The Press. FRIDAY, AUGUST 19, 1864. WHOSE ARE THE LAND REVENUES?

Press, Volume V, Issue 563, 19 August 1864, Page 2

The Press. FRIDAY, AUGUST 19, 1864. WHOSE ARE THE LAND REVENUES?

The questibn which is now before the province is one which goes to the root of those financial relations which were established by the Constitution Act between the General and Provincial Govern, ments; and the difficulty which has arisen is one which could not but arise out of those relations. We said yesterday that it was a dishonest thing that loans raised by the General Government should necessarily take the precedence of those raised by tiie provinces. This is a strong expression; but is it too strong ? Let us put the case : —Canterbury passes an Ordinance, say in 1860, for raising a loan of £300,000 on the security of her revenues, Ordinary and Territorial. The Governor, by the advice of the Ministers, gives his assent to that Ordinance. The money is raised, we will suppose, in London, upon representations supported by the public documents showing tho revenue and expenditure of the province, and the sources from which that revenue is derived. The most important of those sources is the Land Fond, which, by a resolution of the House of Representatives, is paid over to the provincial exchequer. Upon the faith of these representations, and of all the public acts of the Governments, General and Provincial, the money-lender in England invests his capital in the provincial loan. One of the first points into which the capitalist has inquired, has been, whether the securities thus offered to him have been previously encumbered by any prior engagements ; he finds that that is not the case, but that there is a clean title to the estate at the time he invests his capital. So far the transaction is a clear and simple one. But in, let us say, 1863, two years after the money has been borrowed by Canterbury on the faith of arrangements to which the General Government was a party, the General Assembly, being in want of money, proceeds to raise a loan itself. We ask any men of business, whether it is just or honest that the loan so raised by the General Government should take priority as a mortgage of the same revenues which have been already pledged for the provincial loan of 1860? Surely that is not an honest arrangement; and yet it is one which, under the present system of finance, must necessarily exist whenever the General Assembly proceeds to raise money, because the provinces have really no revenues at all except those which remain after the General Assembly has appropriated whatever it thinks right. Wβ say they have no revenues in law—have they none hi equity? By the Financial Resolutions of 1856, the House of Representatives formally pledged itself to the abandonment of the territorial revenue to the provinces, and it has acted on that pledge ever since, with one exception. In raising money —the hundred and fifty thousand pound loan for the first year of the war, and the half million for the second year —the Resolutions of 1856 were virtually violated, when the General Assembly offered as a security those territorial revenues which it had previously pledged itself »hould be handed over to the provinces. It must be admitted that this wae a distinct repudiation of a bargfcin. We say of a bargain ; for Mr. Sewell's Eeaolutioni of 1856 were not the promulgation of a scheme, but the raUGcation of a contract, in which there was value received on both sides, let us recall for a moment the circumstances of that contract. The colony was called on at that time to pay tho debt of the New Zealand Company, about £200,000, which had been expended in founding Wellington, Nelson, and New Plymouth. There was a debt of about £120,000, which had been incurred by the New Zealajid Government, and had been expended entirely, 4re believe, in the Northern Island; and it was tiought desirable that money should be raised for the purchase of Native lands in the Northern Island-

Mr. Sewell therefore proposed to raise £500,000, of which £180,000 was to be spent in land purchases* and the rest used to pay off existing debts ; and the loan was to be charged on the different parts of the colony, in fixed proportions, the Middle Island taking the £200,000 of the Company's debt.

