ... ... 1,775,000

3. Amount of estimated revenue for the last quarter of 1878, as per statement page 21

of the Ways and Means, marked A ... 1 , 464, 630

4. Amount of the Treasurer's Advance Vote for 1877, to be transferred from Trust

Fund on 31st December, 1878 60,00

5. Balance due from the Superannuation Fund Repeal Fund 3,59
f>. Advances on account of the Imperial Government, unpaid

Total Assets ... 5,290,252

[1878.]

MR. COHEN.

409

Liabilities.

The following are the liabilities, actual and estimated :
1. Appropriations of 1877 outstanding on 30th September, 1878, as per

Statement page 23 of the Ways and Means, marked B ...
Less amount estimated as not likely to be required ...

1,030,053
300,000

Leaving a liability of ... ... 730,053

2. Appropriations of 1878, including balances on additional special appro-

priations, outstanding on same date... ... ... 2,296,180

Less amount estimated as not likely to be required ... ... ... ... 280,000

Leaving a liability of 2,016,181

3. Amount of Supplementary Estimates for 1878 and previous years now before the

House 237,493

The total liabilities thus being 2,983,727

Which deducted from the total assets leaves an estimated surplus at the close of the

present year, as shown in the account for 1878, of

2,306,525

With respect to the difference of 140,293
between the balance on June the 30th last
in the London branch of the Bank of New
South Wales, as shown in the Treasury
books, and that shown by the bank's own
statements I would explain, that in working
our railway system, which is daily growing
in dim ensions, it has become absol utely neces-
sary to keep in reserve a large stock of ma-
terial for daily distribution and use, espe-
cially of railway iron, which is necessarily
imported from the Home Country in quan-
tities sufficiently large to cover our require-
ments for different extensions for one,
two, or more years. Honorable members
will at once see that if it be desirable to
preserve an accurate record of the real ex-
penditure for each year, it would be obvi-
ously misleading to finally and definitely
charge against any one year in which
stores may be merely taken into stock the
entire cost of such stores, which may be,
as they are intended to be, used or con-
sumed in a series of two or more years. It
is in practice found impossible, as will
upon consideration be apparent to honor-
able members, to distribute, for instance,
railway iron, immediately upon arrival
in the Colony, and to charge it to the dif-
ferent votes for railway extensions in the
exact proportions in which it will be ulti-
mately wanted and should therefore be
distributed and charged. Long experi-
ence proves that the more convenient
and more accurate system is to make the
requisite final charge to the respective
Parliamentary appropriations, at the time
when and according to the quantity
in which the material covered by the

proposed charge is actually required and
issued for the construction of authorized
lines. Pending this issue, however, it is
essential that the cost of the material
should be debited to some vote, and it is
with the object of enlarging the loan
appropriation by Parliament, in 1872, of
a sum of 75,000, for this purpose, which
sum is now totally inadequate to the public
requirements, that the sanction of the
Legislature to a further loan estimate of
225,000 will be solicited duiing the
session. As will be described in the Esti-
mates, this particular vote will be recouped
from time to time as stores or materials
may be finally issued, and their cost trans-
ferred from this to the vote which finally
covers the service for which such stores or
materials are intended ; indeed, in its
nature this vote will be the same as,
though in its operation it will in harmony
with its terms be more confined than, the
Treasurer's advance vote. And as this
sum of 140,293 represents payments for
railway material made by the Bank of
New South Wales in London, the Treasury
has been unable, for the reasons stated,
and for the want of a further vote beyond
the 75,000, which is quite exhausted, to
transfer the 140,293 as a charge against
any service, and it therefore remains in
the Treasury books uncredited to the bunk.
Adverting now to the papers which deal
with the "accounts for 1*79, it will be
noticed that then <! to the !

mates of expenditure a schedule showing
the total compensation received by
officers in the public service as hold more
than one appointment, or are in receipt of

410

MB. COHEN.

[1878.]

allowances outside their voted salaries,
this information being given in accordance
with the promise of the Government, and
in harmony with what Parliament has a
right to expect. I would further point
out that we have for the first time in-
cluded in the present Estimates of Expen-
diture for 1879 the salaries for the officials
employed in the Sydney Immigration
Office, which have hitherto been paid out of
the general immigration vote. The ex-
penses connected with the Erysipelas Hos-
pital, which may now be considered a per-
manent institution, are likewise submitted
for specific appropriation, as are also the
salaries and expenses connected with the
Money Order and Government Savings
Department, part of which has heretofore
been paid, under the authority of the
loth clause of the Government Savings
Bank Act of 1870, out of the moneys
received by that department, and without
being included in the annual Estimates.
In accord with the administrative changes
effected by the present Government, the
Estimates of the Attorney General's De-
partment are submitted independently,
instead of as heretofore being included in
those for the Department of Justice and
Public Instruction ; whilst for the same
reason the Estimates for the Department
of Mines include the expenditure con-
nected with the " Occupation of the
Lands Branch," the " Stock Branch," and
the " Minor Roads Branch," which has
previously formed part of the Estimates
of the Lands Department. With these
allusions to alterations in the framing of
the Estimates for 1879, I shall now pro-
ceed to deal with the estimated accounts
for that year. Bringing forward from the
account for 1878 the accumulated surplus
which it is estimated will exist at the
close of this year, viz., 2,306,525,
there .has to be added thereto the esti-
mated revenue for the year 1879, which
it will be seen from statement A of the
Ways and Means, page 17, amounts to
the sum of 5,031,155, thereby giving a
total credit of 7,337,680. From this
credit there has to be deducted the esti-
mated expenditure for 1879, which will
be found, according to the account marked
No. 3 to amount to 5,331,070, which
would leave at the end of 1879 an esti-
mated accumulated surplus of 2,006,610.

It will be observed from this statement
that while the expenditure of 1879 is
estimated at 5,331,070, the revenue is
estimated at only 5,031,155, which shows
an estimated expenditure above the esti-
mated revenue of 299,915. This differ-
ence between the estimated income and
expenditure for the year results however
from an addition to the expenditure of
358,000, in connection with a large
number of public works which in the
absence of the surplus and in accordance
with the practice that prevailed prior to
its possession would have been provided
for by loan. The Government therefore
consider that those items may fairly stand
as a charge against the accumulated sur-
pluses of pi'evious years, and being in
effect so charged, and the general expend-
iture from the year's revenue being
reduced by the amount already mentioned,
namely, 358,000, there will be left a
balance in favour of revenue of 58,054.
I will now read a list of the items referred
to, which will be found to more than
account for the apparent deficiency alluded
to, viz. : Breakwater, Clarence River,
20,000 ; Prison Buildings, &c., Trial
Bay, further sum 10,000; Dredge for
Rivers and Lakes, 15,000 ; Dredge, Tug,
and Punts, for Manning River, in the first
instance 18,000 ; Punts for Dredge
Service, 13,000; new Dredge, &c., Syd-
ney Harbour 15,000; erection of Light-
house, Cape Green, 17,000; towards
the erection of a new Lunatic Asy-
lum at Callan Park, 25,000; towards
the completion of public offices for
the Lands Department, further sum,
35,000; for completion of new public
offices for Department of Public Works
and Colonial Secretary, further sum,
45,000 ; towards the erection of new
Free Public Library, 75,000; towards
the erection of new Law Courts, 20,000;
towards the extension of the new General
Post Office, including 13,300 payable to
the honorable Alexander Campbell under
arbitrators' award, for resumption of land
in Pitt-street, 50,000, making a total
of 358,000. In the special appropri-
ations " Interest on debentures and
funded stock " is increased from 520,000
for 1878, to 565,000 for 1879; the
difference, 45,000, being intended to
provide for the interest payable on our

[1878.]

MR. COHEN.

411

projected new loan of 1,500,000, now-
awaiting negotiation in London, to which
I shall, later on, have occasion to refer
more fully. Coming now to the depart-
mental estimates of expenditure, I would
trespass upon the attention of the Com-
mittee for a short time, whilst making
some general comparisons between the
authorized and further estimated expendi-
ture for 1878 and that proposed for 1879,
and dilating upon some of the proposed
votes for the latter year. It would
certainly be quite out of placo for me to
attempt to indicate the items line by line
in which the Estimates vary for the two
years under comparison, and bring about
the final difference between them. I shall
therefore content myself, as I have just
intimated, with pointing out the total
increase or decrease, as the case may be,
in each of the departments, and touching
upon such specific votes as I deem expedi-
ent to bring expressly under the attention
of honorable members. First in order,
then, we come to the Colonial Secretary's
Department, the estimated expenditure
for which is 664,805 for 1879, as against
676,908 already voted for 1878, and
22,980 additioral for that year on the
Supplementary Estimates now on the
table, thus making the total authorized
and proposed expenditure for 1878
699,888, which shows a reduction in
favour of 1879 of 35,000. The Com-
mittee will observe that the Government,
following up their policy as submitted by
them and approved in the last Session of
Parliament, have included in the Estimates
of expenditure for next year the sum of
75,000 for immigration, and they confi-
dently anticipate that an expenditure of this
nature which has so frequently met with the
emphatic endorsement of the Legislature
will be no loss heartily approved of when the
vote referred to comes on for consideration
in Committee. A variety of circumstances
has, during the past few months, tended to
bring this Colony more immediately and
more prominently under the notice of the
British public, as a highly favourable field
for emigration, in which there is afforded
full scope for the thrift and industry of
those who may seek our shores in searcli
of a livelihood and fortune. Although
the policy of Immigration, like all other
.social or economical questions, has alike

its advocates and opponents, it is gratify-
ing to know that the large majority of the
inhabitants of the country hold a deep-
seated opinion in its favour, and are imbued
with that broad cosmopolitan sentiment
which teaches them that they are but a
small section of the great British family,
whose main interests are bound up in com-
mon, and that though settled upon, they
are not exclusively entitled to this favour-
ed portion of Her Majesty's dominions ;
and further, they are affording incon-
trovertible evidence of the sincerity
of their convictions by practically
giving a helping hand by means of this
vote to those fellow countrymen, who may
be struggling in vain against difficulties
that surround them in the parent State,
with its overcrowded population, and are
ready to cast their lot with us and to take
their share of our country's burdens.
Under the heading of " Charitable Allow-
ances " the Committee will observe an
item of 12,500 as a first instalment of a
proposed conditional contribution of
25,0.00 towards the rebuilding of the
Sydney Infirmary, which is submitted for
the approval of Parliament as part of the
arrangement under which it is sought to
establish this institution on a satisfactory
basis. A sum of 20,000 towards the
completion of the Prince Alfred Hospital
is also comprised in the same category ;
and, in consideration of the increasing
urgency for further Hospital accommo-
dation in the metropolis and the desira-
bility of creating facilities for the study of
medical science in the Colony, the Govern-
ment hope that this vote will receive the
sanction of the Legislature. With regard
to municipalities no special sum for in-
creased endowment is included in the
General Estimates for next year, as any
assistance to the Sydney corporation and
the countiy municipalities, beyond that
given by the existing law, will be specially
appropriated by Bills dealing with these
Corporations, and submitted during the
present Session. The sum of 25,000, the
proposed special endowment to the City of
Sydney, though not in the Estimates, will,
however, be found in the estimated account
current for the year 1879 ; and any further
assistance to countiy municipalities sanc-
tioned by Parliament during the present
Session will be included in subsequent

412

MB. COHEN.

[1878.]

accounts for the year 1879. For the
"Administration of Justice and Public
Instruction," the Appropriation Act of
1878 sanctioned supplies to the extent of
454,546, and in the Supplementry Esti-
mates for that year a further grant of
3,455 is asked for this department, these
two sums making together 458,000. The
Estimates of expenditure for 1879 reach
493,188, and therefore exceed the probable
requirement of 1878 by 35,188, which is
almost entirely made up of the addition of
30,000 to the amount of 320,000
obtained by the Council of Education in

1878 for the purposes of the Public Schools
Act. For the support of our State edu-
cational system we will therefore ask
Parliament to grant 350,000. The
annual vote for this service has gradually
risen from 90, 000 in 1867 up to the sum
just mentionedas requisite for 1879. Asany
required information connected with this
vote can be obtained when the item is pro-
posed in Committee of Supply, I shall not
now do more than make this passing
allusion to it, though the meagreness of my
comments will not, I am certain, be taken
as manifesting any want of appreciation on
my part of the important national services
this vote is intended to provide for. The
Attorney General estimates his expendi-
ture next year at 28,093, as against
25,284 voted for 1878. The Depart-
ment of Finance and Trade will ask for

1879 the sum of 378,830, including the
Treasurer's Advance Vote of 60,000,
whilst 327,540 was appropriated by
Parliament for the services of 1878, and a
further sum of 22,259 is included in the
present Supplementary Estimates, thus
aggregating an anticipated total appropria-
tion for 1878 of 349,799. To arrive at
the probable expenditure for the year 1878,
however, this last-mentioned amount must
be reduced by 30,000, the amount of the
Treasurer's Advance Vote, which does not
form a final charge against the revenue,
thus leaving 319,799 for 1 878, as against
318,330 for 1879, this last sum being the
entire estimate of the department, less the
Treasurer's Advance Vote of 60,000,
which is also deducted for the reason just
given. The Government Printing Office
estimate for 1879 is about 9,500 above
the authorized vote for the current year,
two-thirds of this increase, viz., 6,350,

being for the Hansard, in favour of which
Parliament declared its opinion last Ses-
sion. The remainder of the 9,500 is sub-
stantially created by the additional expen-
ses necessarily incident to a continually
expanding establishment. I should add
here that a further sum of 2,OG9 for the
Printing Office is submitted on the Supple-
mentary Estimate for 1878, to cover expen-
ses which the Estimates for that year, as
passed, falls short in providing for, so that if
the last-mentioned amount find its way into
the Appropriation Act the actual difference
between the requirements of 1878 for the
Printing Office, and the estimate for 1879,
will be about 7,500 only, of which the
Hansard will, as I have just stated, absorb
6,350. The Treasurer's Advance Vote
for next year is brought up to 60,000,
the amount taken for the current year,
30,000, being found too small for urgent
unforeseen demands upon the Government.
For the Lands Department the amount
voted for 1878 was 410,637, while the
expenditure for 1879 is estimated at
424,157, or 13,500 in excess of the vote
for the former year. The branches mainly
contributing to this additional charge are
those of " Land Agents, Appraisers, and
others," 3,000; " Triangulation and
General Survey of the Colony," 4,300 ;
"Miscellaneous services," 11,600
whilst in the " Survey of Lands" branch
there is a proposed decreased expenditure
of 10,000, chiefly owing to the sum asked
to cover the cost of temporary increase
in the Charting, Auction, and Compiling
Branches being reduced by that amount.
The Supplementary Estimates for 1878,
however, reach 42,650, inclusive of
36,000, the purchase money of the land
adjoining the Rookwood Necropolis, and
adding that sum to the already authorized
appropriations 410,637 we will have
453,287 as the probable outlay for 1878,
whilst the present Estimates for 1879 are,
as just stated, 424,157. The Public
Works Department, exclusive of Railways,
shows an increase in the proposed expen-
diture for the coming year of 263,000
above the amount already voted for 1878
that isl, 346,156, asagainst 1,083,333
The Public Works vote, in the Har-
bours and Rivers Department, as particu-
larized in the present Estimates for 1879,
being 193,000 as against 118,000 voted

[1878.]

MR. COHEN

for 1878, and Public Works and Buildings
under the Colonial Architect's supervision,
requiring in 1879 504,000 as against
.277,000 appropriated for the current
year. In these two items we have a total
additional expenditure in 1879 of 302,000
beyond that already authorized for the
like services in 1878. The Supplementary
Estimates for the earlier of these two
years (now before Parliament), however,
embrace items for purposes similar to those
just described, amounting to 48,000.
Upon the other hand there is a falling off
in the proposed expenditure of next year
for construction of Electric Telegraphs, of
37,500, and for the construction and
maintenance of roads, of 9,000. as com-
pared with the appropriations already made
for 1878. With respect to the entire
annual cost of our Railway Establish-
ments, including Miscellaneous Services,
I find that the Estimate of Expenditure
for the next year exceeds the vote for
this present year by 31,000. For 1878
Parliament voted for working expenses on
the existing lines, which do not include
the Miscellaneous Services, 458,570, and
in the present Supplementary Estimates
for that year a further sum of 60,600 is
asked for, thus making a little over
519,170 as the probable requirements
for this particular service for 1878. The
amount required for the like expenses for
1879 is estimated at 575,800. which is
117,230 more than the sum already
sanctioned by Parliament for the year
1878, and 56,630 more than the sum so
sanctioned with the addition to it of the
further estimate of 60,600 just alluded
to. On the other hand there is a reduction
of about 88,000 in the Miscellaneous
Railway vote in favour of 1879, with the
details of which it would be profitless for
me to weary the Committee. Honorable
members will agree with me that the large
and substantial growth in the cost of
working the railways is unavoidable in
consequence of the greater mileage over
which traffic is now running, which mile-
age will in all probability be increased by
the opening of further extensions during
the ensuing year. Adverting now to the
Post and Telegraph Department, the Esti-
mates of Expenditure for 1879 as sub-
mitted show an increase of 34,400 over
the appropriations for 1878, into the

minutiae of which I need not now enter,
since the Estimates themselves will afford
full information as to the branches in
which the increased expenditure is pro-
posed. This difference between the two
years will however be reduced jrro t<u,fa
if the sums for this department comprised
in the present Supplementary Estimates
for 1878, amounting to 5,750, be passed.
Proceeding still with the accounts for the
year 1879, I shall now take up tin- -ti-
mates of revenue, which as I before stated
show a probable ingathering of 5,031,155.
Under the head of taxation, which in its
entirety I anticipate will produce in that
year 1,334,150, the sub-classification
of customs is set down to yield 1,183,650.
This is 88,950 more than my original
estimate for 1878, and 20,820 beyond
what I now calculate to receive for that
year, with nine months actual collections
guiding my computation. If, then my
present forecasting for the ensuing year
be realized, "spirits" will bring to the
revenue of 1879, 560,000, which is
53-600 more than they contributed to
the revenue of 1877, and yet only about
10,000 above the probable aggregate
yield for 1878, which I expect will be
549,600. "Wines," I calculate will yield
in 1879, 40,000, a trifle below my pre-
sent estimate for 1878, but slightly in
excess of the actual collection for 1
It will be seen at a glance, that whilst the
Customs collections upon spirits show an
increase in my present estimate for 1878
of about 1 1 per cent, above the actual duty
levied in 1877, wines from the same stand-
point only show an increase of about 4 per
cent. This probable result of the duty
from wines, which, so far as the revenue
is concerned, compares somewhat un-
favourably with the yield from spirits,
may perhaps be attributable to a develop-
ment amongst the people of the Colony of
a greater taste and inclination for the
Colonial Wines, to the exclusion of the
imported Wines. "Tobacco and Ci.
I rely upon to pay a total duty in 1
120,000, or about 9,000 more than my
present estimate for 1878, which in its
turn is 8,300 ii ->f llie^ actual

income from these articles in 1 V 77.
ferring honorable monil>ors to the !
mates of Ways and Means for fuller
information as to our estimated revenue

MK. COHEN.

[1878.]

from " taxation," to which I do not deem
it necessary to allude in further detail, I
will now invite their attention to the
estimates of " land revenue," from which
the Committee will ascertain by comparing
them with those for 1878, that "Land
Sales " are set down to bring to the Trea-
sury in 1879 1,660,000, as against
1,855,000, the original estimate for the
year through which we are now passing,
and 1,790,184, the probable final result as
now computed. " Provisional, pre-emptive
right sales" and "selections after auc-
tion" are excised altogether from the
Estimates of Revenue for 1879. The
estimate of 1,660,000 for that year is
made up of auction sales, 1,000,000,
which includes the balances due on auction
Sales that will be effected in the last
quarter of 1878 ; improved purchases,
150,000 ; deposits on conditional pur-
chases, 430,000 ; instalments on condi-
tional purchases, 20,000 ; and balances on
conditional purchases, 60,000. It is of
course impossible to compute with exact-
ness the probable demand for land f-rom
year to year, as that is controlled by
a variety of adventitious causes, but I
prefer naming a sum which past experience
justifies me in supposing will be obtained,
to naming one which might possibly be
found excessive. There certainly appears
to be no cessation of the desire for " free-
selecting " on the part of the people, and
with improved seasons favouring the Coun-
try there is full warrant for assuming
that there will be no lessening of the
activity which in the past has characterized
the procuring of land under the free-
selecting provisions of our law for the
purposes of settlement. "Annual land
revenue " is estimated to produce in 1879
455,550, as compared with 440,500,
the present estimate for the year 1878,
the difference being in effect accounted for
by "interest upon land conditionally
purchased " which comes within this cate-
gory, and has been assessed at 180,000
for 1879, or about 15,000 beyond the
actual and estimated payments of the
current year. Judging from the Treasury
records of the past two years, and bearing
in mind that the present prospects of
graziers and farmers are far more encour-
aging than they were nine months ago, I
do not think I can be charged with going

beyond a reasonable limit in inserting in
the Ways and Means for 1879 the sum of
180,000 as the anticipated receipts for
interest upon conditional purchases.
Coming now to " receipts for services
rendered," which as a whole are relied
upon to return 1,438,930, the Committee
will notice that there is a very large
addition expected from " railway re-
ceipts," which it is estimated will total
1,085,000 in 1879, and probably reach
877,000 during the present year. This
marked estimated increase of 208,000 is
no doubt a large one. But it should be
borne in mind that not alone does the
railway traffic continually grow on exist-
ing lines, as the public become more
acquainted with its advantages, and dis-
cover the value of [the facilities it affords,
but also that the extensions to North
Wagga Wagga and Tamworth, which will
have been opened for a small portion only
of the present year, will have the benefit
of the traffic for the whole of next year ;
and it is further confidently expected that
the line from Weriss Creek to Gunnedah
a length of 41 miles will be opened in
June next, in sufficient time to obtain the
benefit of the general trade to, and the
wool carrying from, Liverpool Plains and
the adjacent districts. I do not deem it
wise or necessary to trouble the Committee
with a voluminous array of figures, for
the purpose of proving the growth of this
traffic and justifying the estimate now
submitted; but I would refer honorable
members to the excellent Report of the
Commissioner, issued lately, for fuller in-
formation as to the working of the State
Railways, and the effect they have upon
the Country generally. In January last I
announced that we then had 597 miles
of railways open for traffic, and that the
Government at that time anticipated
opening the line to Wagga Wagga in Sep-
tember a prediction which has been
fulfilled and to Tamworth in August of
this year. Although the latter contract
was not completed within the period
named, yet the extension was opened on
the 15th October last, and thus a further
though tardy instalment of justice has
been paid to the north. These two addi-
tions to the working lines will make a
total of 688 miles over which traffic is now
running, 90J miles of them having been

[187&]

MR. COHEN.

415

opened since the 1st of January last. The
opening of the North Wagga Wagga ex-
tension I regard as one of the most im-
portant events, viewed in a national light,
that has taken place since the inaugura-
tion of our railway system, whilst the
completion of the line to Tarn worth, the
capital of the rich and fertile Liverpool
Plains, and the centre of a magnificent
and extensive agricultural area, cannot
be well over-estimated in importance.
We have now, by completing the line to
Wagga Wagga, approached the wealthy
districts of Riverina, the large and valu-
able trade of which has heretofore been
substantially enjoyed by our southern
neighbours, whose geographical advan-
tages our own traders were, in the absence
of locomotive communication, unable to
compete with. At length, however, that
great revolutionizer, the iron horse, has
reached the long looked for goal, and
though it may take some time ere the
business of the settlers of Riverina is
altogether diverted from the adjoining
Colonies to New South Wales, there can
be little doubt that with the railways to
back up the enterprise and competitive
energies of our merchants, the business
transactions of the Riverina inhabitants
with our own Colony will grow largely
and rapidly, being stimulated to some ex-
tent by that sympathetic feeling under-
lying the principle of " trade following the
flag," which should induce our own people
coeteris paribus to trade within the boun-
daries of the Colony in which they reside,
and carry on their avocations. Post and
telegraph office receipts, which also come
within the grouping of " receipts for
services rendered" are estimated at
256,000, or 21,215 more than the
actual and estimated revenue for 1878,
and from information given by the Post
Office Department I have little doubt that
the sum will be realized. "General mis-
cellaneous receipts" are relied upon to
bring in 142,525 during 1879, as against
154,042 in 1878, the falling off being
substantially assignable to the estimate of
"interest on Bank deposits" being re-
duced from 82,400 to 65,000. The
Parliament has already been made aware
of the intention of the Government to in-
troduce a Bill this session to abolish the
duty upon gold a proposal which has had

the approval of the Assembly upon three
different occasions. The loss to the
revenue by the removal of this duty
which for some years past has been
gradually and sensibly decreasing will
be about 7,000. With this statement, I
shall reserve any further observations
until I submit the Bill to the judgment of
the House. On the opening of the present
session of Parliament it was announced
that negotiations, still incomplete, for the
arrangement of a Customs Union between
this and neighbouring Colonies had been
initiated, but the wide distinction between
the fiscal policy of Victoria and our own,
coupled with an intimation from the
Government of Queensland that they are
not prepared at present to make such
alterations in their fiscal arrangements as
a Customs Union would in their opinion
necessitate, leads to the impression that
any general union of the Colonies for tariff
purposes cannot be looked for at present.
I must add, on the other hand, that the
Government of South Australia view the
proposal with favour. With regard to
the accumulated Consolidated Revenue
Surplus it is not my intention at present
to ask Parliament to finally appropriate
any portion of it, further than I have
already indicated. Pending its permanent
absorption, however, it is being benefi-
cially employed in the form of advances to
Loan Funds, for expenditure upon railway
construction and other public works, these
advances amounting now to 1,850,000.
As in my previous Financial Statement
I went fully into figures to prove the
pecuniary advantage arising from the
possession of this surplus, I shall abstain
from now dealing with it at greater
length. With reference to the Consolida-
tion of the public debt, it is needless for
me to enter here into a detailed expression
of my views upon this important question.
I may, however, now opportunely make
reference to the Imperial Act of last year,
known as the Colonial Stock Act of 1877,
which provides for the composition of the
stamp duty chargeable in England on Col-
onial stock, by the payment on the issue of
the stock of a commutation of 7s. 6d. per
100 in lieu of a duty of 2s. 6d. per 100
upon each successive transfer. ^ It also
contains provisions for inscribing and
registering Colonial securities in the

416

MR. COHEN.

[1878.]

United Kingdom, and thereby dispensing
with the necessity for trustees and other
investors incurring the responsibility of
keeping scrip or certificates in their pos-
. session, with their accompanying risk of
loss. By this removal of the difficulties
in the way of investing in Colonial securi-
ties, the body of purchasers will probably
be enlarged, and competition be increased
accordingly, an advantage, it appears to
me, of material importance to the Colonies,
for which they are greatly indebted to the
zeal and efforts of Sir Julius Vogel, with
whom the other Agents General co-
operated. I will not now make further
allusion to this legislation of the British
Parliament, since it does not immediately
affect my present statement, though it is
inherently of too important a character to
be passed by without being brought to the
notice of the Committee, but proceed to
address myself briefly to the action of the
Government in connection with the Loan
now awaiting negotiation in London. It
is of course within the knowledge of
honorable members that, during the late
recess the Government determined, in
view of the then highly favourable state
of the Home money market and the pros-
pective outlay in connection with public
works and otherwise both here and in
England, to exercise their dormant bor-
rowing powers, which covered 4,481,742
by raising a loan in London of 2,865,500,
under the Acts 38 Vic. No. 2, 40 Yic.
No. 12, and 41 Yic. No. 4, though it
was decided to offer to the public in
the first instance debentures representing
1,500,000 only. Against the anticipated
proceeds of this Loan the Government in
July and August last, as the House has
already been informed, negotiated their
drafts on London, through the Bank of
New South Wales, to the amount of
200,000, in view of the then local pro-
spective requirements for authorized rail-
way extensions. Acting upon the advice
of the Agent General and our financial
agents at Home, the floating of the loan
was postponed until after the Stock Ex-
change holidays, which expired in Sep-
tember last, and it will be ground for
regret, as it no doubt was for surprise,
that at the period ac which it was thus
intended to ultimately place our debentures
on the market, all classes of Australian

securities had receded so far in public
favour as to induce the Government not to
press the loan, a change which, so far as
the circumstances of this Colony are con-
cerned, I can scarcely account for on any
sound financial principle, as happily there
has been no sudden and violent political
revulsion, no financial crisis, no complica-
tion in our midst, to alter the affairs of
the Country from what they were prior to
the fall ; indeed, so far as the business of
the State can testify, we have most reliable
evidence of the continuance of a solid
prosperity. It may, however, be some-
what satisfactory to us, withal, to know
that though this depression was general,
New South Wales bonds continued and
still continue to be quoted at the highest
prices for "Australian securities," and at
an advance upon others equal to that
which prevailed prior to this sudden and
unexpected depreciation. If it be borne
in mind that nearly two years have elapsed
since our last batch of debentures, of about
900,000, was offered for public tender ;
that our proposed operation was to recoup
our Consolidated Revenue for advances to
Loan Funds which had been chiefly dis-
bursed upon the railways of the Colony,
now making a net approximate return of
4| per cent, upon invested capital ; and
that since the beginning of the year 1872,
we have, out of annual revenue, paid off
debentures as they fell due to the amount
of about 1,750,000, it is somewhat diffi-
cult for me to assign a valid cause, so far
as we are exclusively concerned, for this
decline in our securities. Many reasons
of a general nature for this unlocked for
disturbance might be suggested, with more
or less accuracy, such as the re-opening of
the foreign market to English capitalists
or investors, concurrently with the settle-
ment of the Russo-Turkish difficulties ;
the unanticipated announcement or fore-
shadowing, after our loan was projected,
of other large Colonial loans ; and, further,
the unauthorized intimation at Home,
both in the stock circulars and the Press,
of the probable intention of New South
Wales to offer from three to four and a half
millions of debentures towards the close of
the year ; and possibly, the operations of
speculators 011 the other side, who were
acting with a view to their individual
interests. It is impossible to avoid at

[1878.]

MR. COHEN.

417

least a temporary feeling of surprise that
this declension immediately followed,
though I do not affirm that it was conse-
quent upon the arrangement of the Eastern
question under the treaty of Berlin, by
which peace was restored to Europe ; for
one would have been disposed to assume
that, with the threatening calamity of the
United Kingdom being involved in war
averted, her own securities, as well as
those of each, of her dependencies, would,
at least, have maintained their existing
places in public opinion, in the absence of
some specific tangible cause for any other
result, arising out of the individual cir-
cumstances of Great Britain herself, or of
the particular dependency whose securities
have been prejudicially affected. We may
hope, however, that our debentures will
ere long, recover this " backwardation,"
as it is termed in the Stock Exchange,
and which there is room for believing is
but transient. Honorable members have
already been informed that, pending the
recovery of the money market, the Govern-
ment have decided not to hasten their
loan operations, and our ability to abstain
from borrowing whilst this dulness con-
tinues cannot fail, I should think, to
strengthen our position in the eyes of the
London capitalist, and fully restore, if it
do not increase, his confidence in our
investments. This loan could not, apart
from reasons of a practical nature, be
brought under the operation of the Colonial
Stock Act, by reason of the absence from
the Loan Acts of certain provisions with
regard to inscription required to be in
them by the Imperial Act before alluded
to. It majfc not be uninteresting for me
now to make some reference to the public
debt of the Colony, which on the 30th of
September last amounted to ,11,724,019.
At that time there were loans authorized
by various Acts of Parliament, but not
negotiated, aggregating 4,481,742, but
as the Government have since taken steps
to place debentures to the amount of
1,500,000 on the London market, the
actual public liability when this operation
is completed will be 13,224,019. As
compared with other Australian Colonies
our position in this regard is highly favour-
able, as the statement I am about to make
will indicate : New South Wales on June
30th, 1878, owed 11, 7 2 4,01 9, with an esti-

mated population of 675,316, equal to 17
17s. 2d. per head. Victoria on the same
date owed 17,082,064, with an estimated
population of 867,634, or 19 13s. 9d. per
head. South Australia on the same date
owed 5,199,800, with an estimated popu-
lation of 24 3,000, or 21 7s. lld.|>erhead.
Queensland on same date owed 9,01 1,350,
with an estimated population of 207,000,
or 43 10s. 7^d. per head. New Zealand
on March 31st, 1878, owed 20,906,119,
with an estimated population of 414,412,
or 50 8s. ll|d. per head. The rate per
head of the combined debt of the five
Colonies just specified is 26 11s. 0|d.,
whilst that of New South Wales standing
alone is, as I have just stated, only
17 17s. 2<d., or 8 13s. 10d. less than
the average of the five Colonies named.
As one important asset in the form of
public works against our public debt, I
would point out that, up to September
30th of this year, the expenditure upon
railways provided for by loan was
9,943,380, and out of the Consolidated
revenue fund 138,223, making a total
of 10,081,603. Up to the same period
the disbursements upon telegraph con-
struction out of kans -wsre 430,187,
and out of Consolidat-.d Revenue 58,690;
these last two sums, representing the total
cost of telegraph con jtruction, amount to
488,877. Adding these totals together,
we find the entire cost of these great
reproductive works to have been, on
September the 30th last, 10,570,480, or
within 1,153,539 of our present public
debt, which as before stated was
11,724,019 on that date. It is necessary
however that I should explain, in order to
afford a clear understanding of this sub-
ject, that the sums advanced from Consoli-
dated Revenue to the different Loan Funds,
spent mainly upon railways and electric
telegraphs, are included in the expenditure
stated to have been provided for by loan ;
since, so far as the loan accounts them-
selves are concerned, tho sums placed to
their credil by way of such advances are
for the purposes of expenditure considered
the proceeds of loans as much as if they
had been the product of debentures issued
under the Acts by which the loans are
authorized. At present, however, the
countiy is in respect of these undertak-
ings under liability to its own Consolidated

418

MR. COHEK

[1878.]

Revenue up to the amount of those ad-
vances ; but so soon as they have been
repaid by the necessary issue of deben-
tures, the liability will be transferred to
the public creditor who may purchase the
debentures, and the public debt be in-
creased accordingly. These advances now
amount to 1,850,000, and have been the
means of our utilizing the surplus to un-
questionable advantage. But, in addition
to the reproductive works to which I have
just alluded, and without reckoning the
invaluable assets of one hundred and
sixty millions of acres of unalienated
Crown Lands, I would mention as ex
isting tangible money assets against the
public debt the unappropriated surplus
upon our Consolidated Revenue, amount-
ing in round numbers to 2,000,000,
^nd the balances due by the conditional
purchasers upon their holdings ap-
proximately estimated at 8,000,000, and
which must be paid before the title to
the land will pass from the Crown. If to
these last two sums, which together make
10,000,000, we add the total cost of
railways and telegraphs, as shown just now,
viz., 10,570,480, we have 20,570,480
as against the public debt of 11,724,019,
or a surplus of nearly 9,000,000 in
favour of the Colony. Figures such as
these may be safely left, without elabora-
tion, to speak for themselves, in proof of
the strength of the Colony, and its ability
to bear large additions to its debt as occa-
sion may arise for making them. With

reference to the proposed sewerage and
water works and the railway policy of the
Government, as foreshadowed in the Gover-
nor's speech at the opening of Parliament,
and which will, in due course, be more
fully disclosed by my honorable colleague
the Minister for Works, I desire to state
that Parliament will be asked in the first
instance to sanction a loan to provide for
the part cost of these undertakings, as the
expenditure involved in them will neces-
sarily extend over a series of years, and I
do not anticipate any immediate necessity
for borrowing. Having now, Mr. Came-
ron, closed the somewhat dry task with
which I, as Colonial Treasurer, am charged,
I have to tender to the Committee my
cordial thanks for having indulgently
accorded me their patient attention. In
the figures I have submitted there are I
venture to think unmistakeable evidences
of gradual and solid prosperity. The
sources of wealth and the elements of
greatness with which our Colony is endowed
require but the judicious and enterprising
application of its people to promote and
secure its continued progress a progress
to be accompanied, let us hope, by the culti-
vation of the arts of peace and good- will, by
an honest and steady pursuit of commercial
and industrial avocations, by the subor-
dination of science to our individual and
State necessities, and by sowing deeply in
the national character those social and poli-
tical virtues which should adorn a people
aspiring to a great and noble future.

THE HONORABLE JAMES WATSON.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE JAMES WATSON,
made 1 2th February, 1879.

LEGISLATIVE ASSEMBLY.

12th February, 1879.

FINANCIAL STATEMENT.

MR. CAMERON : I beg to move that
there be granted to Her Majesty out of
the Consolidated Revenue Fund the sum
of 1,797 to meet the expenses in connec-
tion with the establishment of His Excel-
lency the Governor for the year 1879.
This formal motion affords me the oppor-
tunity of making to the Committee what
is popularly termed the Financial State-
ment a statement that is generally looked
forward to with more than ordinaiy in-
terest. On this occasion however the usual
interest can scarcely be expected, as hono-
rable members are no doubt fully aware
that the statement I am about to make
must be to a large extent supplementary
only to the one made by my predecessor
in November last, which was unquestion-
ably the Financial Statement proper to the
Session. That honorable gentleman en-
tered so fully and so carefully into all mat-
ters relating to the finances of the Colony,
past, present, and future, that I find I
have little more to do than follow him,
and show, so far as the accounts of the
past are concerned, their present position ;
and, with respect to the future, wherein,
our Estimates of Revenue and Expendi-
ture for 1879 differ from those of the late
Government. In doing this, I have to
crave the kind indulgence of honorable
members, as the task is new to me, and at
the same time solicit their patient attention.
I am well aware that figures are dry
and uninteresting to most people, but the

results I have to disclose to the Committee
ai*e so satisfactory and encouraging as
ought, in my opinion, to secure the interest
and engage the attention of honorable
members. Some honorable members may
indeed consider a fresh Financial State-
ment altogether unnecessary, unless it be
the intention of the Government to pro-
pose some change in the fiscal policy of
the Country or introduce some new form
of taxation. Although we intend to do
neither this Session no necessity having
arisen for- such still there are many rea-
sons why another Statement should now
be made. In the first place, as the late
Treasurer had to estimate his revenue for
the last quarter of the year, it becomes
necessary that I should restate the account
for 1878, and show the result of the com-
pleted year's transactions. In the second
place, I have to lay before the Committee
our Estimates of Revenue and Expendi-
ture for the present year, and explain, as I
have already said, wherein they differ from
those submitted by our predecessors. I
have also to explain the intentions of the
Government with regard to the accumu-
lated surpluses of former years ; to inform
honorable members how we intend to deal
with the question of the special deposits ;
what we intend to do with respect to loans ;
and to disclose the railway policy of the
Government. It must, I think, be ad-
mitted that these are all important mat-
ters, demanding the most careful consider-
ation of the Committee. It cannot I
think be fairly charged against us that
undue delay has arisen in submitting the
Estimates of Expenditure for the present
year when the short time which has been
at our disposal is taken into consideration ;
nor can we be blamed, reasonably, for

420

MR. WATSON.

[1879.]

having resorted to the objectionable prac-
tice of taking monthly Supply Bills a
practice which seems to have- become
chronic in our financial system seeing that
such a course is now rendered unavoidable.
In saying that I hope this may be the last
session in which temporary Supply Bills
may be required, I trust I shall not be con-
sidered either presumptuous or egotistical.
Honorable members are probably aware
that none of the Expenditure Estimates
submitted by the late Government, ex-
cepting a few items included in a tem-
porary Supply Bill, were dealt with by the
Committee prior to the resignation of the
Ministry in December last. In conse-
quence of this backward position of our
financial arrangements, the accounts now
submitted with the present Ways and
Means are, with one exception, necessarily
of the same character, and for the same
years as those submitted by the late Trea-
surer. The main differences in the ac-
counts for the years 1877 and 1878 consist
of such corrections and additions as the
lapse of time has rendered necessary. For
1879 they are of a more varied character,
and will require a fuller explanation, which
I shall place before the Committee when
the account for that year is under review.
The accounts submitted and explained by
my predecessor in November last were the
following : 1. An account of the revenue
and expenditure for 1877. 2. An account
of revenue and expenditure for 1878.
3. An account showing the proposed ex-
penditure in relation to the estimated in-
come for the year 1879. From the Ways
and Means, that will shortly be circulated,
it will be seen that I submit accounts of
a similar description, together with an
entirely new account, which as a matter of
convenience I designate the "Surplus Re-
venue Account," and which I have marked
No. 3, and interposed it between the
Account Current for 1878 and the
Estimated Account for 1879, as for rea-
sons, which I will hereafter explain, I
have considered that its proper position.
To enable honorable Members to follow
me readily, I will deal with the accounts
in the order in which I have given them
in the Ways and Means. Under this
arrangement the first to come under
review is the account for 1877. This is
an account with which of course I have

had nothing whatever to do, and it is one
which, under a former arrangement, would
have been closed long before this. Owing
however to the very late period llth
October, 1877 at which the Appropria-
tion Act for that year's services was passed,
it was deemed necessary by the Govern-
ment then in office to insert a new clause
in that Act, which has had the effect of
keeping all appropriations alive for one-
year after the year for which they were
taken. Although this arrangement is
attended with many advantages in con-
nection with votes for Public Works, still
it delays very seriously the final closing of
each year's accounts. This disadvantage
is however, in my opinion, more than
counterbalanced by having the votes,
more especially those for Public Works,
available for a longer period than was
formerly the case when, it may be remem-
bered, lapsed votes had in too many in-
stances to be re-voted and made charges
on subsequent years. With these pre-
liminary observations I will now pro-
ceed to show the present position of the
account for 1877, which it has been found
impossible to close entirely and finally
as there are many important works and
services now in progress, for the comple-
tion of which it is necessary to reserve
funds, as the contracts or engagements for
carrying them out were duly made within
the time allowed by law. It will be seen
by reference to the statement marked B,
page 54 of the Ways and Means, that the
sums reserved to cover these incompleted
and in some cases uncoinmeiiced works
and services, amount to 504,323 10s. lid.
By a reference to the account for 1877,
submitted by the late Treasurer with his
Ways and Means of 6th November last,
it will be observed that 300,000 was
taken credit for as the probable amount
of appropriations for that year not likely
to be required for expenditure. A more
careful estimate has since then been ren-
dered practicable by the expiry of the two
years within which contracts or engage-
ments could be made for the carrying out
of public works or services of a special
nature. That estimate has now been
made, and, as will be seen from statement
B, above referred to, the appropriations
written off" as not likely to be required
amount to the large sum of 409,597

[1879.J

MR. WATSON.

