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The Pamphlet Collection of Sir Robert Stout: Personal Volume

Address in Reply. — Speech delivered by the Hon. Sir Robert Stout, K.C.M.G., M.H.R., in the House of Representatives, 25th June, 1895

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Address in Reply.

Speech delivered by the Hon. Sir Robert Stout, K.C.M.G., M.H.R., in the House of Representatives, 25th June, 1895.

Sir R. Stout.—Sir, I think it is to 4.30. be exceedingly regretted that in an important debate like this none of the members on the Government side of the House have anything to say. I think it was Mr. Gladstone who said that this formed a convenient and proper opportunity for discussing the administration of the Government during the recess, and of any policy if such was sketched in the Speech from the Throne. I regret that the autocratic rule that a so-called democratic House has laid down prevents one from discussing as one would like these subjects which I have mentioned. We are confined to an hour's limit. It would need more than that time to adequately discuss the subjects which I have referred to. But, before referring to the Speech of His Excellency, I must first congratulate the mover and seconder on their speeches. There was in both of them a breezy independence that every one must admire, and I feel sure that if any person had watched the attitude of the Premier and the Minister of Labour during the speech of the honourable member for Rangitata they would have seen that neither of them admired that breezy independence. They seemed exceedingly uncomfortable—one gentleman taking notes which were never used; and the other seemed so restless that he did not know very well how to keep in his seat. Sir, I am not surprised at that, because there were some truths given utterance to by the honourable member for Rangitata which I hope will be laid to heart by the Ministers. I do not know, Sir, whether the honourable member for Rangitata ever attends the theatre, but, even if not, he must have read, I feel sure, of a very old play that is still a very popular play; and ho must have had in his mind's eye the history of the two Surfaces. The Speech, he himself says, is full of most excellent sentiments. He tells us that the general policy of the Government is magnificent : their general principles are so high; their ideals are so good; but their practice is all bad. Whenever you come to details, everything is wrong. Sir, Joseph Surface had most noble sentiments. Now, if one had time, there is a comic element in the Speech that might be referred to. It begins with the fur-seal, which the honourable member for Palmerston says is a very important animal; and it ends with juries, which I suppose also are very important animals. And the thing which struck me as most amusing in the Speech is this: We are told the Ottawa Conference was a meeting made memorable by the Imperial Government despatching to the gathering the Earl of Jersey on behalf of the Mother-country. Why despatching the Earl of Jersey to a Conference would make the Conference memorable I cannot make out, and have not yet heard explained. Perhaps the mover, in his reply, may bo able to tell us. But, Sir, the Speech seems to me, after all—to come to the serious part of the business—to bo a very lamentable performance. There is no ring of enthusiasm in it. There is no aim in it; there is no earnestness in it, and no ideal held before a party, or before the country, that is to be struggled for or sought after. Old Bills are refurbished up again in the Speech. On the whole, there is nothing notable in the proposals. I have used the word "notable," but I should rather say "remarkable," because there is something notable—namely, the omissions from the Speech, and what might be termed the admissions in the Speech. Of course, it is struck in what might be called an optimistic vein; it might have been written by Dr. Pangloss. But let us look at just one or two things. I would take the question of the depression. Last year we were told that we were in a better position than almost any other country, and now this year we are informed that the depression is abating. Then we come to what may be termed the omissions, and I venture to say there is no single branch of the policy on which the Government prided themselves last session but what practically has now to be admitted to have been a ghastly failure. Let me take, Sir, the question of the New Zealand Consols. What was to be the object of the New Zealand Consols? The New Zealand Consols were to be a means of raising money in this colony. We were to have teapots emptied here, and old stockings emptied, and we were to bring into the Treasury all their contents. Sir, have they come? I suppose honourable members will not say that the £150,000 that came from the Bank of New Zealand came out of the teapots; and yet that is what was to happen. The reason why the New Zealand Consols Bill was passed was that we were not to bo dependent upon the foreign money-lender; we were to utilise our own savings, and these savings were to be page 2 spent in the promotion of public works in this colony. Has this £150,000 been so spent? It is true we have not had the law obeyed, because there ought to have been laid on the table on the very first day of the session a return showing how the investments under the New Zealand Consols Act have been made; but that return has not been laid on the table. It ought to have been laid on the table. But, if rumour be correct, this £150,000, instead of being utilised in the colony in the prosecution of public works, has been sent to London—I suppose, to follow our unpledged securities which are lying there in millions. And, then, not only has the Consols system failed. Let us come to the scheme of advances to settlers. Has that been a success? Why, Sir, the sharpest criticism used against the Government was used by the honourable member for Rangitata in seconding the Address, and I can hear almost a chorus from the whole of this House that the impression of members is that the advances-to-settlers scheme has been a failure, and the House is asked, it seems to me, to alter the scheme. If there is any meaning in any phrase, I can imagine that the statement that the matter will "receive careful consideration" implies that the Government themselves have to admit that, so far as the advances-to-settlers scheme is concerned, that also has been a failure. And if it be the case that we are to have the Board