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The Indictment of the Ministry.
To line a box
Or curl a maiden's locks.
Surely we are unanimous in that hope: indeed, our endeavour will be to emulate any party in this House in the effort to hand down that heritage to our children as unimpaired as it is possible to do. What we complain of is the undue adulation—not of the colony, but—of the Administration which is doing so much to damage its prospects. I referred just now to some increases, both of taxation and of expenditure, which are threatened in the Financial Statement, and I pointed out that, as I understood it, the position of the Opposition is that they intend to resist any increase of taxation, or continuance—if you will—of exceptional taxation, and that they intend, on the other hand, not only to resist any increase in the expenditure, but to insist on a substantial decrease. Here is the position of the Consolidated Fund at the beginning of the present financial year, as set forth by the Statement itself: The Treasurer starts with a credit balance on the ordinary revenue of £36,509. It is well, however, to remember that the liabilities at the same date were £127,151. On the other side, he admits a deficit in the Land Fund of £45,716. Starting thus, he expects to end the year with a surplus of £48,152; but in the same Statement will be found the following words:—
"In Defence there is a small increase; but the Government are of opinion that the provision made is not sufficient for such a force as our defence works require, and it is the intention of my colleague the Defence Minister to bring the matter before the House, and, if his proposals are approved, further provision will have to be made. In connection with this matter is the question of our contribution under the Imperial Act. It is possible that a payment may during the year have to be made on this account; but, as it is uncertain, I do not propose to ask a vote. The amount can only be small this year, and if anything has to be paid I propose to make the payment out of 'Unauthorised.'"
been principally interested in the speech of the Colonial Secretary. Ho will be found to have revelled in metaphor—a pastime which is somewhat dangerous. He opened his Conference speech by reference to a remark made by a former speaker who likened the question of Federation to the boughs of a tree, and as descending rather than springing from the roots. Our Colonial Secretary improved upon that. He admitted that the sentiment had not taken root, but likened it to a tree with its roots floating in the air. He, however, remembered his position on this side of the water as an agriculturist, and then likened himself and his colleague to seedsmen whose duty it was to return to their colony and in its fertile soil to plant the seeds from which would germinate the tree of "Federated Australasia." These were his expressions. But he did not adhere long to the agricultural interest; his metaphors also ran upon lions, opossums, elephants; and then came the traditional mountain and the ridiculous mouse. But he said all these difficulties would disappear. Then he launched into what he called a "short historical sketch," and he was sanguine enough to say that this bore upon the question of federation. Speaking of the colonists of New Zealand, he said, "Our hearts and policy had been softened by missionary zeal." We are always glad to get contributions to the materials for an authentic history of the colony, but I do trust that our future historian will be a little discriminating in the use he makes of this speech delivered in Melbourne. The Colonial Secretary confessed that our hearts and policy were not softened only by such means, but also by "the controlling numbers" of the aborigines and their "skill as riflemen:" "therefore," he said—and I quote his very words—"therefore, he recognised the right of the Maoris to their own land." Then he indulged in more metaphor. He likened Australia to a lusty bridegroom and New Zealand to a beauteous bride, but said that it must be a marriage of convenience and that the marriage settlements would have to be carefully and strictly drawn. No union of hearts or interchange of loving sentiments, but strictly a marriage of convenience! And then he ended with a thrilling simile, to which I ask the attention of the House. Australia, as the bridegroom, is supposed to be addressing New Zealand as the bride: "You do not feel disposed at present to throw yourself into my arms, but here is a hand to help to consummate this magnificent union when you feel disposed!" An honourable gentleman suggests that this speech was delivered after dinner. I do not know whether it was after or before. In the presence of such exuberance, my poor sentiments on the subject of Federation may be summed up very shortly. We ought, I think, in every way to act in a friendly and fraternal spirit to our neighbours in Australia, but it is not to our interest, nor should we contemplate it as to our probable advantage, to become federated with our brethren on the Australian continent. In that Book of Destiny which has been foretold as containing so much that is glorious in the future of New Zealand there is, I doubt not, a chapter headed "Independence," and, although it will not be the desire of any party in this House to accelerate that time, yet we ought to keep the probability of our future independence clearly before our eyes. New Zealand is made by Nature for a