The earnings of the railway lines already constructed have, during the last three or four years, not only paid all the working expenses, but within a trifle of the interest on the capital, and it is confidently anticipated that, as they are extended into the interior, the revenue will increase year by year until they will not only pay the full rate of interest on the money borrowed for their construction but become sources of profit to the Colony. Although the Telegraphs at one time had a revenue slightly over its expenditure, they have not recently, owing probably to their rapid extension all over the Country and a considerable reduction in the scale of charges, contributed anything towards the interest on the outlay. It is however expected that this rather unsatisfactory state of matters will not long continue. With the exception of one loan of a million, on account of railway works, negotiated in London in the year 1869, redeemable by drawings of £20,000 annually, which commenced in 1872, there is no provision made, either by way of a sinking fund or otherwise, for meeting the Debentures of this Colony as they mature. All recent loans have been for a period of thirty years. No loan falls due until the year 1888. Many years ago it was found necessary to borrow money to carry out permanent public works of an expensive and important, though not of a reproductive character, but as the necessity does not now exist that practice has been abandoned and loans are now chiefly raised for the construction of Railways and Telegraphs, the revenue from which will in a few years be more than sufficient to pay the interest thereon. The debt outstanding on the 31st December last consisted of the following description of securities, viz. : Terminable Debentures, falling due in various years between 1888 and 1909 £10,072,600 0 0 850,500 0 0 234,830 0 0 530,189 9 2 £11,688,119 9 2 BANKING ARRANGEMENTS. LOCAL ACCOUNT. The local Banking business of the Government has for very many years past been satisfactorily conducted by the Bank of New South Wales, which is the oldest, the largest, and the most influential monetary institution in the Colony. The agreements under which this business has been conducted have from time to time been modified to meet the state of the Public Funds and the altered circumstances of the money market. The present agreement does not expire until the 30th June, 1880. Under it the Bank pays the Government interest at the rate of 3 per cent. per annum on the daily aggregate balance, less a margin of £50,000. Should the Government require to overdraw its account at any time during the currency of the agreement, it can do so to the extent of £200,000, subject to an interest charge at the rate of 5 per cent. per annum. Under certain conditions detailed in the Banking Agreement, which had the approval of the Legislative Assembly, the Government were empowered to make "Special Deposits" with Banks other than the Bank of New South Wales, at a rate of interest not exceeding 4 per cent. per annum. At the present time there is, under this arrangement, a sum of £1,725,000 under Special Deposit with nine of the City Banks. The Treasury collections are deposited in the Bank daily, and payments therefrom can only be made by cheques drawn by the Paymaster of the Treasury. Heads of Departments and other officers in Sydney, entrusted with either the collection or expenditure of public moneys, keep their accounts with the Bank of New South Wales. Collectors of Public Revenue in the interior also keep their accounts with the Branches of that Bank, in districts where such are estabished, and transmit their collections to the Treasury by the drafts of such Branches on the Head Office. For these drafts the Bank charges one-eighth per cent. The charge against the Government for exchange is made quarterly, and the interest payable on its credit balances is brought to account half-yearly. Statements called "Bank Sheets," showing the payments made and the moneys received by the Bank on behalf of the Government, are furnished to the Colonial Treasurer and Auditor General, respectively, daily to the former to enable his Accountant to check the books of the Receiver and the Paymaster, to the latter to enable him to audit satisfactorily the accounts of the Treasurer. LONDON ACCOUNT. The London Branch of the Bank of New South Wales has also for a considerable period managed the financial business of the Government in England. The agreement for the conduct of that business expires on the 30th June, 1880. Through the Agency of the London Branch of this Bank all the larger Loans of the Government have been negotiated, as well as all payments made for Interest on the Public Debt, and for Railway and other materials purchased by the Agent General on behalf of the Colony. For negotiating Loans the Bank is paid, under the existing agreement, a commission of onequarter per cent. on the nominal amount of any Loan not exceeding one million, and one-eighth per cent. on any amount in excess of that sum. One-quarter per cent. of commission is also allowed on the principal sum of debentures paid off, and on payments involving verification of accounts or transmission to the Colony by documentary evidence or vouchers. For interest on the public debt, which is payable half-yearly in London, a charge of one-half per cent. is allowed. The interest payable to the Government in respect of any cash balance in the hands of the Bank is 1 per cent. below the Bank of England rate, for the time being, on the daily balance; and the interest chargeable to the Government for cash advanced by the Bank is 1 per cent. above the Bank of England rate, but the charge on such advance can never be less than 5 per cent. during the currency of the agreement. When the proceeds of a loan, or any portion thereof, have to be made available to the Govern ment in Sydney, exchange upon the operation is chargeable at a rate one-quarter per cent. less than the rate then ruling for sixty days bills on London, or, if required by the Bank, notice of the desired transfer must be given, so that the transfer may be regulated in accordance with the scale provided by the agreement. When funds are required in London by the Government they must be placed there in one of the three undermentioned ways : 1. By remitting sovereigns through the Bank at current rates of freight and insurance, and cost of packages. 