altered, we shall be doing something that will be deceiving those from whom we have borrowed the money. The money has been lent to us upon the faith that this was to be a non-political Board. It was upon the faith not only of what was said in the speech made to the London Chamber of Commerce, but also in an explanatory circular of the Agent-General: it was stated by both that this Board which was to lend money was to be a non-political Board—a Board which had been most successful in years past in lending money; and yet the Government actually cast a slur upon the operations of this Board, which had been praised by the Treasurer and praised by the Agent-General, and invites the House to alter its constitution. And the members of the Government party—at all events, the majority of them—are, I understand, clamorous that some alteration shall take place. Then, Sir, is not that an admission that this scheme also, as well as their Consols scheme, has been a ghastly failure? And then, what about the land-for-settlements scheme? Has that been a success? I am sorry to say, so far as I can judge from the returns published in the papers, that scheme has also broken down. I am exceedingly sorry for that; and I am sorry that honourable members, before proceeding with that scheme, would not take my suggestion. I am sorry the Cheviot scheme of settlement has also broken down. I do not blame the Minister of Lands. I believe he did what he thought was right. I do not cast the slightest reflection upon him. I supported him in what he did; I believe, under the circumstances, he did what he thought right; but it is our duty to face the facts as we find them, and, so far as the Cheviot settlement scheme is concerned, it has been a mistake from a financial point of view. The same may be said of Pomahaka and the Studholme Junction settlements, and I do not believe there is a single estate bought by the Government which, from a financial point of view, has not been a failure. Therefore I am not surprised that in this Speech there is no reference to the success of the land-settlement scheme. Then, their dealings under the Native Land Act have not been a success. We are told there are many Natives signing deeds, but we know the actions of the Government in this matter have not been attended with success, because the Natives have not been approached in a way they should be. I believe in the Crown not allowing private individuals to buy land from the Natives; but the Natives should have been approached in a different way. A suggestion was made in the Act of 1886, under which, if carried out, the Natives would have been much more likely to have fallen in with the Government, and made the Act more workable. Wo hear nothing about the railways. I do not wonder at that, because with a falling revenue there is not much reference to be made to them. Then we come to a most important question—the question of the unemployed. Sir, as I said, last year we were told that we were better off than any other colony. Can we say that this year? Why, Sir, instead of its being recognised, as it was by almost every member who stood on the platform, that it was a function of the State to give work to the unemployed, to whom is that duty delegated now? It is not even delegated to the local bodies; it is delegated to the Charitable Aid Boards. The unemployed now are told that they are to go begging for work in exactly the same position as the people under the poor-law have to go and ask for work, and that is a position which I think the unemployed of this country should not be placed in. Can that be said to be a success? I am exceedingly sorry that our co-operative system should have broken down. I thought there were hopes in it that we might have got over the "unemployed" difficulty, but we have not got over it, and we are now in face of the "unemployed" difficulty just as much as ever, and all the schemes of the Government in reference to it have proved utterly futile and utterly unsuited. Then, the only suggestion that has been made in regard to it is that the same great success attended the mission of the Minister of Labour to Victoria, to New South Wales, and to South Australia about the labour settlements there. That suggestion in the Speech only puts me in mind of an historical Biblical event: When Noah was in great trouble he sent forth a dove. The Minister of Labour was the first dove sent out by the Noah of to-day. He went out, but it would not appear he was very successful, because we are told they have had to send out a second dove in the person of Mr. March, Superintendent of Village Settlements. Mr. March page 3 is sent over to Australia to see if any idea can be got from Australia as to how to deal with this question. Is not that an admission of failure? I thought we were to set an example to other colonies. And what is the admission now? That we have to go to Australia to get an idea to enable us to deal with this vexed problem. What about the State farms? Have they been a success? I venture to say, if any farmer went and inspected them, he would have to come to the conclusion that the State farms in this colony have been, like all the other schemes of the Government, a huge failure. There is nothing, in fact, which the Government have touched that has been a success. Their sentiments are excellent, but their details are all bad, and their administration is entirely faulty and a failure. We have had a reference made in the Speech to the Tuhoe Tribe. When I heard His Excellency pronounce that name, knowing that he did not speak Maori, I thought he meant Tohu. I thought he was referring to the visit to Te Whiti and Tohu; but that is not referred to in the Speech. Why? Is it because they think it of no importance? I venture to say the Natives deem it of importance, and I venture to think the attitude the Premier was placed in was most lamentable. He was certainly not maintaining the dignity of this colony and the dignity of his office when he went to these chiefs and was told that he was an intruder and that his presence was not desirable. Then, Sir, as to what is taking place in the Uriwera, why should we go to the expense of making roads or surveys? I am told, by one who knows all about the land, that it is utterly valueless; that it consists of steep precipices, of hills that cannot be clothed with grass if the small stunted bush and scrub be cut down; that the land is utterly unsuitable for settlement: and here we have hundreds of thousands of acres of Crown lands, good