separate Power, and, planted as we are in the midst of—or, I should rather say, contiguous to—those archipelagoes of the Pacific,—"summer isles of Eden," the Laureate calls them, "lying in dark purple spheres of sea,"—we ought to strive to forecast a noble future in connection with such opportunities. These myriad islands should be our shining Orient, these our glorious East; and to them we should look as requiring assistance and, to some extent, fellowship in the future. While, therefore, we should cultivate every sentiment of fraternal interest to our neighbours in Australia, we ought to keep in view the fact that we can never without neglecting our duty, surrender that independence which ought to be ours in the future. And now, Sir, I will refer again to the Financial Statement, and come back to consider the present position of the colony. I take the same exception to this Financial Statement that I took to the Speech of His Excellency the Governor: I object to it for what it does not contain. Our attention is sought to be engrossed by the movements of the Consolidated Fund. The Treasurer displays the revenue and expenditure with engaging vivacity; he has the money, as it were, on the table before him, and he shifts it to and fro; he makes it fall in glittering cascades to attract our admiration; he collects a little pile and calls it a surplus, and he covers over the deficiency with the Financial Statement! But, while he is seeking thus to engross the attention of honourable members with the beauty of the Consolidated Fund, in the next room his confederates have been amusing themselves with a larger fund—the Public Works Fund—to which our Consolidated Fund is a comparative trifle, as regards at least the opportunities for speculation. I will ask honourable members to bear with me while I touch on the occurrences of the last three years with reference to the Public Works Fund—that fund which is made up of borrowed money. It will be remembered that in 1888, just before the second session of this Parliament, there was a hitch in respect of the proposed two-million loan. The loan, which was to have been authorised the previous year, had been bungled—it could not be raised. It was a period of great anxiety. It was a crisis in the history of the colony in more ways than one. In the usual course, early in that year a certain monetary institution had to present its half yearly report and balance-sheet. I refer to the Bank of New Zealand. I mean to refer often to that bank, but never except in so far as the bank is connected with the finances of this colony; outside of that I have no concern with it at all, but inside of that I have, and every member of this House has, a deep concern in its transactions. It was necessary, then, for the bank directors to present their report and balance sheet. Do not honourable members remember
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the meeting in Auckland when the chairman of directors presented his report? There were ugly rumours current as to the stability of the bank. The chairman of directors then was the Hon. Sir F. Whitaker, and he was also then, and as lie is still, Attorney-General in the present Administration. I am not going to indulge in any phantasies. I will deal with facts. We are hero to speak the truth—impugn it whoso listeth; and I say that that honourable gentleman was at that date deeply indebted to the Bank of New Zealand. I will not say that the amount of his overdraft was £40,000 or any other sum, because some Minister may get up and say it was not so, because the amount was a little larger or a little smaller, as the case might be; but I will say it was a very, very heavy amount, and an amount which has never to this day been discharged, and, if the Government will appoint a Committee—for which I hope to give some further reasons later on—to inquire into the transactions of the Government with the Bank of New Zealand during the past three years, I take upon myself the onus of proving that what I now say is absolutely correct. Here, then, we have at this double crisis—a crisis with the colony and a crisis with the bank—the chairman of directors the Attorney-General of the present Ministry, a power in politics, one who had been the Premier of the colony before, and one who, from his great ability and long experience, exercised no doubt a great deal of weight in the counsels of the Ministry. What was done? As I have said, the loan could not be raised: no assistance could be looked for from that source; but a perfectly abnormal state of finance was created for the emergency. Authority was obtained by the Colonial Treasurer to float upwards of £840,000 of deficiency bills. This was quite an abnormal state of things, the normal amount being £700,000; and, although the maximum of £840,000 was reduced before the balance-sheet of the colony was made up on the 31st March for presentation to the House in the session of 1888, even at that date there were three-quarters of a million of deficiency bills in circulation. The reason why these bills were floated was to buy minted gold. To be accumulated in the coffers of the colony? No; to fill the coffers of the Bank of New Zealand. I ask the Government to meet this charge, if they can, before a Committee, or before any other tribunal they choose to erect. The loan was floated in June, 1888. As I took occasion to say last session, it was floated at a sacrifice of £100,000, by reason of the more favourable