421

10s. lOd., wliicli is 109,597 10s. lOd. in
excess of the former estimate of these
savings, and is exclusive of the Treasurer's
advance vote of 60,000, which also
lapsed, by effluxion of time, and was
written off on 31st December, 1< S "S.
Indeed, it is probable that a very con-
siderable portion of the 504,323 10s.
lid., referred to as having been reserved
for future expenditure, will yet have to
be written off from causes, which are not
at present foreseen. The authorized ex-
penditure of 1877 (including the small
Supplementary Estimate of 29,685 3s.
6cl., now before the House) amounted to
5,903,492 16s. Id., a sum very much in
excess of any previous year and even largely
in excess of the authorized expenditure for
1878 and the proposed expenditure for
1879. Notwithstanding this unusually
large expenditure for 1877 it is still con-
siderably within the revenue of that year,
which in its turn was larger than any pre-
ceding year ; for while the actual expen-
diture is estimated to amount to5, 433,895
5s. 3d., the net revenue amounted to the
large sum of 5,748,245 17s. 5d., thus
leaving a surplus of 314,350 12s. 2d.
The following statement shows wherein
the present account for 1877 differs from
the one submitted by Mr. Cohen on the
6th November : The estimated accumu-
lated surplus on the 31st December, 1877,
as now shown in the account submitted,
marked No. 1, amounts to 2,425,754
5s. ; the surplus shown in the correspond-
ing account, submitted by Mr. Cohen
with his Ways and Means of November
last, was 2,331,610 13s. 7d. ; which
shows an increase of 94,143 lls. 5cl.
As fulL particulars of this increase will be
found in the explanatory statement re-
ferred to, I will not weary the Committee
by reading them now. I may, however,
say that it arises chiefly from the lapsed
votes having largely exceeded the antici-
pations of my predecessor, who, as he only
took office in December, 1877, had almost
as little to do with the transactions of that
year as myself. We now come to the
account for the year 1878j which I may
be permitted to allude to as that of the
late Treasurer, for notwithstanding the
present Government came into office in
December last, I am not aware of any
action on our part that had the effect of

disturbing to any appreciable' extent either
the revenue or expenditure of that
T take the opportunity now afforded me
of congratulating my hon. friend opposite
on the revenue of the year having largely
exceeded the estimate made by him in
November last. That increase, which
was 76,000, was however entirely' due
to the sales of land by auction which
realized 130,000 more than was antici-
pated. The difference between these two
sums arises from the receipts under other
heads not having come up to expectations.
The Customs for example were short of
the estimate to the extent of 14,000,
Railway Receipts 16,000, Annual Land
Revenue 30,000, and Post Office
8,000. In the Ways and Means
submitted by the late Treasurer on the
31st January, 1878, when he made
his first Financial Statement, the revenue
of that year was estimated at 4,873,750.
On the 6th November last, when he made
his second Financial speech, and with nine
months' actual receipts as a guide, it was
estimated that the year's income would
reach 4,915,134. Large as these Esti-
mates were considered at the time, it is
satisfactory to find that they both fell con-
siderably short of the actual outcome of
the year, which amounted to the sum of
4,991,919, being 118,169 in excess of
the former, and 76,785 of the latter,
estimate. I would here point out that I
have reduced the estimated expenditure
of my predecessor for 1878 to the extent
of 36,000. In the Supplementary Es-
timates submitted to the House by the
late Government on the 30th October last,
that sum was placed under the head of
Secretary for Lands " for purchase of land
adjoining the Necropolis, Haslenvs Creek,
for public purposes, 1,440 acres." Now
as \ve did not consider that this sum could,
with propriety, be charged to the year
1878, we resolved to strike it out and
make it a charge on the surplus revenue
account which I will have to deal with
shortly. I may also here take the oppor-
tunity of stating that certain items in-
cluded in the Supplementary Kstimates
of the late Government, but afterwards
provided for in the temporary Supply Bill
of December last, have been left off the
Supplementary Estimates submitted by
me on the 7th instant. Tliev were as

422

MR. WATSON.

[1879.]

follows : Stores and stationery, =8,000 ;
Public Works Harbours and Rivers
Department, 8,500 ; railway working
expenses, 60,000 ; additions and alter-
ations to stations, &c., XI 0,000, making
in all 86,500. In the account for 1878,
submitted on the 6th November last by
Mr. Cohen, the expenditure for that year,
including a supplementary estimate of
218,819 18s. 4d., was estimated at
4,940,219 2s. 6d., and the revenue as
already stated at 4,915,134, thus show- .
ing a deficiency of 25,085 2s. 6d. In
the account now submitted for 1878 it will
be seen that while the actual revenue of
the year amounts to 4,991,919 6s. 6d.,
the expenditure is estimated to amount to
4,942,749 12s. 8d., leaving thereby a sur-
plus of 49,169 13s. lOd. This favour-
able change in the state of the account
is chiefly the result of an increase in the
revenue, as compared with the last esti-
mate, of 76,785 6s. 6d., as the estimated
expenditure in both accounts is nearly the
same. The following statement will, how-
ever, show more clearly wherein the pre-
sent account for 1878 differs from the one
submitted by Mr. Cohen : Estimated
accumulated surplus, 31st December, 1878,
as per account now submitted, 2,474,923
18s. lOd. ; estimated surplus on same
date, as per Mr. Cohen's account,
2,306,525 lls. Id.; increase of surplus,
168,398 7s. 9d., which arises in the fol-
lowing manner, viz. : Additional credits
increased surplus brought forward from
the account of 1877, 94,143 lls. 5d. ;
revenue of 1878 in excess of estimate,
76,785 6s. 6d. Total additional credits,
170,928 17s. lid., from which has to be
deducted an increase in the estimated ex-
penditure to the extent of 2,530 10s. 2d.,
thus making the increase above shown
168,398 7s. 9d. I would here pause in
my explanation of the accounts to state
to the Committee the position of the
Treasury balances on the 31st December
last, as exhibited by the books of the
department. In the last explanatory
statement these balances were given as
they stood on the 30th September, 1878.
Since then the aggregate balance has
somewhat diminished; but that arises from
payments on account of railways and
other public works having been heavier
than usual during the last quarter of the

year. By a reference to page 135 of the
present Ways and Means, the aggregate
amount of these balances on. 31st Decem-
ber last will be found to be 3,358,535
13s. Id., whereas on 30th September
preceding the aggregate amount was
3,519,696 9s. 3d., thereby showing a
reduction of 161,160 16s. 2d. The
following is an abstract of the Treasury
balances as they stood on the last day of
the year 1878, viz. : Consolidated Re-
venue Fund, 1,922,783 19s. 6d. ; old
loans account, 170,095 17s. 9d.; trust
fund, 990,284 2s. lid. ; special loan
funds, 275,371 12s. lid., making
a total of 3,358,535 13s. Id. This
amount was distributeed as follows,
viz. : Bank of New South Wales Lon-
don branch balance 30th September,
1878, 380,448 4s. 2d. ; Head Office,
Sydney Public Account, 399,730 lls.
6d. ; Special London Funds, 150.371
12s. lid., making together a sum of
930,550 8s. 7d. in Bank of New
South Wales. Special deposits in the
undermentioned banks, viz. : Bank of
New South Wales, 331,818 4s. 2d. ;
Australian Joint Stock Bank, 189,611 ;
City Bank, 237,013; Oriental Bank,
237,013 ; Bank of Australasia, 165,909;
Union Bank of Australia, 190,909 ; Eng-
lish, Scottish, and Australian Chartered
Bank, 140,909; London Chartered Bank
165,909; Mercantile Bank, 165,909,
in all 1,825,000. Cash in the hands of
the Receiver, subsequntly deposited in
the Bank of New South Wales,
20,938 ; total cash balance, 2,776,488
8s. 7d. To which has to be added the
amount of the securities in the Trea-
sury Chest, viz. : 582,047 4s. 6d. ;
making a grand total of 3,358,535 13s.
Id. as above shown. It is necessary to ex-
plain that the cash balance of 380,448
4s. 2d., represented to be at the credit of
the Government in the London branch of
the Bank of New South Wales on the 30th
September last, was the balance according
to the books of the Treasury, which was
however 164,235 2s. lOd. in excess of
the balance shown by the accounts furnished
by the Bank. This difference is the amount
of certain payments made by the bank
which had not been passed through the
Treasury books on the 31st December last.
As I have already informed the Committee

[1879.]

MR. WATSON.

that I should state the intentions of the
Government with respect to the Special
deposits in the banks, I take this oppor-
tunity for supplying that information, as
it seems to me the most fitting part of my
statement for the purpose. In doing so I
will, however, have to trespass upon the
patience of the Committee while I narrate
the history of certain transactions with
respect to our London account, with which
the Committee should be made acquainted,
as it has a material bearing on the question
of " Special Deposits," and their iiltimate
disposal. I have no doubt it will be in the
recollection of honorable members that the
late Government sent home, in August
last, debentures to the nominal value of
1,500,000 for negotiation there under
certain, conditions. In his last financial
speech my predecessor stated that this was
done " in view of the then highly favour-
able state of the home money market, and
the prospective outlay in connection with
public works and otherwise, both here and
in England." No doubt this was the
ostensible reason, but I think my honor-
able friend opposite will admit that another
and a very sound reason was that any
sudden withdrawal of a large portion of the
" Special Deposits" from the banks in
Sydney would have been injudicious, and
probably attended with disastrous effects
to the community at large. That this
view was then entertained is proved by
the fact that he drew against the securi-
ties sent home to the extent of 200,000,
the Bills for which have now matured, and
the amount charged against the Govern-
ment public account with the bank of New
South Wales in London. A short time
before the present Government came into
office our predecessors had, in view of
their requirements in London, arranged
with the Bank of New South Wales for a
further advance there of 300,000. This
advance was for a period of three months
from 1st January last; consequently it
falls due on the 1st April next, together
with the previous advance of 200,000.
Feeling assured that in the present state
of the money market at home there was
very little chance of the price of Colonial
securities, of which those of this colony
.stand highest, reaching for a considerable
time to come such a price as would justify
me in- recommending the sale of the deben-
tures now in London, I arranged with the

Bank of New South Wales for a renewal
of these advances for a further period of
six months, as I felt satisfied, and my
colleagues agreed with me, that it would
be unwise to transmit at the present time
so large a sum as 500,000 from the-
colony. This money could only have been,
taken from the Special deposits, or partly
from these and partly from the Public Ac-
count, and its withdrawal would in all proba-
bility have increased the temporary depress-
ion of the trade and commerce of the Colony.
After mature consideration, therefore, I
resolved on the course I have mentioned as
the one not only most politic but positively
the least expensive to the colony. In sup-
port of this I cannot do better than read to
the Committee the minute which I pre-
pared on the subject for the Cabinet, which
was duly a] iproved and acted on "Treasury
Minute. The Treasury, New South Wales,
Sydney, 13th January, 1879. Subject
Loan, re sale of debentures. I have care-
fully perused all the papers having refer-
ence to the loan proposed by my prede-
cessor ; and fi'om these I find that in
August, 1878, Mr. Cohen, 'in view
of the financial requirements of the
Government,' decided.on availing of the
borrowing powers, to a limited extent,
conferred on the Government; and with
this object, sent through the Bank of New
South Wales to their London office deben-
tures for 1,500,000 for sale, under and
by direction of the Agent General, Sir
Daniel Cooper, and Mr. Larnach, who.
formed a board for the purpose. General
directions were given, but no minimum
was fixed by the Government, and the
London board were requested to name
a minimum, submitting same for ap-
proval of the Government before acting.
Several cablegrams and letters confirma-
tory passed between the Government and
the London board, as to the minimum and
prospects of the loan lu-ing floated, and
the latest official information is a cable-
gram from the Agent General, dated the
7th December, 1878, thus : " Board
twice met. Loan prospects no better.
Canada 3,000,0004 per cents, yesterdav
Half only taken at 96 10s., with
half Imperial guarantee. Possibly ours
succeed at 93. Shall we try?" The
Government, against the debentures thus
sent through the Bank of New South
Wales, obtained an advance of 100,000

424

MR. WATSON.

[1879.]

011 1st November, 1878 ; ,100,000 on 1st
December, 1878; and 300,000 to be
paid 1st January, 1879 ; the whole amount
of 500,000 to be repaid the Bank of
New South Wales in London on 1 April,
1879, and such advances were to bear in-
terest as made, and to be 1 percent, above
the Bank of England rate during the cur-
rency of the advance, butnottobe less than
5 per cent., and the advance was not in
any way to be considered as suspending or
altering the present agreement with the
Bank of New South Wales for the conduct of
the general banking businessof the Govern-
ment. Thus 500,000 has been obtained
from the Bank of New South Wales in
London, against debentures for 1,500,000
forwarded for sale, and which, under the
agreement, is repayable in London on 1st
April, 1879. It appears from the official
message from the Agent General, as also
from the cablegrams in the public Press,
that the London money market is very de-
pressed. Although the feeling is easier
than it was a few weeks since, yet it is very
doubtful if the minimum of 93, sug-
gested in the message of the Agent Gene-
ral (and which I could not recommend
being accepted) could now be obtained ;
but even supposing the loan could be
placed in the market at 93, I think it
would be injudicious to do so, in view of
the fact that the Government has large
cash surplus special deposits in the various
banks, as also in the general interests of
the country. I would therefore recom-
mend that a message be sent to the Agent
General instructing him to suspend any
action towards floating the loan until
further advised, or until the money
market considerably improved. The ques-
tion now arises, how are funds to be pro-
vided in London on 1st April, 1879, to re-
coup the Bank of New South Wales the
special advance of 500,000, obtained
against the debentures, if not sold in the
meantime, which is not probable? The
necessary amount cannot be withdrawn
from the Current Revenue (Public Ac-
count), and to me there appear only two
courses open : First, to withdraw from
the banks holding special deposits, giving
the usual thirty days' notice as required
by the agreement, say from 300,000 to
400,000, and withdrawing from the
Public Account, if at the time it will
admit of this and I think it will

the balance required, and remit these
amounts -to London by draft, or as pro-
vided, thus covering the advance of
500,000 ; or, second, to continue the
present special advance of 500,000 from
the Bank of New South Wales, for a
period to be arranged, or until the Lon-
don money market improves, so that the
debentures can be sold to advantage.
These appear to me the only two courses
open ; and having very carefully con-
sidered the subject I have come to the
conclusion that the second course, viz.,
" to continue the advance," is the one the
Government should adopt, for the follow-
ing amongst other reasons : That this
special advance was obtained against the
debentures, and to be recouped after the
sale of same, and that the special de-
posits and Public Account were not in-
tended to be disturbed to defray this
special advance. That while having every
confidence in the ability and readiness of
the banks holding special deposits to repay,
in terms of the agreement under which
such deposits were obtained, to the Govern-
ment as required, yet, having in view the
general interests of the country and the
present depressed state of the money
market in this Colony, I think it would be
injudicious to call up at so short a notice
as thirty days the large sum of 300,000
or 400,000, most probably the latter
amount ; and while I have every confi-
dence in the banks paying this or even a
much larger amount, yet it would, there
can be no doubt, have a very prejudicial
effect on the trade and commerce and
the banking operations of the Colony.
In recommending the second course, I
do so also from the fact that the coun-
try will sustain no loss thereby, but on
the contrary, a financial advantage and
an indirect as well as direct gain, thus :
Suppose the Government continue the
present special advance of 500,000 so
obtained from the Bank of New South
Wales pending the sale of debentures for
a period of (say) twelve months a period
much in excess of the time I anticipate
necessary at 6 per cent, per annum, the
rate now payable according to the latest
cablegrams, and adopting this course and
paying this rate of 6 per cent, in London,
in preference to withdrawing the special
deposits from the banks here, on which
the Government receive only 4 per cent., for

[1879.]

MR. WATSON. '

425

the purpose of remitting to London, there
will be, irrespective of any direct and in-
direct advantage to the country, an actual
profit to the Government of 5s. 3d. per
cent, per annum, or .1,312 10s. on the
amount of .500,000. We are receiving
on our special deposits 4 per cent, per
annum, and when notice is given to with-
draw any portion of such deposits under
the Bank agreement, interest ceases on
the amount to l>e withdrawn from the
date of such notice. For the amount so
withdrawn we obtain from the Baidc of
New South Wales a draft on their Lon-
don Office at sixty da\s' sight, for which
the Government would pay 15s. per cent,
premium, being -j per cent, under the
current rate. This draft will take about
forty-five days to arrive in London, and
.sixty-three days afterwards to mature, or
108 days, and add to this the thirty days on
which, under the Agreement, the interest
ceases here before the money is received,
or in all 138 days before the money can
I )0 availed of in London. Thus take 1 00,
at 4 per cent, per annum is tM : t'100 draft,
at I percent, premium, 15s. ; 100 for 13s
days, at 4 per cent, per annum, 1 10s. 3d.
(which of course is a saving, and assuch must
I >e taken into the calculation), and the Gov-
ernment pay .6 5s. 3d. if the money is with-
drawn from the banks here and remitted to
London, as against l! per cent, per annum
on the present advance if continued, and
if the Bank of England rate fell to 4 per
cent, (and by recent cablegrams these is
every probability of this at an early date).
The Government would then only pay 5
per cent, per annum ; and at this rate, on
the course recommended, there would be
a direct profit to the ( Jo\ eminent on the
transaction of ,6,312 10s. Putting
aside the question of any pecuniary direct
gain to the Government, but taking the
larger grounds of the general benefit to
the country, I recommend for the con-
sideration of my colleagues the desirability

Year. Revenue.

c B. .1.

1872 2,7'.4.2-Jl 7 7

1873 3,323,229 19 6

1874 3,528,884 8 9

Is7.~> 4.121,99.-) II 3

1870 5,0153,828 <> 3

1877 5,748,245 17 ">

]s7S 4,991,919 G 6

of continuing the special advance of
500,000. from the Bank of New South
Wales in London, for such period as may
be arranged, and at a rate not to exceed
1 per cent, above the Bank of England
rate, or until the London money market
improves, so that the debentures against
which such advance was specially made
can be sold at a satisfactory price. .l.\\~.
Cabinet concur in the Treasurer's recom-
mendation. H.P., 13/1/79." From the
views I have expressed in this document
honorable members will see that it is not
the intention of the present Government
to withdraw these special deposits from
the banks suddenly, or in large amounts,
but rather to do so gradually, and chiefly
for carrying out the services specified in
the Surplus Revenue Estimate, and for
advances to the Loan Accounts, pending
the realization of debentures. Ua\in;;
thus disposed of all those matters which
lia\ e a more direct reference to past years,
I now desire to draw the attention of
honorable members to an account which
is submitted for the first time with the
Ways and Means, and which at the out-
set I stated I should as a matter of con-
venience designate "The Surplus Revenue
Account." It is marked No. 3, and
follows the account for 1.^7^, l>ecause it
shows how the estimated accumulated
surplus at the close of that year is made
up. The object in view in presenting an
account of this nature is to show clearly
the manner in which it is proposed to
absorb the accumulated surpluses of pre-
vious years. These surpluses began to
accrue in 1*72, and have been accumula-
ting year by year up to the present time.

Being almost entirely the pro.. Is.-f Land

Sales, they have consequently varied in
amount with the area of land di>|.
of annually. The following tL
show exactly the gradual increase of
these surpluses during the !
years :

Expenditure. Snirl"".

8. il.

2.i;:.2,si3 i i in. tn r, i;

J. 739,066 10 11 .-.sl.ir,:; ^ 7

::.3 13,845 18 2 ls:,.n:;s in 7

:;,:i77,301 6 2 TU.I;"* .-. 1

4.:.77.732 4 2 - 1

5,433,895 5 3 .,U,:Ut 12 2

4,942, 7 49 12 49.1 !9 13 10

Making a total surplus on the 31st December last of t'2. 17 1.923 18 10

426

MR. WATSON.

[1879.]

As this large sum simply represents so
much of the Public Estate realised in excess
of the annual requirements of the Govern-
ment, it has been deemed right and proper
that no portion of it should be used to meet
the ordinary expenditure of future years, but
rather that it should be used only for carry-
ing out Public Works of admitted general
utility, for the erection of important pub-
lic buildings and for other services which
cannot fairly be considered a charge upon
the revenue of any one year in particular,
and which in the absence of such surplus
would probably have to be provided for
by loans. For the purpose of giving these
views practical effect, a separate estimate
has been submitted for the consideration
of the Committee, containing all those
items (and a few others besides) which
the late Government embodied in the
Estimates-in-chief for 1879, and which
they considered fair and legitimate charges
against the accumulated surpluses of pre-
vious years. Instead however of only
charging against the surplus, as the late
Government did, sums on account of these
services, the present Government have
charged the full amounts which it is esti-
mated by the proper officers ' will be
required to complete them. The account
now submitted in connection with this
surplus is divided into two parts, num-
bered respectively I and II. Part I is
simply a statement of assets and liabilities,
from which it will be seen that the assets
exceed the liabilities by the sum of
2,474,923 18s. 10d., which is the same
as the estimated surplus shown in the
account for 1878. In part II that surplus
is brought down on the credit side, and
against it there is charged on .the debit
side the sum of 1,210,000, being the
amount of estimated expenditure for pub-
lic works and other services which it
is proposed, in the separate estimate now
before the Committee, should be defrayed
therefrom. Deducting this proposed ex-
penditure from the surplus there is still
left the large balance of 1,264,923 18s.
lOd. This balance, or remaining surplus, is
of course available under the arrangement
proposed for any service of a character
somewhat similar to those alluded to and
will be strictly reserved for the purpose.
The following are the services which it is
proposed to charge against the surplus,

viz. : Towards the completion of the
Prince Alfred Hospital, 20,000 ; special
grant to country and suburban Munici-
palities equal to half the rates in each case
for the municipal year ending 4th Feb-
ruary, 1879, 34,000 ; special grant to
the Corporation of Sydney for the vear
1879, 25,000 ; for the purchase of land
adjoining the Necropolis, Haslem's Creek,
for public purposes, 1,440 acres, 36,000;
breakwater, Clarence River, 20,000 ;
prison buildings, &c., Trial Bay, further
sum, 30,000 ; dredge for rivers and
lakes, 15,000 ; dredge, tug, and punts
for Manning River, in the iirst instance,
18,000 ; punts for dredge service,
13,000 ; new dredge, &c., Sydney Har-
bour, 15,000 ; for providing water sup-
ply for country towns, 250,000 ; erection
of light-house, Cape Green,17,000 ; for the
erection of a new lunatic Asylum at Callan
Park, 127,000; for the completion of
public offices for the Lands Department,
further sum, 35,000 ; for the completion
of new public offices for Department of
Public Works and Colonial Secretary,
further sum, 45,000 ; for the erection of
new Free Public Library, 150,000 ; for
the erection of new Law Courts, 210,000 ;
for the extension of the new General Post
Office, including 13,300 payable to the
Honorable Alexander Campbell, under
arbitrators' award, for resumption of land in
Pitt-street, 150,000; making a total of
1,210,000. Honorable members will
hav-e observed amongst these items of
proposed expenditure against the surplus
revenue, that we propose a special grant of
25,000 to the Corporation of Sydney for
the present year. They will also have
observed, no doubt, that the usual annual
grant of 10,000 in aid of the City Funds
has been restored to the Estimates-in-chief
for 1879. These amounts, which are for
this year only, are intended by the
Government to be over and above the
annual sum of 25,000, which will be
secured for a period of ten years to the
Corporation should the Bill now before
the House become law, of which I believe
there is every prospect. It will also be
seen that we have placed on the surplus
revenue estimate 34,000 as a special
grant to country and suburban muni-
cipalities. As these two special grants
25,000 and 34,000 are to enable

[1879.]

MR. WATSON.

427

Sydney, suburban, and country municipal-
ities to carry out improvements for which
the rates they are authorized by law to
collect are found inadequate, the Govern-
ment have considered them fair charges
against the surplus revenue of former
years. Some honorable members may be
inclined to question the propriety of charg-
ing some of the items which I have just
read to the surplus revenue account, but I
think good and sufficient reasons can be
shown for the course proposed when the
estimate comes on for discussion. It
has over and over again been main-
tained that our surpluses should be
specially set aside for Public Works
and other services which are fairly charge-
able to the land revenue of the colony,
out of which they really have arisen. The
Government therefore, in the arrange-
ment now made, are simply carrying out
their views of what they believe to be
right and expedient in dealing with the
surplus revenue ; and in these proposed
appropriations we have thought it best,
where it can be done with an approach to
accuracy, to take the full amount re-
quired for a particular service, instead of
adopting the plan of setting down a sum
on account, which always leaves it difficult
for honorable members to bring into one
view the total cost of any specific object of
expenditure. In future this surplus revenue
account should alway show how the sur-
pluses of previous years the existence of
which has so frequently been questioned,
and I candidly admit that I was one of
those who had great doubts on the subject
are being disposed of. Without the
consent of Parliament the surplus should
never be drawn upon to make good any
deficiency in current revenue. On this
principle I have acted, for in the account
for 1879, to which I shall next draw the
attention of honorable members, I have
brought forward no surplus, but have
simply set against the estimated revenue
the expenditure propei-ly chargeable to
the year. Having examined this surplus
revenue account very carefully, I have
no hesitation in saying that the estimated
accumulated surplus at the close of 1878
will be fully realized. Of course, in making
this statement I take it for granted that
the advances made in 1878 and previous
years from the Consolidated Kevenue

Fund to the Loan Fund will -be repaid
when the authorized loans on their account
have been negotiated. I now come to the
Estimated Account for 1879, for which
the present Government are entirely re-
sponsible. I may however say that the
Estimates now submitted are virtually
those of our predecessors. Pending further
inquiries and more satisfactory reasons
for the numerous increases to salaries of
public officers on those Estimates we felt
compelled to disallow almost the whole of
them. The few left on will be justified
when the Estimates submitted by us come
on for discussion. I have already, in deal-
ing with the surplus revenue account,
referred to those public works items which
have been removed from the general Esti-
mates of the late Government and placed
on the estimate of proposed expenditure
out of the accumulated surpluses of former
years. We have also withdrawn the
,10,000 for locking the Darling until we
are satisfied of the utility and practica-
bility of such an undertaking, as well as
of the actual amount which will be neces-
sary to complete such a work. The amount
estimated by my predecessor for interest
on the public debt has been reduced by
the sum of 45,000. This amount, I
understand, was put on in the expectation
that the debentures forwarded to London
in August last would be sold during the
last quarter of 1878, and that three
quarters' interest would require to be
paid out of the revenue of 1879. In
consequence, however, of the sudden
fall in the price of Colonial securities,
and the then depressed condition of the
English money market, our debentures
were not offered for sale, and in all proba-
bility will not be negotiated for some con-
siderable time, so that no interest can in
that case become a charge upon this year's
revenue. The great difference between
the estimated account for 1879 now sub-
mitted and the one submitted by the late
Treasurer is the elimination from the
former of the accumulated surpluses of
previous years. This account is now com-
menced as it were with a clean sheet and
contains on the one side the amount of
the estimated revenue, and on the other
the amount of the probable expenditure
of the Government, as set forth in the
Estimates-in-chief, to which is added the

MR. WATSON.

[1879.]

sum of 5 0,000, appropriated by the Act
42 Vic. No. 6, passed in January last,
towards meeting the expenses connected
with the International Exhibition to be
held in Sydney during the present year.
The revenue as now estimated is in excess
of the estimate of Mr. Cohen to the ex-
tent of only 65,000, which is an increase
under the head of balances of conditional
purchases. Under the eighth section of the
Crown Lands Amendment Act of 1875 it
is provided that, where the balance is not
paid in full at the expiration of three
years from date of purchase, an instal-
ment of one shilling per acre must be
paid, on all lands conditionally purchased
subsequently to the passing of that Act
(which took place on the 10th August,
1875), within three months after the said
term of three years. In consequence of
this provision it is estimated that balances
will be paid up during the first quarter of
this year to the amount of 6 5, 000 over
and above what is anticipated will be re-
ceived under the operations of the law
of 1861. In other respects the two esti-
mates are alike. There are, however,
several variations in the Estimates of ex-
penditure, the most important of which is
the transfer to the surplus revenue account
of those amounts for public works and
buildings, to which allusion has already
been made, which the late Government con-
sidered fair charges against the surpluses of
former years, although they did not deem
it necessary to remove them from the Esti-
mates-in-Chief and embody them in a sep-
arate estimate. The Estimates submitted by
the late Treasurer for 1879 amounted to
5,366,070 4s. 6d., while those now
before the House amount to 4,919,893
11s. 2d., thus showing a decrease as com-
pared with Mr. Cohen's, of 446,176 13s.
4d., which is chiefly accounted for by the
withdrawal from the late Government's
Estimates of the following items, which
are considered proper charges against the
Surplus Revenue Account : Towards the
completion of the Prince Alfred Hospi-
tal, 20,000 ; Breakwater, Clarence
River, 20,000 ; Prison buildings, &c.,
Trial Bay, further sum, 10,000 ; Dredge
for rivers and lakes, 15,000; Dredge,
Tug, and Punts, for Manning River, in
the first instance, 18,000 ; Punts for
dredge service, 13,000 ; new Dredge,

&c., Sydney Harbour, 15,000; erection
of lighthouse, Cape Green, 17,000 ;
towards the erection of a new Lunatic
Asylum at Callan Park, 25,000 ; towards
the completion of Public offices for the
Lands Department, further sum, 35,000.
For completion of new Public offices for
Department of Public Works and Colonial
Secretary, further sum, 45,000, towards
the erection of a new Free Public Library,
75,000 ; towards the erection of new
Law Courts, 20,000 ; towards the exten-
sion of the new General Post Office, in-
cluding 13,300 pay able to the Honorable
Alexander Campbell under arbitrators'
award, for resumption of land in Pitt-
street, 50,000, making a total of
378,000, to which has to be added the
following sums struck out of the Esti-
mates, viz : Locking the Darling, 1 0,000 ;
Interest on Public Debt not required in con-
sequence of the non-sale of the Debentures
now in London, 45,000, thus bringing
the withdrawals up to 433,000. In
addition to these there have been several
other variations of minor importance that
make up the difference between the two
estimates, but which it is considered un-
necessary to specify here in full detail.
Deducting from the estimated revenue viz. :
5,096,155, the estimated expenditure,
which amounts to 4,969,893 11s. 2d.,
there is left an estimated surplus of
126,261 8s. lOd. Before closing my
remarks on the account for 1879, I desire
to inform the Committee that I intend to
bring in a Bill for the purpose of abolish-
ing the duty on gold, as the present
Government hold the same views with
reference to this tax that were held by
their predecessors. The loss which the
revenue will sustain by its abolition is
only about 8,000. Although I have
adopted the estimate of my predecessor
for sales of land by auction, it is not our
intention to dispose of more land in that
manner than may necessary to meet the
requirements of the year. Should other
sources of revenue yield larger amounts
than estimated, which I think very pro-
bable for various reasons, then the
Government may consider it advisable to
reduce the sales of land by auction to a
corresponding extent. It is expected that
during the period the Exhibition is open
the railway receipts \\ill be largely

[1879.]

MR. WATSON.

429

increased, and consequently that the large
estimate of the Commissioner for Railways
will be fully realized. In the Ways and
Means no credit has been taken for the
fees which will IK- derived from the Exhi-
bition when opened to the public. These
will doubtless amount to a very consider-
able sum, and taken in connection with
the proceeds of sale of materials when
the building is taken down, will go a long
way towards recouping the Consolidated
Revenue Fund for the expense incurred
in its erection, and for the general man-
agement of the Exhibition itself. Apart
altogether, however, from these receipts,
the indirect advantages which the Colony
will derive from this grand undertak-
ing cannot be over-estimated. The
Government having taken the entire
management of the Exhibition into their
own hands, and having appointed a Com-
mission to carry out all the necessary
arrangements, are determined to do all in
their power to make the undertaking a
complete success, as well as a credit to the
Colony, and something worthy of the visit
ors whom we may expect from the neigh-
bouring colonies, Great Britain, and other
countries of the world. We, therefore,
trust that the year 1879 will long remain
one of the most memorable in the annals
of the Colony, and the first of a new era
of unexampled prosperity and national
progress in all those arts and sciences
which tend to promote the happiness and
well-being of a civilized people. Having
now, Mr. Cameron, explained our present
financial position, and our prospects for
the year upon which we have just entered,
so far as the Consolidated Revenue Fund
is concerned, I would for a short time
direct the 'attention of the Committee to
the state of our loan accounts. Of these
I find that there are no less than eleven
separate and distinct funds which, under
the terms of the various Acts constituting
them, must always be kept separate one
from the other. This arrangement was
first introduced by Sir James Martin, in
June, 1871, when he was at the head of the
Administration then in power. In the
Loan Act of that year he inserted the
following new clause : " All sums bor-
rowed under this Act shall be paid to the
Colonial Treasurer and shall by him be
placed to a separate credit to be called

' The Loan Fund ' and no part of the
money so borrowed shall on any pretence
be paid used or applied directly or in-
directly either temporarily or otherwise to
or for any public purpose other than the
purposes respectively to which the same
is hereby directed to be applied." This
clause has continued to be inserted in
every Loan Act from that time up to the
present. At the time of its introduction
fears were entertained that moneys bor-
rowed under Loan Acts would be used to
meet deficiencies in the ordinary revenue,
as was asserted had been done formerly.
Since that year, however, the revenue has
increased so rapidly that in place of de-
ficiencies there has been a very consider-
able annual surplus, so that the necessity
for keeping each loan fund account sepa-
rately does not now exist. So nourishing
indeed has been the state of the Con-
solidated Revenue Fund during the last six
or seven yeara that advances have from time
to time been made therefrom to the Loan
Fundsto the extentof .3,065,000, of which
there remained unpaid on the 3 1st Decem-
ber last, jl, 950,000. Those numerous
loan accounts are really becoming cum-
brous, inconvenient, and useless as dis-
tinct funds. For example, if we had
200,000 to the credit of one of those
funds which we did not require for imme-
diate expenditure we could not, in conse-
quence of the clause referred to, make use
of that money for a piv.-Miig service
authorized by another Loan Act, but for
which the money had not been raised. As
this is a state of matters which I think
should not exist, it is my intention to
bring in a short Bill thi.s Cession which
will provide that moneys borrowed
under one Loan Act may ! applied, if
necessary, to services provided for under
another. In other words, that all exist-
ing and future loan funds shall form out-
general loan account only, and that
the money borrowed under any particu-
lar Loan Act may be applied indiscrimi-
nately to any duly authorized Loan Ser-
rfcfe. The Bill shall, however, a U> pro-
vide that money so borrowed cannot be
used for any purpose outside the Loan
Acts. I find that I am supported in my
\iew on this subject by the Auditor Gene-
ral, who in his report on the Public
Accounts of 1877, made the following

430

MR. WATSON.

[1879.]

remarks : " The time has arrived when
the amalgamation of the separate loan
funds might with advantage, in my opinion,
be sanctioned. The checks which the Audit
Act provides upon the issue of public
moneys are such as to prevent the misap-
propriation of loan funds to other pur-
poses than those for which they are voted.
There are now, in addition to the ' Old
Loans Account,' which is included with the
Consolidated Revenue in the Public Ac-
count,' no less than ten separate Loan
Accounts in the books of the Treasury
and Audit Departments, involving multi-
plication of labour without any correspond-
ing benefit." On the 31st December last
the amount of appropriations for railways,
public works, and other services, remain-
ing unexpended, was 2,774,040 Is. 10d.,
and the amount due to the Consolidated
Revenue Fund for advances, pending sale
of debentures, was 1,950,000, making
together a total liability of 4,724,040
Is. 10d., to meet which the following assets
were avaiable, viz. : Cash in the Bank of
New South Wales, 317,072 9s. 7d. ;
special deposits in other banks, 125,000 ;
loans yet to be negotiated, 4,481,647 ;
less amount drawn against the debentures
transmitted to London, in August last, for
negotiation there 200,000 ; advances
not yet adjusted, 320 12s. 3d., giving a
total of 4,724,040 Is. lOd. During the
past year the payments for Loan Services
amounted to 816,713 3s. 2d., distributed
thus : Railways, 723,437 7s. 3d ;
electric telegraphs, 12,168 Os. 7d. ; har-
bours and rivers improvements, 35,398
19s. lid. ; public works and buildings,
34,836 9s. 2d. ; bridges, 10,872 6s. 3d.
I find from the explanatory statement of
the piiblic accounts, which I will shortly
place in the hands of honorable Members,
that our total loan expenditure from the
time we first began to borrow up to 31st
December, 1878, amounted to 13,836,729
19s. 8d., of which 10,139,464 14s. 7d.
was for Railways, and 430,186 13s. for
Electric Telegraphs. Deducting the
amount of these two sums which have
been expended on reproductive works,
there is left a balance of 3,267,078
12s. Id., that has been expended on other
public works of a permanent and useful
if not of a reproductive character. It
fortunately for me, requires no argument

now to prove the wisdom of borrowing
money for reproductive works. As this
is admitted by all enlightened nations,
and so long as there is a prospect of fair
returns for the oxitlay, I think we are
perfectly justified in adhering to the
practice. Our Public Debt if not the
smallest of all the Australian Colonies is
at all events less per head of population
than that of any of our neighbours. On
the 31st December last our debt was
11,724,019 9s. 2cl., or only about
250,000 more than it was on the 31st
December, 1870. In connection with
this subject I may inform the Committee
that a loan Estimate is now in course of
preparation and that when closed finally
no time will be lost in laying it on the
table of the House. As the principal
amounts included in that estimate will be
for Railway extension, I will take this
opportunity of indicating as briefly as
possible the policy of the Government
with respect to railways generally. In-
deed there is no subject of greater impor-
tance to the present and future welfare of
a country than its internal communica-
tion, which it has been universally con-
ceded can best be secured by the construc-
tion of railways. Before I proceed to lay
before the Committee the proposals of the
Government and to state the amounts
which will be necessary for the construc-
tion of the lines proposed, and within
what periods such amounts will be re-
quired, it would be well, I think, that I
should briefly review the Railway history
of the past, and show in what manner our
present Loans for Railway Services have
been invested, and how far the transac-
tions arising from the operations of the
lines open for traffic appear to. justify an
extension of the system. We have at the
present time 688 miles of railway open for
traffic, viz. : 306 miles in the south ;
195 miles in the west, and 187 miles in the
north ; the cost of these 688 miles of rail-
way has amounted to 9,778,000, and at the
close of 1877 the gross yearly re venue was
815,920, which, after deducting the
working expenses, returned a net amount
for payment of interest on capital of
396,935, yielding within a fraction of
4 10s. per cent. The returns for 1878
have not been completed, but it is known
that from various causes, chiefly by the

[1879.]

MR. WATSON.

431

reduction of rate carriage and the carrying
out of extensive renewals, which have
greatly increased the working expenses,
the net returns will not be quite so favour-
able ; but the fact that we have obtained
30,000 in excess of the estimated revenue
is a sufficient indication that the exten-
sion of railway communication expands
the existing and creates new sources of
traffic to the ultimate benefit of the under-
taking, and the promotion of the general
prosperity of the Colony. To show the
progress which lias been made within the
last ten years, I will compare the transac-
tions of 1867 with those of 1877. In
the ten years the number of miles
open for traffic had increased from
204 to 598, or 193 per cent. ; the capital
expended increased from 3,282,320 to
8,883,177, or 171 per cent. ; the interest
paid on capital increased from '2 3s. 8|d.
to 4 9s. 4]d., or 105 per cent. ; the
number of passengers carried increased
from 875,671 to 2,957,144, or 238 per
cent. ; the tons of goods carried increased
from 517,021 to 1,410,610, or 173 per
cent. It is thus clearly shown that the
expenditure for the construction of rail-
ways is a wise and profitable investment
of the public funds which, while yielding
a direct return on the capital expended,
almost equal to the interest on the money
borrowed, at the same time confers on the
Colony indirect benefits which cannot be
estimated in money. It will bo observed
that the 688 miles of railways now open
for traffic already pierce the mountain
ranges and connect the metropolis with
the rich lands of the interior ; and the
extensions now in. the course of construc-
tion will in a shoi-t time make the total
number of miles close upon 900. Of
the lines under contract, the extension of
81 miles from \Vagga Wagga to Albury
(a considerable portion of which I am
assured will be opened within the present
year) may be said to form the connecting
link between this Colony and Victoria ;
and this main line, uniting Sydney to
Melbourne, will, when completed, afford
the first great experiment in Australia of
railway communication with its termini
in great populous cities, and will exhibit
the commercial results of railway traffic
where the conditions are similar to those
of old countries. For my own part I

expect the success of the through line
between two centres of population num-
bering half a million of souls will surprise
even its most sanguine advocates. The
extension of 85 miles from Orange to
Dubbo, another of the lines under
contract, will also form a valuable
addition to our railway system, and will
greatly increase the facilities for settle-
ment, and the industrial occupation of the
extensive agricultural and pastoral country
on the Macquarie, the Bogan, and towards
the Darling. And added to these im-
portant works, the 41 miles extension
from Werris Creek to Gunnedah taps
one of the finest districts of the north.
Besides the extensions just alluded to,
Parliament has approved of the plans,
sections, and books of reference, and
has voted 600,000 for an extension
of the main northern line to the dis-
trict of Armidale and to Tenterfield,
closely approaching the borders of Queens-
land. All these works will be pressed
forward to completion with the least pos-
sible delay. No time will be lost beyond
what is necessary to enable a right deci-
sion to be arrived at, in carrying a line of
railway from some point on the main
southern line to the important town of
Hay ; but although a sum of 384,000
has been voted lor a line from Junee to
Narrandera, with a view to connecting
ultimately with Hay, it is felt that the
great importance of the undertaking,
arising from the vast extent of the country
it is intended to open, fully justifies further
consideration before the route is finally
determined upon. Steps have already been
taken to carry the railway from the Red-
fern station, through the city of Sydney, to
the waters of Port Jackson, erecting a pas-
senger station at a point convenient for
the principal business streets. We hope
to bring this proposal in a definite shape
.before Parliament in a few days, and we
shall seek by special legislation to obtain
the necessary powers to complete the work
with the least possible interruption and
delay. As an outline of our railway policy
for the future, I desin- t<> say that, though
our scheme cannot be sufficiently matured
to be submitted to Parliament this session,
we shall be prepared early with proposals
for connecting the Western and Southern
Railways by a line between Blayney and

432

MK. WATSON.

[1879.]

Murrmulmrrah, or some point on the
Southern line near that town for a line
from Orange to Forbes for lines from
the Great Southern Railway to Cooma
and from Cootamundra to Guiidagai and
for a line from the Southern and Western
to the Great Northern Railway. These
projected lines will give a total extension
of upwards of 400 miles. The proposals
of the Government for further and early
extensions will embrace the country from
Dubbo to Bourke, and that from Gunnedah
to Narrabri, and also a line to the district
of Mudgee. A system of suburban lines
for the metropolis, and an estimate for
their commencement, will be submitted for
the approval of Parliament at an early date,
and I do not hesitate to express my belief
that the scheme proposed will give satis-
faction to this Committee. It is estimated
that to provide for the line already ap-
proved by Parliament, viz., from Tarn worth
to Tenterfield,a further sum of 1,612,000
will be required. For the line from Dubbo
to Bourke, a distance of 227 miles, a sum
of 1,450,000 will be required ; and from
Gunnedah to Narrabri, a distance of 60
miles, the sum of 370,000 will be re-
quired. There will be required for the
line from the Western line to Mudgee the
sum of <892,000, and for the extension
into Sydney the sum of 300,000, exclu-
sive of the cost of land and compensation
to owners of property affected thereby.
My honorable colleague, the Minister for
Works, when submitting the various pro-
jects for the consideration of Parliament,
will explain to the House in detail the
reasons for adopting the various lines sug-
gested, and how far they may be expected
to realize a return upon the capital pro-
posed to be invested in them. I may
state generally, that the Government, in
deciding upon the routes, have studied
only to meet the requirements of the
general community in the most beneficial
way for the advancement of the country
and the development of its vast resources.
Without desiring to interfere unduly with
those duties which more peculiarly apper-
tain to the office of my honorable colleague,
the Minister for Works, I think it right,
nevertheless, that I should inform the
Committee that it is the intention of the
Government to make provision on the
Loan Estimate, which I have already

stated was in course of preparation, for
Water Supply to Sydney and suburbs.
Immediately Parliament has passed the
necessary measure for this important pur-
pose steps will be taken for commencing
the works. Full details will, no doubt, be
furnished by my honorable friend when
the estimate comes before the Committee.
Before closing I desire to recapitulate the
more salient points of my statement, which
are these : That the accumulated surpluses
at close of 1877 exceed the estimate of the
late Treasurer by 94,000 that in place
of an estimated deficiency of 25,000 on
the account for 1878, as formerly shown,
there is now an estimated surplus of
49,000, arising chiefly from an increase in
the revenue of the last quarter to the extent
of 76,000 that there is in consequence
a clearly ascertained total accumulated
surplus at the close of last year of nearly
two millions and a half that the probable
revenue of the present year will be
126,000 in excess of the estimated ex-
penditure that no change is proposed in
the fiscal policy of the Colony for the pre-
sent -that the Government intend to bring-
in shortly a Loan Estimate in which pro-
vision will be made for the extension of
the railway into Sydney for some of the
more important extensions required in the
interior, and for Water Supply for Sydney
and suburbs. I have also shown how we
propose to absorb, and to what extent, the
surpluses of former years ; what arrange-
ments have been made to meet the public
requirements in London ; and what our
intentions are with regard to the special
deposits. Notwithstanding the severe and
long protracted drought from which the
Colony so recently suffered there is now a
tone of hopeful confidence pervading the
whole community, and it is to be hoped
that the splendid season we are now enjoy-
ing, and the abundant harvest we have
had in almost every district of the Colony,
will recompense in some measure those
who suffered most severely from the effects
of that calamitous visitation of Providence.
Fortunately the recuperative powers of
the Colony are such that with occasional
good seasons and prudent management on
the part of those engaged in agricultural
and pastoral pursuits, the losses of a bad
year now and again are not attended with
very disastrous results to the Colony at

[1879.]

