The Press. THURSDAY, AUGUST 18, 1864. THE GUARANTEE OF LOANS.

Press, Volume V, Issue 562, 18 August 1864, Page 2

The Press. THURSDAY, AUGUST 18, 1864. THE GUARANTEE OF LOANS.

The question which was submitted to the Provincial Council on Tuesday night is without exception one of the moet important that has ever been presented to the province. If indeed the Provincial Council liad the power finally to decide on so important a matter, the conduct of Government in forcing on a decision in the address to the Superintendent, could not be too strongly reprobated. Singularly enough the Government, as well ac the Opposition, seemed to have forgotten that the proposal that the General Government should be asked to guarantee the provincial loans was a part of the resolutions submitted to the Council last session, and withdrawn. The province, therefore, until Tuesday night, can not be said to have expressed any opinion upon the,subject. The whole question however is one which must be left for final decision to the General Assembly, and there will be ample time before the Assembly meets for the members of the House of Representatives, with whom the question rests, to make up their minds as to the action to be taken in the matter. The debate in the Provincial Council was not on the whole creditable to the Council, for the question was not debated with the fulness which the subject deserved. For our own part we have abstained from dealing with it, in the hope of hearing the subject ably treated and fully ventilated ; but we have been disappointed. The Opposition did not do wisely in pressing for delay, because the matter has been for a long time before the public, and delay could have added but little to the materials requisite for coming to a conclusion ; and it is always a false move to ask for delay in a very full House, because it is like appealing from the larger to, probably, the smaller number. We confess, however, to feeling a great repugnance to endorse the policy of the Government in this matter. It is quite true that there is a great deal to be said on both sides of the question; but that did not seem to us to be said on one side or the other hut Tuesday. We cannot accept Mr. Moorhouse's vague assertions as to what he could have done when he was Superintendent, because we cannot forget that he was unsuccessful himself in raising the loan for the Lyttelton and Christchurch Eailway, which was one object of his journey to Melbourne when he let the contract to Messrs. Holmes and Co.; and the very mode which he indicated in his speech as the right way to set about placing a loan on the market was exactly that which would effectually damn it. Mr. Moorhouse's tendency is to deal with such things by a sort of intrigue. The agent for the province who is charged with the mission " should be seen as little as possible in the affair " —those we believe were his words. His business is to find out "the gentleman's gentleman of the Stock Exchange." That was an admirable and significant expression, but it is one from which we recoil; and it displays, we cannot help thinking, an amazing want of information as to the manner in which financial operations are, and ought to be, carried on. That ia exactly the way in which a bubble company ought to, and generally does, set to work; but is, as we venture to think, a mode which would be as unsuccessful as it would be diecreditable to a government. There is but one method of floating a loan successfully and creditably, namely, the most perfect publicity as to the purposes for which it is to be raised, and as to the security for repay ment,and anything like "management," or iEtrigue,or finesse in publishing the circumstances of a loan, is precisely that from which the Stock Exchange instinctively shrinks. Mr. Moorhouse had full power to raise the Railway Loan for a long time before he resigned, and he did not raise it, although the money market was at that time singularly favorable to colonial paper. He is not therefore entitled to draw comparisons between himself and a Government who, in remarkably unfavorable times, have been equally unsuccessful. Again, it is incomprehensible to us how any man of Mr. Moorhouse's sagacity can draw comparisons between the past time and the present, without even alluding to the fact that, at the time when he had it in his power to dispose of the loan, there were, comparatively speaking, few other New Zealand loans on, or about to be placed on, the market; whereas now there are three millions thrown on the market by the General Government, and as much more by the several provinces. He ought to have dealt with this branch of the subject, and to have shown how he would have overcome these admitted difficulties. But he has thrown no light whatever on the subject, other than that of the "gentleman's gentleman" theory, which is,we submit, hardly a respectable one. At the same time, little as we sympathise with Mr. Moorhouse's mode of argument, we cannot but agree in the main with his objections to the proposed policy. That policy consists in requiring the loans raised by each province to be raised, virtually, as General Government loans, and to be charged upon the revenues of the whole colony—Territorial as well as Ordinary. And the scheme is to comprise a condition that no further loans shall be raised by any province except under Act of General Assembly. Now the first obvious objection to this plan is, that it is an entire and fundamental alteration of our whole financial policy, to meet a temporary emergency. The Lyttelton Times pointed out last Tuesday, that the effect of this measure could not possibly be felt before the close of next year. The time occupied in passing the Act through the Assembly, in sendicg to England, selling the debentures, and transmitting the proceeds to the colony, would preclude the possibility of any substantial assistance for the next eighteen months. •Aβ a measure, therefore, to meet the present temporary difficulty,it is worthless. But what will be the effect of this measure as a permanent alteration of the financial policy of the colony ? The several provinces have securities upon which to borrow, varying in wide degrees one from the other. Some provinces have sold most of their lands at low prices. Auckland has given away large quantities of her land for nothing. All have fixed a lower price for the remainder, than that which Canterbury finds it quite easy to obtain. The security, therefore, in each case is widely different. Again, Auckland has borrowed, or is borrowing, half a million of money for improvements, for the most part in and around the town, such as public buildings,