circumstances having been lost in the earlier part of the year, when, if there had been no bungle, it might have been more successfully floated. It was floated also, I regret to say, under circumstances of such gross misrepresentation of facts as would, by the rules of any Court of law,—had the case been that of a private company—have entitled the subscribers to have their allotments of scrip set aside. The loan was floated, as I have said, at an indirect loss of £100,000, and at a direct expense, besides, of over £110,000 in discounts and expenses. That loan must have cost the colony 10 per cent, the first year. The gross proceeds, amounting to £1,955,000, went into the Bank of New Zealand. The crisis, so far as the colony was concerned, was over. But the crisis in the affairs of the bank continued, though for a time somewhat relieved by the assistance of our loan. Then a curious thing occurred. I have referred to the meeting early in 1888, and to the disclosures which the directors must have known were inevitable. It was considered necessary to strengthen the position of the bank in various ways, one of which was by representing the contrary of what must be taken to have been known by some to be coming. I charge the Government with having interfered, through the Agent General, in London, by endeavouring to bolster up the credit of the bank and deceive the public. If the Government will not give the Committee I suggest, I ask them to allow any man they choose to name, not connected with themselves,—the honourable member for Lincoln or the honourable member for Waipa,—to go over the file of telegrams to the Agent-General in the latter part of 1888 and the beginning of 1889, and say whether or not the Government of the colony did not employ the Agent-General to assure the public of London that the position of the Bank of New Zealand was sound. That the position of the bank then was sound is what we all now know was not true: the disclosures since made show that without any doubt. Those who make representations are responsible for the facts they allege, or are equally liable for representing what they do not know to be true. Now let us see how the Ministry were aiding the bank with money. There was in 1889, according to the Public Works Account of that year, in round numbers, one and a half millions, the proceeds of this Two-million Loan, lodged in the bank. To anticipate somewhat, I have here a little table, which I think would be rather interesting to the public were it added to those accompanying the Financial Statement, or those which may yet be issued with the Public Works Statement. It is a table of four lines only. It indicates the percentage of money in the Public Works Fund which was uninvested, or the "free money," as the Colonial Treasurer, in his Financial Statement, would call it:—
| On 31st March. | Total Fund. | Not invested. | Percentages not invested. |
|---|---|---|---|
| £ | £ | ||
| 1887 | 1,012,439 | 111,344 | 11 per cent. |
| 1888 | 773,975 | 412,749 | 53 per cent. |
| 1889 | 1,368,926 | 525,367 | 31 per cent. |
| 1890 | 1,224,736 | 587,832 | 48 per cent. |
It will thus be seen that in 1887 there was only a small percentage uninvested. The Government of that day had invested the whole of the available funds, less 11 per cent.—a reasonable sum to hold at call. But in 1888, 53 per cent.; in 1889, 31 per cent.; and in 1890, 48 per cent, remained uninvested. The last three amounts uninvested will be observed to have been large amounts: the first was over £412,000, the next was over £525,000, and the last was over £587,000—
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moneys for which the colony was paying interest, but which the Government left uninvested, obtaining no profit or return from the Bank of New Zealand. Will the Treasurer or his deputy see that these data are annexed to the Financial Statement or the Public Works Statement, for the information of the colony? The figures are all taken from documents issued by the Colonial Treasurer. Now we come to the conversion scheme of last year. It did not promise much of a gain in the way of ready money to the bank, but it meant what banks like: the circulation of coin. I would remind honourable gentlemen that the amount which had to be raised last year was only £388,000, and it is quite clear that temporary provision might have been made for that, if it wore desirable to postpone a larger conversion of outstanding loans. The Government, however, determined to raise a loan which would include £2,207,300, which was the balance of the '78 loan, called "the ten-forties" from the fact that they could be redeemed at any time after ten years from the 1st September, 1888, up to the 1st September, 1918. It was arranged that tenders should be invited to be sent in by the 25th October last year. Now, I wish to refer for a few minutes to something that occurred last session. The honourable member for Dunedin South has this afternoon referred to what the Postmaster-General the other day claimed to be the sanction or agreement of the Public Accounts Committee of last session to the advance of the sum of nearly £5,000 to meet the debentures of the New Plymouth Harbour Board which were to come due on the 1st November last—about a week after the date when the tenders for the conversion of the loan were to be accepted. It will be necessary to refer somewhat to the New Plymouth Harbour Board. It will be remembered that in the session of 1888 the Colonial