MR. WATSON.

433

large although individual losses may be
very serious. I am not aware, Mr.
Cameron, that there is any other subject
of importance which I should bring under
the notice of the Committee at this time.
Indeed I am afraid I may have wearied
honorable members with too much detail ;
but if so, my anxiety to place before them

the fullest information respecting the
finances of the Colony in as clear and in-
telligible a manner as I could, must be my
excuse, and in conclusion I have to thank
honorable members for their patience,
attention, and forbearance during the
delivery of this my first Financial State-
ment.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE JAMES WATSON,
made 10th December, 1879.

LEGISLATIVE ASSEMBLY.

10th December, 1879.

FINANCIAL STATEMENT.

MB. CAMERON : The important duty
now devolves upon me of .laying before the
Committee the present and prospective
financial position of the country ; and in
doing this as briefly as I can, I confidently
rely on receiving from honorable mem-
bers that kind indulgence and generous
forbearance which was extended to me on
a former occasion.' It was my earnest
desire to have made this statement at a
much earlier date, but circumstances have
occurred, over which I may say I have
had no control, to prevent that desire
being carried into effect. The late period
of the year at which we have now arrived
precludes the possibility of the Estimates
for next year being passed before the close
of the present. There will, therefore, I
fear be no alternative, pending the passing
of the Appropriation Act, but to again
resort to the objectionable system of
monthly Supply Bills, in order to carry
on the services of 1880, a system which
on a former occasion I expressed a hope
would not be found necessary ; but I trust
the necessity will be limited to the first
two or three months of the year at most.
It will be remembered by honorable mem-
bers that the last Financial Statement was
made by me on the 12th February of the
present year. On that occasion I stated
to the House that, as the necessity had
not then arisen, it was not the intention

of the Government to propose any change
in the fiscal policy of the country, or
introduce any measure for the imposition
of new taxation. My task then was,
consequently, a comparatively easy one,
as I had little more to do than explain the
differences between the estimates and
accounts submitted by my predecessor in
November of the year preceding and those
submitted by me. In discharging that
duty, I took the opportunity however, of
indicating as clearly as I possibly could
the railway policy of the Government,
and of informing the Committee how we
intended to utilize the accumulated sur-
plus revenue of previous years, as well as
what our intentions were respecting the
special deposits in the banks and other
matters of equal interest. These were all
important questions at the time, and I
think honorable members will admit that
they have been dealt with in a manner
alike satisfactory to the House and the
country. I could wish, Mr. Cameron, that
the task now before me was as easy and
as pleasant as the one I undertook in
February last ; although, in saying this, I
do not wish it to be understood -for one
moment that I desire to shirk tin- re-
sponsibility which my position as Finance
Minister of the colony imposes upon me
at the present juncture. As honorable
members are well aware from their gem-nil
knowledge of the increasing necessities of
the country, and, from the state of the
revenue as exhibited by tin- published
quarterly returns, that the time has arrh ed
when it behoves the Government to pro-
pose new taxation with a view to equalize
the revenue and expenditure, I feel

436

MR. WATSON.

[1879.]

relieved from much of that embarrassment
which otherwise I should have experienced
in broaching such a subject. Although
there is nothing in our present financial
position to alarm the most sensitive
amongst us, still it is such as to demand
the most careful and dispassionate consider-
ation, in order to ascertain to what extent
our ordinary expenditure is likely to
exceed our legitimate income. It is, I
think, almost unnecessary for me to in-
form honorable members, as they must be
pretty well aware of it, that our land
revenue can no longer be expected to yield
the large sums it has hitherto done. I do
not refer to the annual revenue derivable
from the temporary occupants of the
public estate, as that must inci'ease for
many years to come, but to the revenue
if revenue it can be called which is
obtained from absolute and conditional
sales of lands. The demand for land has
very considerably diminished during the
last two years partly, I venture to say,
owing to the general expectation that a
new or amending Land Bill would have
been passed long ere this, partly also to the
increased upset price which has certainly
had a very depressing effect ; but above
all, to the fact that money is not so easily
obtained now as it was formerly. The
mania, for such it really was, for acquiring
land, has, like all other manias of the
kind, and which in this country seem to
be of periodic recurrence, nearly died out.
Future land purchases may, therefore, be
expected to be of a more healthy and
legitimate character. Notwithstanding
the still very considerable amount which
the land sales of this year will reach, this
source of income is not to be relied upon
to the extent it was f ormerly. In view of
this falling off in our land revenue, it
would be worse than folly to longer delay
placing our finances upon a sounder basis
a basis which, to a certain extent, will
render us independent of the proceeds of
the sale of our national estate. No one,
I should imagine, would deny that so long
as these proceeds are faithfully and
judiciously expended in improving the
remaining portion of that estate, with a view
to the settlement of the country and the
increase of its population, by an indus-
trious and suitable class of colonists, that
it is right, and even commendable, to

dispose of limited quantities of land every
year. Unless, however, these objects are
steadily kept in view, and the pi'oceeds so
applied, it must be abundantly evident that
they would be absorbed in the ordinary ex-
penditure of the country. If this system of
meeting current expenses out of capital
were long continued, it could not fail to
end in the same ruin to the State which
would befall a private individual if such
an insane course of conduct were long pur-
sued by him. It would of course be im-
possible now to stop entirely the sale of
land by aiiction without laying ourselves
open to the charge of doing an injustice to
those who are desirous of securing areas
of sufficient extent for either agricultural
or pastoral purposes. As this is, however,
a subject to which I shall again have to
recur when I come to deal with the question
of increased taxation, I shall leave it for
the present. In the meantime it is neces-
sary that I should explain to the committee
the position of the public accounts gener-
ally. In doing this it may be advantageous
to the committee, as it will certainly be
convenient to myself, to state the order in
which I propose to deal with my subject.
First then, I shall show what the position
of the Surplus Revenue Account was at
the close of last Session as compared with
the account submitted by me when I made
my statement in February. It will then be
my duty to show the changes which the
lapse of time has brought about in that
account, and to what further extent we
propose to utilize the remaining surplus.
In the second place I will show how the
account for the present year now stands.
Having in this way given a synopsis of
our financial position to the close of the
present year, I shall refer in a general way
to other important matters of a collateral
nature. After that I will show to what
extent the revenue of 1880 is likely to fall
short of the estimated expenditure of that
year, and how the Government propose to
meet the deficiency. In. connection with
these propositions I shall take the oppor-
tunity to review the progress made in the
revenue of the Colony since the introduc-
tion of responsible Government, in order
to show the Committee the direction which
it has taken during the twenty -four years
we have had the entire control of our
own affairs. Following this arrangement

[1879.]

MR. WATsoN.

437

then, I have now t<> request the, attention
of honorable members while I deal, as
rapidly as the nature of tho subject will ad-
mit, with the accumulated Surplus Revenue
Account. As the reading of accounts
in detail generally drives honorable mem-
bers who have no peculiar aptitude for
figures from the Chamber, I shall endeavour
to generalize as much as possible, leaving
them, if so inclined, to study at their
leisure the various statements attached to
the Ways and Means, which I will shortly
lay on the table. Last Session I adopted,
as the Committee may remember, a new
method of dealing with the surplus revenue
of previous years. That surplus be-
gan to accrue in 1872. In that year it
amounted to .141,000, and went on in-
creasing year by year, until in 1878, it-
had reached, according to the estimate
I made in February last, the sum of
2,474,92:5 18s. 10d.' which is about one
half the entire income of that year. This
surplus had accumulated so rapidly and
had assumed such vast proportions, taking
into consideration the population of the
Colony, that its disposal to advantage was
becoming a difficult question to deal with.
Had the annual amounts which created
this large; surplus arisen from an excess of
revenue proper over our ordinary expendi-
ture, we should probably have done here
what is usually done in England under
.similar circumstances that is, reduced or
abolished some of those taxes which may
be considered to press most heavily on the
working classes. Inasmuch, however, as
as the surplus did not so arise, but resulted
from the sale of more of the public
lands than was absolutely necessary to
supplement our ordinary income, that
course could not with safety be adopted,
as it could not be expected that such large
land sales would long continue. It has
been contended by some honorable mem-
bers, as well as by some portion of tin-
Press, that tfce surplus should have been
expended in the construction of railways
or on other reproductive works. That
would, no doubt, have been a very. judicious
application of it, had our ordinary revenue
been sufficient to have enabled the Govern-
ment to have defrayed therefrom the cost
of all those important public services which
were last Session authorized out of the
accumulated surpluses of previous years.

As llit- ordinary revenue did not, how-
ever, admit of that being done, and a*
such services will not be reprodv -tive, it
would surely have been imprudei , to say
the least of it, hail we propos ! t l.-n-row
money to carry them out and se.l the
surplus for the construction of railways.
Feeling satisfied that it was more judicious
and more in harmony with tin practi.
this and the other Australian Colonies to
borrow money for railways, which with us
are highly reproductive, than for public
buildings and other services which are not
so, we suggested, and the House willingly
sanctioned, the application of part of the
surplus to those important services, which
were embodied in the surplus revenue
estimates of last session. When I sub-
mitted the surplus revenue account in
February last the charge we proposed to
make against it amounted to 1,210,000,
which woxild have left a balance to
expend on some future occasion of
1,264,923 18s. lOd. Before the close
of the session it was, however, found
necessary to bring clown further estimates
for services which had in many cases been
provided for in previous years, the appro-
priations for which had lapsed by efflux-
ion of time. As the surplus had of course
been swelled by the amount of theM' lapsed
appropriations, it was only right and
proper to again charge them against it.
The charges were thus increased from
1,210,000 to l,494 ; . >:;s I*. '>d. : and
the- remaining sui-plus was reduced corres-
pondingly from 1,264,923 18s. 10,1. to
980,585 14s. 5d. This then would
have been the state of the surplus
revenue account at the close of last session
had I submitted a statement showing
these changes. I will not weary the Com-
mittee by detailing all the further di.
which appear in the account
mitted. Suffice it to say that I have
charged against the surplus of pn-
vears the two votes of 50,000 each,
taken in the temporary Supply Hills of
last Session for the International Exhibi-
tion Building, as no portion of the cost of
a work of this magnitude could be fairly
charged to the re\eime of any one year in
particular. Honorable members are well
aware that when this undertaking was
commenced it was never contemj
that the cost would be so great, other

MR. WATSOK

[1879.]

it might not have been proceeded with.
As the exhibition however has been so far
a great success, and has drawn vast num-
bers to our shores, besides directing the
attention of some of the most important
States of the world to these Colonies and
their unbounded resources, it is only
reasonable and natural to expect that the
results will ultimately be a very consider-
able permanent increase of population, and
.the introduction of a large amount of new
capital. Besides these there must be
many other advantages, direct and in-
direct, which the Colony will derive from
the holding of this International Exhibition.
Another cogent reason for charging the
whole expenditure in connection with the
Exhibition to the surplus revenue account
is the great probability of the main build-
ing being used for Parliamentary purposes
during the erection of new Houses of
Legislature worthy of the Colony, on the
site of the present inconvenient and un-
sightly edifices, which is admittedly one
of the finest in the city. If honorable
members will turn to the surplus revenue
account, just placed in their hands, they
will find that some variations, consequent
on the lapse of time, have occurred since
it was submitted by me in February last.
This account is now essentially a cash
account that is, it must always show
the actual payments made out of the sur-
plus which existed on the 31st December,

1878, until that surplus is exhausted by
duly authorized expenditure, or otherwise
legally disposed of. The payments made
from the 1st January to 30th September,

1879, out of the surplus revenue account,
amount, as therein shown, to 1,424,345
15s. 4d., which, deducted from the gross
credits of 3,999,522 16s., left a credit
balance of 2,575,177 8d.on the date last-
mentioned. This balance was, however,
hen chargeable with outstanding liabili-
ties to the amount of 1,808,428 16s. 9d.
It is also chargeable with a supplementary
.estimate on account of services of 1878
and previous years to the amount of
20,695 5s. Id. There is likewise an-
other surplus revenue estimate now before
the House, amounting to 127,999 8s.
5d., which it is also proposed to charge
against the remaining balance on this
account. These three sums, which together
amount to 1,957,123 10s. 3d., being

deducted from the credit balance of
2,575,177 8cl. on the 30th September
last, reduce the surplus to 618,053 10s.
5d., the amount now shown in the account.
Should any honorable member be desirous
of obtaining fuller information respecting
the various changes that have taken place
in the surplus revenue account since it
was first introduced by me, he will find
them clearly set forth in the explanatory
statement of the public accounts, as em-
bodied in the present Ways and Means,
which I will in the course of the evening
lay 011 the table. I now come to the
account for the present year the year
1879 to which I would specially invite
the attention of honorable members, as it
is the one for which I am, as Treasurer,
more immediately responsible. This being
the case, I am naturally anxious that it
should be clearly understood by every
member of the Committee as well as by
the public generally. In dealing with this
year's transactions I shall have to go
more into details than I could wish ; but,
as 1879 is the first year since 1872 that
exhibits a falling income, I may be par-
doned for so doing. It will no doubt be
remembered by some honorable members
now present that prior to 1872 the
Government had great difficulty in mak-
ing ends meet, and that their difficulties
were only tided over by temporary loans,
by the imposition of stamp duties, ad
valorem duties, and a few other increases
to the tariff of lesser importance. The
stamp and ad valorem duties have long
ago ceased to exist, and the loss which the
revenue has thereby sustained has only
been made good by our enormous land
sales. Since 1872 up to the close of 1878
there have been surpluses every year of
varying amount, making in the aggre-
gate close upon two and-a-half millions.
This large surplus was created entirely by
our land sales, without which it could
have had no existence. When the revenue
estimates were prepared for 1879 it was
anticipated that 1,000,000 would be
received this year from auction sales, but
I am sorry to say that that estimate of
my honorable colleague will not be real-
ized by at least 265,000. The revenue
of 1879 as first estimated was expected to
realize 5,096,155. The expenditure
sanctioned by Parliament, inclusive of

[1879.]

MR. WATSON.

439

special appropriations, but exclusive of
the first vote of 50,000 for the Inter-
national Exhibition, now charged to the
surplus account, amounted to 5,006,686,
so that had the estimate of revenue been
realized there would have been a surplus
of 89,469. The Committee will however
regret to hear that, instead of that esti-
mate being realized, the actual receipts of
the year are now expected to fall short of
it to the extent of 571,314. When I made
the financial statement for the present year
there was no indication whatever of such
an unfortunate result, otherwise the
Government would either have reduced
their estimates of expenditure for public
works, which it would have been difficult
to do in view of the requirements of the
.country, or proposed new taxation. The
revenue received into the Treasury during
the first nine months of the year amounted
to 3,231,826 and my estimate for the last
quarter is 1,293,015, thus making
together only 4,524,841, which, as already
stated, is 571,314 short of the original
estimate. On the other hand, the author-
ized expenditure for the year is increased
by additional special appropriations to the
amount of 26,591 16s. 5d., and a supple-
mentary estimate of 41,609 17s. 6d.
These amounts bring the charges against
the present year up to 5,074,8'88 5s. Id.,
which is however reduced by 350,000,
the amount of appropriations for 1879
estimated as not likely to be required.
The net estimated charges stand therefore
at 4,724,888 5s. Id. If from this sum
we deduct the amount which the revenue
is now expected to realize, viz., 4,524,841,
there is left an estimated deficiency of
200,047 5s. Id. It was my intention to
have carried this deficiency into the
account for 1880, with a view to provision
being made for it in the scheme for
additional taxation, which I will have to
submit in connection with the estimated
deficiency in the revenue of that year ;
but having anxiously and fully considered
the matter in all its bearings, I have come
to the conclusion that as this deficiency
was neither foreseen nor anticipated, nor
yet brought about by any improvident ex-
penditure on the part of the Government,
but was merely the result of a falling off
in the land sales, and that the land from
hich we expected a larger revenue this

year is still in the possession of the Govern-
ment, that it would be more in accordance
with the practice of previous Governments
in days gone by to charge the amount
against the surplus, as that surplus was
wholly created by land sales in excess of
the public annual requirements. It will,
I dare say, be remembered by many honor-
able members that the deficiencies of 1870
and previous years, and a large amount of
debentures which had matured, as well as
some other extraordinary claims against
the revenue, were all paid out of the pro-
ceeds of land sales between the years
1872 and 1877 to the amount of nearly
2,000,000. I readily admit, however,
that notwithstanding all these circum-
stances the course now proposed may
appear to be somewhat inconsistent with
the sentiments I expressed in regard to
this subject in my last statement. I
then said that I " deemed it right that no
portion of the surplus should be used to
meet the ordinary expenditure of future
years, but rather that it should be used
only for carrying out public works of
admitted general utility, for the erection
of public buildings, and for other services
which cannot fairly be charged upon the
revenue of any one year in particular, and
which in the absence of such surplus would
probably have to be provided for by
Loans." It is, howerer, quite in harmony
with another part of that statement where
I said that " without the consent of Par-
liament the surplus should never be drawn
upon to make good the deficiency in cur-
rent revenue." I therefore intend to ask
the Committee by a formal resolution to
grant out of the Surplus Revenue account
an amount sufficient to cover the estimated
deficiency in the revenue of 1879 as ex-
hibited by the account for that year. In
theexplanatorystatementalready alluded to
will be found astatementshowingthesoi
of revenue which fall short or are in excess
of the estimate made in February last
when compared with the estimate now
made. From that statement I find that
the items which are less than the original
estimate amount to 667,513, while those
that are more, to only 96,199, thereby
showing a net reduction as previously
stated of 571,314. In connection with
the scheme which I have prepared for in-
creasing the revenue of the country, and

440

MR. WATSON.

[1879.]

which I shall shortly have to bring under
the notice of the Committee, it may be
useful to show, under general heads, to
what extent the revenue of the present
year, as. estimated in February last, is not
expected to be realized. Under the head
of taxation I find that Customs will be
short to the extent of 64,343. Why
this should be it is difficult to under-
stand. It may be that the great exert-
ions made by the friends of temperance
are beginning to bear fruit and if so we
should have 110 great cause to regret
the loss. I am, however, rather afraid that
the true cause will be found in the depres-
sion of business generally during the
present year, and the consequent enforced
denial of what are considered, whether
rightly or wrongly, the luxuries of life. It
is an undeniable fact that this general
depression has affected more or less almost
every source of our revenue. When
money is scarce people are compelled, how-
ever reluctantly, to curtail their expen-
diture and to hope for better times. The
recent telegrams from England, informing
us that trade is reviving there and else-
where, give \is good grounds for expect-
ing that a similar improvement will shortly
take place here. Indeed, even now, there
are many indications of that improvement
having commenced. .Under the head of
Duty on Spirits distilled in the Colony
there is a falling off to the extent of
2,524. This no doubt arises from the
fact that Colonial manufactured rum is not
considered a wholesome beverage until it
has become well matured ; it is therefore
largely exported for its improvement in
this respect, and when returned to the
Colony pays duty as imported spirits, so that
if we do not get the revenue under this head
we get it under that of Customs. Under
the head of Land Revenue, sales generally
show a falling off to the amount of
432,677 ; interest, 7,038, and pastoral
occupation, 28,535. These together
make a loss to the revenue this year of
468,250, which was neither anticipated
nor foreseen when the estimate was pre-
pared. It is in view of this great falling off"
that the Government have determined to
submit to the Committee a scheme of taxa-
tion which, should it meet their approval
and become law, will render us less de-
pendent upon this precarious source of

income for the future. I find that under
the heat} of receipts for services rendered
there is a falling off in railways of no less
a sum than 118,840, and of 12,451
under five other sub-heads. In the state-
ment of Ways and Means for 1879, sub-
mitted in November, 1878, by my honor-
able friend opposite, the member for West
Maitland, it was estimated that the rail-
way revenue for this year would realize
the sum of 1,085,000. When, in Feb-
ruary last, I submitted my estimate of
revenue for the same period, I saw no rea-
son to doubt the accuracy of this particu-
lar estimate, and therefore adopted it.
That estimate was based, I understand,
upon past experience of the development
of our railway traffic. In 1878 the aver-
age number of miles in operation was 633^
and the amount realized was 902,989,
equal to 1,427 per mile. The Commis-
sioner for Railways, anticipating that there
would be an average of 7 1 1 miles open for
traffic in 1879, and seeing no reason to
doubt that the productiveness of each
mile of line would be sustained, framed
his estimate 011 that data, the usual per-
centage for increased traffic being added.
The following are some of the reasons
assigned by that officer for this diminution
of receipts : General depression of trade,
which hag not been confined to this Colony
alone, but seems to have extended to
almost every commercial community. In
Victoria the railway returns have been
diminished during the present year, and
from the railway returns of the Mother
Country for the first half-year of 1879,
traffic so decreased that a loss of nearly
1 per cent, in the dividends has been sus-
tained. In addition to the loss occasioned
to our revenue by the general dulness of
trade, the impaired state of the roads in
the interior, caused by the recent heavy
rains, has retarded the conveyance of fiie
wool to the market, and although this
traffic will yet be secured to the railway,
and the return supplies also, the postpone-
ment of the carriage for a time has served
to limit the amount of revenue estimated
to be obtained during this year. The Com-
missioner adds, howeyer, that the railway
returns for the past month show that a large
increase in the traffic both as regards pas-
sengers and goods has commenced to take
place. As I am, however, of opinion that

[1879.]

MR. WATSON.

441

it is high time this groat national under-
taking should erase to be worked at loss to
the country, 1 intend, in conjunction with
my honorable colleague, (lie Secretary for
Public Works, to give the subject early
consideration, with a view to ascertain
whether it is not possible to derive from
our railways a revenue move commensu-
rate to the outlay for their construction
than has hitherto been the case. Under
the head of General Miscellaneous Re-
ceipts, Fines <ind Forfeitures show a loss
of .1,105; but as receipts of this nature
are of an uncertain character they do not
admit of an accurate estimate being made.
Increases occur under various sub-headings
of the Ways and Means, but altogether
they amount to only .96,199. The only
increase of importance is that of .63,827,
under the head of Unclassified Receipts,
which includes International Exhibition
fees to the amount of 31, HI 3, for which
I took no credit in my former Ways and
Means. Against this there is however a
sum of 25,000 charged in the account
for 1879, to meet the probable expenses
of the Commissioners to 31st December
instant. There! is also an increase of
20,518 under the head of interest on
Bank deposits. My original estimate for
interest was 05,000, but. as 1 have trans-
ferred a large portion of the recent loan
to Sydney I now expect to obtain
85,518. Having thus explained as fully
and as clearly as I can our financial posi-
tion at the present time, or rather what I
expect it will lie at the close of the year,
I desire before entering the domain of the
future to give some information of a gene-
ral nature, as is usual in making a Finan-
cial Statement, such an occasion bein^-
considered the must appropriate for the
purpose. First, then, I will state what
werethebalancesoii the Public Ac-counts, as
exhibited by the bonks of the Treasury on
the 30th November last, although it has
Keen found more convenient to bring all
the other statements attached to Ways and
.Means up to the 30th September only.
On that date then then- was at the credit
of the Consolidated Revenue Fund (ex-
clusive of 1,293,812 due by the General
Loan Fund) 1,210,794 19* 9d. ; at tin-
credit of the Trust Fund. 1,074,373 6s.
Sd. ; at the credit of the old loans,
I' 156,951 Is. 7d. ; and at the- credit of

the General Loan Account, 647,274 6s.
Id., making together a sum of 3,089,:'.'.':5
14s. Id., which was distributed thus: In
the P>ank of New South Wales. Sydney,
792,346 5s. 7d. ; special deposits in nine
of the Sydney banks, r 1 .7l'5.,000 ; securi-
ties in the Treasury chest. {T,0| ,750 12s. ;
and in the Bank of New South Wales.
600, which as a whole corresponds -with
the Treasury balances after deducting an
overdraft of 33,303 3s. 6d. on the public
account in London. This overdraft in the
I Condon account is only an apparent one, for
there must have been an actual balance of
nearly 800,000 at the credit of the
Government, being the undrawn portion
of the recent loan, full particulars of
which have not yet been received. In
consequence of the recent amalgamation
of the various loan funds under the Act
42 Vic. No. 17, passed in April last,
the loan accounts have been much sim-
plified. With the Ways and Means there
will be found statements giving full
particulars of all the services authori/ed
to be defrayed out of borrowed money.
the amount expended up to the 30th
September, 1879, the unnecessary ln.1
ances which have been written off', and
the appropriations and balances of appro-
priations remaining unexpended on that
date. I find from this document that tin-
appropriations from 185:5 to 1*7!) amount
to 25,203,634 18s. 3d., of which there
has been expended 15,974,:;:.!' lla 10d.,
and written off as not required 128,803
Os. Id., leaving for future- expenditure a
sum of 9,100,479 6s. 4d. To cover this
unexpended balance we had ca.sh in tin-
banks to the amount of I''.'3i5. 17,". I Is. Id.,
a balance of 320 12s. 3d. due by the
Commissioner for Railways, and authority
to borrow to the extent of '.. 15 7,497, of
which however some portion is already
raised, although in the alc -in-.- of a. -counts
the exact sum can not be stated. These as-
which together amount to 10,394,291
fit Id., are liable to the ( '..n-olidatcd
l; enM Fund for 1.2'.3.sl 2. that being
tin- balance of advances made therefrom
pending tin- negotiation of authori/ed
loans. While on this subject 1 would
take the opportunity of giving to the
Committee the result of the negotiation
in England of the recent loan of three and
a quarter million-. Tenders were o|

442

MR, WATSON.

[1879.]

for that loan on the 2nd May last, when
it was found they amounted in the aggre-
gate to 7,864,100, and that the prices
ranged from <97 to 99 5s. per cent.
The highest rates were of course accepted,
and these gave an average price of 98
9s. 2d. ; but as the loan had been sold on
terms that is to say, was made payable
by instalments, the last of which fell due
on the 30th September, the interest lost to
the Government, but gained by the buyers,
amounted to 10s. 9^d. per cent., thus
reducing the average price to 9 7 18s. 4|d.,
a price however considerably higher than
that obtained for any other Colonial loan
negotiated this year in London. The high
value set upon our securities cannot be
better illustrated than by stating to the
Committee that the Victorian 4-| per cent,
loan, which was negotiated only a short
time before ours, brought an average price
of only 97 17s. 8d. per cent. Had that
loan sold as well as our 4 per cent, loan
did, it ought to have realized 110 3s. 2d.
per cent., which clearly proves that ours
was the better sale of the two to the
extent of 12 5s. 6d. for every hundred
pounds of stock sold. Although the
debentures of our 4 per cent, loan are not
now quoted on the Stock Exchange, Lon-
don, at quite such a high price as they
Avere some two or three months ago, there
is no reason to doubt that our credit in
that great money market of the world
stands as high as ever it did. The falling
off is attributable, I believe, to an erroneous
impression formed by some gentlemen
either here or in London, or it may be in
both places, with respect to the authority
given by Parliament last Session to borrow
as required, for Railways and other Public
Works, a sum of 7,352,768; but the
mere passing of a Loan Act does not
necessitate the immediate floating of the
loan. From telegrams which appeared
some time back in one or two of the public
prints of the Colony, this would appear to
have been the impression made on the
minds of certain classes in London. Im-
mediately we became aware of these
erroneous views a telegram was sent to
the Agent General to the effect that,
although we could not as a Government
bind ourselves as to time with regard to
the floating of another loan, there was no
probability of the last large loan being

floated as a whole, for several years, as we
had not yet exhausted our borrowing
powers, under previous Loan Acts, to the
extent of over a million. In the constrxic-
tion of railways, for which 5,866,000 of
the last authorised loan was obtained, we
cannot possibly, with our present avail-
able labour, expend more than 1,000,000
per annum, an amount that would enable
us to construct about 160 miles of line.
Before the whole vote for railways could
be expended at this rate, the population
of the Colony will probably be about
1,100,000. It is generally conceded that
the population of a country and its public
debt are important elements in determin-
ing how far railways can be advanta-
geously extended. By the time that the
last Railway vote can be expended,
according to the rate of expenditure just
mentioned, the proportion of capital in-
vested in railways to population will, I
am informed, be less in New South Wales
than it will be in any of the Australian
Colonies, Canada, the United States, or
Great Britain. If we had sufficient labour
we could, in fact, increase our railway
debt during the next six years to
21,000,000, without exceeding the recog-
nized safe limit of railway capital to
population, which is stated to be about
23 per head. The only other subject I
desire to allude to before proceeding to
open the Budget of 1880 is that of the
Public Debt, which now amounts to
14,937,520, the annual interest on which
is 688,486 Is. 8d. The Loans author-
ized, but not yet put upon the market,
which amount to 8,557,945, would, if
realized, increase the debt to 23,495,465,
and the annual interest to 1,030,803
17s. 8d., a sum equal to the entire expend-
iture of the Colony when Responsible
Government was inaugurated in the year
1855. I will now, Mr. Cameron, invite
the special attention of the Committee to
the Account for 1880, which shows the
proposed expenditure in relation to the
estimated income. From the hints I have
already thrown out, and from the state-
ments I have made as to the inadequacy
of the revenue of the present year to meet
the liabilities proper to the year, honorable
members must be prepared to find a
somewhat similar state of matters in
regard to the future. Our fiscal system is

[1879.]

MR. WATSON.

443

not of that elastic character which admits
of expansion as our necessities increase.
It is unfortunately rather the reverse,
for while the requirements of the
country are always increasing, our sources
of revenue are fluctuating, and there-
fore liable to be affected seriously in
times of national depression. Indeed the
demands upon the public purse are then
greater than in times of general prosperity,
becau se the unfortunate and the unemployed
expect that the Government should come
to their aid, and find them employment
upon the public works of the Colony.
Many go even further than this, for they
think it the duty of those in power to
undertake works simply for their benefit.
Since the year 1872, when our ordinary
income began to be abnormally augmented
by the proceeds of our waste lands, the
demands for public Avorks of every con-
ceivable description have been greater
than it was even possible for the Govern-
ment, with the means at their disposal, to
undertake. So long as surpluses were
annually accruing from those sales, no
reasonable objection could be raised to
these demands. But as a change, which
I do not consider an unfortunate one
altogether, has gradually been taking place
in the land revenue during the last two
years, the demands for public works can
no longer be met in the wholesale manner
of the past. With regai'd to demands of
this nature for next year, the Government
have anxiously and carefully considered
each individual case, having no other ob-
ject in view than the public weal. The
items inserted in the Estimates are there-
fore such as could not, in their opinion,
be postponed without injustice to the
districts concerned, or injury to the in-
terests -of the colony at large. If there
are any honorable members, and I fear
there must be many such, who do not find
that provision has been made on the
Estimates for services recommended by
them, I hope they will not on that account
consider that we have slighted their re-
presentations. As it has been found
impossible to provide for all in next
year's Estimates, some must stand over
until the following year, or at all events
until the revenue can bear them without
the prospect of another deficiency arising.
Some honorable members may, however,

be inclined to ask why they were not
placed upon the surplus revenue estimate 1 ?
My answer to that is this : the surplus is
now reduced to a sum which it would not
be wise or prudent to reduce further until
the- revenue recovers or the taxation of the
country is increase' 1. Should the Com-
mittee refuse to entertain our proposals
for augmenting the revenue there will be
but two alternatives either to use the
surplus to make good the estimated defi-
ciency of next year, or strike out of the
Estimates nearly the whole of the items
for public woi'ks, neither of which I ven-
ture to think the House would agree to.
In these circumstances I trust honorable
members will wait with patience until a
time of greater financial prosperity ar-
rive. It will be observed from a perusal
of the Estimates that with the exception
of certain increases recommended by the
President of the Legislative Council and
the Speaker of the Legislative Assembly,
whose recommendations we could not
ignore, scarcely any increases to the
salaries of public officers have been sub-
mitted. This is not because we did not
recognize the claims of many old and
deserving servants of the Crown, but
because we could not consistently ask the
House to grant increases at the very time
we had to propose fresh taxation to meet
the ordinary annual expenditure of the
country. Wherever the pruning-knife
could be used without injtuy to the service
it has been applied by us. In a new
country, however, where progression is
absolutely necessary to existence, and
where so much that tends to promote the
general convenience and prosperity of its
inhabitants has to be undertaken by the
Government, it is impossible to reduce the
Public Departments without seriously
interfering with that progression. Take
for example the departments for the
ministration of Justice and Public Instruc-
tion, the police, the railways, and tlio
post and telegraphic departments, which
must all be maintained in a thorough
of efficiency, to meet the constantly in-
creasing wants of the community at large,
and it will lie seen that no reduction could
be made without injury to the country of
thegravest character: ami so with many
other departments ami MTvioM I could
easily mention. A reference to the

444

MR. WATSON

[1879.]

account for 1880 will show honorable
members that the estimated expenditure,
as shown by the estimates, amounts to
4,984,183 17s. KM., which is less some-
what than the authorized expenditure for
the present year, notwithstanding there
are several inevitable increases down for
next year. Although unwilling to take
up the time of the Committee with details,
I think it only right to point out a few of
these increases. For instance, in the
railway department there is an increase of
over 70,000, which is absolutely neces-
sary if the railways of the colony are to
be maintained in a thoroughly efficient
condition, which I think every one will
acknowledge should be the case. In the
Post Office estimate there is an increase
of 14,000. This also is absolutely
necessary, for there is 110 branch of the
Public Service; that can less bare to be
crippled in its resources than the Post
Office. The services rendered by this
department are in importance second to
none in the service, and it would be a
most unwise economy to" deprive its- re-
sponsible head of the means of maintain-
ing the postal arrangements of the Colony
in the highest state of efficiency. I think
the management and arrangements of the
Post Office generally will compare favour-
ably with those of similar institutions in
any of the Australian colonies. Then, in
the telegraph department there is an in-
crease of about 15,000, which, I pre-
some, is indispensable, owing to the ever-
expanding nature of its business. I regret,
however, to find that it is being carried on
at a heavy loss to the country. While
. the estimated expenditure for 1880 is
125,000, the income is only expected to
amount to 90,000, that is a loss of
35,000, which, unfortunately, is not the
whole loss, for we are paying besides
about 20,000 annually for interest on
money borrowed for the construction of
our existing telegraphic lines. There was
a time in the history of our telegraphs
when they paid a small percentage on the
outlay, but since the reduction of the
charges the balance is largely on the
wrong side of the account. This is a sub-
ject which demands inquiry, and I have
no doubt my honorable colleague^ the
Postmaster General, whose attention has
been drawn to this great disparity, will

before long endeavour to equalize the
revenue and expenditure of this most
useful branch of the Public Service. The
vote for Public Instruction has been in-
creased by 18,000, of which 10,000
is for weather-sheds, and the remain-
der principally for books, printing, and
stationery. The changes proposed by the
Government, in. the Bill now before the
House, may necessitate some modification
of this estimate, but under any circum-
stances it cannot be reduced. The pro-
bability is that it will have to be slightly
increased. The amount necessary to pay
the interest on the Public Debt is
130,000 more than what is required for
the present year. That is an increase
which it is impossible to reduce, as faith
with the public creditor must be kept at
all times and through all variations of
fortune. Amongst the Special Appro-
priations will be found a sum of 25,000
as endowment of the City Municipal
Council, which is payable annually for a
period of ten years, in accordance with
the provisions of the Sydney Corporation
Act of 1879. Honorable members may
remember that the 1879, or first instal-
ment, was authorized and paid out of the
surplus revenue account. In consequence
of this fixed provision for the Council, the
10,000 hitherto voted annually in aid of
the City funds has been withdrawn from
the Estimates for next year. Its place
has virtually, however, been taken by a
like sum to pay municipal rates on
Government buildings, which will be
found under the head of miscellaneous
services in the Estimates of the Colonial
Secretary. There-is also a sum of 20,000
on account of the current expenses of the
International Exhibition, which will, how-
ever, be covered by admission fee.s, which
are taken credit for in Ways and Means
to a like extent. The closing expenses
will no doubt be considerably in excess of
the ordinary current expenses of the-
present year, hence the larger propor-
tionate amount inserted for expenditure
in 1880. To what extent the outlay on
this undertaking will be recouped by the
sale of building materials it is impossible
at present to say, as 110 decision has yet
been arrived at as to the ultimate disposal
of the main building. The proceeds of
sale of materials, whatever they may

[1879.]

MR. WATSON,

445

amount to, should in. my opinion be
carried to the credit of the surplus re-
venue account, out of which the entire
cost has to be defrayed. A sum of .600
will also be found, for the first time,
amongst the special appropriations, being
the amount authorized by the Customs
Regulation Act of 1879, as fees for the
Commissioners of Customs. These are, I
think, the principal increases in the Esti-
mates for 1880. Although the decreases
are not so numerous as I could wish, still
they are on the whole very considerable.
In the departments under my own charge
there are reductions to the extent of
nearly 20,000, and in the departments
over which my honorable colleague the
Secretary for Lands presides, there is
an aggregate reduction of no less than
78,000, which he assures ine is a per-
manent one unless the demand for land
should increase, when the expenses of the
department would necessarily increase
somewhat in proportion. When it is
considered how great has been the falling
off in the land revenue during the last
two years this large reduction can be
easily understood, as well as the desire of
my colleague to reduce the expenditure of
his department proportionately. A re-
duction in the public works estimate, as
compared with the expenditure authorized
for 1879, occurs to the extent of .200,000,
not however with the willing consent of
my honorable colleague the Secretary for
Public Works, who should be thankful he
is not the unfortunate Minister charged
with the more difficult task of finding the
Ways and Means to meet the proposed
expenditure of the year. As few honor-
able member* ;UV perhaps aware of the
great increase that has taken place since
1S71 in the expenditure for public works,
it may be that the following figures will
convince them that it has been growing
out of all reasonable proportion to the
annual revenue, and that it was high time
the (Jovernment should endeavour to re
duce it consistently with the claims and
requirements of the Colony. In 1871,
that is, the year previous to the com-
mencement of a rapid increase of our land
revenue, the amount appropriated for
public works was 1'2~>!. ( .IS3, being equal
to 11 10s. per cent, of the revenue. In
1872 the expenditure authori/ed a-

329,386, or 11 14s. :M. |>c,- cent of
the revenue of the year. In 1873 the ex-
penditure authorized was 461,169, or
13 Gs. 9d. per cent. In 1874 the
authorized expenditure \\.-i ^ l'.">7 l.*22. r
1G 5s. 3d. per cent. In 1S75 it was
659,969, or 16 per cent. In 1876,
1,048,306, or 20 10s. per cent. In
1877, 1,444,430, or ,L>:> 2s. per oanfc.
In 1878, 1,377,135, or 27 11s. 7d.
In 1879, 1,091,880, or 21 2-. 7.1. per
cent. ; and proposed for 1S80, 881,806,
or 18 10s. 2d. From this statement
it will be seen that it was lowest in
1871 and highest in 1*7^. being in
the latter year about two and a half
times greater than it wan in the for-
mer. It is right that I should ex-
plain that the expenditure here given is
exclusive of the ordinary working expenses
of our railways ; it includes, however, mil-
way works defrayed from revenue that
form a charge on the capital account, such
for example as have frequently been pro-
vided for by loans. Of course tli expen-
diture stated for 1879 and 1870 is exclusive
of those works authorized, or proposed to
be defrayed out of the revenue surplus
account, which in the aggregate amounted
to nearly a million and a half for the
present year. Turning to the revenue side
of the account, the Committee will see
that I estimate the revenue of 1880 from
the existing sources of income at
.4,761,875, which is less than the esti-
mated expenditure for that year by the
large sum of 22l'.3i^ 17s. lOd. ; it is
also about 250,000 les.sthan the revenue
of 1878, and more than 1,000,000 lessthan
that of 1877, which was by far the largest
amount ever collected in any one year in
this colony. From a statement which I
have had prepared and attached to the
Ways and Means, showing the revenue of
every fifth year from 1*50 to 1870, and of
each year from that to the piv.-ent time,
and the proportion which each source of
income bears to the population, it will be
seen to what extent and in what direction
our public revenue has been expanding.
It would occupy too much of the time of
the Committee'were I to uheany lengthy
extracts from this statement ; but a !"
will I think, on the present occasion, and in
\ie\\ of ne\\ souiv,^ of income being pro-
po-ed. pro\e both interesting and useful.

446

MK. WATSON.

[1879.]

The revenue of 1850, which was the year
prior to the discovery of gold in this
country, was only 311,581, being at the
rate of 1 3s. 5d. per head of the popula-
tion, of which Customs gave 10s. 9d. In
1855, the year in which responsible
Government came into operation, although
at too late a period of the year to affect its
transactions, the revenue amounted to
957,582, or 3 8s. lid. per head, of
which the Customs gave 1 10s. 4id. The
revenue of 1860 was 1,998,421, or &$
14s. 6d. per head, of which Customs gave
1 11s. lOd. In 1865, when, in conse-
quence of the deficiencies of previous years,
the Stamp Duties Act was passed, and an
additional charge of 20 per cent, made to
all existing Customs duties, the revenue
reached the sum of 1,761,867, or 4
5s. 6d. per head, of which Customs gave
1 10s. lid. In 1870 the revenue had
only increased to 2,082,358, or 4 2s. 9d.
per head, of which 1 13s. ll|d. was
derived from Customs. During these four
quiiiquenniums, the land sales increased
from 2s. 6|d. per head to 8s. 9^d., and the
annual Land .Revenue from 5s. 8d. to 1 9s.
per head. It was during this period also
that railways and telegraphs were intro-
duced, and began to appear in our Ways
and Means as revenue producing services,
while in reality they were the reverse.
This arose from the unavoidable system of
inserting the gros,<i earnings of these great
undertakings in our revenue statements,
and the expenditure in the estimates so as
to bring the latter and very properly so
under the control of Parliament. Our
first railway that from Sydney to Parra-
matta was opened on the 26th September,
1855, and the first line of the electric tele-
graph which was that from Sydney to
the South Head in 1857. The line from
Sydney to Albury was not opened until
the 26th October of the following year.
The progress made since these dates in the
railway and telegraphic systems of the
Colony is pretty well known to every member
of this House ; but notwithstanding that, it
may interest them to know that at the
present moment we have 734^ miles of
railway in operation, 291 in course of con-
struction, and 615 authorized but not yet
contracted for. In telegraphs we have
11,700 miles in full working condition,
272 in course of construction, and 90 for

which tenders have not yet been accepted.
Referring again to the abstract statement
alluded to, I find that in 1871 the revenue
was equal to 4 6s. 2 jd. per head of the
population, of which 1 13s. 2jd. was
derived from Customs. In 1872 the rate
per head was 5 4s. 3-Jd., of which 1
16s. 2|d. was Customs. In 187 3 the rate
per head was 5 18s. 10|d., of which 2
Os. 3d. was Customs. In 1874 it was 6
Os. 3|d., of which 1 12s. 6d. was Cus-
toms. In 1875 it was 6 16s. O^d., of
which 1 12s. l|d. Avas Customs. In
1876 it was 7 19s. 11 jd., of which 1
12s. Id. Avas Customs. In 1877 it was 8
13s. 8d., of which 1 12s. 6|d. was
Customs. In 1878 it was 7 3s. lOfd.,
of which 1 13s. l|d. was Customs. In

1879, with an estimated population of
735,000, the actual and estimated revenue
will give a rate of 6 3s. l|d., of which
1 10s. 5-fd. will be from Customs. In

1880, with an estimated population of
785,000, the revenue, as estimated, would
give a rate of 6 Is. 2id., of which 1
8s. HJd. will be Customs. It "will thus
be seen that throughout the whole of this
decade the Customs duties did not vary to.
any great extent. The rates were some-
what higher in 1871-2, and 3, because the
ad valorem duties were in force during
these years. As these duties were abolished
in 1874, the rate dropped from 2 Os. 3d.
per head to 1 12s. 6id. The average of
the ten years revenue as a whole is 6 8s.
9d. per head, of which 1 13s. 2d. is the
average from Customs Duties. The great
increase in our revenue since 1871 is owing
mainly, however, to the sale of our waste
lands, which realized the following rates
per head during the decade under review,
namely, 1871, 8s. 7R ; 1872, 14s. 6d. ;
1873, 1 8s. 2|d. f 1874, 1 17s. 7|d. ;
1875, 2 15s. 6fd.; 1876, 3 16s. 7fd;
1877, 4 5s. 9fd. ; 1878, 2 14s. llfd.;

1879, partly an estimate, 1 15s. Ifd. ;

1880, entirely an estimate, 1 15s. ; the
annual average for the ten years being 2
3s. 2|d., or 10s. more than the Customs
average for the same period. Few will
deny that this is a most unsatisfactory
and unhealthy state of our revenue,
and that the time has arrived for some
readjustment of our financial system
upon a sounder basis. Before pro-
ceeding to inform the Committee what

[1879.]

