OUR FINANCIAL POSITION.

Press, Volume XII, Issue 1484, 12 August 1867, Page 2

OUR FINANCIAL POSITION.

TO THE EDITOa OP TEE PBBSS. Sis, —A few short months ago we were about as happy, and contented, and prosperous a people as could be ordinarily found among colonists —thriving *in our public revenues, with no serious pressure in trade; desirous of helping each other as far as our feeble ability would allow, and boasting of our provincial wealth and the high character Canterbury had sustained in the markets of the world. And now turn to the other side, and look only on the picture of ourselves as disclosed in the almost tumultuous assemblies of the unemployed, in the records of our Bankruptcy Court, the weekly gatherings at the sitting of the Resident Magistrate, and the forced sales of property- It is in everyone's mouth, and at the corner of every street you hear the question—" How long are these things to last? When will relief come to us ? " And again— " How can this sadden change be accounted for ?"

Let mc try to give an answer to the last question, and then we may perhaps be able to imagine the answer to the rest; but I must trespass on your space, and perhaps upon your patience also. Some of your readers may recollect the time when we began the railway andjtunnel works in this province that we paid £30,000. part of the first cost of that great work, out of ordinary revenue ; but about that time, anticipating the negotiation of our debentures, we were compelled to resort to the Bank for a credit of £15,000. It was granted with this reserve by the Provincial Council, suggested by the Superintendent (Mr Moorhouse), — j «~33»afc hie Honour be requested-to withhold his sanction to the expenditure of any considerable sum-of taevtyv&stitir *** I * t * to the advance made by the Bask be discharged.

