The Evening Star. WITH WHICH ARE INCORPORATED The Evening Morning News, and Echo. FRIDAY, FEBRUARY 12, 1892.

Auckland Star, Volume XXIII, Issue 36, 12 February 1892, Page 2

The Evening Star. WITH WHICH ARE INCORPORATED The Evening Morning News, and Echo.

FRIDAY, FEBRUARY 12, 1892.

For tho CP.HC3 that lacfo assistance, For tho vroas that needs nsisiance, For the future la tho Oistanco,'. ' -ir.d the seed that'ira can da.

We notice with pleasure that Mr Batlley, manager of the Loan and Mercantile Company, in an interview with the representative of a Wellington newspaper, gave a timely and emphatic denial o! the wild statements circulated by the Tory press with regard to the withdrawal of capital from the colony. Mr Battley is so vvell known and esteemed in Auckland as a man of high business attainments and of comprehensive views, that his fair-minded and deliberate statements regarding the taxation proposals of the Ballance Government would in themselves be entitled to great weight. But as the able manager of a powerful and successful mercantile company, and being in London, and in touch with financial authorities there, when Mr Ballance's proposals reached that city, he is stiil more entitled to express an opinion upon the way these proposals—so new in principle, yet so necessary—were received by London capitalists.

It was quite natural that a policy both bold and new, dealing with some of the most difficult problems of the day, should be regarded by people at Home—who hate new ideas and are strongly disposed to run on old lines— with some apprehension and with a. good deal of misapprehension. We are glad to learn from Mr Battley that as Airßallance's measures are becoming better understood, the scare —which was really groundless—is passing away. His Excellency the Governor, in his speech at Christchurch yesterday, confirmed this view from information furnished by his own correspondence from England. He said very pertinently that he had come to the conclusion that the detractors of the colony were among Antipodeans themselves.

Mr Battley tells us that the withdrawal of capital from the colony has been greatly magnified, and that in point of fact there nas not been time for any withdrawal of consequence to have been made. That capitalists would remove their investments from a colony which occupies the strong position of exporting fifty per cent, more than it imports, is an event not very likely to happen.

Should they attempt to carry out an act of such egregious folly, they will be mcl by two difficulties before they hawe gone very far. First, will they be able to withdraw capital to any extent without tremendously reducing the value of their securities? Were any Company to call in its mortgages, it might succeed in the case of the very best —the gilt-edged—securities. With the great bulk, however, a general callup v?ould certainly result in capitalists becoming the owners of thousands of estates and farms all over the colony. The nominal owners—the mortgagors —now manage these properties and pay all rates' and taxes, except the tax on mortgages, without any cost to the mortgagees, in the nope that better prices for produce and a return of better times will enable them to redeem their properties, as they are now in fact doing.

The second difficulty the companies or other capitalists would have to face in enforcing a general withdrawal of their advances would be that in becoming owners of an immense number of properties tbey would be liable for al! rates and taxes, and for the management of every estate they would have to substitute for the nominal owner's management, which now costs them nothing, a host of paid overseers, managers and inspectors, with the further additional taxation arising from the fact that each owner now secures the exemption under the land tax, but when a company became the owner of fifty or a hundred of these mortgaged properties, they would be required to pay the* land tax on the full value of every property which came into, their possession as mortgagees.

Again, suppose capital were to be withdrawn from this colony, what better or safer investments could capitalists find ? Would they invest in Argentine cedillas, in American railroads, in Mexican mines, in Spanish bonds, or in Russian loans ? We don't think capitalists are such fools.

What is positiiqp of New

Zealand ? Twenty years of extravagant borrowing and wild expenditure, i accompanied and authorised by a if ckiesh political Government, resulted ?u a public indebtedness of thirty-sevfcn millions sterling, and required the imposition of the obnoxious property tax , and of greatly-increased Customs duties, in order that the credit of the colony might be maintained. In this connection it may as well be remembered that the colony had resolutely stopped borrowing two years ago. This submission to a heavy and selfsacrific»3g taxation was not, therefore, levied ancLpaid in order tc keep up the market valui'> <oi our securities, so that further loans es«ld be raised, but that we might hoaes'ch. pay our debts. It • therefore follows," i'l holders of New Zealand ..debentures v©olishly attempt to rush their securities on the market, they will injure themseves, no& us.

In ordet to enable the colony to Nvep.ther the financial storm, for which he was in no way responsibly Mr Ballance found it indispensable to compel all parties having interests in the colony—whether residing in it or out of it—to pay their fair share of taxation. He also took measures to so adjust the incidence of this taxation as to compel the cwoers of large estates to pay a graduated tax, with the alternative—if they objected to this just form of taxation—to cut up their estates and soil them to small farmers, who would double the produce from them, and pay at least five times the amount of taxes the owners of these large estates now pay. In point of tact, Mr Ballance found himself in command or a ship on a lee shore, with a long and arduous voyage before him. Like a wise and resolute captain, he shortened sail, put his crew on shoit rations, and made them do double duty, drew on the owners of ship and cargo to enable him tv bring his ship safely to port. Of course, neither crew nor owners liked such | heroic measures until they became | aware of the urgent need for them.

Somebody has said that a wise Chancellor of the Exchequer will so adjust his taxation as to pluck the feathers from the goose with as little squealing as possiole. Well, we have had a good deal of squealing from some of our geese, because hitherto they have lost very few feathers. They are now seeing the necessity of the operation, and the recent outcries have practically ceased. With a wise and moderate administration of the new measures, and with a resolute abstention by the Government from all fads and nostrums, and with the absolute stoppage of all borrowing, there is no reason to doubt that the people of this colony will secure the full benefit of the prosperity they are now beginning to feel, and which their industry and their courageous self-denial have so well deserved.