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4.—His Honor the Superintendent to the Hon. the Premier.

Sir,—I have the honor to acknowledge the receipt of your letter of 13th inst., from which it is clear that your opinion and mine as to the effect upon the Province of Otago, of its abolition, are wide as the poles asunder.

I therefore feel that it would be only wasting both your time and my own to prolong this correspondence. At the same time I cannot refrain from referring to some of the leading points in your letter. And here I may say that I do not think you were called upon to review the action of the Provincial Council of Otago—a body responsible solely to the electorate of the Province; nor was it necessary to assume that everything your Government thought fit to propose would receive the sanction of the Colonial Parliament.

Your letter is, of course, a political manifesto to convince the people of Otago of the good they will obtain by the abolition of their Province and their local Parliament, and by the absorption of their local revenues; and you must forgive me if I follow your example in entering upon a political discussion, which I deprecate.

I may say that had you been administering a law, and called upon me to aid you in so doing, I should not have withheld my aid or advice. As it is, I was advised, and I am also of opinion, that the sending of the Commissioners was without legal warrant or constitutional authority. The Parliament never authorised such a step and did not vote funds for such a purpose. Your letter of instructions, as well as that now under reply, foreshadows a policy that the Parliament has not yet considered, far less ratified. There is no local Government Act, and as yet no provision made for carrying on the departments of the Provincial Government. "What law, I ask, are you administering ?

I looked upon the action of your Government as an encroachment upon the rights of this Province, which, as its elected head, I was bound to resist; and I feel assured that had you been the head of the Provincial Executive you would have counselled more extreme measures than I resorted to. Indeed, I cannot but remember how nobly you aided me with your advice and influence in resisting the General Government's encroachment on our rights and privileges nine years ago.

You entirely misapprehend me by supposing that because the wealth of Otago far exceeds that of other Provinces, its interest, in my opinion, is to evade a share of the general responsibility. On the contrary, I for one, am quite prepared that the Province should assume a very large proportion of the past obligations of the Colony, provided it is relieved of all future liabilities other than those to be incurred by itself for its own benefit, or those which may be necessary for purely federal purposes.

I have no desire to dispute with you that, since 1870, Otago has received a large share of the Public Works and Immigration Loan. I sub- page 10 mit, however, that it has not received more than its due proportion, or than it is able to repay, and this, I fear, is more than can be said in respect of various other portions of the Colony. While upon this point I would most emphatically protest against that phase of your present policy, which proposes to render Otago liable for the debts incurred in the construction of railways in other parts of the Colony, notwithstanding the solemn assurances that to each Province would belong the profit or loss which might accrue from the railways constructed within it—assurances embodied in the Immigration and Public Works Act, and but for which that Act never would have been on the Statute-book.

It is this readiness with which, at the instance of a powerful Government, the good faith of the Colonial Parliament to-day may be cast to the winds to-morrow, which shakes the confidence of myself and others in the stability of legislation which professes to secure to any particular part of the Colony the exclusive-enjoyment of those advantages which may have been derived from its own forethought and superior energy.

I do not know that I rightly interpret your meaning when you say that we should defer to the opinions of those who supply the money for developing our resources. It, in moulding the political institutions upon which the future happiness and freedom of ourselves and our children so largely depend, we are to be influenced by the opinion of money-lenders, all I can say is, that it will be a sad day for New Zealand when this time comes.

How can you reconcile your assertion that Otago has not been a sufferer by Colonial finance, with the fact that, in addition to its obligation in respect of the Public Works and Defence loans, it has contributed upwards of two millions of money to the Colonial chest, for which it has received little or nothing in return, saving the empty honor of being represented in the General Assembly, is, I confess, beyond my comprehension.

One strong reason why, in your opinion, the Province should be abolished is, that during the past session of the Provincial Council, appropriations were passed to the extent of £909,000. To my mind, this affords one of the best arguments in favor of the Province becoming an independent Colony. Large as this sum is, it is far short of what is needed to meet necessary requirements, and far short of what the Province would have at its disposal, but for that vicious system of Colonial finance in which it has become so unhappily entangled, a system which will be stereotyped should the Abolition policy be carried out.

