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 cent., and deposits in the Savings Bank decreased by £75,000. There was a panic in the land. The public had absolutely no confidence in itself. It was rapidly declining into a miserable, pitiable, and contemptible condition of hypochondriacal nervous debility. The more it dwelt upon its complaints the worse it became, and a speculator was regarded as a madman rushing upon destruction. When national bankruptcy and repudiation were suggested, the public, thoroughly alarmed, turned round savagely upon the tactless person who had expressed in words a thought that evidently found a place in many minds.

At that time colonisation was carried on by a partnership. The colonists put into the affair their experience and their unbounded energy, but they had very little capital, most of which was supplied by the sleeping partner, the English moneylender, who charged interest ranging from four to ten per cent., according to the risk. It was the sleeping partner who took most of the profits, and there was a continual dread that he might refuse to continue operations or to grant more supplies. Sir Harry Atkinson’s problem was to decrease his expenditure on the one hand, and to increase his taxation on the other, and also to avoid frightening the sleeping partner.

The position was a troublesome one for any Ministry; it was a dangerous one for a Ministry that was out of touch with the masses; but Sir Harry, who did not know what fear was, showed no hesitation. The property tax yieidedyielded [sic] him a handsome revenue. By adopting a scheme suggested by Mr. Alfred Saunders, he made a uniform reduction of ten per cent. in all Civil Servants’ salaries, saving £100,000 a year. The consternation created in the Civil Service spread much further when the Government suddenly and without warning, in the middle of the grain season, increased the railway freights.

This action was the signal for a great outburst of indignation from Canterbury. The southern provinces immediately jumped to the conclusion that the Government intended to make them bear an unfair proportion of the burden of taxation. The policy proved to be a very unwise one for the Government, as it brought the southern members into close unity against it. Canterbury’s woes drew Canterbury’s members together, and all party feelings