CORRESPONDENCE.

Auckland Star, Volume XIX, Issue 221, 19 September 1888, Page 5

CORRESPONDENCE.

DANGER AHEAD.

(To the Editor,) .^■—■M* Westgarth, how fa Wellington, isj I believe, _ gentleman of high repute in financial circles in London and according to your, correspondent is making certain proposals which the Government have under serious consideration. Among them is oho to prohibit municipalities and harbour beards from borrowing on the London Stook Exchange. ,_ The Government, according to your correspondent, la to borrow for them and to begin by converting their outstanding loans into a uniform three per cent. Government stock. As a question of finanoe this maybe profitable. As a question of politics it must excite the most grave apprehension, To pledge the publio credit for these purposes can only end in plunging the colony in to deeper depression, into a new scramble in the Legislature, worse log-rolling and more widespread waste and ; publio corruption. Set the gain against j the loss and the gain will be as dust in the balance.' » " "

The credit of the General Government should be regarded as a sacred trust, to be used with the most watchful care and to be maintained at its highest point as a reserve against the emergencies from which no people win be exempt. The Government is supreme and its only check the irregular action of a slowly-formed public opinion. Worse still, the power of borrowing for undefined or local purposes, placed in the hands of adroit and self-seeking men, may be used and has been used to mislead and debauch the public opinion, by which alone the Government can be controlled. Started on such a course, the capacity of a Government for mischief is limited only by the exhaustion of the public credit and the ; resources of the people. These perhaps are trite maxim*, but disregarding fcheto has brought upoa us three- I fourths of the difficulty against which New Zealand is how struggling. Holding to them firmly us the foundation of good go- j vernment, I have not ceased to raise a warning voice against the plausible but ruin-, ous policy begun by Sir Julius Vogd and sir Harry Atkinson in 1875, and I regard Mr • Westgarth's proposal, if correctly reported, as pregnant with danger of a similar kind. That local works should depend on local credit is the only; safe rule. Exceptions should be rare and only allowed after the most full deliberation. Municipalities a-ud Harbour Boards may go wrong and do go wrong. Governments, being less under direct control, are even more' liable to do so. In the one case, the borrowers will be brought, up before the mischief is great; in the other, tho borrower goes on till the labour and property of everyone in the country is mortgaged to the utmost point. Then it is sought to reduce great masses of the people to the lowest level of existence and the foundation of misery and pauperism is laid in the struggle of classes to throw on each other the burden sure to follow. '-~ t The proper seourity for loans for local purposes is in the works for which they are r- quired, in the local revenue of the district by which they are incurred, and in-the revenue from any endowments specially made to help them. This, too, may be called a trite maxim, but the breach of it has loaded us with burdensome debt; filled bur Parliament with log-roiling, caused ruinous inflation and debased our politics by resting, them .on Ministerial trickery and on the meanest appeals to public and private cupidity. , A great political reform that will free the Legislature from responsibility or inter-; ference in local works, restore to it the character of a Legislature and rescue it from i its "present position as an unwieldy Boards of Works, I have long regarded as the _i6st pressing need' of the colony. This reform will be a work of great labour and risk to the Government hy which it is in tbe nature of .Governments to avoid work of that kind as long as possible. Under various pretexts it has been avoided in the past but those pretexts are now exhausted, and I hope that Sir Harry Atkinson will not be allowed to seize a new one for further delay in placing the finance of the colony oh the only sound and durable foundation.

Till' that be done, ■wd may convert loans, retrench departments, increase taxation, lower wages, = refiew credit, develop our mines, or protect pur industries, but all must end in merely throwirig the money so made Or so saved into what the late Mr Macandrew justly called the Maelstrom of the Colonial Treasury.—Yours, etc.,

Frederick J. Moss.