MR. WATSON.

447

additional taxation we propose, iu order to
meet the estimated deficiency in the reve-
nue of 1880, I desire to .state; that I have
carefully examined all the estimates re-
ceived from the various revenue depart-
ments ; and after consultation with some,
of the heads of these departments I found
it necessary to modify some of then-
figures, as they were not in several in-
stances justified by the results of past
years. The Customs estimate for example
I reduced by 90,000, as I found that the
original estimate for the present year,
which was 1,1 83,6 ">0, will only be realized
to the extent of 1, 1 19,307, showing there-
by a deficiency of .04,343. The increase
which I calculate upon receiving from
this source of revenue in 1880 under the
existing tariff is only 18,693, and, con-
sidering that wine, beer, sugar, and tobacco
are now extensively manufactured in the
Colony, this inrivasc is, in my judgment,
as much as can safely be relied on. The
Customs Convention with South Austra-
lia is about to be renewed for another
year. Under this renewal the Govern-
ment of that Colony will pay us an annual
sum of 40,000, or the difference between
that amount and what we collect at our
.stations on the Darling on their account.
The other sources of revenue under the
head of taxation i-equire no comment, as
there is no material change of importance
in any of them, unless it be the absence
from the 1880 column of any amount for
duty on gold, an impost which was
abolished during the last session, in con-
formity with the promise I made in my last
statement. From land sales my honorable
colleague the Secretary for Lands expects
to obtain next year .1,375,000, which is
.82,677 in excess of what I anticipate the
sales of thepresent yeur will realize. Of this
sum 750,000 is put down as auction sales,
which is slightly in excess of that now
estimated for 1879, but it is fully a quarter
of a million less than the 1878 sales, and
only a little more than a third of the sales
of 1877. The large amount received from
the sale of our waste lands since the pass-
ing of the Lands Alienation Act of 1861
naturally raises the question whether it is
right to continue to alienate by auction to
the extent we have been doing during the
last few years. It is an easy mode no
doubt of supplementing the ordinary

revenue, but is it just to posterity that we
should relieve ourselves from the expenses
incidental to Government by selling our
patrimony in this wholesale manner, while
we are at the same time creating a public
debt, which we hand them down as an in-
heritance ? Railways, telegraphs, and other
public works of a reproductive character
will, doubtless, in time yield an income
sufficient to enable them to pay the interest
on this debt, but the capital from which it
should be discharged will have vanished,
as far as the State is concerned, excepting
perhaps the balances due by conditional
purchasers, which I am afraid however
will come in so gradually and so slowly as
to prove of little use in clearing off that
great national obligation. As this is
altogether too wide and too complicated a
question to be discussed fully in a financial
statement, I will not dwell upon it longer
at the present time. Having, however,
given the matter a good deal of considera-
tion, and being anxious to ascertain the
exact position of our national estate, I re-
quested my honorable colleage the minister
for Lands to furnish me with certain
specified particulars, which he has kindly
done. As these particulars cannot fail to
prove interesting to the Committee as well
as to the general public, I shall, at the
risk of being considered tiresome, now
give some of the statistics thus obtained.
The total area of the Colony as at present
defined is 1 99,000,000 acres. Of this area
there is 1,137,708 acres under water, in-
cluding navigable rivers. 1 7,460,880 acres
are said to be so barren or rocky as to be
useless, either for grazing or agricultural
purposes. The area suitable for agri-
cultural purposes is stated to be only
21,913,712 acres, and for pastoral purposes
159,625,406 acres. I think there can be
no doubt, however, that a large portion of
this pastoral area will in course of time,
and when required for the purpose, be
found as good agricultural laud as that
now given as such. The area of densely
timbered land is said to be 12,722,574
acres. The sales by auction up to 30th
June last amounted to 11,029,165 acres,
and the selections after auction, to same
date, to 964,968 acres; besides which,
694,848 acres have been alienated as im-
proved land under the 8th section of the
Act of 18G1 and the 2nd of that of 1875,

448

MR. WATSON.

[1879 ]

and 40,318 acres under the provisional
pre-emptive right clauses of the latter
only. I am informed that there is 110
reliable record of the amount of land
alienated by free grants in the early days
of the Colony. Under the conditional
purchase clauses of the Lands Acts of
1861 and 1875 there have been selected
up to the date mentioned, the following
quantities, viz. : Ordinary land under the
1861 Act, 7,733,594 acres, and under the
Act of 1875, 6,289,666, making together
an area of 14,023,260 acres. Mineral
lands under the Act of 1861, an area of
30,886 acres, and under the 1875 Act
64,185, making together 95,071 acres.
The area of grants for public recreation
reserves is stated to be 34,375 acres : for
permanent commons, 72,860 ; and for
temporary commons, 687,276. The area
set apart for water reserves and withdrawn
from sale in any form whatever is 1 0, 2 6 0, 9 5 2
acres, which seems to me an enormous
quantity of land for the purpose, being
one-twentieth of the whole area of the
Colony. For railway lines, 106,555 acres
have been set apart ; and for a number
of other purposes, which it would take
up too much time to enumerate, 20,778,641
acres, of which nearly 7,000,000 acres
are for Gold Fields but open to con-
ditional purchase. Of the ordinary and
mineral lands just alluded to which
have been conditionally purchased under
the Acts of 1861 and 1875, and which
amounted together to 14,118,331 acres,
there have been resumed 80 acres ; can-
celled, 1,791,884 acres ; and forfeited
1,588,475 acres, which reduce the con-
ditional purchases to an area of 10,737,892
acres, of which deeds have been issued for
only 505,176 acres. From these figures
I gather that out of an area of
199,000,000 acres we have disposed of
23,467,191 acres, by absolute and con-
ditional sales, and granted or reserved for
public purposes, 31,940,659, leaving still
at the disposal of the Government an area
of nearly 144,000,000 acres, which is only
about 12,000,000 acres more than is at
present under pastoral lease. Again
referring to the Ways and Means, it will
be observed that I expect to get 190,000
from Conditional Purchasers in the form
of interest, which is an increase of about
17,000 on the amount expected from

them during the present year. Under
the heads of Pastoral and Mining Occu-
pation, the amounts are less, if anything
than the actual and estimated amounts-
for 1879. There are, at the present time
4,296 runs under lease, comprising an
estimated area of 132,368,964 acres,
yielding an annual rental of .158,486,
which is equal to little more than one
farthing per acre. There are, 34
runs unlet, of an estimated area of
613,891 acres, the rental of which is
valued at .526. Taking our Land
Revenue as a whole, the increase for next
year is expected to be 109,570, which,
in view of the Lands Act Amendment
Bill now before Parliament becoming law,
cannot be considered an unreasonable
amount. Under the head of receipts for
services rendered, the only change de-
serving special mention is that in railways,
which shows an increase of receipts over
those of 1879 of 133,840. This increase
ought to be realized, for during the
present half-year the Great Northern line
has been extended to Gunnedah, and
there is every probability of a consider-
able portion of the Albury extension of
the Great Southern line being opened' in
the early part of the ensuing year, the
returns from which should be largely
augmented by the increased passenger
traffic that this should naturally create
between the metropolises of New South
Wales and Victoria. General Miscel-
laneous Receipts show a few variations
none, however, of great importance. In
consequence of a Resolution of the
Assembly, passed towards the close of
last Session, tolls and ferries figure once
more in the Ways and Means, under the
head of rents exclusive of land, to the
amount of 17,500, which is a consider-
able falling off on former years. This
arises no doubt from our railway lines
running parallel to the Main Roads of
the Colony, now almost abandoned, on
which toll-bars were formerly established.
Under the head of interest on Bank
Deposits there will probably be 35,000
less received in 1880 than is estimated to
be received from this source during the
present year, in consequence of the
gradual absorption of our surplus revenue
and Loan Account Balances on authorized
services, which are now being rapidly

[1879.]

MR. WATSON

proceeded with. I come now, Mr. Cameron,
to that part of my subject which I dare
say the Committee is most anxiously
waiting for, namely, the scheme of taxation
I intend to submit for their consideration.
There can be no more unpleasant, indeed I
might say ungrateful task, for a Finance
Minister to undertake than that of mak-
ing a proposition for increasing the bur-
dens of the people in any form whatever.
After complete immunity from additional
taxation for a period of over eight years,
and after a long term of national financial
prosperity, during which we accumulated
a surplus of nearly two millions and a
half of money, it will, I fear, be some-
what difficult to convince the House and
the Country that the time has at length
arrived when our ordinary income requires
to be supplemented by new sources of
revenue. Instead of increased taxation
during the period mentioned there has
actually been a very sensible diminution
for in 1873 the revenue lost nearly
200,000 by the abolition of the ad
valorem duties, and over 100,000 by the
lapsing of the Stamp Duties Act in 1874.
It has, I believe, been the unhappy lot of
many of my predecessors, since the intro-
duction of responsible government, to
propose fresh taxation, but the good for-
tune of few to carry their propositions.
In view of their failures, I would feel
rather discouraged were it not the firm
conviction I have that additional taxation
is absolutely necessary if the progress of
the Country and the well-being of the
community in general are to be considered,
and these are objects which, I should
imagine, honorable members expect the
Government to keep steadily in view.
There is perhaps no country in
the world to which the term "civilized"
can be applied where taxation is lighter
than in New South Wales certainly not
in any of the Australian Colonies ; for I
find from a return attached to the Statis-
tical Register for 1878, that of the pro-
portion of revenue of 1878 raised by
taxation in these Colonies, ours was the
lowest. The following are the several
rates per head of the estimated mean
population for that year, viz. : New
South Wales, 1 18s. 7|d. ; Victoria,
1 19s. 10|d. ; South Australia, 2 2s. 8 Jd. ;
Queensland, 3 7s. Hcl. ; Tasmania,

2 5s. 7 .Id. ; and Western Australia,
_' 14s. 2d. The Colony coining no.-
our low rate is Victoria ; but, as we all
know, the increases which are being pro-
posed to her tariff' for purposes of protec-
tion, will if passed displace her in future
years from the favourable position she
now occupies in the return I have alluded
to. Referring once more to that tabulated
abstract of ovir revenue which will
be found attached to the Ways
and Means, and from which I have
already made several quotations, I
find that in 1855, the year in which we
began to manage our own affairs under
the new Constitution, the rate of taxation
per head wasl 17s. Id. In 1860 it rose,
in consequence of the imposition of a
gold duty, to 2 Os. 8|d. per bead ; in
1863 it was somewhat less, namely 1 19s.
Hd. ; it again rose in 1870 to 2 Is. 6'd. :
in 1871 it was 2 Is. ; in 1872. 62 ta
6cL ; in 1873, 2 8s. 8d. ; in 1874, the
first year after the abolition of the ad
valorem duties, it fell to 2 Is. 1 j ! d. ; in

1875, when there were no Stamp Duties
in force, it was only 1 16s. 1 1 ^d. ; in

1876, 1 16s. 10d. ; in 1877, 1 17s.
3d. ; in 1878, 1 17s. 9cL, which differs
to the extent of lOd. from the rate given
by the . Registrar General, owing to his
calculation having been based on the mean
population of the year. In 1878 the rate
will probably be 1 14s. 11. Id., and for
1 880 it is estimated at 1 1 3s. "Ofd. From
these figures it will be readily perceived
that we are in a far more favourable posi-
tion, as regards taxation, than any of the
Australian Colonies. Taking the income
of this year in round numbers at
4,750,000, then about one-fourth only of
that sum is derived from taxation, and the
other three-fourths are received either for
services rendered by the State or for some
othr equivalent. The conclusion at
which I have arrived from a study of these
figures, and in which I desire the concur-
rence of the Committee, is this that col-
lectively and individually we are so lightly
taxed, considering the protection our pro-
perty receives and the innumerable advan-
tages we otherwise enjoy, that no one,
however poor, has any just cause for com-
plaint on the score of taxation. In fact,
if people could only manage to confine
themselves to the necessaries of life,

450

MR. WATSON.

[1879.]

amongst which I include tea, coffee, sugar,
and rice, their contributions in the shape
of taxes towards the expenses of Govern-
ment would then be very small indeed, and
such as could scarcely be felt by the tax-
payer. The question of taxation is one
which at all times deeply interests every
class of the community. It should, how-
ever, be far more interesting to the repre-
sentatives of the people, who, I am sure,
have the welfare of their country and the
best interests of their constituents tho-
roughly at heart. Believing that this is
the case, so far as this Committee is con-
cerned, I enter with confidence upon an
exposition of our taxation scheme, feeling
assured that honorable members will throw
aside for the time all party feeling and all
purely selfish motives, if any such exist,
and aid the Government in passing such
measures as they can conscientiously sup-
port for bringing about that equilibrium
of revenue and expenditure which is ne-
cessary at all times to a sound financial
system. This question of taxation has
engaged my attention for a considerable
time past, and I feel confident no one but
a person who has occupied a position simi-
lar to the one I now occupy can under-
stand the deep sense of responsibility
which I experience in submitting a scheme
for increasing, in however small a degree,
the burdens of the people, notwithstand-
ing that I have just shown that our pre-
sent taxation is very much lighter than
that of any of our neighbours. I admit
that since I began to study this subject
my position has materially improved, inas-
much as I have not now to provide for
such a large amount as I had at first anti-
cipated. The estimated deficiency in the
revenue of next year is 222,000, but as
an additional estimate to the extent of at
least 100,000 is almost inevitable, this
would necessitate fresh taxation to the
amount of 322,000, which, after all,
would simply square the account. To
leave a margin for contingent and unfore-
seen expenses, it would really be desirable
that we should raise revenue from new
sources, or from an increase of old ones,
to the amount of over 350,000. Under
the scheme which I have to submit, I esti-
mate that we shall receive 358,500. My
anxiety has been to draw up such a scheme
as would commend itself to all, even to

those upon whom the burdens might fall.
In the opinion of the Government the
time has not yet arrived for either a pro-
perty or an income tax in this Colony, such
as is now in operation in England, either
of which would be difficult to adjust and
expensive to collect. Besides, they are
taxes which should not be resorted to
unless in cases of great emergency or great
financial difficulty. Property-holders in
Sydney and the suburbs, as well as in all
districts where municipalities have been
established, are now virtually subjected to
a property tax for municipal purposes, and
to impose a further tax on the same pro-
perty for the support of the general Govern-
ment of the country would, in my opinion,
tend to materially lessen its value. In
many cases too it would amount to nothing
less than a tax- on frugality and industry,
for by these qualities many a man has
secured a comfortable home for himself
and family, while the indolent spendthrift,
who probably had equal advantages, would
have nothing to pay. An income tax is
undoubtedly the most rational as well as
the fairest of all direct taxes that could
be imposed if it could only be properly
levied. The great difficulty, however, in a
new country like this, where incomes are
fluctuating and uncertain, would be to ob-
tain reliable returns. The tax would press
severely upon all whose incomes were fixed
and easily ascertained, such as Govern-
ment officers, Bank officials, and those em-
ployed by public companies, shareholders
of Banks, holders of Government securi-
ties, Arc., while many of those in general
business would be apt to escape altogether.
For these and other reasons which may
readily occur to the minds of honorable
members we have decided not to pro-
pose direct taxation of this particular
nature at the present time. Having
informed the Committee what taxes
we do not intend to propose, I shall now
proceed, sir, to disclose and explain those
we do intend to submit for consideration.
Our scheme embraces both direct and in-
direct taxation. The former, that is our
direct taxation scheme, is simply the
restoration of an old one with some im-
portant additions. I refer to stamp duties,
which are now in operation in several of
the Australian Colonies. One of the
means adopted by the Parliament of this

[1879.]

MR. WATSON.

451

Colony for augmenting tlie revenue and
providing for the deficiencies of former
years was the passing of a measure in
June, 1865, to impose stamp duties. This
measure, which came into operation on the
1st of July of that year, was to continue
in force only until the 31st December,
1868. Under various continuing Acts it
was, however, kept alive until the close of
1874, when it expired by effluxion of
time, the Parliarneint not being then in
Session. In 1875, the Government then
in power, of which Mr. William Forster
was the Minister for Finance and Trade,
submitted a Bill to the Legislative Assem-
bly embodying the principal features of
the Stamp Duties Act of 1865, but
through some informality in its introduc-
tion it was ruled 011 the third reading to
be irregularly before the House, and was
in consequence allowed to lapse. Since
then nothing has been done by any suc-
ceeding Government to re-impose stamp
duties, notwithstanding they proved a
valuable addition to the revenue of the
country during the period they were in
operation, and were collected at a trifling
expense compared with the expense of
collecting some other portions of the
public income. I find that the gross
amount realized from Stamp Duties
during the nine and-a-half years the law
was in force was 730,236, which gives
an annual average of 76,867. The col-
lections of 1874, the last year of this
impost, amounted to over 100,000, and
there was every prospect of there being a
considerable annual increase from this
source of revenue had the law been con-
tinued. Indeed there are uncollected
duties under the operations of that law
to the amount of nearly 100,000, which
are at the present time under the consider-
ation of my honorable colleague, the
Attorney General ; and it will depend
upon the decision at which he may arrive
whether I shall introduce a special Bill for
authority to enable the Government to
enforce the payment of these outstanding
amounts. Seeing then how productive
stamp duties were in the past and that
they embodied the principle of a tax upon
property without its most objectionable
features we have, after mature delibera-
tion, considered it our duty to ask
Parliament to sanction their re -imposition.

3 P

I anticipate that wo shall derive from this
source of income 200,000 per annum,
but as no measure imposing stamp duties
could possibly come into operation before
the 1st of April, 1880, I only calculate on
receiving 150,000 during next year. As
already stated, we propose a very im-
portant addition to these duties an
addition that will have the eft'ect of taxing
incomes to a very small extent, but in
such a way as to admit of gradual expan-
sion as the necessities of the State require
additional revenue. These additions take
the form of receipt stamps. I will now
quote from that part of the resolutions
that I shall presently read to the Com-
mittee, which relates to these additions,
so that honorable members may more
readily understand at once their exact
nature and extent. It is as follows :
" Upon every receipt given for or upon
the payment of any sum of money
amounting to 2 and upwards for or in
respect of any transaction, other than one
strictly confined to the purchase or sale of
any goods, wares, or merchandise where
the sum received or paid shall amount to
2 and not exceed 10, one penny ; ex-
ceeding 10, but not exceeding 1'."),
threepence ; exceeding 25, but not ex-
ceeding 50, sixpence; exceeding 50,
but not exceeding 100, one shilling ; and
when the sum shall exceed 100, two
shillings and sixpence." As it would be
rather difficult for me to show, without
wearying the Committee, how it is in-
tended to secure the payment of tl
receipt duties upon every description of
income, I must content myself for the
present with saying that the Bill which I
shall introduce immediately the neo
resolutions are passed will show them in
full detail. While on the subject of
stamps on receipts for payment of m<
I desire to inform the Committee that we
also propose to increase slightly the duty
on receipts in respect of any transaction
exclusively confined to the pur
any goods, wares, or merchant-'.
Tli.-se increases are as follows : Where
the sum received or paid shall amount to
2, and not exceed 25, one penny ;
exceeding -'">, but not exceeding 50,
twopence ; exceeding 50, but not ex,
in- 100, threepence; and on all
10d, sixpi-n." rates are absoh

452

MR. WATSON.

[1879.]

necessary to secure from merchants,
traders, and others, whose incomes are
not derived from the receipt of fixed
periodic sums, but from the daily trans-
actions of business, their quota to the
revenue of the country under this stamp
duties scheme. With these exceptions,
the measure which I shall have the honor
of introducing, should the Committee pass
the resolutions I will submit for their
approval, differs in no material respect, so
far as I am aware, from the law that was
passed in 1865. So far as our proposi-
tions for increasing the revenue by means
of stamp duties are concerned, I do not
remember any other matter which I
should specially allude to on the present
occasion The subject is one which will
no doubt be fully discussed when the
question is fairly before the House.
The following are the resolutions I
intend to submit when the discussion
on the Financial Statement is closed :
That from and after the first day of
April, 1880, there shall be paid upon
or in respect of the several instru-
ments, matters, and things, hereinafter des-
cribed the several stamp duties hereinafter
specified that is to say upon, Agreement
or any minute or memorandum of an
agreement made in the Colony of New
South Wales under hand only and not
otherwise specifically charged with any
duty whether the same be only evidence
of a contract or obligatory upon the
parties from its being a written instru-
ment, Is. ; Bank Notes An annual com-
position to be paid by Banking Com-
panies in lieu of duties on promissory-notes
payable on demand issued by them, for
every ,100 and also for the fractional
part of ,100 of the average annual
amount of such notes in circulation as
certified under 4 Vic. No. 13, 2 ; Bill
of Exchange, payable on demand, Id. ;
Bill of Exchange of any other kind what-
soever (except a Bank note), and promis-
sory-note of any kind whatsoever (except
a Bank note) drawn or expressed to be
payable or actually paid or endorsed or in
any manner negotiated in the Colony of
New South Wales, where the amount or
value of the money for which the bill or
note is drawn or made, for every 50
and also for any fractional part of ,50,
Gel And tl ic J olio wing instruments are to

be deemed and taken to be promissory-notes
chargeable ivith ad valorem duty within
the intent and meaning of this Act: All
Debentures hereafter issued by any public
company, corporation, or society, in the
Colony of New South Wales and all
debentures whatsoever issued out of the
Colony of New South Wales if negotiated
within the Colony of New South Wales.
Bill of Lading or Receipt from the master,
mate, or agent of any vessel for any goods,
merchandise or effects to be carried to any
place beyond the boundaries of the Colony,
for every such bill of lading or copy
thereof, Is. ; for every such receipt or copy
thereof, 6d. ; bond for securing the pay-
ment or repayment of money or the
transfer or retrausfer of stock and bond
accompanied with a deposit of title deeds
for making a mortgage or other security
on any estate or property therein des-
cribed, the same duty as on a mortgage to
secure a like amount ; bond of any other
kind whatsoever, for every 100 of the
penalty of such bond or fractional part of
100, 2s. Gd. : conveyance or transfer on
sale of any share or shares in the stock
and funds of any corporation, company,
or society whatever in New South Wales,
for every 10 and also for any fractional
part of 10 of the consideration money
therein expressed, Gd. ; conveyance or
transfer on sale of any property (except
such stock and funds as aforesaid), where
the amount or value of the consideration
for the sale does not exceed 50, 5s. ;
exceeds 50 and does not exceed 100,
10s. ; for every 100 and also for any
fractional part of 100 of such amount or
value, 10s. ; conveyance of any other
kind not before charged, 1 ; covenant
for securing the payment or repayment of
money or the transfer or retransfer of
stock, the same duty as on a moi'tgage to
secure a like amount ; covenant any
separate deed of covenant (not being an
instrument chargeable with ad valorem
duty as a conveyance on sale or mortgage)
made on the sale or mortgage of any pro-
perty and relating solely to the convey-
ance or enjoyment of or the title to the
property sold or mortgaged or to the pro-
duction of the muniments of title relating
thereto or to all or any of the matters
aforesaid, where the ad valorem duty in
respect of the consideration or mortgage

[1879.]

MR. WATSON".

453

money does not exceed 10s., a duty equal
to the amount of such ad valorem duty ;
in any other case 10s. ; deed or instru-
ment of any kind whatever not otherwise
charged in this schedule, 1 ; lease (1.)
For any definite term or for an indefinite
term of any lands, tenements, or heritable
subjects, where the consideration or any
part of the consideration moving either
to the lessor or to any other person shall
consist of any money, stock, or security,
in respect of such consideration, the same
duty as a conveyance on a sale for the same
consideration ; where the consideration
or any part of the consideration shall be
any rent, in respect of such consideration,
for every sum not exceeding 50 per
annum, 2s. 6d., and for every 50 or
fractional part of 50 per annum, 2s. 6d.
(2.) Of any other kind whatsoever, ,1.
Memorandum of transfer under the Act
26 Victoria No. 9, the same duty as for a
conveyance for the sale of lands for a like
sum the consideration of such transfer ;
mortgage, bond, covenant, warrant of at-
torney to confess and enter up judgment
and Foreign security of any kind (1.)
Being the principal or only or primary
security for the payment or repayment
of money not exceeding 100, 5s., and
for every 100 and also for any frac-
tional part of 100, 5s. (2.) Being a
collateral or additional security for the
above-mentioned purpose where the pri-
mary security is duly stamped For every
100 and also for any fractional part of
100, 2s. Gd. (3.) 'Transfer or assign-
ment of any mortgage, bond, covenant, or
foreign security, or of any money or stock
secured by any such instrument, or by any
warrant of attorney to enter up judgment,
or by any judgment. For every 100 and
also for any fractional part of 100 of
the amount transferred or assigned, 2s.
6d. (4.) Recoiivoyar.ee, release, discharge,
surrender, resurrender, or renunciation of
any such security as aforesaid or of the
benefit thereof, or of the money thereby
secured For every ."100 and also for any
fractional part of .100 of the total
amount or value of the money at any
time secured, 2s. Cd. Policy for or against
loss by .fire For every 100, and also for
every fractional part of 100 insured for
any term or period exceeding s ' x calendar
months, 6d; and not exceeding six months,
3d. ; on every renewal or continuance

thereof, for every 100 and for
fractional part of 100 insured f,,r any
term, '.}<]. Policy for any \oyagr or period
For every 100 and also for any frac-
tional part of 100 so insured, :!!. ; on
every renewal or continuance tln-i-eof for
every 100 or fractional part
3d. Policy not otherwise specified For
every 100 and for every fractional part
of 100 insured, Is. Receipt given for
or upon the payment of any sum of money
amounting to 2 and upwards For or in
respect of any transaction other than one
strictly confined to the purchase or sale of
any goods wares or merchandise where
the sum received or paid shall amount to
2 and not exceed 10, Id. ; exceed 10
and not exceed 25, 3d. ; exceed
and not exceed 50, 6d. ; exceed 50 and
not exceed 100, Is. ; and where the same
shall exceed 100, 2s. 6d. For or in re-
spect of any transaction strictly confined
to the purchase or sale of any goods, wares,
or merchandise where the sum received
or paid shall amount to 2 and not ex-
ceed 25, IcL ; exceed 25 and not \-
ceed 50, 2d. ; exceed 50 and not
exceed 100, 3d. ; and where the same
shall exceed 100, 6d. Settlement Any
instrument, whether voluntary or upon
any good or valuable consideration other
than a bona fide pecuniary consideration
whereby any definite and certain prii:>
sum of money (whether charged or charge-
able on lands or other hereditaments or
heritable subjects, or not, or to be laid out
in the purchase of lands or other here-
ditaments or heritable subjects or not) or
any definite and certain amount of stock
or any security or pro{>erty of any sort is
settled or agreed to be settled in any man-
ner whatever For every L'l'H) and also
for any fractional part of 100 of tin-
amount or value of the property settled
or agreed to be settled, ~>s. Transfer of
any run or station held under lease
or promise of lease from th>
or of any interest therein, ^
the declared value of the said run or
station or interest, or the value tl
assessed as in this Act provided, shall not
exceed 100, 10s. ; and where such
shall exceed I' 100, th- t'100

and any fractional part of 100, 10s.
Warrant of attorney to confess or enter
up a judgment given as a security for the
payment or repayment of money, or for

454

MR. WATSON.

'[1879.]

the transfer or retransfer of stock. The
same duty as a mortgage to secure a like
amount. "Warrant of attorney of any
other kind, <!. Exemptions : Any
agreement or memorandum for the hire of
any labourer, artificer, manufacturer, or
menial servant. Any agreement or me-
morandum made for or relating to the sale
of any goods, wares, or merchandise. Any
agreement or memorandum made between
a master and any mariner of any ship or
vessel for wages on any voyage coastwise
from port to port in the Colony of New
South Wales. Any Debenture or Trea-
sury Bill issued by the Government of
New South Wales. Any draft or order
for the payment of money issued by any
duly authorized officer of the Government
on account of the Public Service. Any
draft or order for the payment of money
commonly called an advance note issued
by a master of a ship or vessel in favour
of a seaman. Any instrument relating
to the service of an apprentice, clerk, or
servant. Any Customs bond. Any ad-
ministration bond. Any bond to the
Crown for the safe custody of an insane
person. Any bond on appointment of a
special bailiff. Any policy of insurance
in any public hospital. Any policy of
insurance on the tools or implements of
work or labour used by any working
mechanic, artificer, handicraftsman, or
labourer by a separate policy in a distinct
sum. Any policy whereby any Insurance
Company or underwriter or association of
underwriters may effect an insurance or
transaction the original policy repre-
senting which may have already con-
tributed to the Stamp Duty imposed on
Policies : Provided that the fact of such
policy being a re-insurance policy shall be
expressed on the face hereof. Any re-
ceipt given for or upon the payment of
money to or for the use of Her Majesty.
Any acknowledgment by any banker of
the receipt of any bill of exchange or
promissory-note for the purpose of being
presented for acceptance or payment. Any
receipt written upon a bill of exchange or
promissory-note duly stamped. Any re-
ceipt indorsed or otherwise written upon
or contained in any instrument liable to
stamp duty and duly stamped acknow-
ledging the receipt of the consideration
money therein expressed. Any acknow-
edgments given for money deposited in

any banks to be accounted for, provided
that this exemption shall not extend to
receipts or acknowledgments for sums paid
or deposited for or upon any letters of
allotment of shares or in respect of calls
upon any scrip or shares of or in any
joint stock or other company or intended
company which said last-mentioned re-
ceipts or acknowledgments by whom so-
ever given shall be liable to the duty
charged upon receipts. Any instrument
of appointment relating to any property
in favour of persons specially named or
described as the objects of a power of
appointment created by a previous settle-
ment duly stamped in respect of the same
property or by will where probate duty has
been paid in respect of the same property
as personal estate. Any instrument for
the sale transfer or other disposition of
any ship or vessel or any part interest
share or property of or in any ship or
vessel ; and any copy of rules or power,
warrant, or letter of attorney granted by any
trustee of any friendly society within the
meaning of Part III of the "Friendly
Society's Act of 1873" for the transfer of
any share in the Colonial Funds or deben-
tures standing in the name of such trustee,
or any order or receipt for money con-
tributed to or received from the funds of
any such society by any person liable or en-
titled to pay or receive the same by virtue
of the rules thereof, or any bond to be
given to or on account of any such society,
or by the treasurer or by any officer thereof,
or any draft or order or any form of policy,
or any appointment of an agent or any
certificate or other instrument for the re-
vocation of any such appointment, or any
other document whatever required or
authorized by the rules of any such society
shall be exempt from all stamp duties :
Provided that no exemption from any
stamp duties shall be deemed to extend to
any society which shall assure the pay-
ment of money exceeding two hundred
pounds, or of any money on the death of a
member to any person except executors,
administrators, or assigns of such member
or the husband, wife, father, mother, child,
brother, sister, nephew, or niece of such
member. That from and after the first day
of April, 1880, there shall be paid upon
or in respect of the several instruments, and
things hereinafter described, the several
Stamp Duties hereinafter specified that is

[1879.]

MR. WATSOK

155

to say, upon, probate of a will and letters
of administration with a will annexed
Where the estate and effects for or in re-
spect of which such probate or letters of
administration shall be granted exclusive
of what the deceased shall have been pos-
sessed of or entitled to as a trustee for any
other person or persons and not beneficially
as sworn to by the executor or administra-
tor shall be Under the value of 100,
1 ; of the value of <100 and under the
value of 200, 2 ; of the value of 200
and under the value of 300, 3 ; of the
value of 300 and under the value of
400, 4 ; of the value of 400 and under
the value of 500, 5. And where the
value so sworn as aforesaid shall amount
to 500 and upwards then 1 per cent, on
the whole amount. Letters of adminis-
tration without a will annexed Where
the estate and effects for or in respect of
which such letters of administration shall
be granted exclusive of what the deceased
shall have been possessed of or entitled to as
a trustee for any other person or persons
and not beneficially as sworn to by the
administrator shall be Under the value
of 100, 1 10s. ; of the value of 100
and under the value of 200, 3 ; of the
value of 200 and under the value of
300, 4 10s. ; of the value of 300 and
under the value of 400, 6 ; of the
value of 400 and under the value of
500, 7 10s. And where the value so
sworn as aforesaid shall amount to 500
and upwards then one and a-half per
centum on the whole amount. That from
and after the 1st day of April, 1880, the
following duties shall be granted and made
payable upon and for every legacy specific
or pecuniary of the value of 20 and up-
wards, and upon and for every share or
residue of the personal estate of any per-
son dying and leaving such estate of the
clear value of 100 or upwards, which
shall pass either by devise or by force of
the Statute of Distribution, that is to
say : Where any such legacy or residue
or any share of such residue shall have
been given or have devolved to or for the
benefit of a child of the deceased or any
descendant of a child of the deceased, or to
or for the benefit of the father and moth- r
or any lineal ancestor of the deceased, ;i
duty at and after the rate of 1 per
centum on the amount or value thereof,
1 per centum. Where any such legacy or

residue or any share of such residue shall
have been given or have devolved to or
for the benefit of a brother or sister of the
deceased, or any descendant of a brotlf /
or jsister of the deceased, a duty at and
after the rate of 2 per centum on the
amount or value thereof, 2 per centum.
When any such legacy or residue, or any
share of such residue, shall have been given
or have devolved to or for the benefit of a
brother or sister of the father or mother of
tlte deceased, or any descendant of a brother
or sister of t/ie fatlter or mot/ter of the
deceased, a duty at and after the rate of
three pounds per centum on the amount
and value thereof, 3 per centum. Where
any such legacy or residue, or any share of
such residue, shall have been given or have
devolved to or for the benefit of a brother
or sister of a grandfather or grandmother
of the deceased, or any descendant of a
brotJier or sister of a grandfather or grand-
mother of the deceased, a duty at and after
the rate of five pounds per centum on the
amount or value thereof, 5 per centum.
And where any such legacy or residue, or
any share of such residue, shall have been
given or have devolved to or for the benefit
of any person in any other degree of collat-
eral consanguinity to the deceased than is
above described, or to or for the benefit of
any stranger in blood to the deceased, a
duty at and after the rate of six pounds
per centum on the amount or value thereof,
G per centum. And all gifts of annuities,
or by way of annuity, or for any other
partial benefit or interest out of any such
estate or effects as aforesaid, shall be
deemed legacies. And where any legatee
shall take two or more distinct legacies or
or benefits under any will or testamentary
instrument which, shall together be of the
amount of value of 20 each, shall be
charged with duty though each or either
may be separately under that amount
or value. Exemptions, Legacies and
residues or sliare of residue of any
such estate or effects as aforesaid given
or devolving to or for the benefit of
the husband or wife of an>/ j>erson
who shall have died or who shall die
subseqiiently to the 1st April, 1SSO.
Legacies given for religious, e<li"-<i<i"id, or
tkuritaNt purpose*. That from and .
the 1st day of April, 1880, the following
duties shall be granted and made payable
upon and for every succession to the

456

MR. WATSON.

[1879.]

beneficial enjoyment of any real or personal
estate, or to the receipt of any portion or
additional portion of the income or profits
thereof that may take place upon or in
consequence of the death of any person
under whatever title, whether existing or
future, such succession may be derived,
that is to say : Where the successor shall
be the lineal issue or lineal ancestor of the
predecessor a duty upon the value of the
succession at the rate of 1 per centum.
Where the successor shall be a brother or
sister, or a, descendant of a brother or sister
of the predecessor, a duty upon the value of
the succession of 2 per centum. Where
the successor shall be a brother or sister of
the father or mother, or the descendant of a
brother or sister of the father or mother of
tlie predecessor, a duty upon the value of
the succession of 3 per centum. Where
the successor shall be a brother or sister of
the grandfather or grandmother, or a des-
cendant of the brother or sister of the
grandfather or grandmother, of the prede-
cessor, a duty upon the value of the succes-
ion of 5 per centum. Where the succes-
sor shall be in any other degree of collat-
eral consanguinity to the predecessor than
is hereinbefore described, or shall be a
stranger in blood to him, a duty upon the
value of the succession of 6 per centum.
Exemptions. Where the whole succession
or successions derived from the same prede-
cessor and passing upon any death to any
person or persons shall not amount in
money or principal value to 100, no duty
shall be payable, and no d^(,ty shall be
payable upon any successions which as
estimated shall be of less value than 20 in
the whole or by any person in respect
of a succession who if the same ivere a
legacy bequeathed to him by the predecessor
icould be exempted from the payment of
duty in respect thereof. All successions
acquired in trust for religious educational
or charitable purposes. I now come, Sir,
to the second division of our taxation
scheme, namely, indirect taxation, which
is of two kinds : Excise duties and dvities
on importations. First then, we intend
to submit to the Committee a proposition
for slightly increasing the Customs duties,
as the present tariff is not, as I have
already shown, an oppressive one, we
think the duties on a few articles of lux-
ury, rather than necessity, could bear a
small increase without undue>pressure upon

any class in particular. I quite admit
the undesirableness of frequent alterations
in the tariff, as they have a tendency to un-
settle the operations of trade, and cause much
inconvenience to those engaged in mercan-
tile pursuits. A charge of this kind
cannot, however, with justice, be made
against this Colony, for no additions have
been made to her Tariff since the year
1871 ; on the contrary, some considerable
reductions have been made which have had
the effect of removing many obnoxious
restrictions on the trade and commerce of
the Port of Sydney. We propose to raise
the duty on spirits from 10s. to 12s. a
gallon, by which I expect to realize an
extra sum of 100,000. Spirits are not
exclusively the poor man's drink. They
form a beverage which is largely, perhaps
too largely, consumed by the higher and
middle classes of society, who are well
able to pay the additional 2s. per gallon.
If the higher rate is found to have a
tendency to check the consumption of
ardent spirits, the result will be a benefit
to the Colony in another way, and thereby
afford some consolation for the loss of the
expected extra duty. In that event we
would have to cast about for some other
source of revenue to make good the defi-
ciency. At the present time spirits pay a
duty of 12s. per gallon in Queensland,
New Zealand, and Tasmania ; and in
Western Australia, 1 5s. In Victoria and
South Australia the rates are the same as
ours are at present, viz. : 10s. per gallon.
The 1 2s. duty on spirits is not new to this
Colony, as I find it was in force from 1 840
to 1847, after which it was reduced, for
some reason or other to 6s. ; from that
time it has been gradually raised to its
present rate, at which it has long re-
mained. We propose also to increase the
duties on imported wine, which is cer-
tainly not the poor man's beverage.
Sparkling wines now bear a duty of 6s.
per gallon, and all other kinds, 4s. The
former we propose to raise to 10s., and
the latter to 5s. per gallon. From these
increases I expect to obtain 12,000. I
admit that these rates are high, but those
who can afford to use imported wines will
never feel the extra charge, which in the
one case will be about 8d. per bottle and
in the other only 2d. Under the tariff of
1855, popularly known as the " Deas-
Thomson Tariff," wine containing more

[1879.]

Mu. WATSON.

457

than 25 per cent, of alcohol was chargeable
with a duty of 10s. per gallon, a
which continued in force for many years.
As it is our intention to submit to the
Committee a proposition for an excise
duty on Colonial manufactured ale, beer,
and porter, wo think it right, as an act of
justice to the local manufacturers of ti

(ages, to increase also the duties on
importations. J therefore propose to in-
crease the pr- T 1-harges on ale,
beer, and porter imported in bottle from
9d. to Is. per gallon, and in wood, from
6d. to 9d. I expect to realize from these
changes 13,000. The next and only
other item of the taritF which we propose
to increase the duty on is tobacco, and
here, I presume, 1 shall be reminded that
by so doing we are taxing the working
man's most cherished and almost indis-
pensable luxury. This may be the case to
a certain extent, for the working man
and by the way the use of tobacco is not
confined to him alone will no doubt have
to pay a certain proportion of the addi-
tional duty we propose to levy on leaf
tobacco, but I am inclined to think it will
come partly out of the pockets of the
manufacturers, who have hitherto derived
great pecuniary benefit from our present
differential duties. Honorable members
are aware that imported manufactured
tobacco is now subject to a duty of 2s.
perlb. and unmanufactured or leaf tobacco
Is. per Ib. The lower rate was fixed for the
purpose of enabling manufacturers to com-
pete with the imported manufactured
article. It is, however, now pretty well
known that Colonial grown tobacco is
largely mixed with imported leaf in our
manufactories here, and sold as tobacco
manufactured solely from the latter. To
place this matter upon a right basis, as
well as to secure to the revenue all the
duty to which it is entitled on this article
of luxury, we propose to increase the duty
on imported leaf tobacco from Is. to Is. 3d.
per Ib., and charge a duty of 3d. per Ib. on
all tobacco manut'aetured in the colony.
As a change of this nature might, however,
prove prejudicial to many who have gone
to great expense in erecting extenshe
manufactories, mil ess we at the sameslightly
increase the duty on imported manu-
factured tobacco, I propose to raise the
rate on that article from 2s. to 2s. 6d.
per Ib., which is similar to the rates

charged in Queensland and New Z- .
at the present time. When the.-;.- pr<>:
tions are clearly understood by honorable
members, I feel sure they will not hesitate
to give them their support. From these
modifications of the tobacco duties J
mate that we shall receive additional rev-
enue to the amount of 46,000. We next
propose, as already said, to charge an Ex-
cise duty on Colonial manufactured ale,
beer, and porter. It is univt r.sally ad-
mitted that as these are beverages of gen-
eral consumption they are legitimate
objects of taxation, and should therefore
be subject to duty, whether manufactured
in the colony or imported from abroad, as
in the case of spirits. Having no desire
to burden unnecessarily an industry of this
kind by a duty equal to that imposed upon
the imported articles, we propose at present
to charge a uniform rate of only 3d. per
gallon. If we increase our present Cus-
toms duties on ale, beer, and porter to the
extent I have mentioned, then the pro-
posed Excise duty of 3d. per gallon should
not militate against the brewers of this
Colony, who would still be able to success-
fully compete with importers. The duties
collected on ale and beer have fallen off
considerably since 1873. In that year the
amount collected was 45,000 ; in 1874,
42,000 ; in 1875, 40,000 ; in 1
35,000 ; in 1877, 35,000 ; in 1
33,000 ; in 1879 it is expected to be
40,000, probably owing to the great de-
mand consequent on our Exhibition. For
1880 the dutyisestimated at only :5 6,000.
These figures must convince 1
members that Colonial ale and beer are
rapidly displacing the imported articles.
If this were not the case we should
receive through the Custom-house in
1880 from present rates a sum of
60,000 or 70,000. By tin- pr. .posed
Excise duty on ale, beer, and porter,
I hope to add to our public income :
year a sum of 37,500. Some honorable
members may be disposed to question t Im-
propriety of Excise duties on ale.
and }>or'ter, while sugar, win.-, and i

. vhu-h are aUo laip'lv numufaetured
in the Colony, are allowed to escap". To
that objection 1 would simply say that the
day is p.-rhaps not remote when it will be
found necessary to tax the.-.- articles to
some small extent also. In the meantime
it is not required to do so for revenue

458

MR. WATSON.