You do not seem to be aware that when the Appropriation Ordinance was passed, the Province contemplated being able to float a loan, and that a large portion of the appropriation was for the completion of impoitant public works, the execution of which will extend over several years.

You say that "concurrently" the Province has sacrificed its lands by largo sales to runholders. As to this you have been completely misinformed, inasmuch as there have been no sales to runholders during the past four years, excepting the pre-emptive areas to which they are by law page 11 entitled. With regard to its landed estate, I am. not called upon to defend all that the Province has done in the past, but were I to trace the cause of our difficulties in dealing with our waste lands, I should have to attribute them chiefly to the action taken by yourself in granting a renewal of so many pastoral leases in 1866-7. If large sales are improper, I have yet to learn that any sale in Otago has been in violation of law, or made until the absorption of its revenue by the Colonial Government forced such action on the Province. For your Government to complain of large sales of land after the various reports of Parliamentary Committees on its land transactions in the North Island—transactions which no financial exigency demanded—seems to me, to say the least of it, to be singularly inappropriate. In thus referring to the action of the Colonial Government, I also am acting in "self-defence." You must, therefore, excuse my reference to the uncalled-for sacrifice of the public estate in Auckland.

If there is one thing more than another for which the Provincial Government may claim credit, it is the extent to which the public estate of Otago has been husbanded and disposed of for actual settlement and profitable occupation. I venture to say that in no other part of the Colony does this apply to a greater extent.

One of my chief reasons for opposing the policy now in question, is that under its operation the administration of the Provincial estate must be regulated by the exigencies of Colonial finance.

But, even assuming that your information had been correct, and that the Province had disposed of large blocks of hill land to runholders, there are many and cogent reasons which might well have driven it to this course. Among these might be enumerated the refusal of the Colonial Legislature to enable the Province to anticipate its land revenue for the construction of those public works, without which the land would be comparatively valueless for settlement, and also the difficulty experienced in obtaining payment from the Colonial Government of moneys to which by law the Province is entitled.

I would point out to you that there is taking place in Otago a very considerable amount of agricultural settlement on deferred payment, and that this has to be followed up by providing the means of communication, schools, and many other requirements, to meet which money must be had.

Assuming that funds cannot be obtained otherwise than from land sales, I am of opinion that it would be far preferable to sell purely pastoral land to runholders at 20s. an acre than to place in the market for disposal wholesale to speculators, large areas of valuable land which still remain, and which it is the policy of the Provincial Government to preserve to meet the requirements of agricultural settlement.

You further allege that the Province has sought to withdraw from ordinary purposes (which, I presume, means from sale) enormous blocks of country, "for fear the land might be otherwise absorbed."

It is quite true that years ago the Provincial Council resolved to set apart several millions of acres as Endowments for Education, Hospitals, page 12 and other public purposes, in which resolution the Colonial Government did not concur. Ultimately, however, 500,000 acres were agreed to be Crown granted. I fail to see in this action of the Provincial Council any reason why the Province should be abolished, but the reverse. I am disposed to regard this action as a far-seeing apprehension of that centralistic policy against which I am contending—a policy which, whatever may be your present intentions, must inevitably result in the general consolidation of public assets and liabilities throughout the Colony. Among the former, of course, must be included our land fund, our education reserves, and, as likely as not, all other reserves besides. I would not for a moment impute to you any present intention in this direction, but cannot disguise from myself the feeling that you are now embarking upon an ocean of circumstances which you will be unable to control—circumstances in which the Colony must inevitably drift into the position I have indicated. You might as well expect the Ethiopian to change his skin as that Centralism in New Zealand will be content with anything short of that position.