wharvea, &c. Southland is borrowing to construct a' railway which some engineers have pronounced will require reconstruction a few years after it is made. Canterbury is borrowing to make a railway on the most approved plan, which will be a permanent work .Auckland, again, is to have the advantage of the expenditure of one million in immigration, which, though borrowed by the General Government, is cliarged upon the revenues of that province. How can the revenues of Auckland pay the interest on a million and a-half of money—£7o,ooo or £80,000 a year. Who in his senses believes—looking at the finances, at the trade, at the population, at the settlement of that province, that it can offer anything like a tangible security for such a debt. Yet this is the policy of the General Government, and the act of the General Assembly. It is to a body which has committed such an amazing act of folly or of fraud, that we propose now to abandon all the credit and all the financial power of the country. "We cay an act of folly or of fraud, because if the General Assembly intended that Auckland should pay this debt it was an act of folly ; and if it did not intend that Auckland should pay it, but only put into the Act that Auckland should pay it in order to eecure Southern votes, really intending that the Southern Provinces should pay it—it was an act of fraud. Our readers will remember that Mr. Cmcroft Wilson, in his speech at the Town Hall at the close of last seseion, justified to his constituents his support of the Settlements Act on the ground that all the money spent in settlements was to be charged on the province in which it was expended. We are not speaking of the part of the loan to be expended in the war. The million for that purpose is in addition ; we are speaking of that to be expended only in peopling Auckland; and we ask whether it is politic to throw into the hands of the General Government the adjustment of these loans, when it has already committed the audacious folly of saddling the colony with a charge of £70,000 or £80,000 a-year under the pretence that Auckland will pay it ? If these provincial loans are all to be thrown into a general account, and borne by the colony, Canterbury, with its six millions of acres saleable at £2 an acre, and its system of railways which will have been constructed out of the loan, is to have the advantage of a Colonial Guarantee to the extent of £700,000 ; whilst Auckland, with its few hundred thousand acres, and its population mostly concentrated in the town and living on the military expenditure, and with a miserably small amount of remunerative public works—Auckland is to have the advantage of a guarantee of exactly double the amount —that is, the £500,000 for the Provincial loan, and the million charged upon her out of the Three Million Loan. Is this a .good bargain for Canterbury ? We humbly think it is not. But it will be said that the General Assembly will rectify this inequality, by affixing; to each province a portion of the whole money borrowed in proportion to the security it can offer. This ie a plausible but inapplicable argument. In the first place, the miachief will be done before the Assembly will meet. Auckland will already have had the advantage of expenditure which will be charged against her revenues to an amount, which, if there were to be a balancing of account, would entitle Canterbury to be guaranteed to the extent of at least ten millions — looking to the comparative security which the two provinces can offer. Do those who know anything of the action of the Assembly, believe for a moment that anything like a fair arrangement would be made for the adjustment of this guarantee ? Can we forge* that at this, moment Canterbury is charged with a debt of some £70,000 for the cost of founding Wellington, Nelson and New Plymouth, with which she had no more to do than Auckland, which wa s relieved from all liability on account of that old New Zealand Company's debt. Again, under the plan proposed, every province will have an interest in seeing that the money borrowed by every other province is expended in a remunerative manner. How can it exert any control ? Suppose that Canterbury is to join in a guarantee of the debt of Southland, and Southland chooses to spend the money in a manner in which it will bo al 1 lost; how are we to prevent her doing so? The manner in which the money is invested is one important part of the security for the debt. Are we to join in a guarantee, and to have no voice in how the money is spent ? It would clearly be great folly to do so. Then it comes to this: that the General Government must exercise a direct and constant control over ell the public works in all the provinces ; in other words, that an entire revolution is to be made in the whole internal Government of the colony. The Provincial Governments will be at an end. Are we prepared for this ? The reply will be : Then what would you do ? would you leave our debentures as now unsaleable? We reply that we do not believe our debentures will be always unsaleable. Nothing that we can possibly do will get over the present state of the money market, and the impending loan of three millions by the General Government. Let us see clearly how far the present state of the law affects our credit, before we try to alter the law. The main and patent fact, known to all who dabble in New Zealand securities, is this, —that tho loans raised by the General Government take the precedence j of all loans raised by the provinces. It is a most dishonest thing that it should be so; but so it is. The General Government has the pick first of all the revenues. The provinces take the leavings. If the provinces borrow, they borrow on the leavings of the General Government. Such is the law. Now as long as the loans were merely nominal, compared, with the security, there was no difficulty in getting what money we wanted ; in fact, thero was enough and to spare for all. But now that we are borrowing six millions at once, people ask carefully what are tfte legal conditions of the security ? The conclusion then is simple and obvious. If the General Government were to pass an act requiring that a certain part of the lands or land fund of any province should be set aside as a security for the loan raised by that province, and at the same time were to ear-mark that part, so that it could not be touched for any other purpose, and were to discharge it from all liabditiea of the General as well as of the Provincial Governments, our securities would be instantly cleared of aH doubt ; and if money were to be raised at all, such securities would command it. It is the uncertain outstanding claim of the G-eneral Government which is sucking the blood of our credit. Instead of killing the monster, we are asked to put more power into its hands. We ask, — not that the General Government shall' release all