[1879.]

purposes. Besides that, all these indus-
tries are still in their infancy, and the
imposition of Excise duties at this early
stage of their existence might have a very
injurious effect upon them. The manu-
facture of ale, on the other hand, is well
established in the Colony, and of much
older date. Another reason is, that ale
and beer, not being such necessaries of
life as, at all events, sugar and kerosene,
are therefore more legitimate objects of
taxation. Having submitted our taxation
scheme and explained it as fully as the
circumstances and occasion would warrant,
I shall now read to the Committee those
resolutions which relate to our propositions
for indirect taxation. They are as fol-
lows: That in lieu of the duties of
Customs now chargeable on spirits im-
ported into this Colony the following
duties shall be charged, that is to say :
From and after the 10th day of December,
1879, on all kinds of spirits the strength of
which can be ascertained by Sykes' hydro-
meter, 12s. the proof gallon, and on all
spirits and spirituous compounds the
strength of which cannot be ascei'tained
by Sykes' hydrometer, 12s. the liquid
gallon. That in lieu of the duties of
Customs now chargeable on wines im-
ported into the Colony the following duties
shall be charged, that is to say, from
and after the 10th day of December, 1879,
on sparkling wines, 10s. per gallon, and
on all other kinds of wines, 5s. per
gallon. That in lieu of the duties of Cus-
toms now chargeable on ale, beer, and
porter, imported into this Colony, the
following duties shall be charged, that is
to say, from and after the 10th day of
December, 1879, on ale, beer, and porter,
in bottle, Is. per gallon, and on ale, beer,
and porter, in wood, 9d. per gallon.
That in lieu of the duties of Customs now
chargeable on tobacco imported into this
Colony, the following duties shall be
charged, that is to say, from and after the
10th day of December, 1879, on manufac-
tured tobacco, 2s. 6d. per lb., and on un-
manufactured or leaf tobacco, Is. 3d. per
lb. That from and after the 1st [day of
January, 1880, there shall be taken and
levied upon all ale, beer, and porter,
manufactured in the Colony, the sum of
3d. per gallon. That from and after the 1st
day of January, 1880, there shall be taken
and levied upon all tobacco manufactured

in the Colony, whether from imported leaf
tobacco or from tobacco grown in the Colony,
or from both combined, the sum of 3d. per lb.
I do not think, Mr. Cameron, that I have
anything further to say in elucidation of
our present financial position, but should
my statement be found lacking in any
important particular I shall be happy to
supply the omission if hon. Members Avill
have the kindness to point out what
further information they require. Before
concluding, I desire to say that although
the revenue of the present year will be
very much less than I expected it would
be, when I made my last Financial State-
ment, the falling off will not be so much
in our ordinary revenue as in the amount
estimated to be received from Land Sales,
a circumstance which should not create
much alarm, inasmuch as we have still
the land which that revenue, had we got
it, would have represented. The amount
will come in at some future time, when
we perhaps stand in need of it more than
we do even now. I would also remind
the Committee that we do not stand alone
in having a deficient revenue this year,
for if I am not much mistaken there is not
one of the Australian group of Colonies but
has had to acknowledge to a serious falling
off in its public income, and I think the
same unsatisfactory state of affairs has been
found to exist in the United Kingdom as
well as in several of the principal States of
Europe. Commercial depression and stag-
nation of trade, arising from causes which
it is almost impossible to trace, have long
been universal in the northern hemisphere ;
and although we are far distant from the
great marts of the world their influences
have reached us even here, and to some
considerable extent have affected all our
business transactions and relations, and
through these our public income also.
The tide of prosperity having however set
in at Home, let us hope that ere long its
life-giving waves will reach our shores,
and that the blessings that naturally flow
to all classes of the community from a
revival of trade and commerce will soon
dispel the gloom which has of late sur-
rounded us. I now beg to move, that
towards making good the Supply granted
to Her Majesty for the Service of the
year 1880, the sum of 2,135 be granted
out of the Consolidated Revenue Fund of
New South Wales.

NEW SOUTH WALES.

SUPPLEMENTARY FINANCIAL STATEMENT of the HONORABLE JAMES
WATSON, made 36th June, 1880.

LEGISLATIVE ASSEMBLY.

IGlli June, 1880.

SUPPLEMENTARY FINANCIAL
STATEMENT.

SIR, I beg to move that, towards mak-
ing good the Supply granted to Her Ma-
jesty, there be granted out of the Consoli-
dated Revenue Fund of New South Wales
a sum of 4,611 4s. 2d. to defray charges
for Services of 1878 and previous years.
In moving this resolution I desire to take
the opportunity which it affords me of
stating to the Committee our present finan-
cial position, and this I do not only in ful-
filment of a promise I recently made, but
as a duty I owe to the Committee. I am
aware that the course I am about to adopt
may be considered a somewhat unusual
one; but under the peculiar circumstances
in which I now find myself placed, it be-
comes my duty, as the Minister more im-
mediately responsible to Pai'liament for
the management of the public finances, to
make a statement of this nature. It will
be scarcely necessary for me to remind the
Committee that, although it is now six
months since I made the Financial State-
ment proper to this session only a small
portion of the new taxation which I then
proposed, for the purpose of equalising the
revenue and expenditure of the country,
has been sanctioned by Parliament. Be-
sides that, I am sorry to say that the re-
venue of the last five months shows a large
falling off, as compared with the revenue
of the corresponding five months of 1879.
In order to convey to the minds of honor-
able members a correct idea of our present

financial prospects, and the anticipation I
formed in December last, I shall have to
recapitulate a few of the results then placed
before the Committee ; and, while I have
no desire to detain the Committee, yet I
would ask the forbearance and attention of
honorable members for a short time while
I endeavour, in as few words as possible,
to make them understand clearly our pre-
sent position. When I have done this, I
will then explain our proposals for in-
creasing the revenue in order to make good
the falling off referred to, which is chiefly,
if not altogether, in the sale by auction of
our public lands. To show that we can
no longer calculate and rely upon auction
sales of land as a reliable source of income,
I shall state the amounts received from
sales of this kind during the last few y-
In 1874 the receipts were 553,000 ; in
1875, 1,019,000 ; in 1876, 1,561,000;
in 1877, 1,967,000; in 1878, 1,059,000;
and in 1879, 698,981. For the first five
months of the present year the receipts
from auction sales have been only 152,000,
as against 477,000 for the corresponding
period of 1879, which is a reduction of
295,000. From these figures it can
easily be seen that it is absolutely neces-
sary that some substitute should be found
for the income thus lost. Indeed, it
would, in my opinion, be most unwise to
depend in future to any great extent upon
this source of revenue ; nor is it desirable
we should, as wo can hardly expect to
again receive such enormous sums as those
just mentioned. In December last I esti-
mated that the revenue of 1880, including
358,500 of proposed new taxation, would
amount to 5,120,375, and that the

460

MR. WATSON.

[1880.]

expenditure proper to the year would pro-
bably be4,984,183. This left an estimated
surplus of 136,192. As already stated,
however, the revenue of the present year
has not so far come up to expectations,
but the falling off has been principally in
the land sales, which, as I have already
shown, was no less than 295,000. My
estimates of revenue from other sources
will, I confidently anticipate, be realised
on the whole year, although some of them
have not yielded their fair proportion dur-
ing the past five months. This can be ac-
counted for on several grounds with which
it is not necessary I should trouble the
Committee, but I fully expect that my
estimate for the year will be realised. The
Lands Acts Amendment Act, recently
passed, cannot fail to promote the aliena-
tion of Crown lands by conditional pur-
chase, as the conditions of sale are much
more liberal than formerly, so that instead
of 250,000 estimated to be received
under this head, I have good reason to
expect that the actual receipts will be con-
siderably more, but for the present I take
no credit for any increase of this kind.
In addition to the anticipated loss on
land auction sales this year, honorable
members will doubtless recollect that the
Stamp Duties Bill which I introduced in
the early part of the session did not
become law. Had the proposed stamp
duties come into operation on the 1st
of April last, as I had intended, we
should have realised during the last two
months (say) 40,000. To that loss we
have to add (say) 20,000 for the present
month, making together a loss of 60,000
for the quarter. In making my Financial
Statement in December, I estimated that
this source of revenue would have yielded
us 150,000 this year, being at the rate
of 200,000 annually. Some alterations,
however, were made in the schedule to the
Bill in passing through Committee ; and
having made the most careful calculations,
I am now led to expect that 250,000
would have been realised during the first
year of its operation. The Committee
having refused by a small majority to
impose the proposed excise duty on beer
which I submitted, the Government con-
sidered it undesirable to submit their pro-
position for an excise duty on tobacco, or
the increased duties proposed on imported

tobacco, ale, and porter, as these were
contingent upon the passing of the excise
duties. These duties, had they been sanc-
tioned by the Committee, would, I esti-
mate, have given us 96,000 additional
revenue. In consequence of the serious
falling off in the amount anticipated from
the sale of public lands by auction, I have
reduced my estimate of revenue from this
source from 750,000 to 525,000, or a
reduction on the year of 225,000. Thi&
reduction brings the estimated amount for
this year to a lower sum than that received
in the year 1874, which was 553,000. I
am sure honorable members will not say
that 525,000 is an excessive amount to
receive from the sale of lands by auction
when it is borne in mind that 75,000
will be expended on immigration,
528,000 for the construction and main-
tenance of roads, and over 200,000 for
important public works throughout the
Colony. Besides these services, many of
which it must be admitted are fair and
legitimate charges on the proceeds of land
sales, a very large proportion of the ex-
pense of the Land Department is also
chargeable thereto. For many years prior
to 1874, when the increased demand for
land commenced, these sales averaged
250,000 a year, an amount to which no
exception was taken ; and, considering the
increase in the population since then, and
the increased expenditure for the settle-
ment and improvement of the interior, I
think the amount I have named may be
fairly looked for annually. Our position
at the present time is this : My estimate,
to be derived from the sale of lands by
auction, will not be realised to the extent
of 225,000, and in consequence of our
taxation scheme not having passed in its
entirety, we have lost, at all events for
the present, anticipated revenue to the
amount of 246,500, making together a
reduction of 471,500. But in addition
to that I have now to submit the Addi-
tional Estimates to which I referred in my
Financial Statement on account of this
year's expenditure, which I find amounts
to 104,562. Adding this to the reduc-
tion of 471,500 on my original estimate
of revenue, it will be seen that we are in
a worae position at the present moment,
to the extent of 576,062, than I antici-
pated we should be when I made my

[1880.]

MR. WATSON.

4G1

Statement in last December. Instead,
therefore, of a surplus of 136,000 as
then estimated, there is an apparent de-
ficiency of 440,062. I say apparent,
because I anticipate there will be, as
usual, appropriations and balances of ap-
propriations, which will not be required
for expenditure, to the amount of at least
250,000. This would reduce the defici-
ency of 440,062 to 190,062. Past ex-
perience, however, convinces me, that we
cannot do without Supplementary Esti-
mates, so that I expect we shall have to
bring one down next session, which, in all
likelihood, will amount to say 100,000.
I do not anticipate that it will exceed this
sum, because the additional estimate,
which I have laid before the Committee,
contains many items, which, but for the
late period at which I brought down the
estimate, would have appeared only on
the Supplementary Estimates. This ad-
ditional 100,000 will, therefore, raise the
estimated deficiency to 290,062, which is
the sum I have now to deal with, and for
which it is necessary provision should be
made. I will therefore proceed to lay be-
fore the Committee our proposals for in-
creased taxation to make good the defici-
ency just stated, and I trust that honorable
members will throw aside any feeling and
unite with the Government in endeavour-
ing to place the finances of the country
upon a basis which will remain firm and
durable for many years to come. I pre-
sume I need hardly inform honorable
members that we intend to again bring in
the Stamp Duties Bill. As this Bill in-
troduces a scheme of taxation which has
twice received the approval of both
branches of the Legislature, and besides
which it is one that will bring in a large
revenue to the State without unduly press-
ing upon any class in the community, we
feel it our duty to submit it once more for
the approval of the Committee. In doing
so, however, we shall make such altera-
tions as will, we trust, meet the views of
those who took exception to certain parts
of the Bill, without in any way comprom-
ising the undoubted rights of this House
with regard to money Bills. These rights
have been freely admitted, although it has
been contended by some that the altera-
tions made in the Bill by the other branch
of the Legislature, were not an infringe-

ment of such rights, but were simply in-
troduced to render less ambiguous cei
clauses which it was supposed might, 1
afterwards construed to give a retrospec-
tive application to certain kinds of duties
which the Government admitted was not
intended. ^Without expressing any opin-
ion on the point, which has already been
fully discussed in this Chamber, I will
content myself with saying that, notwith-
standing our views on this question remain
unchanged, we have come to the conclu-
sion that it is our duty in the ]
state of the Public Finances of the Colony,
and in the interest of the public, to make
such alterations in the phraseology of the
Bill as will ensure its speedy passage
through all its stages with a view to its
coming into operation on the 1st of July
next. With the exception of the altera-
tions alluded to, and a few verbal correc-
tions, the Bill I shall ask permission to-
introduce will be found practically the
same as the one twice approved of by thi&
Committee. If the Bill becomes law and
comes into operation on the day I have
named, I estimate that we shall receive
from stamp duties during the last six
months of this year, 125,000. This sum,
if realised, and I feel confident it will be,
will reduce the anticipated deficiency to
165,062. Although this is not a large
sum, nor yet one that should create much
alarm, it is nevertheless an amount which
it is our duty to provide for during the
present session, as it would not redound
to the credit of either the Government or
the Parliament to allow it to become
a charge on the revenue of next \
Taxation of any kind is considered objec-
tionable, and no scheme no matter how
fair and equitable which I could devise
would be pleasing to those who would be
called upon to pay ; but I think it will be
admitted that additional revenue must be
raised, if we wish to keep our revenue
and expenditure equal, and I can assure
the Committee that I wish the ta/
proposing it had fallen to some one
yet, however unpleasant it may be, I
not shrink from performing tin- duty. I
will assume, then, that it is admitted the
revenue must be increased ; another
arises liov. evrr,and this is from \vlr
can it be obtained to be the least obj.-<
able and the most equitable. 1 ain unaMe

462

MR. WATSOK

[1880]

to fall back and again try the excise winch,
however, I believe is as equitable a tax as
I could propose. Then a property or in-
come tax, or both might be proposed, but
at present both are open to objections with
which I need not detain the Committee.
Having given the subject the most careful
consideration with a view to propose some
scheme which would be the least objec-
tionable, I have come to the conclusion
that the most equitable means of raising
revenue to cover the estimated deficiency
is to take those sources of profit or wealth
which practically belong to the Crown at
the present time, although in the tem-
porary occupation of others, or which have
been obtained from the Crown, at one
time or another, on conditions of the most
liberal description. These are of two
kinds, namely, the produce of the grazing
lands of the Colony, and the produce of
our mineral lands. It is well known and
even admitted by those in possession of
such sources of profit, that the State does
not receive anything like an adequate
return for those immense advantages
which are annually enriching thousands of
our fellow-colonists. We cannot deny
that much private capital has been ex-
pended, much labour bestowed, and many
hardships endured by some in rendering
these lands productive. On the other hand
it must not be forgotten that while the
State has expended enormous sums of
money, ostensibly for the general good, in
the construction of roads and bridges, rail-
ways, telegraphs, and wharves, in improv-
ing the navigation of harbours and rivers,
and in other works of an important
character, the owners and occupiers of
grazing and mineral lands, whether lease-
hold or freehold, have been largely and
specially benefited by such expenditure.
The saving which the expenditure of pub-
lic money on railways alone has enabled
this class of the community to effect far
more than counterbalances the small re-
turn in the shape of direct taxes which
we propose they be called upon to make to
the State. Our propositions are these :
An export-tax of |d. per Ib. on greasy
wool, and d. per Ib. on washed or scoured
wool ; a tax of 6d. per head on horned
eattle and horses excluding working
horses and working bullocks and dairy
cows under a certain number ; and a

royalty of 6d. per ton on coal. From the
export-tax on wool I estimate that we
shall receive this year 114,000, and
175,000 next. From the tax on
horned cattle and horses I hope to
raise an annual revenue of about 60,000,
which can be obtained this year in full.
From the royalty on coal I expect to re-
ceive this year 19,000. which is at the
rate of 38,000 per annum. In 1879 the
wool exported was 129,123,573 Ibs., of
which 90,410,335 Bbs. were greasy and
38,713,238 Bbs. washed. The greater part
of these exports took place during the last
half of the year. This is a source of re-
venue which is annually increasing in
value, so that we may reasonably expect to
receive from it in the course of a few years
an annual income of 250,000. From
official records I find that there were in the
Colony in 1878, 2,771,583 horned cattle,
and 336,468 horses, giving together a
total of 3, 1 08, 051. Allowing, however. 1
per cent, for working horses and bullocks
and for dairy cattle, that quantity would
be reduced to 2,787,246, which at 6d. per
head would give 69,681. I only esti-
mate, however, to receive 60,000 this
year, in case I may not have allowed a
sufficiently high percentage for the proposed
exemptions from the tax. This, I need
hardly inform honorable members, is no
new description of taxation, as I find that
a tax or assessment upon stock has been
on two occasions in operation in this
Colony. In the year 1847 an assessment
on stock-tax was passed, having a currency
of five years. This Act expired in 1852,
but the assessment was reimposed in the
year 1855, and that Act remained in force
for two years. When we consider the
various ways in which squatters and others
have been benefited by the extensive
public works which have been carried out
by the Government within the last ten or
fifteen years, it will, I think, be admitted
that it is only fair to the community at
large that they should pay to the State
something approaching an equivalent for
those benefits. In asking the wool pro-
ducers to pay an export-tax upon wool, we
are only asking them to pay what is to
them an annual source of income, and in
asking the stock-owners to pay 6d. per
head upon their horses and cattle, it
is only asking them for a rental more

[1880.]

MR. WATSON.

463

commensurate with the privilege they
enjoy. I tun therefore satisfied that honor-
able members who may be engaged in pas-
toral pursuits, or otherwise interested in
squatting, will, seeing the financial posi-
tion of the country demands it, cheerfully
acquiesce in the proposals of the Govern-
ment, and aid them in making such pro-
posals the law of the land. The royalty
we propose on coal is so small that no one
can reasonably object to its imposition.
When land is sold by the Government,
there is always a clause in the grant, ex-
cepting minerals, and although that clause,
so far as coal is concerned, has hitherto
been a dead letter, still the right to the
minerals in such lands on the part of the
Crown exists. For the permission to raise
and sell coal, found on lands which were
once in the possession of the Crown, the
Government propose to charge a royalty
of only 6d. per ton. This charge will be
on the output, which, in 1879, was over
1,500,000. Judging by the past, the
output of coal must go on increasing every
year. I have no hesitation, therefore, in
saying that before many yeai's the royalty
will yield an annual sum of 50,000 or
60,000. In selecting wool, cattle, and
coal as legitimate items of taxation, the
Government have been influenced by
various reasons, some of which I have
already stated. One other I may state,
and that is their collection will entail
almost no additional expenditure, as the
tax upon wool will be collected at the
Custom House by the present officers,
while the royalty on coal will be paid
direct to the Treasury by the proprietors
of coal mines on sworn returns, and their
books will be open at all times to the
scrutiny of the Treasury inspectors. The
per head tax upon cattle will also be based
upon sworn returns from stock-owners
who can pay the amount of their assess-
ment, either to the Treasury or to the
nearest land agent of their district. I am
free to admit that the easy collection of a
tax is no ground or justification for its
imposition, but when the tax is a fair and
reasonable, as well as an equitable one, its
inexpensive collection tends materially to
enhance its value and popularise it, even
with those who have to bear it. If our
proposals are assented to by the Com-
mittee, then we shall receive during the

present year from stamp duties, 125,000 ;
from the export duty on wool, 1 1 1,000 ;
from the tax upon horses and <.
60,000 ; and from the royalty on coal,
19,000 ; making in all 318,000. De-
ducting from this sum the -stii:i.-iti-d <| t -
ficiency of 290,000, there is left an
estimated surplus at the end of year of
28,000. I must confess I should have
been pleased to see the amount much larger
in order to provide for unforeseen charges
that may arise during the remainder of the
year. Next year, and it is right that
honorable members should see this, the
probable product of these taxes would be
as follows : Stamp duties, 250,000 ; ex-
port-tax on wool, 175,000; stock-tax,
60,000 ; and royalty on coal, 38,000,
or amounting together to 523,000. If
to this be added the increased Customs
duties on spirits and wines, assented to
during the present session, and which were
estimated at 112,000, we shall have in-
creased taxation to the extent of 635,000.
To meet, however, the annually increasing
expenditure on account of public works and
improvements, if they are to be continued,
and a probable falling off in the amount
derived from the alienation by auction of
the public lands, it will I fear be found
that further taxation will ultimately be
found absolutely necessary, and when it is
borne in mind that the direct taxation
is under 2 per head of the population, we
cannot complain. Indeed, if we rightly
estimate the requirements of our growing
and increasing population in the interior,
and desire to take advantage of the natural
resources at our command, it is clear to
my mind that we must increase our direct
taxation, and I believe that this can be
done without pressing unduly on any par-
ticular class. This I could easily point
out, but as I have no desire to anticipate
the future, I will now content myself for
the present by reading the resolutions
which I intend to submit to the Com-
mittee. They are,

1. That from and after the 1st day of July,
1880, there shall be taken and levied upon wool
exported from the colony, being the produce of
New South Wales, the following duties : That
is to say on greasy wool, id. per Ib., and on
washed or scoured wool, $d. per ft*.

2. That on or before the 31st day

in each and every year, commencing with the
year 1880, there shall be payable to the Colonial

464

MR. WATSON.

[1880.]

Treasurer or to such officer or officers as he may
appoint to receive the same, 6d. per head on all
horses and cattle in the colony on the 31st day
of August in each year, exclusive of working
horses and bullocks and dairy cows, not exceed-
ing fifty in each case.

3. That from and after the 1st day of July,
1880, there shall be paid to the Colonial Trea-
surer 6d. per ton on all coal, shale, and other
material of a like nature obtained from the
lands of the Colony from and after that date.

Having thus shown our proposals for in-
creasing the revenue, I think it due to the
Committee that I should state, before I
close, the position of the account for
1879, and show to what extent the Surplus
Revenue Account is effected by the
changes which have taken place since it
was last submitted to the Committee.
This, I shall now endeavour to do. In
the Ways and Means of December last I
estimated that there would be a deficiency
of 200,000 on the revenue of 1879. In
consequence, however, of the receipts of
the latter part of the year having fallen
short of my estimate the deficiency turned
out to be 251,000. Since then it has
been found necessary to bring down
a further Supplementary Estimate for
135,000, thus increasing the deficiency
to 386,000. This is, I am free to admit,
an unsatisfactory state of last year's ac-
count, but it is almost entirely owing to
the falling off in the auction land sales,
which realised 300,000 less than I esti-
mated they would when I made my Finan-
cial Statement on the 12th of February,

1879. This, as I have already shown,
proves unmistakeably that we should not
depend, in future, on such an \incertain
source of income to the extent we have
hitherto done. It also proves the absolute
necessity of providing a substitute by in-
creased taxation unless the Committee is
prepared to stop those public works which
have always been considered a fair charge
on the Consolidated Revenue Fund. With
regard to the Surplus Revenue Account,
it may be remembered that in the account
I submitted in December last I showed a
probable surplus of 618,000, which I
stated would have to be charged with the
then estimated deficiency of 1879. That
surplus is now charged with the ascertained
deficiency of last year, namely, 386,000,
and with two further estimates amounting
together to 128,050. These charges,
after taking credit for a few reductions in
the old liabilities, bring the surplus down
to 132,000. I think I have now, as
briefly as I could, placed before honorable
members our present financial position
and the means which I propose to increase
the revenue, and so equalise it with our
expenditure, but should I have forgotten
anything I shall be glad to supply honor-
able members with the information on its
being pointed out. I now leave our taxa-
tion proposals in the hands of the Com-
mittee with the full assurance that they
will receive that careful consideration
which their great importance at the pre-
sent time demands.

NEW SOUTH WALES.

THE FINANCIAL STATEMENT of the HONORABLE JAMES WATSON,
made 9tli February, 1881.

LEGISLATIVE ASSEMBLY.

9th February, 1881.

FINANCIAL STATEMENT.
Mr. CAMERON : I beg to move that
there be granted to Her Majesty out of
the Consolidated Revenue Fund the sum
of ,1,929, to meet pensions for 1881,
under the head of Supplement to Schedule
B. As this resolution is of the usual
formal and initiatory character which
enables me to explain to the House the
financial position of the country, I shall
now proceed to discharge that important
duty to the best of my ability, feeling
assured that while doing so I shall receive
from honorable Members a similar in-
dulgence to that which was so generously
extended to me on former occasions. Al-
though it will be my endeavour to make
my statement as concise and intelligible
as possible, I fear I shall not succeed to
the extent I could wish, because I know
that in every assembly there are always
some who weary under explanations of
accounts, and I do not lay claim to the
power of embellishing them in language
which would make them attractive other-
wise. My desire is to place before the
Committee our present and prospective
financial position in a manner which all
can comprehend. The statement which I
am about to make will be for the most
part an explanation respecting the finances
of the year that is past and a forecast of
those of theyear upon which we haveentered;
but in doing this it will be my duty to
show whether our existing sources of

3 8

revenue are sufficient to produce an in-
come during the present year equal to our
estimated expenditure, and if not in what
way we propose to make up the deficiency.
To the student of political economy the
true state of the finances of a country,
whether it be the country of his adoption
or of his birth, cannot fail to lie interest-
ing, inasmuch as he must be aware that in
proportion to the prosperous condition of
its public revenue will be that of its in-
habitants, provided always of course, they
are fortunate enough to have men at the
helm of affairs chosen and supported by
their representatives in Parliament, on
account of their experience, their abilities,
their capacity to govern, and their appre-
ciation of the requirements of the country.
Without being so arrogant as to assume
for a moment that the present Government
possess all these necessary and desirable
qualifications, I venture to say that, in
the preparation of the Estimates, and those
measures which have already been, or will
yet be submitted to Parliament, we have
been actuated solely by a desire to pro-
mote the best interests of the country
and the welfare of the community gene-
rally ; we also feel satisfied that in all
we have done our motives will bear the
keenest scrutiny by either our oppoi.
or our supporters. Before dealing with
the accounts, I desire to say a few words
in explanation of what may be considered
by some unnecessary delay in submitting
the Estimates and in making the Financial
Statement. As required by the Electoral
Act of 1880, Parliament was summoned
to meet within seven days after the date
the writs of election were made returnable,

466

MR. WATSON.

[1881.]

namely, on the 15th December last, a
period of the year inconvenient in many
respects, and one moreover which did not
admit of much business of importance
being either initiated or proceeded with
before the Christmas holidays set in. In
a financial point of view the time of meet-
ing was still more inconvenient, because
being so near the close of the year it was
undesirable that either the Estimates
should be submitted or the Financial State-
ment made until the results of the year
1880 had been more fully developed. The
adjournment for the Christmas holidays,
it will be remembered, extended to the
llth January, and on the 13th of that
month the general Conference of the
Australasian colonies, of which I was a
member, met in Sydney, and continued its
sittings until the 27th ; but notwithstand-
ing that, I was prepared, and it was my in-
tention, to have made the Financial State-
ment last Wednesday, but in consequence
of the unexpected adjournment of the
House to enable honorable Members to
be present at the opening of the railway
extensions to Dubbo and Albury, I was
precluded from doing so. It will thus be
seen that it was almost beyond my power
to submit the statement at an earlier date.
I admit that it is highly desirable that the
Estimates of expenditure should be passed
before the commencement of the year to
which they apply, but honorable Members
must acknowledge that under the circum-
stances stated, this was impossible with
regard to those of 1881. In fact I find
that on one or two occasions only since the
inauguration of responsible government
has the Appropriation Act been passed
within the proper ^ime. The practice
which has so long prevailed in this colony
of carrying on the Public Service under the
provision made by monthly Supply Bills, is
in many respects objectionable. It is a
practice besides which is attended with
no small amount of inconvenience, inas-
much as none of the public works provided
for on the Estimates can be proceeded with
until the annual Appropriation Act is
passed, which of late years has not been
done until more than half the year to
which it applied had expired. In order to
put an end to this unsatisfactory state of
affairs, I trust the House will assist the
Government inhavingthe Estimatesforthis

year passed as early as possible, and in for-
warding, also their other measiires with a
view to closing the present Session at latest
in April next which would thus enable
Parliament to meet again in sufficient
time to have the Estimates for 1882
passed before the close of the present
year. It affords me no small satisfaction
to be in a position to congratulate the
Committee on a state of financial pros-
perity at the present time which is
perhaps indeed I am sure is not equalled
by any of the other Australian Colonies,
a prosperity, too, which is not confined
to the public revenue alone, but one
which permeates the whole community,
and will, I hope, be of long continuance.
I think I can assert without fear of con-
tradiction that at the present time there
is remunerative employment for every one
who is inclined to work, that trade and
commerce are in a flourishing condition,
and that the prospects of agriculturists
and graziers have been much improved by
the fertilizing rains with which the whole
Colony has recently been blessed. It will
no doubt be in the recollection of many
honorable members that during the early
part of last year, and after I had sub-
mitted the Estimates for 1880, the revenue
fell off so unexpectedly and to such an
alarming extent that I considered it my
duty to take the somewhat unusual step
of making a supplementary statement.
When I made that statement, which I did
on the 1 6th June last, our prospects were
gloomy in the extreme. Instead of a
large increase in the revenue over that of
1879, which I had anticipated there
would be, there was really an actual
falling off during the first five months of
over 260,000. Had this rate of decrease
continued, as we had reason at the time to
fear it would, the deficiency at the end of
the year would have been a serious one.
It was in view of this possible deficiency
that I submitted, for the purpose of
equalizing the revenue and expenditure,
proposals for imposing a small export tax
upon wool and coal, and a tax or assess-
ment on horned cattle and horses. Not-
withstanding, however, my proposals were
not received with the favor which I think
they deserved, 1 still adhere to the convic-
tion that under the circumstances they
were just and reasonable. In proof of

[1881.]

MR. WATSON.

467

this, I think I am justified in saying that
no .strenuous opposition to them was
manifested l>y those most interested. The
benefits which squatters and conditional
purchasers derive from the extension of
our railways into the interior, from im-
proved communication by the opening of
new roads and the erection of bridges
throughout the Colony, and from other
public works and local services, are so
great that neither of these groat and
important classes of the community could,
I think, reasonably object to contribute to
the general expenses of Government in
the manner I proposed. Again, with
respect to the coal tax : surely the
enormous expense the Country has
been put to in the construction
of wharves, erection of cranes, coal-
shoots, and other shipping conveni-
ences, and in improving the ports of the
Colony generally, but more particularly
the port of Newcastle, was a sufficient
justification for its proposal. Fortunately
however for both the Country and myself,
the revenue began to recover before the
prorogation of Parliament, and continued
to increase month by month until at the
close of the year there was an increase of
430,000 over the revenue of 1879, or an
increase during the last six months of the
year as compared with the correspond-
ing six months of 1879 of no less than
690,000. This is a result which must
be gratifying to the House and the Coun-
try, inasmuch as it is a sure evidence of
abiding prosperity, and a substantial and
convincing proof that all classes are par-
ticipating in its blessings. Some writers,
no doubt, have endeavoured to undervalue
our increased revenue, by representing
that we have been sacrificing our national
estate in order to create an income equal
to our expenditure. In doing this they
have not only been reckless in their state-
ments, but apparently indifferent to the
effect which their insinuations against the
Government may have upon the credit of
the Colony in that great money market of
the world. London, where we and other
Colonies have to raise our loans. One
would imagine that the mission of writers
on our public finances was rather to pro-
mote the interests of the Colony, by stating
facts as they existed, than to distort those
facts. However, notwithstanding such

representations our public securities re-
cently stood higher in the estimation of
British capitalists than on any former
occasion, and higher considerably than
those of any of our neighbours. When I
come to deal with the accounts of last
year I think I shall be able to prove to
the satisfaction of the Committee that we
have not been pushing our land sales for
the purpose of swelling the revenue, and
that in proportion to population the
amount received for auction sales in 1880
was less than that received twenty-five
years ago. In reviewing our financial
position, it would be as pleasing to me as
I feel sure it would be to the Committee,
if I could dispense with details and submit
general results only. It is however de-
sirable, I think, that I should follow the
usual practice, in order that the Commit-
tee may understand the various accounts
submitted with the Ways and Means,
which will be placed in the hands of hon.
Members during the course of the even-
ing. These accounts are four in number,
and are all required to elucidate our pre-
sent financial position and future prospects.
No. 1 is the Surplus Revenue Account,
and shows the operations upon it from
its commencement to the 31st December
last. No. 2 shows how far the revenue
of the year 1879 fell short of the expendi-
ture of that year. It will be renieml>ered
by some honorable Members that when I
made the financial statement on the 10th
December, 1879, 1 had to estimate to some
extent both the revenue and expendi-
ture. It is therefore only right that I
should take this opportunity to show how
far my estimates have been realix* : . X".
3 is an account of revenue and expenditure
for 1880, which so far as the expenditure
is concerned is still partly an estimate, as
the votes of last year live, in aivur-i
with the terms of the Appropriation
until the close of the year 1>M. No. 4
statement is an account of estimated
revenue for the present year in relation to
the estimated expenditure. In d
with these accounts I will take them in
the order in which I have referred to them.
I desire, however, to remark that so long
as we adhere to the system of app:
ating funds for the service of e:.,-h indi-
vidual year, M> long will it ''.- Moen
show whether the revenue of each year is

468

ME. WATSON.

[1881.]

equal to the authorized expenditure or
otherwise. This is no doubt the right
principle upon which our public accounts
should be kept, and it is the one which up
to this time has prevailed in New South
Wales. It has, however, its drawbacks as
I dare say any system would have. One
great inconvenience arising from our
present system is the length of time which
some votes of Parliament must be retained
in the books of the Treasury as liabilities,
and the uncertainty which consequently
exists with regard to the exact position of
each year's account. For example under
the Appropriation Acts of the last four
years no vote of Parliament can be
written off until the close of the year
following that for which it was obtained.
This of course gives votes at once a cur-
rency of two years; but this is not all, for
if a contract is entered into for say the
building of a bridge or the erection of a
gaol before the close of the second year's
life of the vote for the purpose, then the
vote must be retained until the completion,
of the work, even if that did not occur for
three, four, or five years. The Committee
must therefore see that under this system,
which I admit has its advantages notwith-
standing, a good deal of uncertainty must
necessarily exist for some considerable time
after the expiry of the year with regard to
its exact position that is, before it can be
definitely ascertained whether the revenue
was sufficient or otherwise to meet the
actual expenditure ; and this cannot be
done until either the votes have lapsed
legally, or the services authorized and
contracted for within the two years allowed
for the purpose, have been completed. At
the present moment there are several
votes for services authorized in the years
1877, 1878, and 1879, which have to be
reserved for expenditure during the present
year, as it has been reported to the
Treasury that the works are being car-
ried out under contracts entered into
within the legally specified time. If,
on the other hand, votes of Parliament
had a currency of only one year, the result
would be that probably more than one-
half of every year's appropriations for
Public Works and special services would
lapse and be written off' finally a course
which could not fail to be attended with
great inconvenience to the public, as the

House might not feel disposed to revote
the amounts in the year following. The
uncertain periods for the meeting of Par-
liament in this Colony, and the delays
that frequently occur in passing the Esti-
mates and obtaining the annual Appro-
priation Act, entirely preclude the possi-
bility of commencing, or even entering
into contracts for carrying out within the
year all the public works annually pro-
vided for. It was in consequence of this
unsatisfactory state of matters that the
honorable Member for Illawarra, when
Treasurer, inserted in the Appropriation
Act of 1877 the clause which gives each
year's appropriations a two years' currency.
The Auditor General in his last annual
report suggested that votes should be taken
to meet the probable actual payments
within the financial year irrespective of
date of service, and in support of his
suggestion he refers to the practice with re-
gard to the accounts of the United King-
dom. In England, however, the Imperial
Parliament meets almost invariably in the
month of February, and provides regularly
for carrying on the Public Service by
voting in globo, as required, large sums on
account, so that the services of the year
whether Departmental or Public Works
are not delayed until the final Appropria-
tion Act is passed. But, besides that,
there is very little analogy between the
services of the United Kingdom and those
of this Colony I mean services other than
Departmental. Here the Government
have to undertake works which in Great
Britain would, in many cases, be earned
out by local bodies from funds locally
raised. Again, there are large State De-
partments in England to whom the ex-
penditure of the funds voted by Pai-lia-
ment are at once entrusted, and who re-
tain them until the Services for which
they were granted are completed, when
they return to the Exchequer such balances
only as are no longer required. For these
and other reasons which could be given the
Government do not feel justified in giving
effect to the Auditor General's suggestion
at the present time. The matter, however,
shall receive careful attention, and if on
further inquiry it should be found practi-
cable, without creating inconvenience to the
public and those Departments entrusted
with the expenditure for public works, we

[1881.]

MB. WATSON.

469

may endeavour to apply the principle to
the Estimates of 1 882 during the next ses-
sion of Parliament. I will now proceed
to explain as briefly as I can how the
Surplus Revenue Account stands at the
present time. For the information of
those honorable members who have taken
their seats in the House this Session for
the first time, I would mention that
this account was commenced on the 1st
January, 1879. When I made my first
Financial Statement in February of that
year, I estimated that at the close of the
year 1878 the accumulated surplus
amounted to close upon two millions and
a half. Instead of carrying the surplus for-
ward as an asset in the account of the
following year, as had been done by my
predecessors, I resolved to make a separate
and distinct account of it, and submit to
the House an estimate of expenditure for
services which we thought were fairly
chargeable against that surplus. This
proposition was made in the utmost good
faith, and with no other object in view
than to utilize the surplus in carrying out
services of such a character as had pre-
viously been provided for by Loan, or
which could not, if undertaken at all,
have been defrayed from the ordinary
current revenue. The surplus which
existed at the close of 1878 was only a
portion of what had been accruing for
years I think from the year 1872 from
the sale by auction of our waste lands, the
proceeds of which were very much in
excess of what was necessary, in addition
to our ordinary revenue, to carry on the
Government of the Country. It would
serve no useful purpose now to prove that
the proceeds of our land sales have neither
been wasted nor misapplied. If I mistake
not, this has already been done on more
occasions than one by some of my im-
mediate predecessors, and probably much
more satisfactorily than could be done by
me at the present time. I think it is
generally conceded that the several Go-
vernments who have controlled public
affairs during the last nine or ten years
acted wisely in expending those funds on
public works, and in clearing off our old
deficiency debts, and other national liabi-
lities of a similar character. No one who
has watched the progress of the Colony
durins: the last decade will hesitate to

admit that great progress has been made
in everything that tends to promote the
welfare of the people and develop the
resources of the Country. Immense strides
have undoubtedly been made in commerce,
in manufactures, and in agricultural, pas-
toral, and mining pursuits. Although it
has often been asserted that we are a
slow-going people compared with our
neighbours in Victoria, we have done
iryich of late, I think, to wipe out that re-
proach, if indeed it were ever merited,
and it may be confidently asserted that our
financial, moral, educational, and social
position at the present time will compare
favourably with any Colony of the British
Empire. When [ made the Financial
Statement on the 10th December, 1879, I
estimated that, after allowing for all the
services authorized and proposed to be
charged against the surplus Revenue
Account, there would still remain an unex-
pended balance of 618,000, out of which,
however, I proposed to make good the
deficiency in the revenue of 1879, in
consequence of the land sales of that
year having failed to realize the oirgi-
nal estimate; that deficiency was then
shown to be 200,000. Deducting this
sum from the surplus balance of 618,000,
there still remained a balance of 418,000.
Although the deficiency on account of 1879
has, from various causes which will be
explained when I come to deal with the
account for that year, increased from
200,000 to 382,000, the sum now
charged to the surplus Revenue Account,
there is a balance on that account still of
320,000 in round numbers, a sum which
the Government do not at present intend
to suggest should be expended, as they
think it is desirable to have a balance in
reserve to meet any emergency which may
hereafter arise. To detail the various
changes which the lapse of time 1
sarily produced in this account would I
fear only tire the patience of the Com-
mittee. I may, however, remark that tlif>
various payments made out of the surplus
Revenue Account since it was commenced
as a separate account on the 1st January,
1879, to the 31st Decmil-r. 1S80, and
the payments still to be ma.lc therefrom,
will be found fully set forth in tb expla-
natory statement of the Public Accounts
as embodied in the W*Jt voA M- "s for

470

ME. WATSON.

[1881.]

the present year, which I will shortly lay
on the table of the House. It will be seen
from a statement which I have had pre-
pared and placed with these Ways and
Means that appropriations to the amount
of 300,993 Is. 3d. lapsed on the 31st
December last, and have been finally
written off in the books of the Treasury.
Amongst these it will be observed is the
vote of 210,000 for the erection of new
Law Courts, as the site on which such
buildings should be erected has not yet
been fixed upon. I am glad to inform the
Committee that the necessary steps were
taken within the prescribed period to
secure from lapsing not only the vote for
the erection of a new Free Public
Library, but of almost the whole of the
other votes that were taken in 1879 for
services of importance and public utility.
I now come to the year 1879, which was
one of general depression, not only in New
South Wales but in all the colonies, in-
deed I might say throughout the world,
a depression which seriously affected our
public income, and created a deficit for the
first time since the year 1871. In making
the Financial Statement in February, 1879,
I estimated the revenue of that year at
5,096,000, and the expenditure in round
numbers at 4,970,000, which gave us an
estimated surplus of 126,000. How-
ever, as the year advanced the revenue
gradually fell off, so that when I made
my second statement in December follow-
ing, with eleven months' actual receipts
to guide me, I estimated that the revenue
of the whole year would only amount
to 4,525,000 ; but even that was an
over-estimate, for when the year closed
it was found to have reached only
the sum of 4,482,000. This was
614,000 short of my first estimate,
and 43,000 of my second. Compared
with the revenue of 1878, the reduction
was no less than 510,000. In framing
both these Estimates, the greatest possible
care that had been taken by the heads
of the various departments from whom in-
formation of this kind is usually obtained,
in addition to which, they underwent a
keen scrutiny by myself, which resulted
in several alterations being made to bring
them more into harmony with the revenue
of the preceding year. At the commence-
ment of 1879 it was never anticipated

that such a falling off would occur, as
there was no indication then that such a
general depression as that which imme-
diately followed, and which continued up
to the month of June, 1880, was about to
overtake the Colony. Comparing my first
estimate of the revenue of 1879 with the
actual outcome of the year, I find that
there was a falling off under the head of
taxation of 61,000; in land sales there
was a falling off of 509,000 ; and in the
annual land revenue of 39,000. In re-
ceipts for services rendered the falling off
was 110,000. These made together a
total falling off of 719,000, which was,
however, reduced to 614,000 by an in-
crease on miscellaneous receipts to the
extent of 105,000. I would draw the
special attention of the Committee to the
fact that of this net decrease of 614,000,
no less than 509,000 was on account of a
falling off in the land sales ; so that
after all the revenue proper was not in
that unsatisfactory state which at first
blush it would appear to be for that year.
Unfortunately, while the revenue of 1879
was falling off in this unexpected and
somewhat alarming manner, there was no
corresponding diminution of expenditure
indeed, the reverse was the case, for, as
already stated, I estimated in February,
1879, that it would amount to 4,969,000,
but, in December of the same year,
when re-stating the account, I found
that it had been increased, by additional
charges, to 5,075,000. Having how-
ever, then estimated that there would be
savings to the amount of 350,000, this
latter charge was reduced to 4,725,000.
The charge against the account for 1879,
as now ascertained, is 4,857,447 9s. Id.,
while the actual revenue and receipts
available to meet this amount is only
4,475,059 8s. lid., thus showing a
deficit of no less than 382,388 Os. 2d.
It is just possible that this deficit may be
slightly reduced by the lapsing of some
balances which may not be required on
those appropriations which are still re-
tained, at the request of my colleague, the
Secretary for Public Works, for expendi-
ture during the present year. The defici-
ency on this account I have charged, as
already explained, against the Surplus
Revenue Account, which under the circum-
stance was fairly liable for the amount.