You say the people of Otago do not realise, and are misinformed as to what Abolition means. If this be so, why not submit for the consideration of the people those measures which will enable them to interpret for themselves its real meaning—those measures which are to usher in the political millennium? To my mind, whatever the measure may turn out to be, the man must be blind indeed who does not realise in the whole action of Centralism in New Zealand, during the past 25 years, "One purse for the Colony," a consummation totally irreconcileable with your conviction that the land fund and public reserves of the respective Provinces will be localised.

You say that in respect of Immigration and Public Works the Colony has done more for Otago in five years than the Province could have done for itself in ten. To this I must entirely demur. It would not be difficult to show that had the Province been permitted to conduct those operations for itself, the result would, to say the least of it, have been equally satisfactory, and in all probability much more so. I have no hesitation in saying that the Clutha Railway, for example, would have been constructed by the Province for at least £50,000 under what it has actually cost.

You say that the Governments, Provincial and General together, are spending much more than the credit of the Colony can afford. I quite agree with you as regards the latter; and if this is to be adduced as an argument in favour of Abolition, it may fairly be urged as a reason for abolishing the General Government, or, at all events, of very greatly curtailing its expenditure. It does seem strange that in the face of the fact that, the Colonial expenditure is more than the credit of the Colony can afford, the Government should have been so desirous during the past few sessions of increasing that expenditure by the establishment of new and expensive departments.

And now one word more as to what is to be in the future. You may page 13 be right in your assumption that whatever your Government proposes the Assembly will sanction. I may be pardoned, however, for saying that Governments as strong as yours have in the past had to submit to a public opinion they could not control; and I feel convinced that the opinions of so large and important a section of the Colony as Otago will not be lightly set aside by the Colonial Legislature.

It should not be the aim of statesmen to ignore the feelings of those over whom they rule, and if one large section of any country is forced into a hostile attitude towards the Government, and its opinions and feelings ignored, history tells us that there are sad days in store for such a country.

The justice of Otago's claims, which you say are "chimerical," may, I trust, yet receive from the Assembly that consideration which is denied by your Government.

I fail to see how the country districts of Otago can benefit by your proposed scheme. Hitherto, for example, the Provincial Council has given no subsidy to Dunedin, as they felt it their duty to devote the revenue to making roads and bridges, and building schools throughout the country districts. You, however, as the first step in the decentralizing process, have given a subsidy of £10,000 to Dunedin, and promised that it shall be perpetual. How, therefore, Dunedin can be said to have benefited more from Provincial administration than the country districts I cannot understand. You have forgotten that the districts which have hitherto been most jealous of Dunedin, and farthest removed from it, have returned as members of the Colonial Parliament strong Provincialists. The people of Otago are not so "misinformed" as you seem to imagine; and if, as you say, the Province has been spending more money than the Colony can afford, of course your scheme means a stoppage of public works throughout the Province, unless, indeed, you imagine that the credit of the Colony will not be injured by every County and Road Board borrowing what they please. You cannot, however, consider that allowing a County or Road Board to borrow is a good thing, whilst granting the same right to a Province is an evil thing.

I would only say further that, believing as I do that, like myself, you are aiming at making New Zealand a great, prosperous, and free country, it is to me a source of the deepest regret that we do not agree as to the most effective and only means of accomplishing this end.

Much as I should feel disposed to defer to your judgment, I cannot ignore the conviction which a life-long experience of New Zealand politics has forced upon me; and if, in the heat of a political controversy, not of my seeking, I have used any expression distasteful to you, you will, I trust, pardon such. I am well aware that in every discussion some expression may seem harsh to an opponent that was not so meant by the writer.

Had it not been that you had hitherto so loyally and under much obloquy in the past supported the Constitution—and did I not hope that calm reflection may yet induce you to return to your previous political page 14 platform—I need not, perhaps, have entered into so much detail. I feel however, that you will pardon the length and, perhaps, ardour of my letter, and believe me to be actuated by a strong desire for the continued prosperity and advancement not only of Otago, but also of all New Zealand.