the land fund from it« claims, but we say that the secunty of a provincial loan ought to be as clean as that of a general one, and that it touches tha credit and honor of the whole colony that it should be so. We isk, therefore, that the General Government, which ianctiond provincial loans, shall discharge the security, at present common 10 both, of its claims, to the extent to which it allows the Provinces to borrow. That policy could be carried out without a revolution. Wesleyax Meeting.—Last night a meeting was l.i'ld at the Wesleyan Church, the occasion being the jubilee of the institution of the missions of that denomination. The Rev. J. Buller occupied the chair. Mr. Garrick, and several other gentlemen, addressed the meeting on the subject of the Wesleyan missions since their formation, and their success, and increase m the English colonies during the last fifty years. Towards the close of the proceedings a collection for missionary purposes was made, and the meeting, which was very numerously attended, broke up at about a quarter to ten. Heathcotk Reading-boom.—On Monday evenins, Mr. Richard Davis gave a lecture on the Traditions of the Maoris, which, as was to be expected froni the lecturer's acquaintance -with Native manners and customs acquired during along residence in the colony, was extremely interesting. The most striking point dwelt upon was the analogy that exists between many of the Native traditions and Holy Writ, as instanced in their ideas respecting the creation, the deluge, and many other points. The lecturer alluded to the article in the JPress on Hochstetter's opinion as to the tradition of their arriving from a place called Hawaiki, and quoted songs and proverbs in support. The attendance was very good, and on the next occasion we suggest a larger room — had the evening been warmer the heat would have been insufferable. A vote of thanks to Mr. Davis was proposed, and warmly responded to. It is gratifying to the promoters to find these lectures so well attended, and it is to be hoped that other gentlemen of the neighbourhood will come forward and give a reading or lecture for the benefit of the institute. The West Coast.—We understand that the survey of the West Coast, which was left unfinished by Mr. Bain, has now been completed by Mr. Kochfort, from the Otngo boundary northwards, to the point where Mr. Dybson's survey commences. Mr. Kochfort reports the country as heavily wooded all the way down, and intersected by a great number of lakes and lagoons. The ranges extend three mile 3 back all the way, the land between being terraced and low wooded hills, many of them of slate formation. With regard to the discovery of gold Mr. Rochford was not in possession of any reliable information. A considerable rush appears to 1 are set in, as no less than 103 intending diggers landed one morning from the steamer and a sailing Vessel she lvid in tow ; but on the other hand, Vlr. Rochfort had heard of great disippointment provailing among the diggers, and of threats to burn down the house of the man whom they imiigined to have caused the rush. It was certain, however, that coarse gold had been found nine miles up the Hohonu. The township on the south side of the Grey is being laid out; the quarter-acre sections being pegged off, and the belt cut, so as to allow of its entire completion when necessary. There has been slight difficulty with the Maoris about the road passing through their reserve, but they have ultimately agreed to its being carried out as laid down on the map. CANTEKBtrjIT RIFLE YOLUNTEEBS. —Last night was a " field-day" for both companies, who, at about seven o'clock in the evening, marched through the streets of Christenurch with their new-formed band of drums and fifes at their head, for the first time. The two companies, which were about a hundred strong, were under the command of Major White, and the step and column were kept in a far more perfect manner than we should have expected to have ««en in men wi:o have had so littlo marching-drill. We congratulate the Volunteers on their band, which plays the requisite quick-steps in perfect time, and altogether in a most successful manner. At the same time, if Christchureh undertakes to hare a volunteer corps, it is simply disgraceful to turn out. so feeble a force. The companies have been greatly strengthened of late ; but Christchurch ought to turn out five hundred men, or give the whole thing up. Pkincess' Tjikatbe.—Faust and Marguerite was repeated last night to a tolerably well-filled, house. Tiiis play has been placed on the stage in the most admirable manner, and the stylo in which it is played by the company 13 -worthy of the highest commendation. The stage effects are on the whole better managed than any piece we have yet seen, and those who have not yet had an opportunity of attending the theatre during its performance will be well repaid by a visit this evening. The play itself is not to our taste, and though the part of Mcphistopheles is a complete conception consistently maintained throughout, we greatly wish Mr. Shiels had taken a totally different view of the part. His get-up is admirable, but too obviously extravagant, and the whole part is devoid of the awe which is inseparable from the true idea. It grates upon us to see Mephistopheles made, as it were, the clown of the drama. Alis3 Aitken, who sustaius the part of Marguerite with her usual ability, sings " There was a King in Thule" with great taste and feeling, but much slower than is usual. The air, which is very simple and grand, drags a little when the time is slackened. All that Glitters is not Gold has been repeated so often it needs no remark further than to say that though it halted a little in some scenes last night, it appears as great a favorite as ever. Me. Pollock's Bekefit. —This gentleman takes his benefit on Friday, and has selected one of the best known and most popular of the true school of English comedy—The Rivals, by Sheridan. It has never been facted here yet, and we have no doubt will attract a full house.