2. By remitting the bills of the Bank at one quarter per cent. less than the exchange of the day. 3. By placing in the hands of the Bank, as collateral security, Government Debentures for sale, on which the Bank must advance up to a sum of £350,000, if required. Copies of the London account, supported by vouchers and authorities, &c., are furnished monthly to the Treasurer and Auditor General, respectively. On receipt of these documents the receipts and payments therein shown are at once abstracted and passed through the books of the Treasury in the same manner as if the transactions had taken place in the Colony. REVENUE AND EXPENDITURE. The Revenue and Expenditure of the Colony is increasing year by year in proportion to the prosperity of the people and the increase of population. This is naturally to be expected for as new lands are taken up and outlying districts occupied, demands upon the Government for all those services which tend to promote the well-being of a community are constantly being made; and although these services when granted create an additional expenditure, there generally follows an augmentation of the revenue, both from the sale and occupation of the waste lands of the Colony, and the larger consumption of dutiable articles. When responsible Government was established in 1855, the revenue amounted to £973, 178, the population being then only 277,000. Ten years later that is, in 1865, and after the Colony of Queensland had been formed out of the Northern Districts of New South Wales-the revenue amounted to £1,755,462, and the population to 411,000. In 1875, exactly twenty years after the introduction of Responsible Government, the population had increased to 606,000, and the revenue to £4,121,996. The population is now estimated at 700,000. During the last six or seven years the revenue has largely exceeded the expenditure, and notwithstanding that Loans for Public Works and other purposes have been paid off out of the annual surpluses of these years, to the extent of nearly two millions, there was left an actual surplus on the 31st December, 1878, of close upon two millions and a half. One-half of this surplus it is proposed to expend upon public works and buildings of a permanent and national character-still reserving a million and a quarter for future appropriation. The following statement, taken from the Government Gazette of 2nd January last, shows in a condensed form the actual revenue and the actual disbursements during the year 1878: It will be observed that the expenditure here shown amounts to a larger sum than the Revenue of 1878. It must, however, be understood that this expenditure includes a large amount chargeable to the Revenue of previous years, which owing to the lapse of certain appropriations for public works under the provisions of the Audit Act, could not be incurred until re-votes for such services were obtained. The Treasury, New South Wales, JAMES THOMSON. 8th May, 1879. Total Expenditure in 1878 NEW SOUTH WALES. AN ACCOUNT of the Rise, Progress, and present Condition of the Revenue of the Colony of New South Wales. [Written in the Year 1876 for the information of the Imperial Government.] REVENUE AND RECEIPTS. FROM the foundation of the Colony in the year 1788, to the establishment of the first Legislative Council in 1824, the records of local revenue and expenditure are too imperfect to render them of much value for statistical purposes, or for comparison with the revenue and expenditure of subsequent years. Up to that time the public expenses of the Colony, which consisted chiefly of expenditure connected with the support and management of British convicts, were borne almost entirely by the Imperial Government. From a Parliamentary paper published in the year 1824, it appears that the expenses of the Colony to the Crown, including expenditure for transportation, were, in 1821, £425,350 14s. 4d., and for the period from 1st January to the 7th September, 1822, £365,729 178. 9d. During these years the local annual revenue could not have much exceeded £30,000. Early in the year 1800, import duties (probably the first form of indirect taxation attempted in the Colony) were imposed on spirits, wine, and beer, for the purpose of providing funds for completing the erection of a Gaol in Sydney, a work which had previously been carried on by a voluntary assessment, levied in the first instance on the inhabitants of Sydney, but afterwards on the community at large. As the produce of these imposts was, however, found inadequate to complete the work, duties on other articles of luxury were resorted to, which, with some slight modifications, were continued to be collected under Proclamations of successive Governors till the year 1840. When Major-General Macquarie assumed the Government in 1810 the population was 11,590, and the port duties about £8,000 a year. On his retirement from office, in 1821, the population had increased to 29,783, and the port duties to nearly £30,000. Notwithstanding the establishment of a Legislative Council in 1824, which was the third year of Sir Thomas Brisbane's administration, it does not appear from any of the official records that the expenditure of the local revenue was in any way controlled by that body, nor does it appear that any Estimates were prepared or submitted to the Council before the year 1832, three years after it had been enlarged to fourteen Members. On the contrary, it is on record that before the year 