bush-land that could be utilised for settlement, where roads are required to be made, surveys to be made—lands that would make homes for people. Instead of utilising the funds of the colony for that purpose, we have got Armed Constabulary and unemployed sent up to Uriwera in order to have roads and surveys made through lands which will be unsuitable for settlement perhaps for another hundred years to come. It is done without the sanction of Parliament. I am not aware of any vote being passed for opening up the Uriwera either by roads or by surveys. Why, then, this waste of money? It seems to me to be done only for one purpose. The Premier wont to the Uriwera. He was to publish a book about it. We have not yet seen it; and to say that he could force this settlement this armed force has been sent there—to show that his mission was of some value. There is no other reason I can think of why this Uriwera campaign should have been commenced at all. Before I refer to the policy portions of the Speech I may say a word about two matters which I exceedingly regret to see in the Speech. I do not wish to comment on them. I refer to the cyanide question and the Midland Railway. I do not deny that the Government was perhaps bound to say something about the Midland Railway; but I deny that they have any right to say anything about the cyanide patent. That is, perhaps, to be fought in a Court of law, and it is unwise and unfair to discuss beforehand that which is to be discussed before a judicial tribunal. We know that if matters which are sub judice are discussed by the Press the papers are liable to be proceeded against for contempt. I exceedingly regret, and I feel sure the Government will regret when they come to think, that reference has been made in the Speech to these two matters. I leave them there because I think it unwise of the House to discuss them at the present time. We have to remember, as far as the Midland Railway is concerned, that we are dealing with a foreign company, and, if this House is to discuss beforehand what may have to be decided by a Court of law, we are putting this colony in an entirely false position. Therefore I will not discuss the matter, and I hope honourable members will not. What are some of the remedies that are proposed in this Speech? The first is that we are to have an additional Minister. This is certainly most peculiar. Why, Sir, if the administration of the affairs of the colony required an addition of Ministers they might have been in Wellington more than they were during the recess. There were hardly ever two, or more than two, Ministers in Wellington together. I do not deny the right of Ministers to go over the colony; it is their duty, and it may be their necessity, to do so; but no one can say that necessity required that, out of seven, only two Ministers were to be found at their administrative duties in Wellington, and directing the administration of the colony. The consequence of their absence is well known. Work had to remain, and be piled up, until they came back, and the administration of the colony was not carried on properly. I am amazed now that it is proposed to appoint an additional Minister. We have seven Ministers. We had only seven when there were ninety-four members in this House. Now we are going to have an additional Minister when there are only seventy-four members in this House. Why should that be necessary? What has changed the opinions even of Ministers themselves? I can remember reading the division-list in 1887 or 1888, when the Act was passed reducing the number of Ministers, and, if I recollect rightly, two or three of the present Ministers voted for the reduction to only six, which they have increased by one already. Some of them actually voted for only five Ministers: and now we are asked to have eight Ministers. What I say is that this colony does not require eight Ministers, and I say that seven Ministers are quite able enough to carry on the business of the country if they will attend to it. It would be entirely unfair to have an additional Minister placed in this House, considering the number of members of the House; it would be entirely unfair and improper. If the administration of affairs requires an additional Minister you page 4 will have to increase the number of members of the House as well as the number of Ministers. What is the next remedy suggested? We are to have our Representation Act altered. We are to permit what has been the curse of every country—what is called gerrymandering. We are not to allow after every census an impartial tribunal to fix upon the boundaries of our constituencies, but are to have that law altered or interfered with. I do not know there is much more I ought to refer to. We have got a Fair Rent Bill. I do not know that such a Bill is not necessary under present circumstances, considering the low prices that have been ruling for some time past. The rents at Cheviot, at Pomahaka, and many other places should be reduced, and I believe, that being so, it is better to leave that to a judicial tribunal than to Ministers, because Ministers, however fairly they may try to act, will be accused of improper action. I see no objection to a Fair Rent Bill, but, if Ministers are going to extend the functions of this tribunal beyond that of dealing with Crown tenants, they must put in a word interpreting what is "fair." I do not know what is to be termed "fair" if there be no competition, and if the Minister is going to put in "fair" with regard to rents he will have to insert what is "fair" with regard to interest. He cannot limit it to rent; and it is possible the Advances to Settlers Act may have to be amended. We may have a tribunal set up to say if 6 per cent, is fair interest if the prices of wheat and other crops continue low. The mortgagors may not be able any more to pay interest than rent. Where are we to draw the line? If you have the right to deal with Crown tenants, as you have, then I cannot see how you can help dealing with the question of 5.0. interest on loans. Well, the other thing that is referred to is this—and there comes, I think, a touch of my honourable friend the Minister of Education: He says, "For the third time in succession you will be asked to pass a Bill extending to local bodies the right of levying rates upon land-values." It has a literary flavour—" for the third time One can see it must have been penned by him. I think he must have been reading Macbeth It puts one in mind of what happened round the witches' caldron,—