Treasurer, from his place in this House, stated that the future of the Board with reference to its interest payments in London raised a "serious question," and that this House should "consider and determine" whether the necessities of the Board should not be relieved by advancing against its income, because otherwise the Board would be compelled to stop payment and might involve the colony. He introduced in that year a Bill called "The Harbours Bill"—but why not "The New Plymouth Harbour Bill" I do not know. It proposed to assist the New Plymouth Harbour Board by capitalising the perpetual-leasehold rents and deferred-payment land payments in the Provincial District of Taranaki, to which the Board was entitled, so as to enable it to meet its interest for three or four years: the proceeds could not possibly cover a longer term. The House unequivocally condemned the proposal and said it would have none of it—that it was dangerous to interfere in such a matter. Yet, during the recess which followed, the Colonial Treasurer advanced to the Board sufficient money to enable it to meet the half yearly interest due in May, 1889. In the first week of the session of that year I took occasion to ask the Colonial Treasurer what assistance had been given to the Board and the means by which that money had been provided. The Treasurer stated that he had advanced £090 against rates on Native lands and £2,200 against the 25 per cent, of the land revenue. Feeling somewhat doubtful as to the security of the colony in relation to that advance, I pressed the Colonial Treasurer, after he gave the answer to the question on the Order Paper, as to whether he was satisfied of the position of the colony in making that advance. The answer he gave was that he was assured there was no doubt whatever as to the security of the Government. On being still further pressed as to whether the Government had taken the opinion of the Law Officers of the Crown on the subject, he replied that the Government had done so before making the advance. Now, one of two things has occurred: either the Treasurer spoke without being correct or the Law Officers of the Crown have changed their opinion; for now we are told that other moneys since advanced under similar circumstances are not likely to be recovered. Reverting now to the point at which I digressed, and dealing with what occurred in the Public Accounts Committee, I am now going to refer to something that is not to be discovered only by hunting up the archives of the colony, but to something which is in print and which was circulated, but only for the information of those gentlemen who composed the Public Accounts Committee. I refer to a letter, dated the 12th July, 1889, from the Agent General to the Colonial Treasurer. Although no previous correspondence is set out, the letter clearly indicates that it was called forth by a communication from the Colonial Treasurer to the Agent-General,—that the letter was probably written upon the lines indicated in a communication from the Colonial Treasurer. In that letter the Agent-General tells the Colonial Treasurer that "the opinion generally" in London is that default by the New Plymouth Harbour Board would have no more than "a transient effect." Remember that it was known that this Board was in difficulties. The Colonial Treasurer had himself announced the fact, and bis announcement is reported in Hansard for 1888. And remember, too, that the payment of the Board's interest would not fall due until more than a week after the conversion was to have been effected. The letter goes on to say this—and I will use the very words themselves: It advises, with reference to the Board, that the colony should "tide over the next dividend somehow, as a pure matter of expediency." Here is our high-toned Agent-General putting it on the ground of "pure" expediency that the Government should do something to deceive the moneyed public in London! What are we coming to? Is this the Government of sound finance? Is this the Government of high morality? Is this the Government of faultless promise? It was bad enough for the Agent-General to propound such a thing, but worse for the Colonial Treasurer, who was also Premier, to adopt that advice, print this letter, circulate it amongst the Public Accounts Committee, and get something from that Committee which, according to the Minister the
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other day, warranted the Treasurer in advancing £4,992. That there was any warrant, any authority, for doing so, no one who considers the matter for a moment will dare to assert. What is a Committee but a few gentlemen delegated by this House to inquire into and report on a matter, and whose recommendations can, until this House has adopted them, have no weight or authority? And yet in that Committee, if I am correctly informed, by some juggle—by some proposition that this money should not be advanced and then by "the previous question" being carried—the Colonial Treasurer took upon himself to advance the cash to the New Plymouth Harbour Board. That is what occurred. The loss of the money is not the most serious part of the matter. We, perhaps, can afford to lose this £5,000, but I doubt whether we can afford to lose the good name of the colony in connection with its finance. What was this letter written for but to enable the Colonial Treasurer to write Home to the Agent-General to promulgate on the Stock Exchange that the next payment by the