1826 the Colonial Revenue had been applied at the discretion of the Governor to the liquidation of expenses of every description, almost indiscriminately, and without any fixed rules of appropriation. In that year the expediency of rules for its application was determined upon; and it was decided that the entire charge of the Civil Establishments of the Colony should be defrayed out of the local revenues, and that of the Convict Establishments out of the funds to be annually provided by the Imperial Government. Prior to 1824, all accounts of receipts and expenditure were transmitted to the Lord's Commissioners of the Treasury. In that year Mr. Lithgow was appointed Auditor-General for the Colony, but his duties were limited to auditing the local revenue and expenditure accounts. The accounts connected with the expenditure for the maintenance and supervision of British convicts, kept by the Commissariat, were, as formerly, periodically forwarded to the Imperial Government, and the business of that Department continued as heretofore, under the sole and immediate control of the Governor for the time being, as the Representative of the Crown. Even after the appointment of Mr. Lithgow as Auditor-General, and up to the year 1855, when Responsible Government was introduced, the accounts of the Crown Lands Revenue of the Colony were annually transmitted to the Imperial Audit Office, where they underwent a minute and thorough examination. In April, 1827, the first Collector and Comptroller of Customs was appointed, with a suitable establishment of officers and clerks. Prior to that the Customs duties were collected by a functionary called the Naval Officer. In February, 1829, the department of Customs was placed under the direction of the Commissioners of Customs in England, and transferred to the charge of officers under their orders, sent out by them for the purpose. From that time up to 1852, when the control of all the revenues of the Colony was transferred to the local Legislature, the Customs continued to be a kind of semi-Imperial institution. In the early days of the Colony, and even for some years after the establishment of the first Legislative Council, the Customs' duties, which were then the principal source of revenue, were collected under Proclamations of the Governor. In the Imperial Act 4 Geo. IV, cap. 96, which provides for a Legislative Council, there is a clause which conclusively proves this, as it makes perpetual the Act 59 Geo. III, cap. 114, passed in the year 1819, the preamble of which is as follows :— "Whereas since the establishment of a Colony in New South Wales the Governor or other persons administering the Government thereof have from time to time caused to be raised and levied certain rates and duties upon goods wares and merchandise imported into or exported from the settlements therein And whereas it is expedient that the said Governors and all other persons who may have advised issued or executed any order with respect to the raising or levying any such rates or duties should be protected from vexatious suits until further provision shall be made by Parliament." It further states that till the first day of January, 1821, no action or prosecution should be commenced against the Governor or other person in any way connected with the collection of these rates or duties. Another clause of this Act authorizes the rates or duties collected prior to the passing thereof to be continued or discontinued wholly or in part by the Governor of the Colony as he should deem expedient, and by the third section he is also empowered to levy a duty upon spirits made within the Colony, provided such duty shall not exceed the duty levied upon imported spirits. It also empowers him to make rules and regulations for the collection of the same. To remove all doubts as to the legality of the collection of duties under proclamations of successive Governors, the Legislative Council passed an Act, in August, 1825, to stay proceedings against the Colonial Treasurers of New South Wales and Van Diemen's Land, then a dependency of the Colony, or any other person, for collecting, levying, or receiving duties previous to the passing of such Act. Another Act was passed by the Council in November of the same year, to continue until further provision should be made certain duties, tolls, rates, fees, and other sums of money, and to legalize the collection of all such duties, tolls, &c., levied under any Proclamation or Order of any Governor before the 12th day of August, 1824, the date on which the Legislative Council was established. Under the provisions of this Act the Governor was likewise empowered to reduce or discontinue the said duties, tolls, rates, fees, and other moneys as should be deemed by him expedient. CUSTOMS AND EXCISE DUTIES. From these enactments it is evident that, until the Legislative Council was enlarged, the imposi tion of Customs duties and other taxes in support of the public revenue was left entirely to the discretion of the Governor of the Colony for the time being. The Customs and Excise duties, which were chiefly on articles of luxury, collected at the time these Acts were passed, do not appear to have been considered excessive by those who had to pay them. The following is the tariff as fixed by the Proclamation of Sir Thomas Brisbane, dated 25th October, 1825 :— Spirits imported from Great Britain or the West Indies Tobacco... Ad valorem duty on foreign goods... Spirits made or distilled from grain the produce of the Colony 6s. Od. per gallon. 1s. Od. per lb. 2s. 6d. per gallon. These rates were slightly increased by the Proclamation of Governor Darling, dated 16th Octo ber, 1828 The duty on foreign goods remained as before, and only the one charge on spirits made in the Colony, viz., 2s. 6d. per gallon, was authorized. The following are the amounts of Import Duties collected under these Tariffs in each year, from 1824 to 1840, viz. : |