The question of the abolition of the Provinces, and the absorption of the revenues arising from the public lands into the colonial assets, are so intimately connected that they must be discussed and determined together. The two great sources of revenue in New Zealand are the Land Fund and the Customs. At the present the Land Fund, large as it is, becomes, under the Land Revenue Appropriation Act, 1858, payable to the different provinces in which the different portions of the fund arise; while, on the the other hand, Customs become at once Colonial Revenue, although a certain small portion is deducted, and goes to the credit of the different provinces in proportion to the numbers of the white population resident in the different provinces respectively. It must be evident even to the most superficial observer that this is unfair, not only to the provinces but to the people. For it may happen—indeed it does now happen in seven out of the nine provinces—that there is, so to speak, no land fund out of which to provide a revenue. The seven Provincial governments are, therefore, practically bankrupt. This, how ever, is far from being the case with the other two. Their public lands page 10 are now valuable, and are producing enormous rents and prices. The rents of the public lands in Otago and Canterbury are about £130,000 a year. And on so grand a scale has the land in these two favored provinces been sold and disposed of lately, that during this year they have voted nearly two millions of money for Provincial works—all arising from the public lands. They are making superb endowments for education, and in every way are pushing forward with energy and foresight, (always of course within their own boundaries) roads, railways, public improvements, and the manifold hands and feet of civilization, which are at once the products, the evidences, and the producers of wealth and power. In this Otago and Canterbury are much to be praised. Indeed the authorities of these two great provinces are an example to the General Government of the colony. And were it not that the public welfare and the public safety imperatively demand the abolition of all Provincial institutions, the abolition of the semi-independent administration of these provinces would perhaps be a change for the worse. It may be said, indeed, and said truly, that there will soon be an end to this sale and leasing of public land in Otago and Canterbury, by reason of the rapid rate at which their public estate is passing away into private hands; and it may also be said that the now bankrupt seven other provinces will then be in a position to hope for full exchequers, because their landed estate will be of value. Were things allowed to go on as at present this would undoubtedly be the case. But they cannot go on thus. New Zealand is like an auxiliary screw in a gale on a lee-shore. The officers have tried a new and short cut to the port of success, but they have been caught by the prevailing winds, and thrown upon the stern and rugged coast of financial difficulty. For days she has struggled gallantly in the storm with sails alone. But the gale increases—the sails are carried away—the ship heels over on her side, and the captain and most of the crew have at last resolved to cut short away the fore and main masts. But now the ship drifts more helplessly upon the dark and gloomy rocks. The cry is raised—"Light the fires, get up steam! It is our only hope to escape wreck and get safe to port." But the engineer and a part of the crew object. "Oh, no!" they cry; "the coals are ours. You agreed to that long ago. The coals are sacred! Do what you like with the masts and the cargo. Never mind the shippers; never mind the ship. You must not touch the coals or the engines; they are sacred!" No reasonable man expects that any of the Provinces can much longer retain its lands. Every pound, therefore, spent out of the proceeds of the land by one Province beyond that spent by the rest is a direct act of robbery against the public creditor and the other portions of the Colony. It needs but very little logical discernment to perceive that it is not the land fund, but the Customs revenue, which should belong to any district or province. In no proper sense can it be said that the people of a place provide the land fund in it. For it is the State which allows them to occupy its lands, either for a time as tenants, or for ever as freeholders. They either become tenants to the State, or they buy a certain amount of property for which they pay a certain price. For their money they get their money's worth. Thus every individual who rents a station, and every individual who buys a hundred acres of land from the Government, gets back immediately his money's worth—in the same way as if he were dealing page 11 with a private person. The run-holder or the purchaser does not give his rent or his purchase-money for the purposes of the good government of the country. He gives it for so many acres of land on which to build his home, and feed his cattle, and rear his children. In fact it is a mere contract. The Government, as a trustee on behalf—not of a Province, but of the people of New Zealand—sells a portion of its estate to an individual member of the community. The land then belongs to the purchaser; the money belongs to the Government in trust for the people, irrespective of Province or district. This is not the case with the Customs. The duties demanded from the people on the goods they eat, and the clothes they wear, are paid by them solely for the purposes of Government, They get nothing but government in exchange. If any funds should belong therefore to the Provincial Governments they should be funds such as these last, which the people pay individually for the purposes of Government. More especially is this true as the Provincial Governments are now called upon to supply nearly all the wants of the people as members of the body politic. It is manifestly unjust that the people should be taxed more heavily than any other people in the world, and should, while the funds of the General Government are being directed to objects alien to the true purpose for which they were raised, be then taxed again by the Provincial Governments to support those necessary public objects—such, for instance, as Education—which should be borne by the General chest. The injustice is monstrous, when it is seen that other Provinces are permitted to escape this additional tax through the use of the moneys belonging to the whole of the people, which arise from public lands; while the taxes wrung from the pockets of the working classes are being devoted to paying, not the cost of government, but the interest of a public debt, incurred for the very purpose of improving the public lands, the improvement of which does not benefit the people, or lessen the taxation one sixpence. The case stands thus:—

(1.)	The General Government of New Zealand taxes the people for the purposes of government more heavily than any other people in the world are taxed.
(2.)	The proceeds of that taxation are refused for the purposes of government, but are in a great and yearly-increasing measure used to pay the interest of the public debt.
(3.)	From this in many Provinces the people have to remain practically without the benefits of good government, unless they choose to tax themselves a second time, in order to do the work they have already paid the General Government to do.
(4.)	The loans are being spent principally in Otago and Canterbury, and are making the public lands in those provinces of great value; but in no instance are these lands made to pay the interest or bear any part in the charges or responsibilities thus arising.
(5.)	Thus two Provinces are becoming enormously rich, while the other's have now become bankrupt.
(6.)	Soon all the general revenue will go simply for interest, sinking fund, and one or at most two departments of the, General Government; and if the people desire education, police, gaols, road boards, lunatic asylums, or indeed any portion of the blessings of civilised society, they must be taxed increasingly.