The cost of purchasiug Native lands promised to be a heavy burden on the current revenue of the colonj for many years, and the Southern provinces naturally resisted the attempt to take their land fund for such a purpose. Now let us take the. case of Canterbury. Canterbury owed no part of the Xew Zealand Company's debt; Canterbury owe* no part of the debt spent in jears before it was founded, in the North; but the revenues of Canterbury were liable under the Constitution Act to be expended in land purchases in the Northern Island—if the Assembly voted the money. But it was in the power of the South, by refusing supplies, to put a stop to the purchase of lands in the North altogether. The North then had a distinct interest in buying up the opposition of the South by making a fair bargain ; and the proposal was that, if the Middle Island were for ever relieved from charges on its land fund by the General Government, it would take upon itself the debt of the New Zealand Company. We did not owe one penny of that debt. "We had as good a claim to be relieved from it as Auckland had ; but that was ihe price at which ice bought up our land fund for ever. It was a bad bargain at the time. The Canterbury land fund was then a mere bagatelle, and she was sitting under the scorn of the colony for persisting in maintaining that her lands were worth twice as much as her neighbors charged for theirs. A debt of £70,000, which was about our share of New Zealand Company's debt, was a heavy liability for this province to undertake at that time. But we did take it a* the price of keeping our land fund. The event proved that our sagacity was not ip fault, and that we had made a good bargain. But the point we wish to press upon our readers is this—that the property in its own land fund by Canterbury, and the other provinces of the Middle Island, was a thing bought and paid for. The Resolutions of 1856 were not of the nature of a convenient financial arrangement to be dealt with —retained or abandoned—as the General Assembly might think fit, but were the conclusion of a contract in which valuable consideration put on both sides. The War Loan of 1860 was a violation of that contract in theory, though not in practice ; for though the Government introduced the lands of the colony into the security for that loan, the land revenue still continued to be paid to the provincial chest as before. The example was a dangerous one, as it prepared the way for a further violation of a solemn engagement. In 1862 j the Domett Ministry had occasion to go to the money lenders for £500,000, and the land fund was again introduced as a collateral security for the debt. In 1863, under the terrors of the Auckland panic, the purse strings of the colony were again withdrawn, and under counsels which sounded very much like those of Mm who said, "yea, all that a man hath will he give for hie life," the General Government once more went to the money market for three millions. But, by some unexplained circumstance, whether in real ignorance of the language of former Acte, or whether intentionally shrinking from so daring a violation of national engagements, we know not, but so it is (and we believe very few of our readers are aware of the fact) the three million loan which. Mr. Reader Wood is about to negotiate, if the Panama Company will allow him to do so— is not secured on the lands of the colony at all. All sums of money borrowed and raised under the authority of this Act, and interest thereon, shall be a charge upon the ordinary revenue of New Zealand, as defined by the " Ordinary Revenues Act, 1858." Such are the words of the Loan Act of 1863 ; and the "Ordinary Revenue" does not, by the Act of 1858, include the territorial revenues. This is an important fact, which, were it explained in proper quarters in London, might have a powerful effect in destroying the pernicious influence which the three million loan has had in swamping our credit. It ought to be explained that the security on which we are borrowing is totally distinct from that which the General Government offers. If our readers have followed us through this somewhat lengthy but necessary story, they must have come to the conclusion that the right of the Provincial Governments to their land fund is one which, cannot be violated without an utter disregard to those financial engagements which the whole honor and credit of the colony demand that we shall maintain. But if the provinces have an equitable claim to the enjoyment each of its own land fund, it follows that they have an equal claim to anticipate the revenues derived from that source ; and that to interfere with such a power, by saddling the land revenues with charges on the part of the General Government, is in plain fact to violate the engagements of 1856. We assert then, first, —that the borrowing of money by the General Government as a first charge upon the security of the lands which have been already pledged by the province, with the consent of the General Got eminent, is dishonest towards the holders of the provincial debentures: and, secondly, —that the borrowing of money at all on the «ecurity of the land fund, of which the General Government has by an honorable engagement divested itself, is" a breach of national faith towards the provinces. In a word then, the financial policy proposed by the present Government of Canterbury is a reversal of the engagements of 1856. It proposes that the land fund of Canterbury shall be pledged for a debt of Auckland, and that of Otago for a debt of Tanaiaki. Surely his Honor's advisers have not contemplated the matter in this light. And if not, surely it is not too late that they should reconsider then* policy. If this policy were one exclusively relating to provincial politics, they might stand or fall by it; but when the question is one so wide in its bearing, and involving the financial engagements into wliich the General Government has entered with all the Prpvinflea, surely it would be far wiser to leave the to the Representatives of the people .jjjf&*fßEg General Assembly, irho -nill, we entertain no" doubt, make themselves /ally acquainted with the views of their constituents in the matter. Especially may we expect that Mr. Rolleston, who, from his more recent advent to political life, can scarcely have a full cognizance of all the past circumstances out of which the present position has grown, will feel no hesitation in yielding to the very general feeling which is entertained even amongst his own supporters, that the matter shall be more fully considered before the province is irretrievably pledged to any action in the matter. Had the Opposition the

other night entered into a full discussion of all the bearings of the question, we have not the slightest doubt but that the Government would have given way, a course wliich no Government with any selfrespect can take, the moment there is the slightest appearance of a party opposition. And if the policy now proposed be abandoned, will it not be wiser, more consistent with the national honor, and more consonant with the interests of the most importantprovinces of the colony, tliat any legislation by the General Assembly shall tend rather to strengthen by the authority of specific Acts those engagements which are now recorded in the less rigid, though not less honorably binding, form of the Resolutions of 1856. Such would be tho effect of the policy we sketched out yesterday, a policy which we believe to be consonant with the views of most thinking men in this province, and which we cannot but believe would be accepted by an Assembly in which there is still to be found almost all the leading men who were parties to the financial engagements of 1856.