New Plymouth Harbour Board would be duly made? We thus see the Agent-General of the colony fussing about London and assuring people that the New Plymouth Harbour Board is all right! Dealing now with the conversion-loan in connection with which this advance to the New Plymouth Harbour Board was made, we find that the Loan Agents of the colony in London advertised for tenders for £2,700,000. The exact sum required for meeting the two loans was £2,595,300, so that the loan for which they asked the public to subscribe was £104,700 over the amount actually required to discharge the old indebtedness. Now, in the Financial Statement we are told that the Loan Agents have actually taken £70,000 in addition, or, in all, £2,770,000. I am not sufficiently acquainted with such matters to know whether or not it is usual, when a specific sum is asked for, to take more than the subscribers have been informed was intended to be taken. Compared with £2,700,000, the sum of £70,000 is a trifle; but, if once the practice is allowed, there is no limit to which it might not be carried. Why not accept every tender sent in, as well as those for £70,000 more than advertised for? Docs it not reduce the security of those who have tendered on the basis of £2,700,000 to take from them £70,000 more? The Colonial Treasurer, in his Financial Statement, said that "The papers relating to the negotiation of this loan will at once be laid before Parliament." But they are not yet on the table, and I shall look with a considerable degree of interest for the explanation of this last financial operation by our Loan Agents in London. One more reference to the Bank of New Zealand and I have done. Honourable gentlemen, looking at the "Abstract of the Revenue and Expenditure of the Public Account" for the financial year ending the 31st March last, will see a sum of £800,000 shown as "Remittances to London." That seems to have been remitted this year, although there was a considerable sum which we might call "free money" in London, under the head of "Advances," as well as the large uninvested balance already shown to have been lying at the credit of the Public Works Fund, but which certainly was equally the property of this colony and surely available for temporary purposes. However, £800,000 was in transit from this colony to London on the 31st March. That was a unnecessarily large sum, seeing that the interest and sinking-fund payments, due in April, did not exceed £600,000. In 1887,—and the distinction and comparison between the administration of that time and the administration of the present are somewhat instructive,—there was nothing in transit from this colony to London. A balance was there which was used for the temporary purpose of paying interest and thus saving exchange. In the first year of this Ministry being in office, however, there was, on the 31st March, £200,000 in transit to London; last year, on the corresponding date, there was £557,000 in transit; and this year there was £800,000. Now, Sir, there is only one other topic I would touch on. The honourable member for Waipa has gone through this Statement, and he has derived—I will not say comfort but—a certain amount of consolation, because he gathers that it is hero and there stated that we shall have no more borrowing. I say it is only necessary to look at the tables attached to the Financial Statement to see that there is an absolute necessity, almost at once, for raising money—not to be spent in the colony, but for meeting engagements in London, for transactions calculated to test the credit and strain the resources of the colony as much as any previous transactions. I have referred to the scheme for the conversion of the loans last year and suggested whether or not it was expedient then to raise the £2,207,300 to meet the ten-forties;—that, if it were not necessary, that the Colonial Treasurer might have waited until an equally or a more favourable occasion offered itself. Now, what is the position with reference to next year? Honourable gentlemen will find from Table No. 4 (pages 43 and 44) attached to the Financial Statement, although no special remark is made with reference to the fact, although no attention is drawn to its importance, that next year there are four loans falling due, amounting to £1,813,184; to meet which there are accrued sinking funds amounting to £609,786, leaving a balance of £1,203,398, subject to some slight reduction in the shape of sinking funds that may accrue in the meantime. Worse still, there is, in the year 1892, a loan of £4,257,700 to be met. There is thus a total within the next two years of nearly five and a half millions to be paid, after taking credit for accrued sinking funds. But, Sir, we are to have "no more borrowing !" Is not this Financial Statement most illusive—is it not most deceptive—in glossing over these facts, with "a surplus" claimed to support which we must have a new meaning for the word when the next dictionary is issued in New Zealand? Is it not mere paltering with the truth—mere cheating of our eyes—to state, as this Statement does, that we are to have no more borrowing, in the face of these five and a half millions to be met within the
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next twenty-four months? And that, Sir, will not be all. No prospect is held out of meeting the £400,000 of debentures which were floated in 1887. They will have to be met also within that period.
An Hon. Member.—To whom do they belong?