Thrice the brinded cat hath mew'd.

I do not know otherwise where it was borrowed. But why should he refer to this only as thrice? The Noxious Weeds Bill, I think, has been brought forward thrice; the Apprentices Bill, I think, we have had three or four editions of. Why should this one Bill—the Rating Bill—only have "for the third time"? I think almost all the policy Bills of the Go vernment might be headed "for the third time"—there is nothing new in regard to them. That seems to be the whole policy of the Government. And now I must come to deal with what I term some of the administrative acts of the Government during the recess, because really, Sir, this is the only opportunity we have of discussing this matter. The first thing wish to refer to is the rumour that I have seen in the papers that the Colonial Treasurer has agreed to arbitration, if Parliament approve, as to certain claims of the New Plymouth Harbour Board. Sir, that is a most monstrous proposal—a monstrous proposal—and I am amazed at the Government having undertaken such responsibility—a most monstrous proposal, if we consider the history of that loan. On every bond issued by that Harbour Board there was a declaration that, so far as the General Government is concerned, it is not concerned with the loan. Just the same as in the prospectus of our loans, when we issue our loans in London, the investors are warned that the Imperial Government has nothing to do with our loan, so we warned those who should deal with the New Plymouth Harbour Board loan that the General Government had nothing to do with it. And yet we have had the Treasurer pledging the honour of this colony to submit some claims of the bondholders to arbitration, and that too after the emphatic letters that have passed between the late Mr. Ballance and the bondholders. Nothing could be more emphatic than the attitude he took up; yet all that has been departed from, and this colony has agreed, through its Ministers, to agree to arbitration. Sir, I submit that this is entirely unwarranted. The Treasurer had no business to make any such arrangement; he passed beyond his powers, and I cannot understand why such a thing should have been done. Now, coming to two other things that I think require consideration from this House : I come first to this question of our new loan; and if there had been no reference to the loan in the Speech, if there had been no reference to the loan by the mover and seconder of the Address in Reply, I do not know that I should have referred to it; but we are invited to discuss it. We were told by the mover of the Address in Reply, the honourable member for Palmerston, that this is a bright spot in the history of New Zealand—this floating of the 3-per-cent. loan. Sir, does the honourable gentleman wish comparisons? Does the honourable member know how we stand in comparison with the other colonies? Why, Sir, we will take, for example, the small colony of Western Australia. That small colony of Western Australia has only about a tenth of our population and only about a tenth of our exports. So far as everything that may be considered a security for the money-lender is concerned, it is nothing compared with us.

An Hon. Member.—What about its territory?