[1881.]

Mr. WATSON.

471

The next account to come under review is
that for 1880, which must, for many
reasons, be more interesting to the Com-
mittee than the one for the year pre-
ceding, which I had just shown was
an unexceptionally bad year. It was
in 1880 that we endeavoured, in \ icw
of the falling off in the land sales
of 1879, and the requirements of the
country, to establish an equilibrium
between our annual revenue and annual
expenditure by means of fresh taxation.
Our propositions to effect this desirable
object were of three descriptions, namely,
to increase the Customs duties on certain
articles, to establish Excise Duties, and to
re-impose Stamp Duties. I estimated that
we shoidd derive from these, if our pro-
posals were carried in their entirety, an
aggregate sum of 358,500. It is, how-
ever, well-known that we carried only a
portion of our scheme of taxation, and
that several important alterations were
made in the Stamp Duties Bill, which had
the effect of very materially reducing the
amount I expected to obtain from this
source. The new duties of Customs which
the House authorized, namely, increased
duties on imported wines and spirits, I
estimated would produce <! 12,000 ; I also
estimated that the Stamp Duties would,
if brought into operation on the 1st of
April, have realized 150,000, or at the
rate of 200,000 per annum. In conse-
quence, however, of the alterations referred
to, and the fact that the Bill did not come
into operation until the 1st of July, the
amount realized in 1880 was only 72,000
or less than one-half of my original esti-
mate. Then again, with reference to spirits,
I estimated that, inclusive of the increased
duty which was to produce 100,000, we
should receive during the year 630,000,
but as we only received GOO,000 it is
evident that the additional 2s. per gallon
was not productive of the increase expected
I also estimated that inclusive of the higher
duties authorized to be collected on wines
they would produce in 1880, 47,000.
Inasmuch however, as they produced only
41,000 it proves that we only received
one half of the additional 12,000 I
anticipated. Some persons have argued
from this that the increased duties on wines
and spirits have had the effect of diminish-
ing the consumption of these articles, but

the mere fact of my estimate not being
realized (luring the lirst year of their im-
position is not conclusive evidence of such
a result. It is only natural to expect that
merchants, publicans, and private indivi-
duals, would exhaust their fore
laying in fresh supplies at the higher rates.
For this reason I think the receipts of last
y<ar are not a fair criterion by which a
just estimate; can be formed of v. hat the
increased rates will add to our Customs
revenue. The receipts of the present
will however, furnish a more reliable test
of this question. I need not again
to the action which the Government took
in June last to increase the public
income, with a view to make good the
actual falling off in the revenue during
the first iive months, and the anticipated
falling off din-ing the remaining seven of
last year, having already alluded to the
subject. Nor need I refer to the unex-
pected and striking change in the revenue
that took place about the latter end of
June, and continues, I am glad to
even up to the present time, as I also in-
formed and congratulated the Committee
respecting that highly gratify ing circum-
stance. Suffice it to say that the revenue
of last year will cover the expenditure, and
leave us with an estimated surplus of
49,510. It is, however, only right to
state that it is possible, nay probable, that
this surplus will be nearly, if not wholly,
absorbed by a further Supplementary
Estimate. I need hardly say that tin
result which no one could ha\e
when it is borne in mind that the re\
up to June last was over 'JLMin.nuf
in place of that amount more than the
revenue of the correct aiding period of
1879. The falling off in the revenue of
last year ns compared with my original
estimate was chielly in the auction land
sales, which according to the estimn
my colleague, the Secretary f<
were expected to yi< '-\ 750,000. I'ut
as they only yielded 435,000 th>
lost under this head alone .:'.! .">.< " 'U. which
if obtained would have ineiva.-ed my
estimated surplus to o\er .i.'i'.iKHHio. 1
would take this opportunity of .-h<
that the auction sales of land in

. not so large in proportion M popula-
tion as they \\eiv in iS.Vi, the 1 :
responsible Government in this Colony.

472

ME. WATSON.

[1881.]

In that yearthesalesaniountedto245,000,
which for a population, of 287,000 is equal
to 17s. per head. In. 1880 the sales by
auction realised 435,000, which, estimat-
ing the population of that year at 785,000
gives a rate of only lls. Id. per head. As
a proof also that we are not misapplying
the proceeds of our land sales or using
them to meet the ordinary expenses of
Government, I would mention the fact
that our expenditure on public works, in-
cluding of course roads and bridges, out of
the Consolidated Revenue Fund during
last year, was close upon XI, 250,000, being
actually more than the amount realised
from land sales of every description. In
1856 the expenditure on Public Works,
also including Roads and Bridges, was only
97,000, which is a sum considerably less
than the proceeds of the land sales of that
year. This comparison shows that we are
not now at least living upon our land sales
to the extent that was done twenty-five
years ago. My only object in referring to
these matters is to prove that the state-
ments so frequently and so persistently set
forth in some of the public prints of the
Colony with respect to the alleged misap-
propriation of the proceeds of our lands are
so biased and exaggerated as to render them
of no value to the public for whose instruction
or entertainment I presume they are written.
Before closing my remarks on the account
for last year, I think it is iny duty to show
to the Committee that, notwithstanding I
did not receive all the revenue I antici-
pated from the old and the proposed new
sources combined, there were some of the
former which yielded considerably more
revenue than my estimate, and that these
are the very sources which more conclu-
sively prove the general prosperity of the
people. We received for interest on land
conditionally purchased 1 4,600 more than
I had estimated ; pastoral occupation
yielded 12,600 more; and mining occu-
pation ,6,000. I would remark here that
the pastoral tenants of the Crown, whose
runs were re-appraised last year, have not
yet been called upon to pay the additional
amounts due because the new appraise-
ments have not all been finally approved.
Had these increased rents, which I esti-
mate at 60,000, and which properly
belong to the year 1880, been received on
or before the 31st December last, the

surplus would have been over 100,000.
Our railways yielded 1,189,000, as
against my estimate of 1,100,000, which
is an increase of 89,000. The post oflice
gave an increase of 11,200 over my
estimate, but this I have no doubt is at-
tributable to the fact that postage stamps
were largely used during the latter part
of the year in lieu of duty stamps. The
exact amount so used cannot be estimated
with certainty, as there are no ready
means of arriving at it. To the extent
however that postage stamps are used in
this way to a like extent will be the loss
to the Stamp Department. Mint receipts
gave an increase of 1,500, which is I
think an indication of increased activity
on our gold-fields. Taking the revenue
of last year as a whole, we have reason to
feel thankful that it has turned out so
well. Before proceeding to state to the
Committee what our financial prospects
are for the present year I will pause for a
little for the purpose of summarizing the
results of the three accounts which I have
been reviewing, all of which refer to the
past, in order that honorable Members
may judge for themselves whether these
results can bear the test of an analysis of
a different description. The test which I
propose to apply will take the form of a
statement of assets and liabilities, with
which I think most persons are familiar,
as it is universally adopted by banks,
public companies, mercantile firms, and in-
deed trading institutions generally. On
the 31st December last the following were
the assets of the Consolidated Revenue
Fund : Cash balance under advance in
part to the General Loan Account, in the
form of an overdraft, 1,440,227 10s. 6d. ;
amount due by, and to be recovered from
the General Loan Account, for advances
made thereto, prior to 1879, pending the
sale of Debentures, 465,437 18s. 7d. ;
amount of the Treasurer's Advance Votes
for the years 1879 and 1880, to be repaid
during the present year, 200,000 ; which
make together an aggregate sum of
2,105,665 9s. Id. The liabilities were :
Amount of appropriations retained for
services which were either in course of
execution or contracted for at the close of
the year, chargeable against the Surplus
Revenue Account, 960,181 Is. 9d. ;
amount of appropriations for services

[1881.]

MR. WATSON.

473

provided for in 1879 reserved for expendi-
ture during the present year, 124,774 14s.
6d. ; amount of appropriations for services
provided for in 1880 remaining unexpended
on 31st December last retained for future
expenditure, less appropriations to the
amount of 350,000 estimated as not
likely to be required, 490,474 6s. Id. ;
amount payable for compensation for land
resumed under the " Rushcutters' Bay
Resumption Act of 1878," 16,811 ;
amount of Supplementary Estimates now
before the House, 143,932 14s. 9d. ;
making a total of 1,736,173 17s. Id.
Deducting the liabilities from the assets
there is left a credit balance of 369,491
12s., which in mercantile transactions
would represent the balance at the
credit of profit and loss account, but
which in Government accounts simply
represents the amount still at the dis-
posal of Parliament. This credit bal-
ance of 369,491 12s. consists of the
balance of 319,981 Us. 4d. at the
credit of the surplus revenue account,
and 49,510 Os. 8d. at the credit of
the account for 1880. I think this
method of stating the accounts proves
conclusively the correctness of those sepa-
rate accounts which I have been explaining
to the Committee. Having thus disposed
of the transactions of past years as far as
that can now be done, the way is cleared
for submitting and discussing our propo-
sitions for the future, at all events so far
as they affect and relate to the year upon
which we have just entered. In doing
this it will not be necessary for me to detain
the Committee at any great length, as the
Estimates, which were laid on the table
of the House last night, have no doubt
afforded honorable Members an oppor-
tunity for ascertaining pretty accurately
the nature and extent of the services for
which we intend to ask them to grant us
the necessary supplies. A perusal of
these Estimates must have convinced
honorable Members that in their prepa-
ration the Government have exercised the
strictest economy consistent with a due
regard to the public interests, and that,
where the proposed expenditure is in-
creased it is 'justified in every instance,
either on the ground of some peculiar cir-
cumstance of the case, or from the fact of
the service being of such a character as to

render an increase absolutely inevitable,
as for example in the case of our rail-
ways, which every year are penetrating
further and further into the interior.
But as the alterations in the Estimates
are really few and unimportant, I consider
it would only be wasting the time of the
Committee were I to point them out in
detail. Of course there are some items of
an exceptional character which render it
necessary perhaps that I should make
special allusion to them. I would how-
ever preface my remarks on these by
stating that during the recess, and in con-
sequence of the formation of a new Minis-
terial Department that of Public In-
struction which was required to carry
out the provisions of the " Public Instruc-
tion Act of 1880," a re-arrangement of
the public business was affected which has
varied somewhat the arrangements that
previously existed. The alterations are
not, however, so numerous as to disturb
to any great extent the order of last
year's Estimates. The principal changes
have necessarily occurred in what was for-
merly the Department of Justice and
Public Instruction, by transferring to the
estimates of the new Department all those
services which naturally come under the
control of the Minister of Public Instruc-
tion, who is responsible to Parliament, in
common with other Ministers, for a proper
administration of the Departments with
which he is now entrusted. I think it
will be freely admitted by honorable Mem-
bers generally that the manner in which
my esteemed friend and colleague, Sir
John Robertson, has grappled with and
successfully overcome the many difficulties
of his new position does him infinite
credit. His administration of the Public
Instruction Act up to the present time
has not only won him the approba-
tion of the Press and the public, but
secured him the gratitude of that large
and respectable body, the Public School
Teachers, whose interests were to a ivrtain
extent in his hands. The only oth.-r
change of importance that I can recollect
at present is the transfer of the Prisons
from the control of the Colonial Secretary
to that of the Minister for .histire, a
change which I think all must admit to be
a judicious one, inasnnu-h as the manage-
ment of Prisons as naturally belongs to

474

MR. WATSON.

[1881.]

the Department of Justice as the imprison-
ment for crime follows the trial and con-
viction of the criminal. I have no doubt
the change will be found to work well,
at all events it will relieve my colleague,
the Colonial Secretary, of a great deal of
work, for which his position in the Govern-
ment leaves him very little time. The
first increase I would draw attention to is
a sum of 6,000 for completing Torpedo
Defences. It has been represented to
the Colonial Secretary, by Lieut. -Colonel
Scratchley and Major Cracknell, that this
amount is absolutely necessary if the ser-
vices of the Torpedo Corps are to be ren-
dered available in the event of an invasion,
of which I trust the chances are still
remote. There is, as might naturally be
expected, an increase in the Police Esti-
mate, which I must confess is now assum-
ing large proportions. 219,000 seems a
large sum for police protection to a popu-
lation of about 800,000 souls ; but owing
to the ever increasing demands from out-
lying stations, and from the inhabitants
of districts which are daily growing in
importance, I presume there is no help for
it. The increase is about 6,000, which
I see is chiefly for additional constables.
There is no other increase of any import-
ance on the Colonial Secretary's Estimate
till we come to Miscellaneous Services
where I find a service that makes its
appearance on the Estimates only once in
ten years, which some may think is often
enough, as no less than 20,000 is required
for it. I allude to the sum necessary to
defray the expense of taking the Census
in April next, and for tabulating the in-
formation contained in the returns. This
is a necessary and unquestionably an im-
portant service, and it is to be hoped that
the gentleman entrusted with the general
supervision of it will do his utmost to
ascertain at the earliest possible moment,
for the information of the public, the
population of the Colony on the 3rd of
April next. We will all be anxious for
this information because it will to a large
extent illustrate the progress of the Coun-
try during the last decade. Of course the
tabulation of the returns for statistical
purposes will be a labour requiring no
small amount of skill, and involving
much time and patience. As the frequent
and correct ascertaining of the population

of a new country like this would, in
my opinion, be attended with immense
advantage to the public, but more particu-
larly to the Government, Avhose system of
Immigration it would enable them to
regulate, I am inclined to think that, in
addition to the elaborate Census taken
decennially, we should have a more simple
and intermediate quinquennial one taken
of the population only. However I
merely give this opinion for what it is
worth. Honorable Members have no
doubt observed that a sum of only
50,000 is inserted on this year's
Estimate for Immigration, as against
75,000 in previous years. This has
been done because to a certain extent
immigration is in abeyance at present,
and also because a considerable portion of
the year must elapse before the new regu-
lations will be submitted for the approval
of Parliament. For Public Instruction
there is an increase of 157,000 which
requires explanation. No doubt most
honorable Members are aware that the
Public School fees were greatly reduced
under the Public Instruction Act of
1880, and that provision was made therein
for their payment into the Treasury.
Prior to that Act coming into operation
the teachers were allowed to retain the
fees for their own use. These fees were
of course over and above the fixed salaries
allowed by the Council of Education.
Since the new Act came into force the
teachers have had to pay the fees collected
(which were reduced to 3d. per scholar
per week) into the Treasury. It conse-
quently became necessary to re-arrange
the teachers' scale of remuneration ; and
in doing this allowance had to be made not
only for the fees paid into the Treasury,
but for the loss teachers had sustained by
a reduction of more than one-half in the
scale of fees. The amount of fees esti-
mated as likely to be received from the
pupils attending the Public Schools this
year is 45,000 ; but had the rates
remained as formerly, the amount would
in all probability have been 100,000, a
sum which really represents the loss
sustained by the teachers, and which the
Government have to make up to them in
fixed salaries. This then accounts, satis-
factorily I hope, for 100,000 of the
157,000 increase on the Estimates for

[1881.]

MR. WATSON.

475

tliis year, ,45,000 of which comes back
to the Treasury, as already stated, in the
form of fees. Of the remaining 57,000
to be accounted for, ,9,000 is for High
Schools for boys and girls for six months,
and 2,850 for Evening Schools. Then
there is a sum of 20,000 for school sites,
and 15,000 for rent of premises for
schools and teachers' residences, besides
several minor amounts sufficient to make
up the difference. There is an increase
on the Railway Estimate of 45,076 and
in the Estimate of the Postmaster General
of 21,797 ; but these are what I term
inevitable increases, because the very
nature of the services leads to an in-
creased expenditure every year. When
the proper time arrives, my colleagues
charged with the administration of these
branches of the Public Service will no
doubt be quite prepared to fully explain
and justify the proposed increased expen-
diture on their respective Estimates.
After the long and somewhat irregular dis-
cussion that took place a few nights ago
with reference to the amount awarded to
the Milburn Creek Copper-mining Com-
pany, which is now inserted in Estimate
of the Secretary for Mines, it is unneces-
sary for me to attempt an explanation. In
fact the papers which have been laid on
the Table of the House give such a clear
and full account of the whole affair that
anything I could say would be simply
superfluous. When the item is submitted
in the usual way for the sanction of the
Committee, I presume any additional in-
formation (if there be such) will be forth-
coming. Although I have as rapidly and
briefly as it was possible for me to do,
explained to the best of my ability the
larger increases shown in the Estimates
for 1881, there are of course other varia-
tions of a minor kind which I have not
alluded to, because, as I said before, it
would only be wasting the time of the
Committee to do so. The Committee will
perhaps bear with me a little longer while
I refer to one other matter rather an
important one in connection with the
Estimates. As usual, we have had re-
commendations from the heads of almost
all the Public Departments for increases
to the salaries of different officers. To
have complied with such wholesale recom-
mendations would have been next to

impossible, but we have taken upon our-
selvesthe responsibility of inscrtingafew in-
creases to officers whose labours and respon-
sibilities have been largely increased of late
years, feeling assured that when they are
submitted for consideration the Committee
will endorse, by their votes, the small
selection we have made. The time, how-
ever, has arrived when a measure must be
introduced by the Government for regulat-
ing the Civil Service and for fixing in some
equitable manner the salary attaching to
each particular office. The latter can, I
, imagine, only be done by a proper classi-
fication of officers, and probably by having
a minimum and maximum salary for each
class. I cannot however at present de-
scribe the exact nature of the Bill which
the Colonial Secretary intends introducing
during the present Parliament, but I have
no doubt it will be one which is likely to
give satisfaction not only to the Civil Ser-
vants but to the general public, who are
as anxious to see this important matter
properly settled as they are themselves.
The expenditure proposed for 1881 may
be summarized thus : Under the sche-
dules to the Constitution Act, 45,311
7s. ; departmental expenditure requiring
Parliamentary sanction, 4,235,455 ; in-
terest on the public debt and other special
appropriations, 952,200, making a total
proposed expenditure of 5,232,966 7s.
It now becomes my duty to show, and I
would ask the attention of honorable Mem-
berswhilel doso, howthis largeexpoiuliture
can be provided for that is, whether our
existing sources of revenue and the in-
creasing annual produce thereof will be
sufficient or otherwise for the puqiose. It
affords me no small satisfaction to be able
to inform the Committee that our ordinary
income, as estimated for the present year,
will provide the necessary Ways and Means
and in addition leave a handsome surplus.
This is a financial position which cannot
fail to give unbounded satisfaction t<> tin-
House and the Country, as it is one which
seven or eight months ago, no one, I am
sure, could have anticipated. While .the
expenditure is estimated at 5,232,966 7s.,
our income is expected to amount to the
sum of 5,440,670, which, with tl;
ception of the year 1S77, when tin- revenue
reached the enormous sum .000,

will be the largest annual income we have

476

MR. WATSON.

[1881.]

ever had. Indeed, if we exclude the pro-
ceeds of land auction sales in each of these
yeara, the revenue of 1881, if my estimate
is realized, will be considerably in excess
of that of 1877. If from the revenue of
the latter year, which was, as already
stated, 5,748,000, bededucted.fi, 967,000
for auction sales, there is left an income
from other sources of only 3,781,000.
Applying a similar test to the estimated
revenue of this year, it would stand thus :
Revenue as estimated, 5,440,000. De-
ducting therefrom the amount of pro-
ceeds of land sales by auction, estimated
at 450,000, there is left an income
from other sources of 4,990,000, a sum
1,209,000 larger than the ordinary re-
venue of 1877, and about 80,000 in
excess of the whole revenue of last year
inclusive of land sales. The estimate of
revenue for this year having been prepared
with more than ordinary care, and having
been, carefully revised by myself, I feel
confident it will be realized, unless some
unforeseen calamity should befall the
Colony, in which case any calculation of
income would be sure to be upset. I may,
however, say that so far as the year has
gone, my estimate bids fair to be realized,
as the revenue from 1st January to the 8th
February is 154,000 in excess of the
corresponding period of last year. From
taxation of every description, including
Stamp Duties classed under this head, I
expect to receive the sum of 1,594,900,
which will l>e as near as possible about 2
per head of the population. The Land
revenue, it is estimated, will reach the sum
of 1,811,800, of which only 450,000 is
from auction sales, and 230,000 for
interest on land conditionally purchased,
an item which I trust the House will
never consent to give up, because by doing
so a grievous wrong would be done to the
community at large. For services ren-
dered the receipts are expected to aggregate
1,811,000, and miscellaneous receipts are
estimated to amount to 222,000, making
together as already stated, a grand total
of no less than 5,440,000. Deducting
from this the estimated expenditure for
1881, namely, 5,232,966 7s., there is
left an estimated surplus of 207,703 13s.
The committee will, I feel sure, agree with
me in thinking that with such a large
annual income as that which I have just

explained is likely to be derived from our
existing sources of revenue during the
present year, there is no immediate
necessity for additional taxation, as it should
be amply sufficient to carry on the general
Government of the country, and admit
also of a large amount being expended on
public works. I freely admit that I held
a different view in the earlier part of last
year, but circumstances have materially
changed for the better since then. During
the time that our land sales were pro-
ducing such enormous sums of money the
Government was in a position to meet
almost every demand, no matter how ex-
travagant, upon them. The result of this
was an abnormal expenditure for public
works, which it is now absolutely neces-
sary, in the absence of such large sums
from the sale of our national estate, to
bring within reasonable bounds and within
the limit of our income as it now exists.
It was while endeavouring to provide for
public works largely in excess of what
our ordinary income could bear that pro-
posals were made for increasing the taxa-
tion of the country ; but as our present
sources of income are proving more pro-
ductive than could have been anticipated,
I see no reason why we should not endea-
vour to keep our expenditure within our
means. It is, however, desirable that so
soon as other urgent questions are disposed
of a complete revision of our system of
taxation should be effected, in order to
bring it more into harmony with economic
principles. In any such fiscal changes
new ground must be occupied to replace
the taxes now diminishing in their pro-
ductiveness, in consequence of new indus-
trial developments as well as to more
equitably distribute the public burdens.
The importations of beer, tobacco, and
sugar are falling off every year, while it is
well known the consumption is daily in-
creasing. If these articles, which have
always been considered luxuries, are
rightly liable to custom duties when im-
ported, they are equally liable to duty if
manufactured and consumed in the Colony.
In connection therefore with a well de-
vised system of taxation there should also
exist excise duties, otherwise our Customs
duties become to the manufacturers of
the articles named nothing more nor less
than protection. Taking our present

[1881.]

MR. WATSON.

477

population at an estimate of 800,000, the
revenue of this year, if it come up to my
expectations, would be equal to 6 16s.
per head. In Great Britain, with a popu-
lation of say 40,000,000, therevenue for the
year 1880-1 was estimated to yield about
85,000,000, which would be only equal
to 2 2s. 6d. per head, which is 4 13s.
6d. less than our rate. Of course our
income includes revenue derived from
sources which do not exist in England,
to the extent at all events that they
do here, as for example railways and
land. While therefore perfectly sen-
sible that the conditions of the two
countries are so different as not to admit
of a fair comparison, I nevertheless think
the difference in conditions is not so great
as to justify the much higher rate of ex-
penditure which exists in this Colony. It
is no doubt true we have a sparsely popu-
lated territory to govern, nearly three
times the area of Great Britain and Ire-
land, but on the other hand we have no
large standing army and navy to maintain
such as that which costs the Imperial Ex-
chequer over 26,000,000 annually. Then
again, the interest on the public debt of
Great Britain is 30,000,000, or rather
more than one-third of its whole expen-
diture, while here the interest at the
present time is only 686,000, or some-
thing under one-eighth of our entire income.
As far as public debt is concerned I think
we have the decided advantage over the
parent State, for the simple reason that we
have valuable and reproductive works to
show for it, while England has little more
to represent its debt of eight hundred
millions than the glory she achieved in
many a hard won battle, and the high and
proud position she now occupies amongst
the nations of the earth. I refer to these
matters merely for the purpose of show-
ing the necessity for keeping our expen-
diture, if possible, within our income, as it
is not desirable to increase the burdens of
the people unnecessarily. It has been too
long the habit of all classes of the com-
munity to come to the Government for the
purpose of having their local wants supplied,
and even municipalities, which were thought
to be liberally endowed when first estab-
lished, are not satisfied now unless they
obtain, in addition to that endowment, an
annual grant equal to the amount of their

annual rates. This system is not only de-
moralizing, but destroying entirely that
self-reliance and manliness of spirit which
should characterise every free community.
The measure which the Colonial Secretary
has obtained permission to introduce for
the extension of the principle of local
government in thinly inhabited districts
will be a step in the right direction, and
tend to check these frequent and unreason-
able demands for local works which are
of no benefit to the public generally. I am
glad to be able to inform the Committee
that the working of our railways last year
will yield an interest on the capital in-
vested of 4 per cent. This is a highly
satisfactory result, and justifies the hope
that the day is not far distant when this
great national undertaking will not only
pay the interest on the money borrowed
for the construction of railways, but be-
come a source of considerable profit to the
Colony. By the timely and judicious re-
duction of rates which we have made we
hope to secure the greater part of the trade
and traffic of Biverina. After having gone
to such immense expense in extending the
Great Southern line to Albury and Narran-
dera it becomes the bounden duty of the
Government to do all in their power to
secure the benefits which such extensions,
if properly managed, are calculated to be-
stow upon the metropolis. In proportion
to the benefits derived by the metropolis
will be the advantages accruing to the
inhabitants of those distant parts of the
Colony. The connection of Melbourne
with Sydney by railway will enable us to
ascertain shortly whether the grand re-
sults which have been predicted from such
a union will be realized. A reasonable
time must, however, be allowed before a
just opinion can be formed, for like many
new things its value may neither at once
be appreciated nor willingly acknowledged.
Although the steamers will continue to
compete with the railway, and probably
with success for a time, the latter must
ultimately triumph, as the journey be-
tween the two cities can be etfvctrl in
less than half the time, and with more
comfort and considerably less risk to both
passengers and goods. Before closing I
desire to say a few words with respect to
the loan account. It was the intention of
the Government last year to have launched

478

MR. WATSON.

[1881.]

a loan in the London market during the
present year, and debentures were accord-
ingly prepared for that purpose, but since
then money has become so plentiful in
Sydney that the proceeds of such a loan
if brought out to the Colony could not be
invested with the banks (if indeed any of
it would be taken by them) at rates other
than what would create a serious loss to
the country ; and if left in London, the
probabilities are that even still lower rates
of interest would be obtained there.
Under these circumstances we felt that
we would not be justified in raising a
loan in London at the present time, not-
withstanding the market is highly favour-
able for the purpose, as the securities of
this Colony were never in greater demand
or stood higher in the estimation of the
public. Besides the reason just given for
delaying the launching of a loan in Eng-
land, I am glad to say that there is no
immediate urgency now, as we have a
balance in the bank at the present time
sufficient to enable us to meet not only all
the requirements of the Consolidated Re-
venue Fund, but to make such further
advances to the general loan fund as may
be found necessary to cany on our rail-
way extensions, our water supply works,
and such other services as have been
authorized to be provided for by loans, for
several months to come. Should the
necessity however arise, it may be found
expedient to negotiate a loan in the
Colony for five or six hundred thousand
pounds, which I feel confident will readily
be taken up at prices equal to, if not
higher, than those which could even now
be obtained for our bonds in England,
as I am told that there are many persons
seeking investments for trust and other
funds who would gladly accept our 4 per
cent, debentures for the purpose. If
we get a price here only equal to what
we could get in London it would still be
a preferable sale, because we would have
neither stamp duty brokerage nor commis-
sion to pay. The negotiation of a loan
in the London market cannot however
be delayed for any great length of time,
as the General Loan Account is at the
present time indebted to the Consolidated
Revenue and other funds for advances
pending the sale of debentures to the
extent of 1,800,000, a large portion of

which will be required this year to carry
out the various works authorized out of
the surplus Revenue Account. Of course
so long as we can abstain from borrowing,
so long will we save the country a consider-
able sum for interest. The loans author-
ized but not yet negotiated amount to
9,891,122 18s. 7d. In the Explanatory
Statement to which I have already referred,
the exact state of the Loan Accounts will
be found fully set forth, and with the
"Ways and Means will be found several state
merits showing the Services provided for by
Loans, the amounts expended thereon to the
31st December last, and the balance remain-
ing unexpended on that date. A Loans
Estimate is now in course of preparation,
and will be submitted shortly for the con-
sideration of the House. I am not in a
position therefore to state definitely at
present what fm-ther railway extensions
are intended, as the question has not yet
been finally settled. I may, however,
mention that the extensions authorized
amount to 679 miles, the greater por-
tion of which is now under construc-
tion, and for the remainder the plans are
being completed, in order that tenders may
at once be invited. Surveys for fresh
extensions have been made in various parts
of the Colony : amongst these may be enu-
merated the extension to connect the
Great Northern Railway with the South-
ern and Western Railways, the extension
of the railway to Illawarra, a railway
from the sea-board at Grafton to the table-
lands of New England, and the two
branches from the Southern line to Monaro
and Gundagai. When the Northern line is
completed to Tenterfield we shall be able
to form a junction with the Queensland
Railways, and upon the completion of the
line connecting the Northern with the South-
ern system, there will be uninterrupted rail-
way communication between the capitals
of Queensland and New South Wales,
a distance of 743 miles. To connect the
capital of South Australia with Sydney,
244 miles of line must be constructed in
this Colony and about 60 in South Aus-
tralia. The whole distance between Sydney
and Adelaide is 863 miles, 559 of which
have either been constructed or are under
construction. It may be said that we
have already formed a junction with the
railways of Victoria, for there are now

[1881.]

MR. WATSON.

479

only two miles of common road to inter-
cept through railway communication
between Sydney and Melbourne, a distance
of 575 miles. The Public Debt has been
reduced during the past year to the
extent of 33,500. This reduction
is due principally to the extinction of a por-
tion of the railway million loan of 1867,
for which there is an annual appropriation
of 70,000 for the payment of principal
and interest until the whole loan is re-
deemed, which will not however occur
until the year 1902. In 1882 the Govern-
ment have the option of paying off or
allowing to remain outstanding certain
interminable debentures to the amount of
232,130. As these debentures, however,
bear interest at the rate of 5 per cent, it
will be more advantageous to pay them off,
even if that has to be done by renewal, as
the money for the purpose can now be
readily obtained at 4 per cent, or under,
than to continue the loan in its present
form. 1 think that I have now referred
to all those topics connected with the
finances of the Colony which it is usual to
refer to in a statement of this kind, but if
there are others on which the Committee
desire information, it will afford me much
pleasure to supply it when required. The
prosperous condition of the Colony at the
present time, and the highly favourable
state of our public income, have enabled
me to place accounts before the House and
the country showing results far more satis-
factory than I anticipated a short time
back, for I was then under the impression
that, in order to meet our ordinary

expenditure, it would again become my duty
to make fresh proposals for increasing the
public revenue. Our present sources of
income have proved equal to the largely
increased expenditure of 1881, and for the
time being at least have spared me an
unpleasant duty. Although we can no
longer boast of large annual surpluses, I
am not inclined to think that this is a
matter for regret, inasmuch as it is well
known that they often led to expectations
of Government aid which it was frequently
found neither convenient nor judicious to
grant. As the surpluses of past years
were simply the result of a wholesale alien-
ation of our public lands, the limitation
now of land sales to a reasonable annual
amount will rather prove beneficial than
detrimental to the public interest, for it is
a well-known fact that, without a corres-
ponding increase of population, land alien-
ated in large quantities cannot be utilized
to the advantage of the purchaser, much
less to that of the general public. I trust,
however, the time is not far distant when
both will be so combined as to result in a
more rapid settlement of the country than
hitherto, and when its great agricultural
and mineral resources will be developed
in such a manner as to promote the pros-
perity and well-being of all classes. In
conclusion I have to thank honorable
Members for the patient hearing they have
accorded to what is generally considered a
dry subject, but one notwithstanding which,
when rightly understood, is full of interest
to every one who has the progress and
welfare of the Colony at heart.

AJP^EISTDIX.

MEMORANDUM explanatory of the Financial System of the Colony

of New South "Wales, &c.

[Written in May, 1879, for the information of the Imperial Government.]

THE Financial System of the Colony of New South Wales is regulated chiefly by the Constitution
Act of 1855 and the Audit Act of 1870, and in matters relating to Trust Funds and Loans by
special Appropriation Acts of the Local Legislature.

THE CONSTITUTION ACT.

The Imperial Act conferring a Constitution on New South Wales and granting a Civil List to
Her Majesty was assented to on the 16th July, 1855, and came into operation in the Colony on the
24th November of that year. This Act provides for a Legislative Council and Legislative Assembly.
The Members of the former are nominated by the Governor with the advice of the Executive
Council, and the Members of the latter are elected by the inhabitants of the Colony, All taxation
and Appropriation Bills must be originated in the Legislative Assembly, and these are generally
introduced by the Treasurer and Secretary for Finance and Trade, who must be not only a Minister
of the Crown but a Member of the Assembly. The Ministry consists at the present time of the
following Officers of State :

The Colonial Secretary. (At present the Premier. )

The Treasurer and Secretary for Finance and Trade.

The Minister of Justice and Public Instruction. (See foot-note.)

The Attorney General.

The Secretary for Lands.

The Secretary for Public Works.

The Postmaster General.

The Secretary for Mines.

The Vice-President of the Executive Council (without Portfolio.)

These Officers form, with the Governor as President, the Executive Council. All appointments,
whether salaried or not, are vested in the Governor with the advice of the Executive Council.

Prior to the passing of the Constitution Act the Territorial Revenues of the Colony belonged to
the Crown, but on that Act coming into operation in 1855, they were placed at the disposal of the
local Parliament, and, together with the taxes, imposts, rates, and duties, were formed into one
fund, under the title of the Consolidated Revenue Fund. In lieu of the Crown Revenues thus
given up to the Colony, an annual Civil List of 64,300 was made payable to Her Majesty out of
the Consolidated Revenues of the Colony. This sum was to provide for,

1st. The salaries of the Governor, the Judges, and certain high Officers of State.

2nd. Pensions to Judges and to certain officials who were allowed to retire on political grounds,
when the new Constitution came into operation, as well as pensions to other Governnu-nt
officials who could retire from office in accordance with certain regulations and rates lixnl
by the Superannuation Act of the Imperial Parliament, 4th and 5th Wm. IV, c. '-'I.

3rd. For the maintenance of Public Worship.

The Constitution Act also provides that the Legislature of the Colony shall have power to make
laws for regulating the sale, letting, disposal, and occupation of the waste lands of the Crown within
the Colony ; and also for imposing taxes and levying Customs duties.

The expense of collecting the Revenue, the Interest on Loans negotiated prior to the Constitu-
tion Act coming into operation, and the Loans themselves as they mature, form, under the pro-
visions of that Act, primary charges on the Consolidated Revenue Fund. All loans negotiated smce
then, together with the interest annually payable thereon, are also, under the Acts authorizing such
Loans, made primary charges on that Fund.

NOTE. Since this memorandum was written the Department nf .lu>:i o and 1'uMi.- Instruction has been divided and a
Minister of Public Instruction appointed to carry out the provisions of the Act 43 Vic. No. 23.

482 APPENDIX.

All Money Votes or Bills must in the first place be recommended to the Legislative Assembly by
Message from the Governor, and no part of the Public Revenue can be issued except on Warrants
bearing the Governor's signature, and directed to the Treasurer of the Colony.

THE AUDIT ACT OF 1870.

This Act was passed to regulate the receipt, custody, and issue of public moneys, and to provide
for the audit of the Public Accounts. Its main provisions are the following :

1. That all Collectors, Receivers, and Disbursers of public moneys are to be public Accountants,
and as such are required to provide security for the due performance of their duties, and for the due
accounting for moneys coming into their hands by virtue of their respective offices.

2. Collectors of public moneys in Sydney are required to pay their collections into the Treasury
or Government Bank weekly, or daily if considered desirable ; Collectors in the interior monthly,
or at such other times as may specially be appointed.

3. The Treasurer or his deputy the Receiver is also required to pay his collections daily into the
Bank keeping the Public Account.

4. Moneys can only be drawn from the Public Account in the Bank under the authority of the
Governor's Warrant. Before the Governor signs a Warrant he must have the certificate of the
Auditor General that the various sums therein asked for by the Treasurer are legally available for
issue. On receipt of the Governor's Warrant the Paymaster, under the authority of the Treasurer,
issues cheques upon the Public Account in the Bank, for the payment of all duly authorized claims
against the Government.

5. Appropriations of Parliament are available for issue during the year for which obtained and,
if required, for three months thereafter. If not then expended they lapse, unless contracts or
engagement to carry out the Services have been made and entered into before the expiration of the
year for which such Services were provided for, in which case they are kept alive as long as
necessary. (This provision has since been modified by the insertion of a clause in the annual
Appropriation Acts giving the votes of Parliament a currency of two years, as the limit given in the
Audit Act was found very inconvenient in practice. )

6. The Manager of the Bank, keeping the Government Account, has to forward daily to the
Treasurer and Auditor General respectively, a statement of each day's transactions. The Trea-
surer has likewise to furnish the Auditor General daily with a copy of his Cash Book, together
with vouchers and authorities in support of the entries therein shown.

7. The Treasurer, or any Public Accountant, paying, inadvertently or otherwise, a sum of money
in excess of Parliamentary authority, or making a double payment, is liable to be surcharged by
the Auditor General for the amount so overpaid.

8. The Treasurer is required to publish in the 'Government Gazette a Quarterly Statement of
his receipts and expenditure, and to prepare also an Annual Statement of the same, within three
months of the close of the financial year, for the use of the Auditor General, who must audit and
thereafter submit such Annual Statement, with his report thereon, to Parliament.

9. The Auditor General, being an. officer of Parliament, can only be removed from office by
the Governor with the advice of the Executive Council, upon the address of both Houses of the
Legislature.

THE TREASURY.

The Treasury is the Department entrusted with the collection and disbursement of the Revenues
and otaer public moneys of the Colony. It is under the control and general management of the
Treasurer and Secretary for Finance and Trade, who, being a responsible Minister, ceases to act
when the Government of which he is a Member retires from office. The permanent head of the
Department is the Under Secretary for Finance and Trade, who is responsible to the Minister for
the efficient conduct of its business. The following are the principal officers in the Treasury
that is, those having charge of branches, viz. :

The Chief Inspector of Public Revenue Collectors' Accounts, and Consulting Accountant.

The Accountant.

The Receiver.

The Paymaster.

The Examiner of Expenditure Accounts.

The Clerk of Correspondence.

The Registrar of Records.

The Under Secretary, the Receiver, and the Paymaster are under heavy security for the faithful
discharge of their respective duties. The subordinate officers of the Pay and Receiving Branches
also give security, proportioned to the responsibilities of the positions they occupy. The office hours
are from 9 to 4, daily, excepting on Saturdays, when they are from 9 to 1.

APPENDIX. 483

REVENUE.

The Revenue of the Colony is now classed under the following general heads, viz. :

1. Taxation.

2. Land Revenue.

3. Receipts for services rendered.

4. Miscellaneous Receipts.

The first of these, Taxation, consists of Customs Duties that is, duties levied on certain goods
imported^iiito the colony ; and Excise duties on refined Sugar and Molasses, and on Spirits distilled
in the Colony. Duty on Gold exported or sent to the Mint for coinage, and certain Trade
Licenses.

The Land Revenue, which is collected under the Land Acts of 1861 and 1875, and the Mining
Act of 1874, embrace all receipts under the following sub-heads, viz. :
Proceeds of Land sold by Auction.
Proceeds of Sale of Improved Lands.

Proceeds of Sales of Land by Selection after Auction. (Now in abeyance. )
Sales of Provisional Pre-emptive Rights.
Deposits on Lands Conditionally Purchased.
Instalments of Lands Conditionally Purchased.
Balances of such Purchases paid up.

Interest on the Balances of Conditional Purchases unpaid.
Rent and Assessment on Pastoral Runs.
Quit Rents.

Mineral Leases and Mineral Licenses.
Leases of Auriferous Lands.
Miners' Rights and Business Licenses.
Fees on the Preparation and Enrolment of Title-deeds.
Miscellaneous Land Receipts.

Receipts for services rendered (collected under various Acts of Parliament) include Railway and
Telegraph Receipts, Postage, Commission on Money Orders, Mint charges, Fees for escort and
conveyance of Gold, Pilotage and Harbour and Light Rates, Fees for the Registration of < 'attlu
Brands, Contributions towards the prevention of Diseases in Sheep, and Fees of Office generally.

The Miscellaneous Receipts are composed of Rents, other than rents of Land, Fines, and
Forfeitures, Proceeds of Sale of Government Property, Interest on Bank Deposits, and various
minor items which cannot properly be embraced in any of the three classes above referred to.

COLLECTORS OF PUBLIC REVENUE.

Although the Treasury is the Department into which all Revenue and Public Moneys have
ultimately to be paid, there are numerous duly appointed officers, both in Sydney and throughout
the Colony, authorized to collect Revenue on behalf of the Treasurer. The principal Collectors in
Sydney, such as the Collector of Customs, the Commissioner for Railways, the Postmaster General,
and the Superintendent of Electric Telegraphs, pay their collections into the Bank keeping the
Public Account daily ; and forward daily vouchers to the Treasury containing full particulars of all
such deposits. Other Collectors in Sydney pay their collections into the Treasury weekh .
lectors in the interior remit their collections once a month, except in the case of Land Agents,
who are required to make weekly remittances, in order that the necessary steps may be taken as
early as possible for completing the sales and leases of land effected by them. All Collectors of
Revenue have to give security for the faithful discharge of their duties. These securities are pro-
portioned to the probable amount of collections within a given period.

INSPECTION OF PUBLIC REVENUE COLLECTORS' ACCOUNT*.

The Accounts of Collectors of Public Revenue, both in Sydney and the interior, are from time
to time, but at irregular intervals, carefully examined by Inspectors attached to the Treasury.
These officers' inspections have been found more effective, because lo;al and minute, than the audit
of the attested accounts furnished by Collectors periodically to the Auditor General

EXPENDITURE.

With the exception of the amount reserved under the Constitution Act as a Civil Last to Her
Majesty, the amount required for the payment of interest on the Public Debt, and a few sums
appropriated permanently under special Acts for various Services, the Revenue of t
left entirely to the control of the local Legislature. Any expenditure therefore out o
dated Revenue Fund without the express sanction of Parlianu-nt is illegal t and should
General, in the course of his audit of the Treasurer's accounts, discover a payment for
provision had not been legally made, it would become his duty to report the circumstance
meat.

484 APPENDIX.

In order to obtain the necessary sanction of Parliament, the Treasurer submits to the Legislative
Assembly, annually, an estimate of the several sums the Government will require to meet the
expenses of the various public Departments, and for such public works and special services as may
be considered absolutely requisite during the year then ensuing.

Although the Estimates are prepared by the Treasurer, they can only be brought before the
Assembly by Message from the Governor, because, as already stated, the Constitution Act provides
that no money vote or Bill can be entertained by that branch of the Legislature unless so recom-
mended.

When the Governor's Message is read by the Speaker to the House, it is usually ordered, on the
motion of the Treasurer, that it be printed, together with the accompanying Estimates, and
referred to the Committee of Supply.

The Treasurer having obtained the sanction of the House for going into Committee of Ways and
Means on a certain day, to cover a formal vote previously taken in Committee of Supply, takes
that opportunity for making his Financial Statement, or as it is popularly called the "Budget
Speech." In this speech it is usual to review the finances of the Colony for the past two or three
years, but more especially those of the then current year.

Having done that, he next proceeds to show what is likely to be the financial position of the
Country in the following year. In doing this he submits his Ways and Means, which include a
carefully prepared Estimate of the probable revenue for that year, and shows that it will be suffi-
cient or otherwise to meet all the sums embodied in his Estimates of Expenditure. If the revenue
is not considered sufficient for that piirpose, it then becomes his duty to inform the Committee in
what manner he proposes to make good the deficiency. Should the Committee agree to his pro-
positions, the Expenditure Estimates are then proceeded with, and the various amounts when
voted are included in the annual Appropriation Bill, which has to pass through the same stages as
other Bills before it becomes law.