And again, when later in 1862 a further demand was made of £50.000 for the same purpose, a* an advance from the ordinary revenue, in anticipation of the loan, tin? Council in -jiving its sanction to it, in an address to :iis Ilniour very emphatically declared that the ordinary publio works of the province should not suffer from the expenditure of funds appropriated to such objects — in other words, that the greater works of railways wore to be constructed solely by the proceeds of the loans, and that the ordinary revenue of the province was not to be diverted from its legitimate uses and applied to them. And this was a very wise direction, showing forethought and prudenoe I think on the part of the Council; and this resolution was adopted by the Council at the time it was asked to assent to a Bill authorising the negotiation of a loan for £500,000 for certain other great works within the province. And so we went along in our usual quiet way nntil the melancholy years of 1864 and 1865. On referring to the doings of the Provincial Council, I find that in ApruY 1864, Mr-Bealey being then Superintendent, Mr J. Hall was appointed to the office of Secretary for Public Works, and before that month expired a series of resolutions were brought down to the Council deolaring that it was expedient to construot the Southern Railway—bufc more particularly the bridge across the Eakaia — and that for the purpose of providing the funds necessary for these works £340,000 should be raised, as part of theloan I have above alluded to. I need hardly tell you now, because surely neither you nor your .readers can have forgotten, how vigorously these resolutions were opposed by a email minority of six or seven, amongst whom MrMoorhouse was the most strenuous. In August, 1864, we were told by Mr Bealey, that he had entered into a contract with Mr Doyne for designs, plans, and specifications for the Rakaia bridge and the Southern railway, and in June, 1855, the Council had laid before it the contract made with Holmes and Co. for the construction of the work at the very moderate cost of £201,000. It is important that these dates should be borne in mind. Mr Bealey and his advisers (Messrs Hall, Bolleston, &o.) knew perfaotly well that their term of offioe was drawing to a close ; thac within nine months of their signing such a contrast with Mr Doyne and Mr Holmes, which was to involve the country in an overwhelming expenditure, they would have left office and would be succeeded by another' Government and another Superintendent, who with his supporters had systematically condemned this work as reckless and unoalled for. Nor must it be forgotten that this contract was entered into before the negotiation of the loan which was to pay for it, and consequently in absolute defiance of their own resolution passed, as I have shown you, in April 1864. The sequel we know; but of that presently. Then, in this came year, 1865, the goldfields on the West Coast Brat broke' out, and we remember how eager men wore for a road across the rocky mountains. Well, the Council passed "a resolution granting to the Government the sum of £30,000 for this purpose. ; Now let us for a moment look at the position of affairs. First, we have a positive resolution of the Council forbidding any works of magnitude being commenced pending our iliability to the Bank. Next,'a 'resolution to the effeot that the Great Southern Railway should only be carried out on the negotiation of-; the loan passed■ for that, purpose. And, lastly, we have the Council sanctioning the construction of a road to the West Coast at a cost of .: Aa commercial men, we surely must be aware that in the case of the Joint Stock Banks, which are merely trading : corporations, they have power to aid the commerce of the district in which they trade to a certain limited eifent. JFor example, the Bank of New Zealand, iwhich is perhaps a corporation. mom 'intimately associated with our local interests'than !any other Bank, would here have authority to 'afford accommodation to ita customers to an extent equal to its trading with the people <rfthe province, and holding the Government account it would aid the local oommerce relatively to its position with the Government; as, for example, if the deposits of the Government wefe considerably, in. its favour, not only would the Bank employ the unused oT~tEe Government by giving facilities to the .local oommerce, but its own available means ■ would necessarily be used-in a like manner for their own profit, and hence trading transactions jwottld be made easy ; and where the personal credit of their customers stood high larger accommodation would be given and'greater facilities would be afforded in nearly all legitimate commercial transactions. But we 'have the reverse of this picture before us. ; In consequence* of the Government entering upon these large works, before the negotiation of the loan of 1862, the whole of the ordinary Revenue of the province has been absorbed ; and in addition to it >we Hhe - last eighteen months found ourselves indebted to our bankers to the extent df from £80 to £100,000 upon an overdrawn account. ; The cost of the Southern railway, as I have , •endwnj; ,j waa ti> be• at £201,000: The present Superintendent that work at the Selwyn-'-cahceued ttte : tareleee'contfract with Mr Doyne* who ought never to have boon brought into tha province, but only after an expenditure ihas been , incurred amounting to something_like _£120,000._ _The road, to the West Coast has cost ua £150,000 in the place of £30j066, and as ; I believe is the case, that a portion of these works, of the first at all events,' has been paid for in debentures and land, we have an outlay of at least £150,000 taken* during the last two or three years from the revenues of Iheprovince that ought to havo been devoted to other purposes, or for which weiave incured a debt to the Bank of New Zealand. Taking then our floating debt to thu "corporation at a minimum of £80,000, I would ask any thinking man of business whether it is 'reasonable to suppose that the Bank, having given the province thie amount of assistance, could at the same time be extending like accommodation to the trading interest; for let us remember Canterbury ia only one among the many places in which the Bank trades; and in aU Auckland, Dunedin, Nelson, Inveroargill and Wellington they are probably called npon to assist in like manner. The Bank of New Zealand then has been placed in the position to refuae aid except in very unexceptionable cases to its customers, and it follows as a neceeesry corollary that the other banking firms have done likewise. For why ebbuM they help those who merely come to them incases of extreme emergency, but with the greater liability of risk and lost. What has been the result then ? —surely that " merchants, farmers, shopkeepers, have been obliged to losing all they had; others who have been still able to drag along have had their means of employing labour curtailed, and. the consequences of all this'have at lengtti extended to the labouring classee. , .' .: ~-.,: ,■'■:. •;. ... ■.-. : -: ; '-..-. We talk of our frefeukp/our legula&re bodies, as fcejag our legislative bodies ere rion-entlUesif,hiving passed resolutions so emphatic as these I have shown you they are from party motives or negligence, pureuing.a.opurse so utterly - at variance with .toeir formwdecieions. The Government; that of Mr Bealey and Mr Hall, which led ue jnto this difficulty ought to be held responsible for it. The evil does not rest with' their work, for the character and .the -credit, of Canterbury we are told is at stake in the old country, and our loape are not negotiable because we have the reputation of being reckless spendthrifts ; and nolHought, no allowance, is made for the manifest dufeniltie* we have contended with. These are painful experiences, but how difi ferent would pur lot have. bean had we possessed a Council of matured heads, instead of what is called new blood, knowing nothing of the former proceedings of the House; which would have challenged, nay, not only challenged, but which would positively have refused supplies except they were provided in accordance with the compact out of the loan of 1862,~» loan which i* not yet floated on tha market of England. I fear I hare exhausted your patience, but I may perhaps srith your permieion,: return to thissubjectx>n,iom*future occasion. I am, &&, Aβ Old Sbwxkb.