Sir R. Stout.—It has got a desert territory. I am not aware that desert territory is of any value, even to those who reside on the West Coast. Sir, how does it stand? I say that the price and the conditions under which the Western Australians have raised £750,000 are more favourable than those of our million and a half, and I will show it. Western Australia floated their 3½-per-cent. loan at £103 1s. 4d. We floated our 3-per-cent, loan at £94 8s. 9d. But, in considering that we have to take what page 5 were the interest concessions. If honourable members will look at our prospectus and the Western Australian prospectus they will see that large interest concessions were given by us—interest concessions that at a rate of 3¼ reduced our price to £93 13s. 3d., because we are paying interest on money we have not received. Our interest dates back from the 1st April, and part of our money is not paid till the 1st August, so that practically the price we got for our loan, allowing for interest concessions, was £93 13s. 3d. The Western Australian people did not give the same interest concessions. They only gave a small amount of interest concessions, which reduced their price to £102 12s. 5d. If we include the interest concessions, you will see the interest we pay was about 3¼, or a shade over 3¼, and theirs was, I make it out, £3 7s. 6d. It might be supposed that we paid less than they by about 2s. 5d. per £100; but they have an enormous advantage over us, and I will show how. I stated last year in the debate on the Financial Statement that able financiers laid down this proposition : that in borrowing money and converting loans you ought to take your loans on a short term; that, considering interest is falling all over the world, and has been falling for a century, it is bad finance to have a long-termed loan. Now, what have we done? I pointed out last year—I quoted an extract from a leading French economist, in which it was pointed out—that ten or fifteen years ought to be the longest term that a State ought to take a loan for if they wished to be prudent in finance. But what have we done? We have taken our loan for fifty years. We cannot alter the rate of interest for fifty years. But what has Western Australia done? She has only taken the loan for forty years, but with the option at the end of twenty years of paying it off; and I therefore submit that, so far as the price of the loan is concerned, Western Australia has better terms than we have for our 3-per-cent. loan. The honourable gentleman talked also as if this was the first 3-per-cent, loan any colony had ever quoted. Why, at the very time we sold it—I have here the returns of the Stock Exchange for May—at the very time we sold our loan for £94 8s. 9d. I find that the Canadian 3-per-cents were standing at 99½ to 100½. The Canadian 3-percents were at 100½ at the very time when we got £94 8s. 9d. for our loan. Then, if you take the Ceylon 3-per cents, you will see that they were fetching in the London market a higher price than we got for our 3-per-cent, loan, fetching £102 to £103. Then, there is a Mauritius 3-per-cent, loan, and a British-Columbian loan. I therefore say, considering the money-market in London at the time, that we have not made a great bargain; and, if honourable members will look at the Stock Exchange lists for what 3-per-cent, loans brought at the time, they will find that the 3-per cent, securities of the Corporations, such as Bath and Reading, were fetching £3, £5, and £6 above par at the very time we sold our loan for £94 8s. 9d. Therefore I do not see, especially considering what Western Australia did, where this great glory, these bright spots, come in. And now I must refer to some statements that have been made in reference to the issue of this loan; and I refer to the explanatory circular issued by the Agent-General in reference to the loan, and I say that there is no person reading that explanatory circular but must feel sorrow for the honour of the colony, because there are statements in that explanatory circular which are not true, and statements that are so placed that if true they must deceive any person who knows nothing about New Zealand finance. Why, to begin with, the first suggestion made in the first paragraph is that all this money is to be lent on freehold security. There is no suggestion that it is to Crown tenants or on leaseholds. On the contrary, the suggestion is the other way; it is only to be advanced to three-fifths of the value of the land. That is all that is said in the circular. Then we come to the second paragraph, where it deals with the financial position of New Zealand; and what does it state? Why, instead of taking the surpluses as certified by the Auditor-General