until there is no escape from that obligation. From a glance at the figures I have quoted it is evident that the time has arrived when this matter must be grappled with, and if these works are to be undertaken Government must be in a position to supply funds for their completion within the next three or four years. By the end of the year it is possible that the Colony will be in debt to the Crown Agents, it may be to the extent of $233,000. This sum the Crown Agents could borrow at a reasonable rate, provided that in the meantime an Ordinance was passed by the Council authorising the issue of a loan. If this could be arranged the raising of the loan might be postponed until the end of the year. Before that time arrives, however, it must be settled what amount will be required, what form the loan should take, whether it is to be raised by lump sum or by instalments, and whether it shall be a gold or a silver loan. As to the amount, you will see that if $640,000 is spent in 1892, the Colony will owe the Crown Agents $233,000, and there will remain a balance of $1,140,000 to be provided in 1893 and future years, making a total liability of some $1,373,000-say $1,400,000. This sum, (there or thereabouts,) may therefore be taken as the amount of the loan required; and the Ordinance should give power to borrow up to that amount. As to the form of the loan, the Government in my opinion cannot do better than issue it in the same way as the existing one, viz., by the sale of debentures, with a sinking fund sufficient to redeem in twenty years, with the option of paying it off at any time after five years. With regard to borrowing in a lump sum or by instalments, it is manifest that if the Colony could get equally good terms it would be desirable to adopt the latter alternative. In 1866-7 the Crown Agents borrowed $138,000 for the Colony in this way, at an average rate of 33 per cent., pending the issue of debentures. Application might be made at once to the Secretary of State as to the rate the Colony would have to pay for such temporary convenience. From the Colonial Hansard it appears that in 1886-7, and indeed much more recently, the question of a silver loan as against a gold loan was discussed. Unless silver can be borrowed on the same terms in regard to interest as gold, a gold loan would be more advantageous than a silver one. The Crown Agents have large gold payments to make for the Colony, and if a silver loan was raised the whole amount would have to be remitted to the Crown Agents in the course of two or three years, and the Colony would have to take the risk of an adverse exchange. If a gold loan is raised none of it need be remitted to England, as it might be absorbed in meeting gold payments at home, and the Colony would be relieved for a time of the cost of transferring money to England to meet the requirements of the Crown Agents. In such a case there could be no difficulty in meeting any objection that might arise in reference to the loan account not being kept distinct from the general financial transactions of the Colony. It would be simply "a matter of account," as it is called, and full information on the subject could be published every month or every quarter by the Treasurer, as the Council might desire. Judging from the state of the share market at home, a loan could be raised at home at 33 or 4 per cent. at the outside, whilst here it would cost at least 4 per cent.
Had a silver loan been raised in 1888 in precisely the same form as the gold one, it would have cost the Colony up to September last $69,000 more than the remittances for the gold loan. The equivalent of the $1,400,000 which the Colony will most likely have to borrow is at the present time, at say 3s., equal to £210,000. Members of the Council will doubtless concur in the opinion that an Ordinance similar to that of 1886 (No. 10) should be introduced, authorising the borrowing of a sum not exceeding £210,000 at the end of 1892, or at any time after 30th June, 1892, should the state of the market be favourable. I have already stated that the estimated surplus of revenue over ordinary expenditure for 1892 will be about $256,260, and there appears no reason to doubt, notwithstanding the decrease in the opium revenue, that a similar amount will be available in future years, if the expenditure is carefully watched. It must not be forgotten that considerable additions to the revenue will be derived at no very distant date from the new Central Market and the depôts for slaughtering cattle, so that looking to these and other sources of revenue, I do not think that by borrowing £210,000 a too heavy burden would be imposed upon the revenue of the Colony. That it should have fallen to my lot in my first address to the Council to suggest that it should consent to an increase of the public debt is to be regretted, but I cannot flinch from the responsibilities of my office, and I anticipate that the Council will be prepared to share this responsibility, as my views as to the necessity of such a course coincide with those of some of my predecessors, as well as those of several honourable members. The question is one of great urgency, however inadequately and imperfectly it may have been brought before you. In speaking of the loan I should say I have adopted throughout the use of round numbers, as being least confusing, and the amounts I have quoted must be regarded as approximate only. It would, in my opinion, be most satisfactory to the com- munity if a Committee were appointed to consider the subject fully and in all its bearings. Should the Council agree in that view, I would nominate the following gentlemen to be a Com- mittee for that purpose, feeling sure that they will readily place their valuable services at the disposal of the Government:-The Honourables the Registrar General, the Colonial Treasurer, C. P. CHATER, J. J. KESWICK, and T. H. WHITEHEAD. In order to assist them I would appoint the Clerk of Councils as Secretary, giving him authority to lay before
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