The Appropriation Act therefore becomes the Treasurer's guide in disbursing the revenue of the
Colony. No money can however be legally issued by him without the Warrant of the Governor,
and that can only be obtained in the manner prescribed by the Audit Act of 1870, already alluded to.

As soon as the Appropriation Act is passed the various sums therein stated are entered in the
Treasury ledgers, and against these appropriations the payments made from time to time by the
Treasurer are duly charged.

PAYMENT OF CLAIMS.

Claims for salaries and other departmental expenses are, after examination and cei*tification by
Heads of Department, forwarded to the Treasury for liquidation. Before being paid, however,
they undergo inspection by the Examiner of Expenditure Accounts, who classifies and places in
abstract all claims that are found unobjectionable. After signing the abstract the Examiner hands
it to the Accountant, in order that he may certify whether funds are available to meet the demands
therein shown, as well as to see that the Governor's Warrant has been obtained for their payment.
Having satisfied himself on these points the Accountant also signs the abstract and forwards it to
the Paymaster, whose duty it is to issue cheques on the Public Account in liquidation of all claims
thus passed by the Examiner and Accountant. Claims of a peculiar and special nature are dealt with
in a somewhat similar manner.

The Paymaster and the Receiver submit their respective Cash Books, together with the vouchers
in support of their entries, to the Accountant every morning. It is the duty of the latter officer to
compare the vouchers with the entries therein, and check the same in every way possible. He
must likewise see that the cheques charged against the Public Account, as shown in the Bank
Sheet, which he also receives daily, correspond with the entries made in the Paymaster's Cash
Book ; and that the moneys deposited in the Bank correspond with the sums collected by the
Receiver, as shown by his Cash Book. Having satisfied himself in respect to these matters, he
signs the two Cash Books and returns them, retaining, however, the vouchers, which he or his
assistants at once proceed to enter in the General Cash Book of the Department, and thereafter
post into the Revenue and Expenditure Ledgers. Having completed these operations, the vouchers,
together with a copy of the Cash Book for the day, are forwarded to the Auditor General, for the
purpose of undergoing the audit prescribed by the Audit Act.

LOANS ACCOUNT.

The Loans contracted by this Colony have been chiefly for public works of a permanent and
reproductive character, such, for instance, as the construction of Railways and Telegraphs the
improvement of the navigation of Harbours and Rivers the construction of Wharves, Docks, and
Breakwaters the erection of Bridges, Gaols, and Court-houses and for services which are calcu-
lated to benefit posterity to even a greater extent than they do the present generation.

APPENDIX. 485

All moneys raised by Loan are kept in an account separate and distinct from the Consolidated
Revenue Fund, so that no portion of such moneys can be used by the Government for any purpose
foreign to that for which it was obtained, without being immediately reported to Parliament by the
Auditor General.

The expenditure of Loan Funds is carried out in precisely the same manner as expenditure out
of the Consolidated Revenue Fund. Parliamentary authority must be obtained both for the Loan
to be raised and the services to be paid for out of the proceeds. Heads of Departments and others
entrusted with the carrying out of the services provided for by Loan, forward from time to time
duly certified claims to the Treasury, where they are paid under warrants of the Governor pre-
viously obtained.

No appropriation or balance of an appropriation for a Loan service is cancelled or written off until
the service has been completed, or all idea of carrying it out abandoned by the Government.
Moneys thus saved on a Loan can only be dealt with by Parliament, that is, they cannot be ex-
pended by the Government unless under a fresh appropriation of the Legislature.

METHOD OF RAISING LOANS.

Although Parliament fixes the amount of every Loan, as well as the rate of interest to be paid
thereon, the mode of borrowing is left to the Governor with the advice of the Executive Council.
A few of the smaller and earlier Loans were raised in the Colony, at rates of interest varying from
2f d. to 3|d. per cent, per diem. Since, however, Loans of greater magnitude have become necessary,
the negotiation of them has been effected almost exclusively in England by our financial agents
there. From the establishment of Responsible Government until recently, the Loans of this
Colony have been raised on debentures bearing interest at the rate of 5 per centum per annum,
with a currency generally of thirty years. In 1873 the rate of interest was however reduced to 4
percent., and a Loan for 509,780 at that rate was the same year authorized to be raised by
inscription ; that Loan has been negotiated in the Colony at prices ranging from 95 percent, to par.

The Debentures of the last two or three Five per cent. Loans negotiated in London realized prices
varying from 95 to 104 per cent., and those of the three and a quarter million Four per Cent.
Loan negotiated there this month realized an average price of 98 9s. 2d. The Debentures issued
by this Government have consisted almost invariably of three denominations, namely, 100, 500,
and 1,000, and every Loan is composed of a certain proportion of each denomination.

THE TRUST FUND.

This Fund embraces all accounts of a special nature, excepting Loans, which, as already stated,
are by law kept separate and distinct from all other accounts. Trust Funds are moneys set apart
for particular purposes, either by Parliamentary or Executive authority, and must be reserved for
those purposes alone. The various accounts embraced in the Trust Fund are kept in the Treasury,
and the money in the bank where the Public Account is kept. Payments out of this fund can only
be made under the warrant of the Governor, obtained in the usual manner that is, the Auditor
General must first certify that the amounts asked for by the Treasurer are legally available for
issue.

PUBLIC DEBT.

In 1855, the year in which Responsible Government was established in this Colony, the public
debt was only about two millions. On the 31st December, 1878, it stood at 11,688,119 '.'-
exclusive of advances to the amount of 1,950,000 made from the Consolidated Revenue Fund,

incurred will show that the money borrowed has to a large extent been applied to public works of
a reproductive, permanent, and beneficial character in short, towards the settlement and progress
of the Colony, viz. :

E.rpcndittire to 31< December, 1878 :

Railways 10,139,464 14 7

Telegraphs 430,186 13

Immigration ... "30

The Sewerage and Water Supply of the Metropolis 1 IM**

For improving the Navigation of Harbours and

Rivers ... ... >41.4ft

Public Works and Buildings generally

Roads and Bridges generally 3'.",.!'..i

Public Works, Queensland, when it formed part of

New South Wales

Total 13,836,729 19 8

486 APPENDIX.

The earnings of the railway lines already constructed have, during the last three or four years,
not only paid all the working expenses, but within a trifle of the interest on the capital, and it is
confidently anticipated that, as they are extended into the interior, the revenue will increase year
by year until they will not only pay the full rate of interest on the money borrowed for their con-
struction but become sources of profit to the Colony.

Although the Telegraphs at one time had a revenue slightly over its expenditure, they have not
recently, owing probably to their rapid extension all over the Country and a considerable reduction
in the scale of charges, contributed anything towards the interest on the outlay. It is however
expected that this rather unsatisfactory state of matters will not long continue.

With the exception of one loan of a million, on account of railway works, negotiated in London
in the year 1869, redeemable by drawings of 20,000 annually, -which commenced in 1872, there is
no provision made, either by way of a sinking fund or otherwise, for meeting the Debentures of
this Colony as they mature. All recent loans have been for a period of thirty years. No loan
falls due until the year 1888. Many years ago it was found necessary to borrow money to carry
out permanent public works of an expensive and important, though not of a reproductive character,
but as the necessity does not now exist that practice has been abandoned and loans are now chiefly
raised for the construction of Railways and Telegraphs, the revenue from which will in a few years
be more than sufficient to pay the interest thereon.

The debt outstanding on the 31st December last consisted of the following description of
securities, viz. :

Terminable Debentures, falling due in various years between

1888 and 1909 10,072,600

Terminable Debentures, payable by annual drawings of

20,000 850,500

Interminable Debentures 234,830

Funded Stock Interminable 530,189 9 2

Total 11,688,119 9 2

BANKING ARRANGEMENTS.

LOCAL ACCOUNT.

The local Banking business of the Government has for very many years past been satisfactorily
conducted by the Bank of New South Wales, which is the oldest, the largest, and the most
influential monetary institution in the Colony. The agreements under which this business has been
conducted have from time to time been modified to meet the state of the Public Funds and the
altered circumstances of the money market. The present agreement does not expire until the 30th
June, 1880. Under it the Bank pays the Government interest at the rate of 3 per cent, per
annum on the daily aggregate balance, less a margin of 50,000.

Should the Government require to overdraw its account at any time during the currency of the
agreement, it can do so to the extent of 200,000, subject to an interest charge at the rate of 5
per cent, per annum.

Under certain conditions detailed in the Banking Agreement, which had the approval of the
Legislative Assembly, the Government were empowered to make " Special Deposits " with Banks
other than the Bank of New South Wales, at a rate of interest not exceeding 4 per cent, per
annum. At the present time there is, under this arrangement, a sum of 1,725,000 under Special
Deposit with nine of the City Banks.

The Treasury collections are deposited in the Bank daily, and payments therefrom can only be
made by cheques drawn by the Paymaster of the Treasury. Heads of Departments and other
officers in Sydney, entrusted with either the collection or expenditure of public moneys, keep their
accounts with the Bank of New South Wales. Collectors of Public Revenue in the interior also
keep their accounts with the Branches of that Bank, in districts where such are estabished, and
transmit their collections to the Treasury by the drafts of such Branches on the Head Office. For
these drafts the Bank charges one-eighth per cent. The charge against the Government for
exchange is made quarterly, and the interest payable on its credit balances is brought to account
half-yearly. Statements called "Bank Sheets," showing the payments made and the moneys
received by the Bank on behalf of the Government, are furnished to the Colonial Treasurer and
Auditor General, respectively, daily to the former to enable his Accountant to check the books of
the Receiver and the Paymaster, to the latter to enable him to audit satisfactorily the accounts of
the Treasurer.

LONDON ACCOUNT.

The London Branch of the Bank of New South Wales has also for a considerable period
managed the financial business of the Government in England. The agreement for the conduct of
that business expires on the 30th June, 1880. Through the Agency of the London Branch of
this Bank all the larger Loans of the Government have been negotiated, as well as all payments
made for Interest on the Public Debt, and for Railway and other materials purchased by the
Agent General on behalf of the Colony.

APPENDIX. 487

For negotiating Loans the Bank is paid, under the existing agreement, a commission of one.
quarter per cent, on the nominal amount of any Loan not exceeding one million, and one-eighth
per cent, on any amount in excess of that sum. Otic-quarter per cent, of commission is also
allowed on the principal sum of debentures paid off, and on payments involving verification of
accounts or transmission to the Colony by documentary evidence or vouchers. For interest on the
public debt, which is payable half-yearly in London, a charge of one-half per cent, in allowed.

The interest payable to the Government in respect of any cash balance in the hands of the Bank
is 1 per cent, below the Bank of England rate, for the time being, on the daily balance ; and the
interest chargeable to the Government for cash advanced by the Bank is 1 per cent, above the
Bank of England rate, but the charge on such advance can never be less than 5 per cent, during
the currency of the agreement.

When the proceeds of a loan, or any portion thereof, have to be made available to the Govern-
ment in Sydney, exchange upon the operation is chargeable at a rate one-quarter per cent, less than
the rate then ruling for sixty days bills on London, or, if required by the Bank, notice of the
desired transfer must be given, so that the transfer may be regulated in accordance with the scale
provided by the agreement.

When funds are required in London by the Government they must be placed there in one of the
three undermentioned ways :

1. By remitting sovereigns through the Bank at current rates of freight and insurance, and cost

of packages.

2. By remitting the bills of the Bank at one quarter per cent, less than the exchange of the day.

3. By placing in the hands of the Bank, as collateral security, Government Debentures for sale,

on which the Bank must advance up to a sum of 350,000, if required.

Copies of the London account, supported by vouchers and authorities, &c., are furnished monthly
to the Treasurer and Auditor General, respectively. On receipt of these documents the receipts
and payments therein shown are at once abstracted and passed through the books of the Treasury
in the same manner as if the transactions had taken place in the Colony.

REVENUE AND EXPENDITURE.

The Revenue and Expenditure of the Colony is increasing year by year in proportion to the
prosperity of the people and the increase of population. This is naturally to be expected for as new
lands are taken up and outlying districts occupied, demands upon the Government for all those
services which tend to promote the well-being of a community are constantly being made ; and
although these services when granted create an additional expenditure, there generally follows an
augmentation of the revenue, both from the sale and occupation of the waste lands of the Colony,
and the larger consumption of dutiable articles.

When responsible Government was established in 1855, the revenue amounted to 973, 178, the
population being then only 277,000. Ten years later that is, in 1865, and after the Colony oi

During the last six or seven years the revenue has largely exceeded the expenditure, and not-
withstanding that Loans for Public Works and other purposes have been paid off out
surpluses of these years, to the extent of nearly two millions, there was left an actual surplus on
the 31st December, 1878, of close upon two millions and a half. One-half of this surpl
posed to expend upon public works and buildings of a permanent and national characte
reserving a million and a quarter for future appropriation.

The following statement, taken from the Government Gazette of 2nd January last, shows in a con-
densed form the actual revenue and the actual disbursements during the year 16<8 :

REVENUE, 1878.

Customs ... ...

... 1,148,737

Duty on refined sugar and molasses ...
Duty on spirits distilled in the Colony

40,212
4,007

4
i

4
5

Stamp Duties (arrears) ...
Duty on Gold

6,893

Licenses

109,851

1 309 717

Land Revenue

S'lles

1,915,466

Interest on Conditional Sales

160,M4

Pastoral Occupation
Mining Occupation
M iscellaneous Receipts

216,002
11,662

21,946

3
11
6

4
1

488

APPENDIX.

Receipts for services rendered

Railway receipts

860,285 2 10

Telegraph receipts...

72,095 3 6

Postage ... ... ... ...

148,571 15 4

Commission on Money Orders ...

5,737 12

Mint Charges

9,810

Fees for escort and conveyance of Gold

1,465 1 2

Pilotage and Harbour and Light rates ...

32,062 5 2

Registration of Brands

850 1 9

Contributions under the Sheep Disease Prevention Act

7,188 12

Fees of office

45,516 10 2

ATiQppll an pr^ii Q T?-pr>pivi~Q

1 183 58

3 11

Rents, other than rents of land ...

6,096 17 5

Fines and Forfeitures

9,939 13 8

Interest on Bank Deposits

91,771 15 5

Other items...

65,098 19 6

17 907

Total Revenue of 1878

4,991,919

6 6

EXPENDITURE, 1878.

Civil List charges

48,231 16 4

Executive and Legislative Departments ...

19,133 7 4

Colonial Secretary's Department ...

4,584 6 11

Volunteer and Military Forces

62,138 18 9

Ordnance Department ... ... ...

22,222 4

Police ...

187,347 11 3

Prisons

72,466 14 1

Audit Department ...

6,219 18

Registrar General's Department ...

15,750 1 3

Agent General for the Colony (London)...

2,850

Immigration ...

95,126 16 11

Medical Officers and Lunatic Asylums ...

64,355 10 6

Charitable and Benevolent Institutions ...

80,180 2 8

Department of Justice and Public Instruction ...

4,911 14 3

Public Instruction and Educational Establishments ...

375,360 5 1

Free Public Library...

5,008 7 7

Observatory ...

2,626 17 4

Museum

2,299 4 6

Attorney General's Department ...
Administration of Justice ...

4,592 15 10
124,351 1 1

Treasury

14,585 16 1

Customs ... ... ... ... ...

48,587 11 5

Government Printing Department

34,988 15 10

Stores and Stationery

91,003 5 7

Marine Board

38,157 17 10

Administration of the Public Lands

355,807 18 6

Department of Mines

18,269 9 7

Department of Public Works ... ... v ..

7,080 16 5

Railways

698,446 3 3

Public Works

317,677 3 5

Harbours and Rivers Navigation W T orks

184,237 3 11

Roads and Bridges ...

525,496 14 1

Post Office

281,119 11

Electric Telegraphs...

96,181 13 7

Interest on Loans

560,651 10 8

Repayment of Loans

27,400

Drawbacks and Refund of Revenue

268,387 9

Charges on Collections

4,342 15 10

Endowment of Municipalities

82,634 17 10

Sydney Branch of the Royal Mint

16,250

Pensions 36 Vic. No. 29

8,806 5 8

Departments other than those abovementioned...

33,025 16 8

Miscellaneous Services ... ... ...

195,990 1 4

Total Expenditure in 1878

... 5,108,881 2 11

It will be observed that the expenditure here shown amounts to a larger sum than the Revenue of
1878. It must, however, be understood that this expenditure includes a large amount chargeable to the
Revenue of previous years, which owing to the lapse of certain appropriations for public works under
the provisions of the Audit Act, could not be incurred until re- votes for such services were obtained.
The, Treasury, New South Wales, JAMES THOMSON.

8th May, 1879.

APPENDIX. 489

NEW SOUTH WALES.

AN ACCOUNT of the Rise, Progress, and present Condition of the
Revenue of the Colony of New South Wales.

[Written in the Year 1876 for the information of the Imperial Government.]

REVENUE AND RECEIPTS.
Preliminary Remarks.

FBOM the foundation of the Colony in the year 1788, to the establishment of the first Legislative
Council in 1824, the records of local revenue and expenditure are too imperfect to render them of
much value for statistical purposes, or for comparison with the revenue and expenditure of sub-
sequent years. Up to that time the public expenses of the Colony, which consisted chiefly of
expenditure connected with the support and management of British convicts, were borne almost
entirely by the Imperial Government. From a Parliamentary paper published in the year 1824, it
appears that the expenses of the Colony to the Crown, including expenditure for transportation,
were, in 1821, 425,350 14s. 4d., and for the period from 1st January to the 7th September, 1822,
365,729 17s. 9d. During these years the local annual revenue could not have much exceeded
30,000.

Early in the year 1800, import duties (probably the first form of indirect taxation attempted in
the Colony) were imposed on spirits, wine, and beer, for the purpose of providing funds for com-
pleting the erection of a Gaol in Sydney, a work which had previously been carried on by a volun-
tary assessment, levied in the first instance on the inhabitant! of Sydney, but afterwards on the com-
munity at large. As the produce of these imposts was, however, found inadequate to complete the
work, duties on other articles of luxury were resorted to, which, with some slight modifications,
were continued to be collected under Proclamations of successive Governors till the year 1840.

When Major-General Macquarie assumed the Government in 1810 the population was 11,590,
and the port duties about 8,000 a year. On his retirement from office, in 1821, the population
had increased to 29,783, and the port duties to nearly 30,000. .

Notwithstanding the establishment of a Legislative Council in 1824, which was the third year
of Sir Thomas Brisbane's administration, it does not appear from any of the official records that the
expenditure of the local revenue was in any way controlled by that body, nor does it appear that
any Estimates were prepared or submitted to the Council before the year 1832, three years after it
had been enlarged to fourteen Members. On the contrary, it is on record that before the year
1826 the Colonial Revenue had been applied at the discretion of the Governor to the liquidation of
expenses of every description, almost indiscriminately, and without any fixed rules of appropriation.
In that year the expediency of rules for its application was determined upon ; and it was <1
that the entire charge of the Civil Establishments of the Colony should be defrayed out of the local
revenues, and that of the Convict Establishments out of the funds to be annually provided by the
Imperial Government.

Prior to 1824, all accounts of receipts and expenditure were transmitted to the Lord's Commis-
sioners of the Treasury. In that year Mr. Lithgow was appointed Auditor-General for the Colony,
but his duties were limited to auditing the local revenue and expenditure accounts. The accounts
connected with the expenditure for the maintenance and supervision of British convicts, kept by
the Commissariat, were, as formerly, periodically forwarded to the Imperial Government, and the
business of that Department continued as heretofore, under the sole and immediate control of the
Governor for the time being, as the Representative of the Crown. Even after the api>ointmcnt <
Mr. Lithgow as Auditor-General, and up to the year 1855, when Responsible Government was in-
troduced, the accounts of the Crown Lands Revenue of the Colony were annually transmitted
the Imperial Audit Office, where they underwent a minute and thorough examination.

In April, 1827, the first Collector and Comptroller of Customs was appointed with a suitable
establishment of officers and clerks. Prior to that the Customs duties were collected by a fu
tionary called the Naval Officer. In February, 1829, the department of Customs was pla
the direction of the Commissioners of Customs in England, and transferred to t
under their orders, sent out by them for the purpose. From that time up to 18
of all the revenues of the Colony was transferred to the local Legislature, the Custc
be a kind of semi-Imperial institution.

490 APPENDIX.

In the early days of the Colony, and even for some years after the establishment of the first
Legislative Council, the Customs' duties, which were then the principal source of revenue, were
collected under Proclamations of the Governor. In the Imperial Act 4 Geo. IV, cap. 96, which
provides for a Legislative Council, there is a clause which conclusively proves this, as it makes per-
petual the Act 59 Geo. Ill, cap. 114, passed in the year 1819, the preamble of which is as follows :
"Whereas since the establishment of a Colony in New South Wales the Governor or other persona
administering the Government thereof have from time to time caused to be raised and levied certain
rates and duties upon goods wares and merchandise imported into or exported from the settlements
therein : And whereas it is expedient that the said Governors and all other persons who may have
advised issued or executed any order with respect to the raising or levying any such rates or duties
should be protected from vexatious suits until further provision shall be made by Parliament." It
further states that till the first day of January, 1821, no action or prosecution should be commenced
against the Governor or other person in any way connected with the collection of these rates or
duties. Another clause of this Act authorizes the rates or duties collected prior to the passing
thereof to be continued or discontinued wholly or in part by the Governor of the Colony as he
should deem expedient, and by the third section he is also empowered to levy a duty upon spirits
made within the Colony, provided such duty shall not exceed the duty levied upon imported
spirits. It also empowers him to make rules and regulations for the collection of the same.

To remove all doubts as to the legality of the collection of duties under proclamations of succes-
sive Governors, the Legislative Council passed an Act, in August, 1825, to stay proceedings against
the Colonial Treasurers of New South Wales and Van Diemen's Land, then a dependency of the
Colony, or any other person, for collecting, levying, or receiving duties previous to the passing of
such Act. Another Act was passed by the Council in November of the same year, to continue
until further provision should be made certain duties, tolls, rates, fees, and other sums of money,
and to legalize the collection of all such duties, tolls, &c. , levied under any Proclamation or Order
of any Governor before the 12th day of August, 1824, the date on which the Legislative Council
was established. Under the provisions of this Act the Governor was likewise empowered to reduce
or discontinue the said duties, tolls, rates, fees, and other moneys as should be deemed by him
expedient.

CUSTOMS AND EXCISE DUTIES.

From these enactments it is evident that, until the Legislative Council was enlarged, the imposi-
tion of Customs duties and other taxes in support of the public revenue was left entirely to the
discretion of the Governor of the Colony for the time being. The Customs and Excise duties,
which were chiefly on articles of luxury, collected at the time these Acts were passed, do not
appear to have been considered excessive by those who had to pay them. The following is the
tariff as fixed by the Proclamation of Sir Thomas Brisbane, dated 25th October, 1825 :

Spirits imported from Great Britain or the West Indies ... 6s. Od. per gallon.

Spirits from other countries ... ... ... ... ... ... 7s. 6d. ,,

Tobacco.... ... .,. ... ... ... ... ... ... Is. Od. per Ib.

Ad valorem duty on foreign goods... ... ... ... ... ... 5 per cent.

Spirits made or distilled from grain the produce of the Colony 2s. 6d. per gallon.

On all other spirits made within the Colony ... ... ... 4s. 2d. , ,

These rates were slightly increased by the Proclamation of Governor Darling, dated 16th Octo-
ber, 1828

Spirits imported from Great Britain or the West Indies were

raised to ... ... ... ... ... ... ... ... 6s. 6d. per gallon.

Spirits from other countries to .. ... ... ... ... 8s. 6d. ,,

Manufactured tobacco was made ... ... ... ... ... 2s. Od. per Ib.

Unmanufactured tobacco ... ... ... ... ... ... Is. 6d. ,,

The duty on foreign goods remained as before, and only the one charge on spirits made in the
Colony, viz., 2s. 6d. per gallon, was authorized.

The following are the amounts of Import Duties collected under these Tariffs in each year, from
1824 to 1840, viz. :

1824 ... "... 28,763 1833 108,466

1825 48,437 1834 124,501

1826 47,733 1835 140,424

1827 49,472 1836 153,682

1828 65,116 1837 163,286

1829 74,731 1838 145,330

1830 78,657 1839 158,232

1831 87,803 1840 195,080

1832 93,864

APPENDIX. 491

From this statement it will be seen that in sixteen years the Customs revenue had increased from
28,7(53 to 195,080, or at the rate of 578 per cent. In 1824, when the population of the Culoiiy
was 32,702, the Customs revenue was 17s. 7d. per head ; and in 1840, when the populati
129,463, it was at the rate of 1 10s. l^d. per head. During 1875 it was at the rate ofl 12s. Hd.
in a population of GOG, 652.

The duty on spirits distilled in the Colony from 1825 to 1840, inclusive, realized an aggregate
sum of 44,804, which gives an annual average during that period of 2,800. The duties collected
during the years 1839-40 amounted, however, to over 26,000, a circumstance which proves that
the manufacture of spirits in the Colony was on a much larger scale than formerly.

No change seems to have been made in the tariff as fixed by Governor Darling until the year
1840, when the Legislative Council passed an Act (4 Vic. No. 11) for increasing the duties on
spirits, wine, and other goods and merchandise imported into the Colony and its dependencies. The
following are the import duties which that Act authorized to be collected from and after the
passing thereof, viz. :

On spirits the produce of the United Kingdom or British Possessions, per

gallon 12s.

On all other spirits imported, per gallon... ... 12s.

On wine, 15 for every 100 in value.

On tea, sugar, flour, meal, wheat, rice, and other grain, and pulse, 5 for
every 100 in value.

Manufactured tobacco and snuff, per Ib ... 2s.

Unmanufactured tobacco, per Ib. ... ... ... ... Is. 6d.

On all other foreign goods, 10 for every 100 in value.

The duties on spirits manufactured in the Colony remained as they were.

Under this tariff there were collected in 1841, 223,845 ; in 1842, 215,253 ; and in 1843,
164,929. Instead of the increased rates having improved the Customs revenue they seem to have
had the contrary effect, for the amount collected in 1843 was less by 30,151 than that collected in
1839, under the old tariff. This falling off is, however, chiefly attributable to great commercial
embarrassment and general monetary depression during the three years mentioned, the result
of a protracted drought in 1839, of excessive speculation, and a reduction of the price of wool in
England.

The duties levied under the Act 4 Vic. No. 11, having been considered excessive, an Act was
passed in December, 1843, to alter and amend the import duties and the duties collected on spirits
distilled in the Colony. This Act (7 Vic. No. 24) was reserved for the approval of Her Majesty,
and was not to come into operation until such approval had been notified in the usual manner ID
the Government Gazette. The duties it authorized were however never collected, as the Act was
disallowed by Her Majesty. The following were the duties therein provided for :

Imported spirituous liquors, one-half the rates then in force.
Spirits distilled in the Colony, a similar reduction.

And the following specific duties in lieu of the ad valorem duties then chargeable on the under-
mentioned articles :

s. d.
Flour or meal, per cwt ... ... ... ... 2 6

Grain Wheat, per bushel ... ... ... 10

All other sorts, per bushel ... ... 04

Sugar refined, per Ib. ... ... ... ... Oj

Unrefined and Molasses, per ft. ... Oi

Wine, per gallon ... ... ... 10

Tea, per Ib 1

Coffee, .., Oi

By the Act 11 Vic. No. 7, which passed in August, 1847, and came into operation on the 1st
January, 1848, the duty on spirits distilled in the Colony was increased to 3s. (kl. per gallon, t
on imported rum and whiskey reduced to the same rate, and all other spirits to 6 Spirits,

strength.

On the 1st July, 1851, the District of Port Phillip, which had, since it settlement in 1836,
formed part of New South Wales, was erected into a separate Colony, under the desigi
Victoria. Up to that time, therefore, the Customs duties and other revenues derr
district were included in those of New South \Valea.

492 APPENDIX.

The following are the combined Customs duties and duties on Colonial Spirits collected under the
several Statutes in force from 1844 to 1851, the year of Separation, viz :

Customs. Colonial Spirits.

1844 151,969 13,122

1845 157,489 19,504

1846 151,354 13,658

1847 170,822 15,084

1848 169,678 9,232

1849 187,048 4,357

1850 219,298 2,850

1851 201,501 7,210

In August, 1852, an Act (16 Vic. No. 7) was passed repealing all former enactments relating to
the imposition of duties except so far as they related to the duty on spirits distilled in the Colony,
and authorizing the collection of the following duties from and after the passing of the same, viz. :

s. d.
Ale and Porter in wood, per gallon ... ... ... ... ... 1

Do. in bottle ,, 2

Coffee, chocolate, and cocoa, per Ib. ... ... ... ... ... Og

Currants, raisins, and other dried fruits ... ... ... ... ...

Brandy and gin, per gallon ... ... ... ... ... 6

Whiskey and rum ,, ... ... ... ... ... ... ... 4

Perfumed spirits ,, ... ... ... ... ... ... ... 4

Spirits, liqueurs, cordials, brandied fruits, or strong waters, mixed or
sweetened with any articles the strength of which connot be ascertained
by Sykes' hydrometer, per gallon ... ... ... ... ... ... 6

Wine not exceeding a certain strength and gravity, per gallon ... ... 1

Refined sugar, per cwt. ... ... ... ... ... ... ... 3 4

Unrefined sugar, ,, ... ... ... 2 6

Molasses, ... ... ... ... ... ... ... 1 8

Tea, per Ib. 1

Manufactured tobacco, Is. 6d. per Ib. to 31st December, 1853 ; thereafter Is.
Unmanufactured, Is. per Ib. to 31st December, 1853 ; thereafter 8d.
Cigars and snuff, 2s. per Ib.

The duty upon Colonial spirits was increased from 3s. 6d. to 3s. 8d. per gallon, by the Act 16
Vic. No. 9, also passed in August of the same year.

The duteis on both imported and Colonial spirits were again considerably increased by an Act

Eassed in November, 1854. That Act (18 Vic. No. 24) authorized the following duties to be col-
jcted on imported spirits, viz. :

s. d.
Brandy and gin, per gallon ... ... ... 9

Whiskey and rum ,, ... ... ... 6

Perfumed spirits ,, ... ... ... 60

Liqueurs, cordials, <tc., per gallon ... ... 9

And on spirits distilled in the Colony ... ... 5 8

These rates did, however, continue long in force, for by the Act 19 Vic. No. 14, passed in
September, 1855 only a few months before the introduction of Responsible Government all the
Acts under which Customs duties were then being collected were repealed, and the following
entirely new tariff, which came into operation on the 12th of that month, substituted : -

Spirits

s. d.

Brandy and gin, per gallon ... ... ... ... 10

Whiskey, rum, and all other spirits, per gallon ... ... ... 7

Spirits, cordials, liqueurs, and strong waters, sweetened or mixed
with any article the strength of which cannot be ascertained

by Sykes's hydrometer, per gallon ... ... ... ... 10

Perfumed spirits, per gallon ... ... ... ... ... ... 7

Wine containing more than 25 per cent, of alcohol, per gallon ... 10

Wine not containing more than 25 per cent, of alcohol, per gallon ... 2

Ale, porter, and beer in wood, per gallon ... ... ... ... ... 1

Ditto ditto, in bottle 2

Tea, per Ib 3

Sugar refined, and candy, per cwt. ... ... ... ... ... ... 6 8

Ditto, unrefined, per cwt.... ... ... ... ... ... ... ... 5

Treacle and molasses, per cwt. ... ... ... ... ... ... ... 3 4

Coffee and chicory, per Ib. ... ... ... ... ... ... ... 2

Cigars, per Ib. ... 3

Tobacco and snuff, per Ib. ... 2

APPENDIX. 493

This tariff, which seems to have given general satisfaction, and which is even now spoken of as a
model tariff, was one the last of the many important measures passed by the Legislative Council
which expired on the 24th November, 1855, the day on which the new Constitution was proclaimed
in the Government Gazette of New South Wales. So popular was this tariff, which was known aa
the " Deas Thomson Tariff," that, with the exception of a duty of 10s. per Ib. on opium, imposed
in November, 1859, and a reduction of Is. per Ib. on the importation of unmanufactured tobacco as
a relief to the Colonial manufacturer, who could not otherwise compete witli the imported article,
it remained undisturbed until June, 1865, when, in consequence of a deficiency in the revenue, a
short Act was passed increasing the duties for a limited period on all importations then liable 'to
duty (except tea, sugar, brandy, and gin), by an additional charge on existing duties of 20 per cent.
Another Act (20 Vic. No. 7) passed in the same month of that year, imposing a package charge of
Is. on every description of package therein mentioned, which brought in a considerable revenue.
That Act, however, expired on the 31st of December, 1867, and has not since been renewed in any
form whatever. The Act 29 Vic. No. 3, imposing the additional charge of 20 per cent, on the
importations above referred to, being universally condemned, was repealed in January, 1866, when
the tariff of 1855 was considerably enlarged.

The most important feature of the tariff of 1866 was the imposition of an ad valorem duty of 5
per cent, on aU goods imported into the Colony, except those which were chargeable with specific
duties and a few articles altogether exempt from duty. The duty on whiskey and rum was raised
to 10s., wine to 3s., ale and porter in bottle to 6d., and in wood to 3d. per gallon. Duties on the
following articles were added : Malt, 6d. per bushel ; hops, 2d., and opium, 20s. per Ib. ; rice, 2
per ton ; and dried fruits, 10s. per cwt.

For several years after the inauguration of Responsible Government the revenue was found
adequate to the expenditure, but in the years 1862-63 the country became clamorous for public
works of every description ; and the Government of the day, pressed by Members of Parliament
who were anxious to serve their constituents, sanctioned in anticipation of Parliamentary appro-
priation a much larger expenditure than it was possible for the ordinary revenue to meet. The
result was a large deficiency, which was temporarily provided for by the issue of Treasury Bills
with a limited currency. To provide for the payment of these Bills at maturity and prevent defi-
ciencies in the future, ad valorem duties were proposed by the Government in 1864, and the
requisite measure for their imposition was introduced and passed by the Legislative Assembly, but
rejected by the Council, which viewed it as one of a protective character. The rejection of this
measure towards the close of a long Session resulted in another deficiency that year almost as large
as that of 1863 and previous years. This second deficiency was, however, more the result of
unpropitious seasons, consequent stagnation of trade, and general monetary depression, than the
loss of the ad valorem duties, which, even had the measure for their imposition become law, could
not have effected the revenue of the year 1864 to any great extent.

Throughout almost the whole of the decade ending with the year 1870 the Colony suffered
severely from alternate droughts and floods of a most disastrous nature, and it was not until the
year 1871 that the revenue was again found equal to the expenditure. From that year until the
present time the revenue has so largely exceeded the ordinary expenditure that the Government
have been enabled to pay off all the temporary loans of former years, as well as a considerable
amount of what is called the permanent debt. This gratifying state of the revenue has not, how-
ever, been brought about by any large increase in the taxation of the country, but from the
proceeds of sale of laud, for which there has been a growing demand since the commencement of
the year 1872.

It was with a view to meet the deficiencies in the revenue of the last decade that the additional
duty of 20 per cent, on existing duties, the package charge, the ad valorem duties, and the
increase to the specific duties already alluded to were made to the tariff of 1855. As some of these
were only continued for a short time, it became necessary to supply their place with others of a
less objectionable character. In 1871, therefore, an Act (34 Vic. No. 21) was passed imposing
specific duties on a number of articles which had hitherto been charged an ad valorem duty o
5 per cent. This important change produced a considerable augmentation in the Customs reve
The Act imposing these specific duties also made a distinction between sparkling and s
the former became chargeable with a duty of 6s., and the latter with 4s. per gallon : i-i
increased from 3s. to 5s. per Ib. ; ale and porter, in wood and bottle, were increased respcc
6d. and 9d. per gallon ; coffee and chicory, from 2d. to 3d. per Ib. ; hops, from 2d. to 3d. per
and rice, from 2 to 3 per ton ; the duty on opium was reduced to 10s. per Ib.

In 1873, when the revenue was in a flourishing condition, the Government of the day proposed
and carried a measure (37 Vic. No. 5) for the abolition of the ad valorem duties, which
only generally condemned for their demor.-ilixin- tendency, but most obnoxious 1
community on account of the injurious extent to which the trade of 1
interfered with. That measure also provided for the reduction by thilty-tWO
changeable with specific duties. The present < ;,.v.-niment have recently
of reducing that list still further, as opportunities occur, so as to bring the tariff
as possible, to that of

494 APPENDIX

The following statement of Customs revenue and duties on Colonial spirits and Colonial refined
sugar and molasses, from 1852, the first year after the separation of Victoria, to 1859, when
Queensland was formed, and from that time until the year 1875, will illustrate pretty fairly the
progress of the Colony during the twenty-four years embraced in these periods.

Customs. Refined Sugar, &c. Colonial Spirits.

1852 217,021 18,211

1853 354938 28,755

1854 405,720 35,550

1855 421,735 51,616

1856 471,401 51,075

1857 533,104 63,477

1858 557,298 50,955

1859 611,874 54,627

From the reduced territory of Neiv South Wales.

Customs. Refined Sugar, &c. Colonial Spirits.

1860 555,104 44,129

1861.. 585,312 38,514

1862 609,373 35,643

1863 616,009 14,587 35,651

1864 538,446 15,900 10,085

1865 636,102 15,763 22,677

1866 828,710 12,820 22,054

1867 783,338 18,233 23,083

1868 847,537 15,287 29,970

1869 838,964 17,982 18,577

1870 853,815 17,816 12,623

1871 860,121 18,617 9,929

1872 974,857 15,020 8,829

1873 1,127,811 24,958 11,634

1874 951,233 33,883 10,800

1875 974,432 31,267 8,573

CROWN LANDS REVENUE PROCEEDS OF SALES.

The Waste Lands of the Colony are the sources of revenue next in importance to the Customs.
Previous to the year 1831, when the system of free grants was stopped by the Imperial Govern-
ment, the amount received as proceeds of sale was extremely small.

While the Colony was in its infancy, and free immigration progressing at a slow rate, grants of
land were liberally bestowed upon persons willing to cultivate the soil ; but notwithstanding this
inducement, very few free immigrants had arrived in the Colony prior to the administration of
Sir Thomas Brisbane, which commenced in December, 1821. From that time, however, the Colony
began to emerge from a penal into a free settlement, as the tide of free immigration then set in with
a force which has continued, stronger or weaker, up to the present time.

The number of grants of country lands which had been issued up to the close of 1825 amounted
to 2,936, the annual quit rents thereon being only 933 2s. 2d. The grants and leases of town
allotments up to the same period numbered 1,340, the quit rents of which amounted to 1,250.
The average annual quit rent payable therefore by'4,276 grantees was about 10s. each.

During the administration of General Darling a Land Board was appointed for regulating grants of
land, in consequence of irregularities and abuses having arisen during the administration of his pre-
decessor, Sir Thomas Brisbane. Under the regulations established by this Board, land was granted
only in proportion to the means of the applicant and the likelihood of his ability to improve his grant.

The revenue arising from land sales from 1826 to 1831, when free grants were stopped and a system
of s?1es by auction at an upset price of 5s. per acre established, was derived from sales by selection
under the regulations of Governor Brisbane, published in the Sydney Gazette of 31st March, 1825,
These regulations permitted individuals to purchase Crown lands at the rate of 5s. per acre, on con-
dition of their paying a deposit at the time of 10 per cent., and granting promissory-notes for the
remainder, payable by equal instalments at intervals of six months in the course of three years from
the date of purchase. In the majority of cases these instalments were postponed until the expira-
tion of three years ; and as it was then found that purchasers were unable, from various causes, to
pay up their balances, they were allowed, on completing the payment of one-third of the price, viz.,
Is. 8d. per acre, to retain their lands on the payment of a quit-rent of 2d. per acre, being interest
on the balance of 3s. 4d. at the rate of 5 per cent, per annum.

As this liberal arrangement did not however receive the sanction of the Secretary of State, other
conditions of a less favourable nature, having reference to all uncompleted purchases made under
Sir Thomas Brisbane's regulations of 5th November, 1823, and 18th May, 1825, were framed and

APPENDIX. 495

notified in the Government Gazette during the months of August and September of 1831. Pur-
chasers who had accepted the terms above referred to, had either to accept the new conditions or
surrender their lands, and lose all previous payments made thereon.

The system of free grants of land was, as already stated, abolished in 1831 by the Imperial Go-
vernment. It was accordingly notified in the Government Gazette, on the 1st of July of that year,
that no land should in future be disposed of otherwise than by public sale, at an upset price of 5s.
per acre, and that all sales should be advertised for three months, and then sold to the highest
bidder ; that 10 per cent, of the price was to be paid at the time of purchase, and the balance in
one month thereafter. In 1835 the period of advertising sales was reduced to one mouth.

These conditions continued in force until the 17th January, 1839, when the public were informed
by notice in the Government Gazette, that in pursuance of instructions from the Right Hon. the
Secretary of State, dated the 9th August, 1838, the minimum price of Crown hinds in all parts of
the Colony open to selection for purchase, including lauds then advertised for sale or applied for,
would be raised from 5s. to 12s. per acre.

Doubts having been entertained, prior to this change, as to the validity of the grants or convey-
ances of land issued by, and in the names of, the various Governors of the Colony, instead of in the
name of the Sovereign, an Act (6 Win. IV No. 16) was passed by the Legislative Council in June,
1836, declaring that all grants or conveyances so issued should be as valid and effectual in law as if
made and issued in the name of His Majesty or his two immediate predecessors.

On the death of King William the Fourth, on the 20th June, 1837, it was found necessary to
pass another Act to render valid all grants or conveyances which had been made or issued in his
name under the Great Seal of the Colony, between the day of his demise and the 25th October, the
date of the receipt of the intelligence of such demise.

No other change of importance with respect to the sale of Crown Lands took place until the
year 1842, when the Imperial Parliament passed "An Act for regulating the Sale of Waste Land*
belon'jhvj to the Crown in the Australian Colonies. 1 ' Previous to the passing of this Act the grants
and sales of the Waste Lands of this Colony had been made under regulations framed in accord-
ance with instructions received from the Secretary of State. Under the provisions of this measure,
however, all former regulations were repealed, and new ones promulgated in March, 1843. Accord-
ing to these, public sales were to be held quarterly ; not more than three, nor less than one month's
notice of sale to be given ; lowest upset price, 1 per acre ; application might be made to have
specified lots put up for sale ; no lauds to be sold before survey ; grazing lands to be put up in
sections of 640 acres ; land suitable for cultivation in areas of 20 to 320 acres, and town allotments
quarter an acre in large, and half acre in small, towns. Land offered for sale, and not bid for was
to be open for selection at the upset price. No land was however to be alienated outside pro-
claimed boundaries. Receipts for land were made transferable. Expenses of survey, sale, and
management to be primary charges on the Land Revenue, and one half of the proceeds of sales to be
appropriated to the purposes of Immigration.

In the same year (1843) the Legislative Council was made a partially representative body. The
Act of the Imperial Parliament, 5 & 6 Vic., cap. 76, providing for this reform, authorized the
Council to be increased to thirty-six Members, twenty-four (or two-thirds) of whom were to be
elected by the inhabitants of the Colony, and twelve (or one-third) nominated by Her Majesty.
This measure also provided for the establishment of District Councils throughout the Colony, a
for the constitution of new Colonies when considered desirable, out of territories comprised within
the Colony of New South Wales. In accordance with the last-mentioned provision t
Phillip District was formed into a separate Colony, under the name of Victoria, on the 1st July, 1851,
and the Moreton Bay or Northern District, into the Colony of Queensland, in the year 1859.
withstanding these dismemberments the Colony as it now exists contains an area of 200, 000, 000 acres
of land, of which probably not more than 20,000,000 acres have up to the pre*
alienated.

A period of nearly twenty years elapsed before the Imperial Act of 1842 was altered or repealed,
although several unsuccessful attempts were made between 1856 and 1861 to settle tl
Question," admitted by all parties to be not only the most important but the mostdimcult qua
with which the local Parliament under the new Constitution had to grapple.

After much opposition, two Acts dealing with this subject were passed in the year 1861 one for
regulating the alienation, the other for regulating the occupation of Crown Lands. 11
came into operation on the 1st January, 1862, and continued in force, without
1875, when some enlargement of their provisions and certain alterations necessary fa
and remove doubts were effected.