and the officers of the Treasury—the actual surpluses—there has been put down what is mischievously called the gross surplus. That is put down on the table here, and then the Agent-General goes on to say, "There have been spent out of revenue certain sums of money for public works." That is true; but I say that any person reading this circular will assume that all those moneys that have been allocated to public works have been expended, and that we have all the surpluses remaining over this expenditure. That is an entirely misleading statement. Then, the next misleading statement comes in the next paragraph. It is this: "New Zealand has not raised any loan in this country, excepting those for conversion purposes, since 1888." Sir, that is quite true, and it is quite false. It is quite true in the sense that there has been no loan raised directly; but what has been done? Let us take an example of what was done with the Cheviot loan. We had for that a loan of £250,000. Where did we raise that money? We raised that money on the London market, and since 1888. But how did we do it? We called it a conversion operation. What we did was this : We issued that loan in this colony, and then took it to England and converted it there, after it had been in existence only a few months. And that is not raising a loan in London ! Why, this is simply playing with words. And so with various other loans. We have converted loans for the purchase of Native lands, and have converted other loans; and it is absurd and ridiculous and unfair to go to the London money-lender and say that we have had no loans but for conversion purposes since 1888. Then he goes on in the next sentence and says the gross amount of public debt in 1889 was £38,375,050; and then that the gross amount of public debt in 1894 was £39,826,415; leaving any person to assume, in reading the paragraph, that the page 6 debt has only increased by £1,451,365. But what is the fact? Instead of giving them the net public debt, he gives the gross public debt; and the difference is this: that, instead of our debt having increased by the difference between these sums, he has left out the sinking fund, and part of the sinking fund has been absorbed, and the result is that the debt has increased about half a million more than appears by this system—has increased by £443,465 more. Here again, I submit, is a most misleading statement. Then, take the next misleading statement of the case, in which the honourable gentleman stated that we had £800,000 at 4 per cent., that he could use, as he believes, for public purposes. Why, surely he cannot have had forwarded to him Return B. 29 of last session, in which it appears that the only amount left clear was £476,000; the balance of the £800,000 was in the Post-Office Savings-Bank, and belongs to that institution. To say, therefore, that he held that amount at the command of the Government is an entire misstatement. Then I come to another point: The honourable gentleman stated that, so far as our railways are concerned, they earn over 3 per cent.; but that is not true. The earnings of 1893-94 were only £2 17s. 9d. In 1894-95 it might be expected to be about 1s. under the year before, as far as I can calculate—£2 16s. 9d. Here was another entirely misleading statement; and I say that it is a shame and a disgrace to this colony, when it goes into the market to ask for money, that it should put before the money-lender what is simply a bogus prospectus, such as some companies are sometimes in the habit of making. Here let me say one or two words with respect to other statements that have been made about the colony. The question was asked the other day of the Premier as to whether he agreed with the speech made by the Colonial Treasurer to the London Chamber of Commerce. A copy of that speech has now been circulated through the colony; it comes from the Agent-General's office, with the Agent-General's stamp on it; and it has been forwarded to members of the House. What do you find in it? You find that the statements in it are not true—and there is no other name that can be applied to it. You have, for example, this excuse given for the collection of the land-tax—namely, that "it was simply done not because we wanted the money, but to stop the issue of Treasury bills." But the London Chamber of Commerce did not hear the speech of the Premier in this House, or the speech of the Colonial Treasurer, in which both honourable members declared that it was absolutely necessary, for the safety of the colony's finance, that funds should be raised at an inopportune time. What was the excuse given by the Colonial Treasurer? He did not say the same thing before the Chamber of Commerce. No. This is what he says:—