Mr. Hutchison.—They belong to the Colonial Bank. I believe the Government claim that they made a very successful financial operation by the floating of these debentures two years ago, although the gilt has been taken off that statement by the publication, after last session, of the information that we had to pay £500 as stamp duty in London. However, these £400,000 of debentures will have to be met. And then there are the loans j to local bodies, which at present amount to £250,000. No provision is indicated for that debt. With reference to these loans to local bodies, I, as a country member, have a complaint to make against the Colonial Treasurer. I speak feelingly, and I say that I and many other honourable members in this House, and certainly many of our constituents, have been rated specially to meet loans advanced under the Loans to Local Bodies Act, succeeding the Roads and Bridges Construction Act. Settlers in various parts of the colony have had to repay advances so made at the rate of 5 per cent., of which 1 per cent, should have gone to form a sinking fund. But nothing has been devoted to that purpose. Let it be told the Colonial Treasurer that he has collared our sinking fund!
Mr. Kerr.—What has he done with it?
Mr. Hutchison.—He has put it in his surplus! Then, Sir, there is the deficit in the Land Fund. There is no prospect of that being met in the ordinary course, and we must, I fear, look forward to there being a further deficit within the next two years. If we put down £70,000 as representing the deficit of the Land Fund as it will be in 1892, we shall probably not be exaggerating the amount. This is the matter on which the Premier very blandly says, "I do not propose to deal with it this year; "but some one will have to deal with it next year or the year after. Then, there is no doubt about it, when this large loan has to be floated consideration will have to be given to the claims of certain parts of the colony for an extension of the railway system. The honourable member for Dunedin South has indicated that the Otago people will not be satisfied until they get an extension of the Central; and I think the people of the North Island, or of this part of it, will not be satisfied until the gap between Woodville and Eketahuna is completed, and the railway systems of the north and west thus connected with Wellington. If we put down a million for railway extension we shall not be overstating the amount that will be required. Then there is, I am afraid, almost too certain £200,000 to be provided for the New Plymouth Harbour Board. I do not know if the payment which the Colonial Treasurer ventured on making upon the pretended authority of the Public Accounts Committee of last session was more intended to cover the conversion scheme, which would mature at a time prior to the payment of the interest, or whether it was not rather to saddle this colony with the liability of the New Plymouth Harbour Board. You will remember that the claims of this Board have always been treated as peculiar; and so they are, for, now that no further money can be advanced, the Board has defaulted, and the bondholders in London are entitled to put in a Receiver, who may claim to have a place at the Treasury Board and a seat also at the Land Board of Taranaki, in order to secure the 25 per cent, of the land revenue of that provincial district—a humiliating position for any colony to be placed in. The bailiff is in possession. We may dress him up, as Charles Dickens is said to have done, as a liveried servant, but he will be a bailiff all the same and will not retire until his claim is satisfied. If we now add up the various sums which I have enumerated, and if we add the expenses necessary for floating such a loan, we come within a little of eight millions! What does the honourable member for Waipa think of the Financial Statement now? Within, I say, a year or two this colony will have to find eight 'millions in the London market, or become default. It is enough to make a man ill. I do not marvel at the absence of the Colonial Treasurer. A year ago he was hale and stalwart—one whose giant strength men talked of; and now he has broken down! There has been, indeed, sufficient cause. What is our outlook? We wish to 44 leave this land as a noble heritage to our children." It will have to be done by better men than those who at present hold the Treasury benches. 1 will not, whatever I may think, refer to these honourable gentlemen as the pimps and panders of banks and loan and mortgage companies, because that would be unparliamentary; but I deplore the fact that the conduct of those who occupy the Government benches has been such as cannot be described in parliamentary language. They have sacrificed the interests of this colony through three long years. We are not safe for one single hour while these gentlemen have control of the finances of the colony. No wonder that they cling to office, and that they wish to postpone their day of reckoning. No wonder that they want this moribund Parliament, meeting in what I may call this mortuary chamber, to grant them supplies for another year. We are under a system of triennial Parliaments and yet we are asked to vote supplies for a fourth year, so that those gentlemen may hold office till next session. I hope they will not succeed. Whatever the temper of this House may be—whatever may be the numerical divisions in this House—I take leave to say, with unusual confidence, that out of doors the Government have not a majority. On the hustings they will be impeached and at the ballot-box they will be condemned.
George Didsbury, Government Printer, Wellington.