H.—3

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or unwilling to be responsible for the way in which the money was spent, the Board contented itself with informing the Controller-General that it could not be fully responsible for the expenditure. The Audit Department refused any longer to acquiesce in this state of things. The Board did not see their way properly to supervise the working of the society, and the society wanted to be free from control. The result was that a petition was sent in to the Government asking for incorporation as a separate institution under the Act. The consent of the Charitable Aid Board was required by law before the petition could be entertained. This consent was secured by giving an undertaking that the society should not in future become a burden on the rates. The Board in thisjway -contracted itself out of its legal responsibilities by means of a bargain which had no real validity ; and the society was left free, so far as local control was concerned, to collect subscriptions, which the State was bound to subsidise at the rate of £1 4s. in the pound. The bait is the State subsidy. As long as this is given for outdoor relief, so long does the State provide a nutrient medium for the culture of parasitical organisms to prey upon itself. The second great object of the Act of 1885 was to remedy the glaring want of uniformity and justice in the distribution of charitable subsidies to the different provinces without at the same time drying up the springs of charity. The Province of Otago had for many years been honourably distinguished for the voluntary support of its charitable institutions, while the Province of Canterbury was similarly distinguished, for the magnificence of its grants from the public treasury. In Dunedin every citizen of a liberal turn of mind was a marked man; benevolent ladies haunted his office by day and his home by night. In the easily-canvassed parts of the city, to have an office was equivalent to paying a second rent in charitable subscriptions. The willing and accessible few had to pay for the inaccessible and indifferent many. In this way the people of Otago were driven to rebel against the voluntary system; and their exasperation was intensified by the contrast offered by Canterbury. There, over and above the sums given on the pound-for-pound principle in 1884, they saw that a sum of £9,664 was given directly by the State for charitable-aid expenditure, as against £276 given to Otago; while in the same direct way— i.e., without any local subscriptions— £2,931 was given in Auckland and £850 in Taranaki, where the voluntary contributions for the year • amounted only to £66. Such was the state of things which compelled Parliament to systematize the distribution of State subsidies for charitable aid. It was felt, however, that any law which set the tax-gatherer to remedy these inequalities would be apt to kill the spirit of voluntary giving which it was so desirable to foster. Accordingly, it was provided that for all subscriptions the State would give £1 4s. in the pound subsidy, while the rates should only be subsidised to the extent of pound for pound. As by the first great principle of the Act administration was successfully decentralised by the new law, yet the number of local bodies has been so increased as almost to paralyse its working altogether, so by the second great principle uniformity and justice in distributing the subsidies were secured, but at the price of almost entirely stopping voluntary subscriptions. The following figures show how voluntary contributions have been affected by the law of 1885-86. In the year before the Act was passed— i.e., in 1884, —Otago raised £3,242 by subscriptions, Canterbury raised £1,100. In 1892, Otago raised £203, Canterbury £29. Law has commuted the voluntary burdens of the benevolent minority into a compulsory tax on all citizens ; constraint has superseded duty; and who shall appraise correctly the loss and gain of such an exchange ? We cannot escape the consequences of our neglect of social duty. Let this fail beyond a certain point, and, if society is to exist, compulsion must be brought in to support it. This despairing of duty, and this falling-back on compulsion, is illustrated in rather a startling fashion in our dealings with many other social problems. With regard to nearly all of them we seem to have been living in a fool's paradise of hope. Duty is considered to have become bankrupt in so many of our undertakings that there seems to be a world-wide movement in favour of compulsion by law. The New Zealand Hospitals and Charitable Institutions Act of 1885 has successfully localised administration and taxation, it has established a uniform system of distributing subsidies; but it has also fixed in the popular mind, and especially in the minds of the least self-reliant of our people, the belief that they have a right to a living whether they work or not. Every year my conviction deepens that w r e cannot leave this law where it is—we must complete the reforms which it has already made by removing the inconsistencies which compromise retained. What we need is a measure to consolidate the local bodies into about twenty strong Boards for the whole colony. I believe it is impossible to effect any real reform of the abuses of our charitable-aid and hospital system, except as part of a comprehensive Local Government Act. The whole system of subsidies in aid of local government must be recast. It is perfectly clear to me, for instance, that, so long as the local administrators of outdoor relief are able, as at present, to get half its cost from the consolidated revenue—that idlers and drunkards will absorb a very large proportion of what is meant for the victims of weakness and calamity—that respectable men and women, worn out with toil and old age, will be thrust aside by impudent beggars, and that deserted wives and families will abound. To cast the whole burden of outdoor relief on the local ratepayers must, I fear, be admitted to be impossible in the present state of public opinion regarding the saving virtue of direct taxation. It must therefore be accompanied by a remission of existing burdens. To secure this vital reform it would be wise to concede a great deal. The State might take over the whole cost of the children who are now paid for partly out of rates, and who are being boarded out by the Boards, or otherwise provided for in a very parsimonious fashion. I have satisfied myself, by personally visiting all the children boarded out in the chief centres by the Boards, that the whole system must be reformed in the following points: (1) The children must not be intrusted to persons who are themselves in receipt of charitable aid; (2) they must be boarded out in the country; and (3) there must be organized a comprehensive and thoroughgoing system of visitation, such as it is not possible for the existing Boards to undertake. The following case, which occurred on my recent visit to Auckland, may be taken as an illustration of some of the evils which have to be guarded against:—