"Instead of being hard up for cash at that time, we had lying in London, and we have got them still, three millions' worth of unpledged securities of New Zealand, against which at any moment we not only could have raised the interest falling due, but could have got twice or three times the amount if it had been necessary to do so."

What are the facts? This is not a thing that admits of any dispute. We have got the returns laid on the table last session. They are signed by our auditors, and by our own officers; and what do they show? They show that last year the total amount of securities we had in London of every kind amounted only to £2,168,500. We had not £3,000,000 of that sort, either pledged or unpledged. Of this amount of £2,168,500, £476,000 was unpledged, and only that amount; and it is therefore a misstatement to say we had £3,000,000 in London. They were pledged to the Government Insurance, to the Public Trust Office, to the Sinking Fund Commissioners, and to the Post-Office Savings-Bank; and it is most injurious to the Government Insurance Association if it be thought for one moment that their moneys, invested as the law directs, are to be treated as unpledged securities. There are other statements in this speech that I submit are not in accordance with fact; but I am not going to deal with them at present, in the absence of the Treasurer. I have only dealt with this one point, and it is so clear that I hope the Premier and others will see if they cannot give some explanation of it. It cannot be put down to mis-reporting. There have been some occasions when the Government, when they have said an inconvenient thing in their public utterances, put it down to the reporter; but that cannot be said in this case. This speech is a carefully-revised speech made by the Colonial Treasurer to the London money-lender, and issued by the Agent-General to the various members of this House; and I say it is exceedingly unfortunate that such a speech should ever have been made, and it is exceedingly unfortunate, when we are going to London, that wo should fail to state the truth. I believe the credit of this colony is such that we do not need misstatements; we .do not need untruths to be uttered; and this misleading explanatory circular of the Agent-General's is exceedingly unfortunate. But this speech of the Colonial Treasurer's is still more unfortunate; and I ask those who care to do so to look at a few of the Press comments on this utterance, and they will see that in those Press comments they make a great deal of this fact of the three millions of unpledged securities. We have no such unpledged securities; we never have any unpledged securities of that class; our securities, both pledged and unpledged, were under three millions, and, taking the two millions we had, they were so pledged that, if you are to say, regarding the men, women, and children who have funds in the Public Trust Office, that these funds are to be at the beck and call of the Colonial Treasurer to be dealt with as he thinks proper—what is the value of your Public Trust Office, your Government Insurance, or your Sinking Fund Commissioners? I say that it is a most unfortunate utterance; and the other reported utterances page 7 about the surplus are also unfortunate. The London money-lender is told that we have a surplus of about £400,000. Our surplus is £180,000; we have got it certified to by the auditors; and therefore, why should this gross surplus be mentioned? You might just as well deduct any other amounts as deduct the amounts spent on roads, railways, and bridges, or the sums paid to the Public Works Fund. What is the lender to assume from these misleading statements regarding the surplus? It is not a surplus at all; the money has been spent, and the surplus must present itself as the difference between revenue and expenditure—than is, what is left. I shall not refer further to this speech delivered by the Colonial Treasurer before the London Chamber of Commerce, but I must say this : that when I read it I read it with pain, because I believe that the honour of this colony is at stake, and it is not for the honour of this colony that any person should be misled. It is not for the honour of this colony that people in London should imagine for one moment that the Agent General and the Colonial Treasurer should go to London and make statements that are not true. Now, what is the position in which we stand to-day? I was very much struck with a speech made by the honourable member for Ashley during the recess. He said, dealing with clause 21 of the Alcoholic Liquors Sale Control Bill, that the Government was not responsible for that, but that the blame rested upon the shoulders of the Liberal party, and that he was glad to take a share of that blame. He must also take a share of this blame. This is a slur cast upon the party; it is a slur cast upon the colony; and, if the Liberal party choose to carry this burden about with them as they have carried the 21st section, I say that they are welcome to do so. I am, perhaps, an older member of the Liberal party than the honourable member and others that call themselves such; but I have not lost faith in Liberalism; I am still a believer in social and political reform; but I say this: that no party can ever succeed in the end unless it has a high moral ideal and a high moral aim, and I believe it is the duty of every man in this House—even at the risk of being called unpatriotic—to speak the truth. Has New Zealand descended to this low ebb: that a man is to be called a traitor if he dares to say what is true? Has New Zealand reached this low ebb? I believe in speaking the truth, whatever happens. It is better for us to have no money to advance to our settlers, it is better for us to have no public works, better for us to keep our consciences clear and our morals pure, than to have all the millions there may be in London. What have we done? We have gone to London and got the loan of money from the money-lenders on such a circular and on such a speech; and when I thought of this question of patriotism and unpatriotism there came to me a few lines I think I might quote of what true patriotism means. It is from a modern poet with whom I have no doubt the Minister of Education is acquainted—one of our best modern poets. Speaking of this very charge of being unpatriotic, he says this:—

The ever-lustrous name of patriot
To no man be denied because he said
Where in his country's wholeness lay the flaw;
Where in her whiteness the unseemly blot.

* * * * *

Be this the measure of our loyalty:
To feel the noble, and weep thy lapse the more.
This truth by thy true servants is confessed:
Thy sins, who love thee most, do most deplore.
Know then thy faithful! Best they honour thee
Who honour in thee only what is best.

Mr. E. M. Smith.—That's me.

Sir R. Stout.—I say that in dealing with this question of patriotism, and of what is unpatriotic, I do hope that this colony, whatever our opinions may be, whatever our personal views, our political opinions are—I hope that this party, the party of the majority in this House, will repudiate as one man the tactics employed in misleading the English moneylender.

Samuel Costall, Government Printer, Wellington.