The following are the main features of the Alienation Act (25 Vic. No. 1) of 18C1 :

1. The Governor, with the advice of the Executive Council may set apart sites!

towns, or villages, and declare what lands shall be reserved for the preaervat.
supply, railways, roads, canals, or other public purposes.

2. Holders of lease's issued prior to the 22nd February, 1858, to have a pre-emptive righl

purchase to the extent of 640 acres.

496 APPENDIX.

3. Sales allowed on certain conditions, in consideration of improvements on any Crown Lands.

4. Free selection, before survey, by any one person of any area from 40 to 320 acres of any

land not reserved for public purposes, or not being town or suburban lands, at the price of
1 per acre, on condition that a deposit of 5s. per acre be paid on application ; that either
the balance be paid at the expiration of three years, or interest thereon at the rate of 5
per cent, per annum until the payment of such balance ; that the purchaser reside on his
selection for three years from date of purchase, and effect improvements thereon during
that period to the value of 1 per acre.

5. Mineral lands (other than gold) open to conditional purchase at 2 per acre, on condition that

10s. per acre be paid on application and improvements made to the extent of 2 per acre.

6. That land conditionally purchased but abandoned before the expiry of three years from the

date of selection shall be declared forfeited, and may be sold at auction.

7. Other Crown Lands to be sold by auction without conditions for residence and improve-

ment, in lots not exceeding 320 acres each, and advertised in the Government Gazette not
less than one month, nor more than three. Upset prices to be : Town lands, 8 ; suburban
lands, 2 ; other lands, 1 per acre ; or such higher price as may be fixed by the
Government.

8. Lands other than town and suburban, put up at auction and not sold, may be purchased
without competition at the upset price, or at such higher price as may have been offered
at sale.

Under these and the other provisions of the Lands Alienation Act of 1861 the revenue derived
from the sale of thej Waste Lands of the Colony has considerably increased, more particularly
during the last three or four years. The aggregate amounts received for lands conditionally
purchased from 1st January, 1862, to 31st December, 1875, a period of fourteen years, were as
follows :

Deposits of 5s. per acre 1,933,821 12 8

Balances paid up , 301,942 4 2

Interest, at the rate of 5 per cent, per annum, paid on out-
standing balances 383,898 14 3

Making in all a sum of 2,619,662 11 1

In addition to these sums there were balances unpaid none, of course, legally due so long as the
interest is paid upon them to the amount of 5,499,522 13 2

Sales by auction during the same period realized ... ... 3,047,533 4 7

Selections after auction and pre-emptive purchases, &c. ... 684,507 11

One, and perhaps the most desirable, of the objects in view in passing the " Crown Lands
Alienation Act of 1861 " was, to encourage agriculture and promote the settlement of the interior
by an industrious yeomanry. To secure this object and prevent land speculation, the maximum
area that any one person could select was limited to 320 acres, and that, or any lesser area down to
the minimum of 40 acres, could only be secured permanently by the purchaser residing on his
selection continuously for a period of three years, and making improvements during that period to
the value of 1 per acre. There being, however, no definition in the Act of the word
"person," selections were frequently made in the names of children of tender years, Avho couldnot
possibly comply with these conditions. It was likewise found that many of the declarations
respecting residence and improvements made by conditional purchasers, at the end of the three
years, were false, and that the law was being evaded by a system of selection called "dummying "
or "vicarious selection," that is, servants or others purchasing land in their own names, for the
purpose of afterwards transferring it to the persons who advanced the money, and for whom the
land was in reality taken up, but who could not, in consequence of their having previously pur-
chased the maximum area allowed by law, take it up in their own names. It was therefore with a
view to correct abuses and irregularities such as these that an Act (39 Vic. No. 13) was passed in
August, 1875, to amend the Crown Lands Alienation and Occupation Acts of 1861. The following
are the leading provisions of this Act so far as relate to the sale of Crown Lands :

1. Leased town and suburban lands, or lands on gold-fields OH which improvements have been

made, may be sold to the owners of such improvements without competition, at a rate to
be fixed by the Governor in Council, not being less however than 8 per acre for town
lands, 2 10s. for suburban lands or lands on a gold-field, and 1 per acre for all other
lands.

2. Improvements must be of a fixed character, and such as to make the occupation of the lands

on which they are made more beneficial. Such improvement must not at any time before
have been used for a like purpose.

3. No owner of improvements on country lands, within areas reserved from conditional pur-

chase, shall be entitled to piirchase such lauds, unless the improvements are of the value
of 40 or over.

APPENDIX. 497

4. Improvements shall not exempt such lands from conditional purchase or pre-emptive lease,

unless they are of the value of 40 collectively, or 1 per acre.

5. The word " person," in the Lands Alienation Act of 1861, to mean in respect to past con-

ditional purchases, any persons under or over the age of twenty-one years, but in future a
person of or over the age of sixteen years. Applications must be made in person.

6. When the balance of purchase money of any conditional purchase is not paid at the expira-

tion of the three years allowed by the Act of 1801, or within three months thereafter,
annual instalments of Is. per acre must be paid until the balance, with interest at the rate
of 5 per cent, per annum, have been paid. This will be accomplished by the payment of
twenty-seven such annual instalments.

7. Land conditionally purchased which is not for the bond fide use of the purchaser but for the

use of some other person whose servant or agent he may be, shall be illegal, and the land
itself with all improvements thereon shall be forfeited, and the pel-son so acting shall be
guilty of a misdemeanor, and liable on conviction to imprisonment with hard labour for a
term not exceeding two years.

8. Mineral land leases granted under the eleventh section of the "Crown Lands Occupation

Act of 1861 " can be converted into mining conditional purchases, notwithstanding such
lands may be included within a reserve from sale made subsequently to the granting of
such lease : Provided, however, they were not, at the date of application for such leases,
within the population areas prescribed by the thirteenth section of the " Crown Lauds
Alienation Act of 1861."

9. Maximum area of future conditional purchases increased from 320 to 640 acres. Further

area of 640 acres can be purchased when the conditions of the lirst are fulfilled.

10. Persons applying to liave land measured for sale by auction to make a deposit of sixpence

per acre on the area so applied for, which shall be refunded if the laud is not offered for
sale within twelve months thereafter, or if purchased at sale by any other person. If
purchased by the applicant the amount so deposited will form part of his purchase money.

11. Lessees of pastoral lands may purchase any area of such lauds not exceeding 640 acres nor

less than 40 acres, within each block of five miles square at one pound per acre, on condition
that improvements shall be made thereon, to the satisfaction of the Minister, within t
months, to the like value. If improvements are not so made the sale will be cancelled, 25
per cent, of the deposit forfeited, and the balance refunded.

For the purpose of carrying out effectually the Land Acts of 1861, and with a view to facilitate to
the utmost the conditional purchase of land by persons in the interior, agents were appointed by the
Government to every town and district of importance throughout the Colony. These officers, who
are called " Land Agents," are authorized to conduct sales of land by auction ; sell, without compe-
tition, country lands that have been put up at auction, but not sold ; receive deposits and interest
on lands conditionally purchased ; sell and receive the rents of pastoral leases within the first class
settled districts, and issue licenses to cut and remove timber and other materials from < 'row n Lands.
Thursday in each week has been appointed as the day on which lands can be conditionally purchased ;
and to prevent injustice being done to any one, or favoritism on the part of the Land Agents, stringent
rules for the regulation of sales of this nature have been framed for the guidance of these officers.

OCCUPATION OF CROWN LANDS.

Besides the revenue derived from the sale of Crown Lands there are now, and for many years past
have been, large sums annually received from the temporary occupants of the pastoral lands of the
Colony, which are still of immense extent. It was not until the year IS'23 that stock-holders were
duly authorized to occupy the Waste Lands for grazing purposes. Occupation licenses, terminable by
the Government at any time by six months notice, were first issued during the MUninutntiaa oi
Thomas Brisbane, giving the holders thereof free grazing rights over a specified block o
square miles. The occupants of pastoral lands are now generally called squatters, a term w
originally applied to persons who, without authority, formed stations in the interior, and having no
means of their own, lived at the expense of the more legitimate tenants of the Crown.

During the government of Sir Richard Bourke, an annual license fee of 10 was imposed upon the
squatters, more with a view to exclude improper and suspicious characters from tl
squatting than to obtain revenue. At the instance of the squatl
afterwards added a small tax upon stock, for the purpose of supporting a B.
tection of the pastoral districts.

In April, 1844, Sir George Gipps, by proclamation, imposed an annual license fee c
every block of land capable of depasturing 4,000 sheep, whether siu-h Mo,
tiguous. This new regulation gave great dissatisfaction to the iMiuatt.-n.. man y oi
occupied several Mocks under the one license fee regulation of Sir BJchaid
after the issue of this proclamation, the squatters fonm-d themselves ,nx> an ^
protection of the pastoral interests, which were then beginning to be of vast

3TJ

498 APPENDIX.

Colony. The Association forwarded a petition to the Queen and both Houses of Parliament, as weir
as one to the Governor and Legislative Council, in which they embodied their grievances, and set
forth pretty fully and very freely their views with respect to the management of the Waste Lands
of the Crown generally.

It was probably these petitions, and somewhat kindred action on the part of the Legislative
Council, which induced the Imperial Parliament to pass an Act (9 and 10 Vic., cap. 104) in 1846
for regulating the leasing of Crown Lands in the Australian Colonies. Up to that time there had
been no proper system in operation, no regular leases, and no fixity of tenure. This Act provided
for the issue of Regulations or Orders in Council which were to have the force of law. The Act
and Orders in Council were received in Sydney in July, 1847, and published in the Government
Gazette in October of same year, together with a few subsidiary regulations by the local Go-vern-
ment. The Orders in Council divided the public lands of the Australian Colonies into three
classes, viz., settled, intermediate, and unsettled. In the unsettled districts leases might be
granted for terms not exceeding fourteen years, in the intermediate districts for eight years, and
in the settled districts for one year. The rent of runs in the unsettled districts was to be in pro-
portion to the stock they could carry : for every 4,000 sheep a charge of 10, and for every addi-
tional 1,000 a charge of 2 10s. was to be imposed. A short Act was passed in 1859 converting the
intermediate districts into settled districts and authorizing the renewal of leases within such dis-
tricts from year to year, on the then existing terms, until other Legislative provision was made.

In the year 1855 the Legislative Council passed "An Act (19 Vic. No. 26) to authorize the levy of
an Assessment on Sheep and Cattle depastured upon Crown Lands beyond the Settled Districts." Under
the provisions of this Act, a rate of one half-penny was levied on every sheep, and a rate of three-
pence on every h^ad of cattle and horses depastured in these districts. This Act, which was for
one year only, was renewed in 1857, and in 1858 converted, under the Act 22 Vic. No. 17, into an
assessment on runs, in the unsettled and intermediate districts, and an increased rent on lands
leased for pastoral purposes within the settled districts. Holders of runs beyond the settled
districts were to pay a yearly assessment of 7 10s. for every thousand sheep or their equivalent
in cattle, which their runs should be estimated by competent authority to be capable of carrying,
subject to certain reductions where the right to runs was obtained by tender without public notice,
or under competition by tender under similar notice. The renewal of any lease already granted
for pastoral purposes, within the settled districts, to be at the rate of 2 annually for every section
of 640 acres, but for leases put up to auction after the passing of that Act, the minimum rent to
be at the rate of 1 for every section of a like area.

The Orders in Council issued under the Imperial Act of 1846 remained in force until the 1st
January, 1862, when the Act of 1861 (25 Vic. No. 2) for regulating the occupation of Crown Lands,
passed by the local Parliament under the new Constitution, came into operation.

The main provisions of this important measure are the following :

1. Crown Lands are divided into three classes or districts, viz., first class settled districts,

second class settled disti'icts, and unsettled districts.

2. Existing leases not renewable unless under this Act.

3. The Governor with the advice of the Executive Council may withdraw from lease any lands

required for any public purpose whatsoever.

4. Old runs, the rent of which had not been determined in the manner prescribed by the Orders

in Council, to be appraised, and the valuation thus arrived at to be the rent thereafter
payable.

5. Leases in the first class settled districts to be for one year only, and for portions not less

than 640 acres, renewable at an annual rent of 2 per square mile. Lands not previously
under lease to be put up to lease at auction at the upset price of 1 for every section of 640
acres. Holders of purchased or granted land to have the right of a pre-emptive lease of
adjoining lands to three times the area of such land.

6. Pastoral leases in the second class settled or in the unsettled districts to be for a period of

five years, the rent to be decided by appraisement, but in no case to be less than 10 per
annum. The assessment under 22 Vic. No. 17 to cease on all runs which have been
appraised. Lessees to have no pre-emptive right to purchase.

7. Runs in ordinary cases not to exceed 25 square miles in area. Under certain circumstances

may however be enlarged to 100 square miles. Runs to be tendered for. Forfeited or
vacated runs may be put up to auction in leases for five years, at an upset price of 1 per
square mile.

8. Where inferior runs have been improved by the lessees, and rendered capable of sustaining

4,000 sheep or 800 head of cattle in all seasons, the leases may be extended to ten years.

9. Runs may be held from year to year at an annual rent of 10, and the assessment under 22

Vic. No. 17, until an appraisement has been made of the fair annual value, when leases
may be granted for five years. Thereupon the assessment shall cease.

APPENDIX. 499

10. The holders of land in fee-simple in the unsettled and second class settled districts, allowed
pre-emptive leases of adjoining lands to the extent of three times the area of their pur-
chased or granted land.

11. Leases for mining coal may be granted in areas not exceeding 320 acres, and for other
minerals or metals, excepting gold, in areas not exceeding 80 acres, fora period of fourteen
years, with right of renewal for a like period, at an annual rent of five shillings per acre.
Lessees to expend in improvements at the rate of 5 per acre within the first three years.

.12. Annual licenses may be issued to cut and take from any Crown Lands any timber, or dig
for and remove any gravel, stone, brick earth, shells, or other materials.

The " Lands Act Amendment Act of 1875," already referred to, does not disturb in any material
point these provisions of the " Occupation Act of 1861." It provides, however, for the settlement
of some important questions that had arisen, and supplies some omissions which had been discovered
during the fifteen years that Act was in operation. The following are the principal matters therein
.provided for :

1. Lands temporarily reserved for water supply, and forming part of any pre-emptive or other

pastoral lease, not to be withdrawn from the ordinary use of the lessees.

2. Lands sold conditionally or otherwise, within any lease granted for pastoral purposes in the

unsettled or second class settled districts, shall cancel so much of such leases as relates to
the laud sold and to three times the adjoining area thereof when duly claimed by the pur-
chasers as a pre-emptive lease.

3. Conditional purchasers or holders of land in fee-simple cannot exercise pre-emptive grazing

rights over adjoining lands containing improvements such as would exempt them from con-
ditional purchase under the " Crown Lands Alienation Act of 1861."

''4. The upset price of lands put up to lease at auction in the first class settled districts may be
fixed by the Minister at a higher rate per section of 640 acres than 1.

5. The Governor in Council may grant leases, for purposes other than pastoral, in areas not
exceeding 200 acres, and may determine the prices thereof. Such leases not to create right
of purchase or right of sale on account of improvements made thereon.

6. The Governor in Council may also make and proclaim Reserves for the preservation of
timber, and may issue leases or licenses to cut and remove the same therefrom on the pay-
ment of such rents or license fees as may be deemed expedient.

7. Lessees of pastoral lands may remove improvements from lands held by them under lease,

or promise of lease, which have been either conditionally purchased or leased under pre-
emptive right. If not removed, lessee may recover compensation from the person purchas-
ing or obtaining a pre-emptive lease of such land.

8. Upon giving three months notice to the lessees of pastoral lands, the Minister may order the

survey of the boundaries of any run or group of runs, and call upon each lessee to pay his
proportion of the estimated cost of such survey into the Treasury, provided that no demand
shall exceed 20s. for each mile of boundary to be surveyed.

GOLD FIELDS REVENUF.

The discovery of gold in New South Wales and Victoria, almost simultaneously, contributed,
.more than any other circumstance in the previous history of Australia, to promote the i
of its several Colonies and give an impetus to their trade and commerce which have few parallels
,even in the history of the world. From the date of this discovery until the present time the p
cress made by the two named Colonies in the establishment of all those institutions which
to the happiness and welfare of a community has been so rapid as to excite universal surprif
admiration.

The gold fields of this colony have not only enriched the people but added a very considerable
amount annually to the public revenue, both directly and indirectly directly from the f<
for the privilege of Digging for gold, and indirectly from the larger consumption of dutiable goo
consequent on increased population, one of the most valuable results of the gold d
population increased from 197,168 in 1851, to GO,O.V2 in 1S75, notwithstanding t
sustained in 1859 by the separation of Queensland. This increase in twenty-four yean
rate of 207 per cent., or an annual average of 17,062.

During the first two years after this important discovery the revenue derived from the
licenses to dig and search for gold was considered one of t|ie droits of th, ( "* JjJ "
with that view placed to the credit of the ( bra n Luda Revenue Account.

_j_j ;x- _i_:_ *u i,i rtf trnlrl 1 censes was transferred to tn *"-

Wren inav view piaceu vu me ureiui- ui m*, v. . --- ___j *

Crown having surrendered its claim, the produce of gold licenses was
revenue of the colony, and from that time till now has been subject to tin
tion of the local Parliament.

The first Act (16 Vic. No. 43) for the management of the gold-6d^ w
Legislative Council in December, 1852, came into operation on the 1

500 APPENDIX.

continue in force until the end of the year 1854. Under its provisions the fee payable for a gold-
digging license was fixed at 30s. per month for British subjects, or a royalty in lieu of the fee, of
one-tenth of the value of the gold procured from Crown Lands. Aliens were charged a fee of 3
per month, or a royalty of double that of the British subject. Leases of auriferous tracts of land
could be obtained on the payment, in advance, of a fee of 25. In September, 1853, an amending
Act (17 Vic. No. 23) was passed, in which the license fee waa reduced to 10s. per month, and the
royalty to 3 per cent, of the value of the gold procxired from Crown Lands. Aliens were admitted to
the rights and privileges of British subjects in respect to gold-mining, and the half-monthly licenses
discontinued. The rates for digging on private lands were reduced to one-half those chargeable on
Crown Lands. Two short Acts were passed in 1854 and 1855, continuing the Gold Fields Manage-
ment Acts, 16 Vic. No. 43, and 17 Vic. No. 23, to the 31st December, 1856.

In March, 1857, both these Acts were repealed by a new measure (20 Vic. No. 29) for the manage-
ment of the gold-fields, in which the license-fee was reduced to 10s. per annum. This Act differed
from previous Acts in two material points : the first was that no rates were leviable on gold-mining
on private lands, and the second that a fee of 4 was payable by persons carrying on business on
any of the proclaimed gold-fields of the Colony. The rates payable for working auriferous tracts
of land were in future to be determined by regulations to be issued by the authority of the Governor
in Council. This measure was, however, superseded by another (25 Vic. No. 4) passed in Novem-
ber, 1861. Under this Act the license fee or miner's right was allowed to remain at 10s. per
annum, but half-yearly licenses were issuable after the 1st July in each year at 5s. each. Business
licenses were reduced to 20s. per annum, and 10s. for half-yearly ones after the 1st of July. The
rates for working auriferous lands were to be fixed in a manner similar to that prescribed by the
preceding Act. Although another Act (30 Vic. No. 8) was passed in September, 1866, containing
many new and important regulations affecting the management of the gold-fields, the license fees
and other charges connected with gold-mining remained unaltered.

Notwithstanding the many concessions to, and the liberal arrangements made for, the benefit of
the gold-mining class of the community by Parliament, under the provisions of the various Acts
referred to, the produce of the gold-fields of this Colony has not increased to the extent expected.
The value of the gold received in 1862 from the several gold districts is half a million in excess of
any subsequent year. The unsatisfactory condition of our gold-fields is attributable more to the
want of energy and the scientific knowledge necessary to develop and successfully work the almost in-
numerable rich quartz reefs throughout the country than to any absolute scarcity of the precious metal.
The marvellous returns in the year 1872 from some of the Hill End auriferous quartz claims pro-
duced a mining mania which, though profitable to the Government for a time, proved disastrous in the
extreme to the majority of the multitudes of all classes of society who embarked in the numerous gold-
mining ventures which were then started almost daily. The temporary impetus to trade and the
fictitious prosperity produced by these, together with rich discoveries of tin and copper ore in
several parts of the Colony about the same time, indiiced the Government to submit to Parliament
a comprehensive measure for making better provision for the regulation of mining generally. After
considerable delay and much opposition the measure (37 Vic. No. 13) was passed in April, 1874.
This Act provides for the establishment of a Mining Department, and in connection therewith of a
School of Mines and a Mineralogical Museum. It also provides for the establishment of Mining
Districts under the jurisdiction of Wardens, for the appointment of Mining Registrars, Mining
Surveyors, and other officers necessary for conducting the business of the department efficiently and
with convenience to the public. Miners' rights may be issued with a currency not exceeding
fifteen years, at the rate of ten shillings per annum. Business licenses for six or twelve months, at
ten shillings and twenty shillings each respectively. Leases of auriferous lands may be granted for
any term not exceeding fifteen years, and for any area not exceeding 25 acres, at an annual rate of
twenty shillings per acre. Mineral leases may also be granted for any period not exceeding twenty
years, but renewable for a like period, for coal-mining in areas not exceeding 640 acres, and for
other minerals not exceeding 80 acres, at an annual rent of 5s. per acre, on condition that 5 per acre
be expended thereon by the lessees within the first three years. Leases may be determined by the
holders giving three months' notice. Mineral leases, conferring upon the holders thereof the same
rights and privileges in respect to mining for minerals other than gold, as are conferred by this Act
upon the holders of licenses to dig and search for gold, may be issued at the raije of 20s. per annum.

GOLD DUTY.

Not many years after the discovery of gold in the Colony, the opinion became pretty general that
the miners ought to pay to the State something more for the privilege of extracting gold from the
earth than the license fee. In accordance with this view, the Legislature passed an Act (20 Vic.
No. 17), in February, 1857, imposing a duty, to be levied at the Custom House, of 2s. 6d. per ounce
on all gold exported from the Colony, and a duty of 2s. 3d. per ounce on all gold, not the produce
of other Colonies, imported into the Mint. No export duty to be charged on gold which had pre-
viously paid the Mint import duty.

In 1862 an Act (26 Vio. No. 5) was passed reducing these rates to Is. 6d. and Is. 3d. per ounce
respectively. Since then several attempts have been made to abolish this duty* entirely, chiefly

* The duty on gold was abolished during the Session of 1879-80.

APPENDIX. 501

on the ground that no such duty exists in the neighbouring Colony of Victoria ; but although the
necessary measures for the accomplishment of this object passed the Legislative Assembly on each
occasion, they were invariably rejected by the Legislative Council. The duties therefore remain
as fixed by the last-mentioned Act. Some concession seems, however, to have been made to the
gold-diggers immediately after the passing of the " Gold Duties Act of 1857," for in March of that
year the license fee was reduced from 10s. per mouth to 10s. per annum.

POSTAGE.

Perhaps in point of time postage comes next as an item of revenue. In November, 1 825, an Act
(6 Geo. IV. No. 23) was passed by the Legislative Council, only then recently established, to regu-
late the postage of letters in New South Wales. From the preamble of this Act it would almost
appear that no postal system had hitherto existed, and yet it is difficult to believe that a growing
community, numbering in that year 33,000 souls, could have done up to that time without some
means, however primitive, of inter-communication. The following are the words of the preamble
referred to : "And whereas no post has as yet been settled or established in this Colony by the
Postmaster General and it is expedient to provide for the temporary postage and conveyance cf
letters until a post office may be so established &c." Authority was given by this measure to the
Governor to establish a post office in Sydney with branches in such other places as he might deem
necessary, to fix rates of postage, and appoint officers until permanent arrangements were made by
the Postmaster General in virtue of the powers vested in him by an Imperial Act passed in the
ninth year of the reign of Queen Aune.

From the passing of that Act until March, 1828, the postage was appropriated by the Postmaster
to defray the expenses of the postal establishment, but from that date it was directed that the

Eostage should form a branch of the public revenue, and the Postmaster and hie staff be remunerated
y fixed salaries. The postage in 1829, the first complete year after that arrangement, amounted
to 1,324 15s. 7d., a sum more than sufficient to cover the whole of the expenses of the department,
including the conveyance of mails to a distance, on the principal lines of communication, of about
150 miles from Sydney. Indeed, up to the year 1850, the expenditure of the post office did not
exceed to any great extent the amount received for postage.

It does not appear that any postal aiTangements were ever made by the Postmaster General of
England, for in the next measure (5 Wm. IV, No. 24) passed by the Council in 1835, reference is
only made in the preamble to the previous local Act. The Act 5 Wm. IV, No. 24, repeals the
former Act, and provides for the appointment of a Postmaster General and other necessary officers.
The postage rates fixed by this Act range according to distance, from 4d. to Is. per half -ounce.
Public officers and Members of the Executive and Legislative Councils were allowed to frank letters
the former on Public Service only, and the latter under certain restrictions. Newspapers were
also exempt under this Act from postage.

Between the passing of this Act, and the Act 3 Vic. No. 4, of 1867, under which the business of the
post office is now carried on, there were no less than twelve measures passed in connection with
this most important branch of the Public Service. In 1849 the postage rates were fixed according
to weight irrespective of distance : Town letters not exceeding half an ounce, Id. ; country letters
not exceeding that weight, 2d. ; and ship letters, 3d. The franking system was abolished, although
some slight advantage was allowed to soldiers and sailors of the Imperial service. The manufacture
and sale of postage stamps was likewise provided for in this year, and a postage charge of Id.
imposed upon newspapers posted and transmited within the Colony, which was however repealed
in December, 1851, reimposed in February, 1864, and abolished in 1873.

MONEY ORDER SYSTEM.

In the Act 31 Vic. No. 4, passed in 1867, to consolidate and amend the laws relating to the (Poet
Office, provision was made for establishing, in connection with the Post Office, a Money <
Department, which came into operation in 1868. Money Order Offices are now established
city, town, and village of importance throughout the Colony, at which orders can be o
each other or on any of the Australian Colonies, as well as on the United Kingdom of Great i
and Ireland. Orders are also obtainable in any of these places on New South VV ales,
contemplation to have the benefits of the system extended to America, with which con
munication is now regular, and the trade not only considerable but rapidly improving.

GOVERNMENT SAVINGS BANK.

In the year 1871 Parliament passed a measure (34 Vic. No. ir.) for the establishment of a Govern.
ment Savings Bank, an institution which is now in full working order in connection wit! m->

Order Department, having already branches in every place of importance throughou

RAILWAY RECEIPTS.

Until the introduction of railways the public imM was not augmented by any a
of magnitude or importance. Railways in this Colony had their ongin m P.*;
even in their infancy were under the fostering care of the local Government.

502 APPENDIX.

were started within a short time of each other : the first, the Sydney Railway Company, was
formed in 1848, and incorporated by Act of Council in 1849 ; the second, the Hunter River Railway
Company, was formed and incorporated during the year 1853.

The discovery of gold near Bathurst in 1851, by disturbing the labour market, upset the calcu-
lations of the Sydney Railway Company to such an extent as almost to bring their works to a
stand-still, and notwithstanding the importation of 1,000 railway labourers, through the agency of
the Land and Emigration Commissioners in England, both companies fell into irretrievable
difficulties, from which they were extricated in 1855 by the Government purchasing their properties
on terms satisfactory to the shareholders.

From that time till now the construction, maintenance, and management of railways in New
South Wales have continued in the hands of the Government. The first line, that from Sydney to
Parramatta, was opened on the 26th September, 1855. During the twenty years which have
elapsed since that event, the progress made in the construction and extension of railways has, con-
sidering the engineering difficulties which had to be overcome and the scarcity of labour, been on
the whole satisfactory. At the close of 1875 there were 437 miles open for tariff, and 249 miles in
course of construction. During the first ten years of that period the net revenue derived from the
traffic on the lines in operation only averaged 1 "228 per cent, on the capital invested. Latterly,
however, the net earnings have given a rate of interest somewhat over four per cent., although the
average of the last ten years is only 2 - 831 per cent. The gross railway receipts paid into the
Treasury during last year amounted to 598,663 12s. Id. The amount expended in the construction
of railways, including cost of rolling stock, &c., to 31st December, 1875, was 8,129,325 18s. 6d.

ELECTRIC TELEGRAPH RECEIPTS.

It was not until some years after the introduction of railways that the construction of telegraph
lines was commenced. The first line formed was that from Sydney to South Head, in 1857. The
line to Albury was opened for business direct with Melbourne on the 26th October, 1858. The
numerous extensions since then have placed Sydney in telegraphic communication not only with the
adjoining Colonies but with every town or place of importance in the Colony. It is also in direct
communication by cable with New Zealand, and via South Australia with England and the other
nations of Europe. While the telegraphic system was confined to the larger towns the receipts
paid not only the working expenses but something towards interest on capital. The recent exten-
sions, which have chiefly been to distant parts of the Colony where the business is comparatively
small, have, together with a reduction in the scale of charges, produced a different result. While
the working expenses in 1875 amounted to 65,604 Is. 2d., the gross revenue of the department
was only 49,238 2s., showing a loss of 16,365 19s. 2d., besides the interest on 351,896 6s. 3d.
expended in the construction of Electric Telegraphs up to the close of last year.

MINT RECEIPTS.

In November, 1851, the year of the gold discoveries in Australia, the Legislative Council
appointed a Select Committee to inquire into and report upon, the expediency of establishing in
Sydney an Assay Office and Mint. After due enquiry the committee brought up their report, in
which they recommended that the Council should petition Her Majesty to establish, by the exercise
of her prerogative, a branch of the Royal Mint at Sydney, for the purpose of converting Australian
gold into current coin of the realm, and giving thereby encouragement and stability to the trade and
commerce of the Australian Colonies, as well as an additional value to the British posessions in this
part of the globe. This recommendation was not only approved, but at once acted upon. The result
of the petition to Her Majesty was the establishment soon after at a cost, however, to the Colony
of 48,990 of a branch of the Royal Mint in Sydney, which came into active operation in 1855.

By a local Act, passed in 1854, it was declared that the gold coin to be issued from the Mint in
Sydney should be a legal tender for payments within the Colony. Later it was declared by
proclamation of Her Majesty to be a legal tender in British India and all the Australian Colonies.
In 1866 the Imperial Government, in consideration of the local Legislature having in the preceding
year made permanent provision for the maintenance of the branch establishment, declared by
proclamation of Her Majesty that the coin issued by the Sydney Branch of the Royal Mint should
be a legal tender for payments within the United Kingdom of Great Britain and Ireland. From
that year, therefore, the gold coins of the Sydney Mint have been current in almost every part of
the British dominions.

Besides the indirect benefits arising from the establishment of a Mint in Sydney, the fees
derived from minting operations, from the commencement to the present time, have not only
covered all the working expenses of the department and the cost of machinery and buildings, but
contributed no inconsiderable amount towards the public revenue of the Colony. These fees
gradually increased from 1855 until 1862, when they attained their highest point, viz., 32,806.
From that time they have been gradually receding, not owing so much, however, to a diminution of
the quantity of gold received for coinage as to a large reduction made in the charge for Minting,
which, although a loss to the revenue, has proved a boon to the producer. Notwithstanding the
revenue was greater in 1862 than in any subsequent year, the gold coined in 1871 was 82,316 ounces in

APPENDIX.

503

excess of the quantity coined in that year. In 1875 the receipts were not equal in amount to the
annual endowment provided by the Act of 1865 above referred to, but they were in excess of the
actual expenditure, as 2,090 of the endowment was returned to the Treasury during the present
year.

From the commencement of operations at the Mint on the 14th May, 1855, until the close of 1875
a period of over twenty years there were received for coinage 10,355,855 ounces, the value of
which was 39,965,835 15s. 6d. The issues have been 36,045,500 sovereigns, 3,8<I7,(KX) half-sove-
reigns, and 484,936 ounces of bullion, the total value being 39,914,081 2s. 6d. During the same
period the revenue amounted to 385,519 18s. 6d., which gives an annual average, for (say) twenty
years of 19,276.

STAMP DUTIES.

One of the means adopted by Parliament for augmenting the revenue and providing for the
deficiencies of former years was the passing of an Act (29 Vic. No. 6) in June, 1865, to impose Stamp
Duties. This Act, which came into operation on the 1st July of that year, was to continue in
force until the 31st December, 1868. Under various continuing Acts, it was, however, kept alive
until the close of 1874, when it expired by effluxion of time, the Parliament not being then in
Session. In 1875 the Government submitted a Bill to the Legislative Assembly, embodying the
principal features of the Stamp Duties Act of 1865, but through some informality in its introduction
it was ruled irregular, and therefore allowed to lapse. Since then nothing has been done to re-im-
pose Stamp Duties, notwithstanding they proved a valuable addition to the revenue of the Country
during the period they were in operation, and were collected at a trifling expense compared with
the expense of collecting some other portions of the public income. The gross amount realized
from Stamp Duties during the nine and a half years the law was in force was 730,236, which gives
an annual average of 76,867. The collections during 1874 amounted to 100,871, and there w
every prospect of there being a considerable annual increase from this source had the law been
continued. (Ste addendum.)

OTHER SOURCES OF PUBLIC INCOME.

In addition to those larger sources of public income referred to in the foregoing remarks, there are
many sources of minor importance from which, as a whole, a very considerable revenue is derived
annually. The principal of these are Pilotage and Harbour and Light Rates ; Rents of Tolls, Ferries,
Wharves, and other public property, exclusive of land ; Licenses to Publicans, Wholesale Spirit
Dealers, Auctioneers, Pawnbrokers, Hawkers, and others ; Fees of Office ; Fines and Forfeitures ;
Interest on Bank Deposits and Collections by the Government Printer. The revenue derived in
1875 from these and a few other sources of miscellaneous receipts amounted to close upon 300,000.

PUBLIC INCOME OF 1875.

The following is a summary of the public income of the year 1875 :
Indirect taxation :

Customs ..................... 974,432 1

Duty on Refined Sugar and Molasses ... ...... 31,266 1

Duty on Spirits distilled in the Colony ...... 8,57218 3

1,014,271 11 1
Direct Taxation :

Stamp Duties (arrears only) ............ 4,7251911

Duty on Gold .................. 14,19511 2

Land Sales :

Auction Sales .................. 1,019,05219 1

Selections after Auction ............... 102,440

Provisional Pre-emptive Right ... ... ... 65,379 6 ,

Deposits on Conditional Purchases ......... 439,109

Balance, of do 58,609 " " , ,.. .. .

Land Rents, &c. : we mo 1,1 in

Interest on Land conditionally purchased ...... 7o,91

Rent and Assessment on Pastoral Lands ...... 219,55910 7

Fees on Transfer of Runs ............... ''

Quit Rents .................... ].87J

Licenses to cut Timber, &c ............. *** " y

Mineral Leases and Mineral Licenses ......... s -'' '

Cold Field Licenses and Leases of Auriferous Lands 9,12<

Fees on the preparation and enrolment of Title Deeds W,\** J "

Miscellaneous items ............... 5,3 ^ ^

504 APPENDIX.

Receipts for services rendered : s. d. g, d.

Railway Receipts ' ... 598,66312 1

Telegraph Receipts 49,238 2

Postage 110,580 5 4

Commission on Money Orders ... ... ... ... 4, 189 17 6

Mint Charges 13,5651111

Fees for Escort and conveyance of Gold ... ... 3,961 17 4

Pilotage and Harbour and Light Rates, &c. ... ... 32, 114 15 4

Registration of Brands ... ... ... ... ... 1,504 3 6

Contributions under the Sheep Diseases Prevention

Act of 1866 12,5491910

Fees of Office generally 32,128 9 3

858,496 14

Miscellaneous Receipts : ,.

Rents other than rents of land 33,789 12 10

Fines and Forfeitures 8,173 10

Interest on Bank Deposits 38,26814 3

Other items 40,635 19 9

120,867 7 8

Total Revenue and Receipts, 1875 4,121,99511 3

GENERAL REMARKS.

From this statement it will be seen that, although the public income of New South Wales is at
present derived from various sources, there is only about one-fourth of it raised by indirect
taxation, or that description of taxation which falls upon the community at large. Last year the
direct taxes that is Custom and Excise duties amounted to 1,014,271 Us. lid., which is equal
to 1 13s. 5d. per head of the population, a rate very much below that of any of the other
Australian Colonies.

The revenue received from direct taxation is paid by certain classes for the enjoyment of certain
privileges. The receipts from the sale and occupation of certain Crown Lands are only payments for
their equivalents in investments which, in the hands of the industrious, prove highly remunerative ;
and the large amount received for services rendered by the State is admittedly less than would be
paid by the public if such services were conducted by private enterprise instead of by the Govern-
ment.

Irrespective, therefore, of its splendid climate and other peculiar attractions, this Colony should
be desirable as a place of residence on account of its moderate taxation, its free-trade principles,
its facilities for mining operations, and the easy terms upon which its waste lands can either be
purchased or temporarily occupied.

As such a large proportion fully three-fourths of the public income is derivable from sources
other than taxation, it is only natural to expect that these should be affected to a considerable
extent by bad seasons ; for example, long droughts and disastrous floods ; by diseases amongst
sheep and cattle, by rust in wheat, and by other diseases to which cereal crops are subject, not
only here but in all countries ; and by over-speculation. The Colony has suffered severely at
different times from each and all of these calamities, but such are its wonderful recuperative powers
that no sooner had they passed away than trade and commerce returned to their accustomed
channels, and other industries flourished as vigorously as before.

The public income is also more or less affected by a rise or fall in the price of wool in England.
When wool is high the trade of the Colony benefits, land is purchased more freely, and a tone
of hopeful confidence pervades all classes of the community. When a fall takes place the reverse,
of course, is the case. For many years past, and until recently disturbed by the uncertain state of
European affairs, the wool of this Colony realized prices highly remunerative to the wool-growers ;
and perhaps at no former period in the history of the country have the pastoral tenants of the
Crown been in a more prosperous condition, for besides the high prices obtained for their wool,
they have obtained in the local market almost unprecedented prices for their fat stock.

There have been also occasional stagnations in trade, when building and other industrial opera-
tions have been all but suspended and when as a natural result the labour market became much
depressed. During such periods the Customs duties have slightly fallen off, but never to such an
extent as to inconvenience the Government or render it necessary to resort to any new mode of
taxation. The deficiencies of former years have been more the result of impropitious seasons and
excessive expenditure than a falling off in the produce of the Customs or Excise revenue.

The Treasury, New South Wales, JAMES THOMSON.

Sydney, 1st August, 1876.

APPENDIX.

505

STATEMENT of the Annual Revenue and expenditure (including Temporary Loans) of the Colony
of New South Wales, from the commencement of the year 1826 to the close of the year 1 v

Year.

Revenue and Expenditure.

Temporary Loans.

Balance at the close of each year.

Receipts.

Payments.

oToTd. Amounts repaid.

Dr.

Cr.

1826
1827
1828
1829
1830
1831
1832
1833
1834
1835

1836
1837
1838
1839
1840
1841
1842
1843
1844
1845

1846
1847
1848
1849
1850
1851
1852
1853
1854
1855

1856
1857
1858
1859
1860
1861
1862
1863
1864
1865

1866
1867
1868
1869
1870
1871
1872
1873
1874
1875

90,026
81,812
97,034
103,219
107,831
122,854
135,910
164,991
205,515
273,745

86,615
107,683
92,120
97,086
83,990
135,282
112,640
123,327
135,177
170,359

::,4ii

22,460
17,646
11,413

12,428

23,270
64,934
135,272
238,658

1,382,937

1,144,279

330,533
354,766
334,079
427,368
682,474
497,303
428,732
350,891
310,953
366,687

215,026
294,491
463,162
567,967
529,845
744,069
501,914
343,890
345,584
290,268

354,165
414,441
285,359
144,760
297,389
50,622
26,200
7,600
48, :
122, r-.vj

48,760
2,300
75,664
21,600

27,900

24,100

4,083,780

4,296,216

148,324

52,000

346 481
396,260
396,863
483,279
575,795
591,936
532,718
823,606
960,783
1)73,178

296,230
324,874
460,431
462,258
564,487
783,812
632,425
800,384
1,139,964
1,082,910

9,500
88,200

163,303

14(i
82,9iM
181,0%
250, 3-2 1
13t>,<i*7
135.
L'iii',099
88, KU
29,057

77,154
57,917
80,642
144,176
105,321
60,746
52,125

48,000
2,000
55,500
1,500

6,080,899

6,547,775

578,081

204,700

1,125,090
1,161,651
1,368,389
1,511,964
1,309,891
1,432,406
1,611,570
1,534,187
1,391,263
1,755,462

1,067,710
1,176,400
1,190,727
1,401,448
1,204,433
1,594,009
1,650,734
1,814,827
1,853,184
1,722,016

10,000
6,800

76,437
55,888
233.
309,066
414*524
252,921
213,757

35,000

66,883
258,261
80,809

270,543
144,006

14,201,873

14,675,488

414,549

50,800

2,045,589
2,012,041
2,107,157
2,202,970
2,102,697
2,226,767
2,801,871
. 3,324,712
3,509,966
4,191,996

1,963,720
2,017,475
2,173,897
2,173,705
2,156,479
2,426,931
2,257,954
2,411,982
2,879,829
.VW6,609

769,344

137,100
207,600
443,800
443,500
446,600
541,900
393,000

603,304
420,270
256,548
192,398

346,818
350,085
339,943
343,321
348,105

366,684

132
1,045, COS
1,340,605

J.l .'.'. ;".>-'

334,600
o 040 000

26,455,766
62,205,261

23,798,581
50,462,339

3,638,570

3,255,500

The Treasury, New South
1st August, IS'lti.

506 ADDENDUM.

SINCE the foregoing account of the revenue was written Stamp Duties have been reimposed in a
modified form ; a few increases made to the Tariff, and some changes effected in the Land laws of
the country, by which it is expected the public income will be considerably benefited.

From the operations of the Stamp Duties Act (44 Vic. No. 3) it is anticipated that a sum of
200,000 per annum will be at once realized. By the Act 43 Vic. No. 16 the import duties on
spirits of all kinds have been increased from 10s. to 12s., sparkling wines from 6s. to 10s., and all
other kinds of wines from 3s. to 5s. per gallon. Under the Act 43 Vic. No. 17 the duty on spirits
distilled in the Colony has also been raised to the same rate as that now chargeable on imported
spirits, viz., 12s. per gallon.

The principal features of the " Lands Acts Further Amendment Act of 1880" (43 Vic. No. 29)
which is to be read with, and as forming part of the "Crown Lands Alienation Act of 1861,"
"The Crown Lands Occupation Act of 1861," and the " Lands Acts Amendment Act of 1875 " are
the following :

1. Reduction of value for improvements from 1 to 10s. per acre.

3. The time for the completion of improvements may be extended from three to five years, pro-
vided the Minister shall be satisfied that all other conditions have been duly performed,
that improvements to a value not less than 6s. per acre have already been made, and that
the conditional purchaser shall reside on his land during the extended period of two years.

3. The term within which the expenditure of 2 per acre on mining operations, other than

gold mining, may also be extended to five years on mining conditional purchases, provided
the Minister is satisfied that not less than 1 4s. per acre have already been expended
thereon on mining operations.

4. Conditional purchases shall not be transferable until the purchasers have resided thereon

for five years from the date of purchase.

5. Forfeited selections are not open to conditional purchase or sale otherwise, until the expi-

ration of thirty days from the notification of such forfeiture in the Government Gazette.

6. The minimum rent of runs shall not be appraised at a lower rate than 1 per section of 640

acres, unless in the case of first and second leases, which may be as low as 10s. per section.

J. T.

The Treasury, New South Wales,
1st May, 1881.

Sydney : Thomas Richards, Government Printer. 1881.

UNIVERSITY OF CALIFORNIA LIBRARY

Los Angeles

This book is DUE on the last date stamped below.

41584

| H Mill nil | III |

3 1158 00339 5372

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