Local Self-Government will probably, at no distant time, form the chief dividing line between parties. It underlies all our political questions, and no Ministry has been able altogether to avoid it since the destruction of the old provincial institutions in which its principles were embodied. The loan policy has enabled Ministries to dally with Local Government in the past. But that resort must cease when people have discovered that an unsystematic and reckless borrowing policy means permanent burdens for all, while the permanent gain is for comparatively few. Last session the sum appropriated from the Consolidated Revenue was three million three hundred and twenty-eight thousand pounds. Of this vast sum, only forty-seven thousand pounds were available for even the pretence of public works. Additions and repairs to buildings, furniture, and similar items absorbed nearly all of this small provision excepting a poor £10.000 for tracks on goldfields, and £3,000 for prospecting. The whole of the great balance was needed to pay interest on loans, departments, the working of the railways, the cost of education (exclusive of school buildings), and the maintenance of hospitals and asylums.

There remain the land sales, a fluctuating and decreasing sum, but which were estimated to produce £330,000 for the current year. The Survey and Crown Lands Departments, extermination of rabbits and a few minor claims, absorb £154,000 of this amount. Two Reclamation Boards (New Plymouth and Lake Ellesmere) take £50,000, and certain local bodies get £35,000 for their share of the proceeds of deterred payment lands. The ordinary subsidies to local bodies will absorb probably £90,000 more. Here we have the only source, except loans, from which the smallest aid in opening up the country is to be expected.

Let us turn to the loans. From them we have now to look for roads and bridges, public buildings, water works, lighthouses and telegraphs, land purchase and immigration. These, with the departments connected with public works and railway construction, absorb nearly £700,000 during the year. The construction of railways takes nearly a million, and £184,000 was required for contingent defence. It will be seen from this brief sketch how unhealthily dependent we are becoming upon loans. If we do not take care, borrowing must become our normal state. The best and surest means of taking care is to bring down the enormous central expenditure, and to begin by reducing the number of members in our overgrown Legislature to at least one-half. This can only be accomplished by handing over local duties to well organised local bodies by whom they can be more efficiently and more economically performed.

In this light, local self-government is an important question of administration. Finance is dependent upon local government, and not local government upon finance. But I venture to say that it is of still graver moment if regarded from the ground of a higher policy; and that the fate of those who come after us must largely depend upon its satisfactory solution. Shall New Zealand continue its march as the well ordered and prosperous Democracy it has hitherto been? Or shall it, as wealth increases and society becomes more artificial, sink into an Oligarchy, with the social misery and political page 2 servitude from which an Oligarchy is always more or less inseparable? It is this consideration which gives dignity and weight to a question that might well be relegated to the background of politics if it concerned only the power of the people to control small local works, and to regulate small local affairs. Let us therefore first glance at