8.—6

XVII

It is so essential that something should be done at once to replace the present method of assisting local bodies to construct their roads and bridges by a sounder system of finance, that the Government has decided to introduce this year a short Bill dealing with the financial aspect of the question. The Bill will provide that local bodies shall be classified according to their needs, and according to the measure of their own efforts to meet these wants. Government will propose, out of public-works moneys raised for the purpose, to pay over to the local bodies sums which they themselves may spend on necessary works. The sums allotted to the most needy will be larger than those paid to the next class, and so on. These subsidies, it is hoped, will diminish the roads-and-bridges votes on the public-works estimates, and finally do away with them altogether. PEOCBBDS OF LAND SALES. For some years past the proceeds of the sales of land, both for cash and on deferred payments, have been paid into the Consolidated Fund. That the landed estate of the Crown should be sold, and the proceeds used as ordinary revenue is unsound finance, and I propose to reform this by transferring the proceeds of sales oHand from the Consolidated Fund to the Land for Settlement Account, which will thereby be strengthened and rendered less dependent on borrowed money; the change should be welcome to those who believe that the practice of the pasb cannot be justified, and to those who are disposed to welcome any reform that will promote land settlement. POST AND TELEGEAPH DEPAETMENT. The revenue of the Post and Telegraph Department continues to show a steady increase. It exceeds the expenditure for the year by £98,798 18s. 6d. Savingsbank deposits reached the sum of £11,627,367 14s. 3d., and the amount of interest allowed to depositors was £472,874 18s. sd. The total amount now standing to credit of depositors is £15,543,186 16s. Bd., equal to £14 9s. Id. per head of the population of the Dominion. Money-orders were issued to the value of £2,759,393 Bs. 5d., and postal notes to the value of £565,090 Bs. 6d. The revenue from telephone exchanges was £179,123 18s. Bd. Mail contracts for the ensuing triennium will be re-let from the beginning of next year. In calling for tenders particular attention will be paid to the wants of settlers in remote districts, and the fullest consideration will be given to the extension of the rural-delivery system. Where it is found that conditions warrant the employment of self-propelled vehicles, these will be adopted. The question, however, is one which requires to be approached with caution. A considerable extension of the parcel-post system is contemplated. The Chief Electrician of the Department has returned from America and Europe after investigating the most modern developments of the telephone system. As the result of his recommendations, the establishment of automatic telephone exchanges in the four large centres and elsewhere is contemplated. It is proposed to spread the work over a period of about five years. There has been considerable telephone-exchange extension during the year, and thirteen new exchanges were opened. Provision has been made for party-line telephone services, by which a number of , subscribers may be connected with the same wire at reduced rates, the Department bearing the capital cost of the wire to a much greater distance than formerly. This is found to meet the requirements of many who have hitherto felt the charges too heavy, and the service is being used to a large extent. Demands for telephone communication between centres of population continue to be made, and where these facilities are found to be necessary every effort is made to provide circuits to enable conversations to be obtained with as much promptitude and satisfaction as are practicable. The net expenditure out of the Public Works Fund for telegraph-extension was £147,692 6s. Bd. During the year constructionworks were carried out totalling 489 miles of poles and 2,153 miles of wire. Considerable maintenance-work was undertaken, several sections of line, about 1,364 miles in all, having been overhauled and strengthened.

iii—B. 6.