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world to maintain their independence of foreign domination, and bear moreover not only the whole cost of their own defence but in a very large proportion the cost of Colonial defence also.

And now as regards the financial position. When I read the Honourable Member's speech I at first intended to supply in detail the results of an exhaustive examination of this subject; but this is now impossible consistently with the performance of work absolutely necessary to be done in the short time before my departure, and any regret I might feel on this score is much lessened by the con- sideration that for reasons above given a general discussion on the financial position, is only to an extremely limited extent pertinent to this subject of salaries, and that it had for other reasons be better postponed until the consideration of the Estimates for 1892. I am able, however, to say enough to render it clear that our financial position though not wholly satisfactory is not one, which gives any more reason for alarm and despondency than the general condition of the Colony. I observe the Honourable Member states that according to the latest official information there will at the end of the year be a deficit in our finance of $100,000. Presuming him correct, or as I think very possibly under the mark, I need scarcely say that such a statement without explanation gives a very wrong impression to the outside world; inasmuch as it leaves entirely out of sight not only the enormous sums which have in the last few years been expended out of Revenue upon public works, elsewhere ordinarily provided for by Loan, but also omits to notice (which is for the purpose more important) that $820,000 of this year's expenditure which is estimated to cause this deficit, is also for Extraordinary Public Works. Allowing for a considerable falling off in certain items of Revenue (as to which however I should mention that the great fall in assessed taxes anticipated by the Honourable Member is I understand in fact not likely to exceed 2 per cent.) allowing however I say for a considerable falling off in certain items of Revenue, and in the matter of expenditure for the increased Mili- tary Contribution, and for the payment under the new instructions during the current year of December salaries (amounting to some $90,000) which in previous years have been paid in the following January, I am of opinion, as previously stated, that the deficit will at the end of this year be considerably more than the $100,000 mentioned by the Honourable Member, if the full amount of $820,000 were to be expended on Extraordinary Public Works. But judging from the rate at which the Department works I am disposed to think that this estimate of expenditure would have been considerably beyond the mark in any circum- stances. And in view of the fact that some new works, such as Governor's Peak Residence (the prosecution of which I abandoned immediately after my return to the Colony) will not be proceeded with for the present, and that there has been a temporary cessation of all new public works in consequence of the recent telegram from the Secretary of State, I question whether at the end of the year there will be more than a very small deficit, even if, as I scarcely antici- pate, the whole increase of salaries voted by the Council should be approved by the Secretary of State. As on the other hand there is likely to be little or none left of our surplus balances, there would in all probability be a considerable deficit by the end of next year, if we continue to defray out of Revenue the great drainage and water distribution works now in progress. This however is not likely, and there is every reason to believe that the Secretary of State, when he has been placed in a position to estimate the condition of affairs, will sanction a loan for public works such as in every one of the larger dependencies of the Crown would have been raised long ago. What should be the amount of such a loan I will not undertake to estimate. It of course depends on the extent of the Public Works which it may be determined to undertake. But I may mention that from statistics furnished to me, I estimate at $50,000 the increased Revenue from the New, Central Market, from the new or extended depôts for cattle, sheep and swine and from the public laundries and at $11,000 that from the New Water Distribution

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