The Press. SATURDAY, APRIL 5, 1873.

Press, Volume XXI, Issue 2393, 5 April 1873, Page 2

The Press. SATURDAY, APRIL 5, 1873.

We showed yesterday tbat the mode of providing the interest in the public works expenditure, prescribed in the Immigration and Public Works Amendment Act, is not to be depended on. It is very well in theory, but the political circumstances of the colony will prevent it being pub in practice. What then ir tn be done ? Our obligations are growing upon us every year; and, as contrasted with our resources, will in a few years attain a magnitude almost unparalleled. Yet they must be discharged with unfailing punctuality and to the full. If then the system proposed by Government is not practicable, what other can be adopted ? The payments must be made, and that from sources entirely outside our present means. The question is, how can they be provided tor ?

Three several courses suggest themselves. In the first place, we may go on as we are doing now, paying interest out of principal—periodically contracting a fresh loan to pay the interest on the last. This may appear a very simple expedient. There are many persons who look on borrowing as the solution of all financial difficulties, and who, we verily believe, would rather the Government, sold debentures at 60 than that the deficiency should be supplied by any form of taxation. But though this process may be feasible while the debt is small, it cannot be continued. The interest for the current year on the first two instalments of the public works loan is £96,000; every farthing of which is charged on the loan itself. This, however, represents but a fraction of the debt. The Government have undertaken to complete all the lines specified in the Kail ways Act in five years at the utmost, (most of them in three or four years,) and the cost, at the lowest computation, will amount to £4.000,000. To this must be added all the sums spent on immigration and the other parts of the schema —-the construction of roads, the purchase of land in the North Island, and so forth—to which £2,000,000 have been appropriated— together with the costs of administration, and a variety of miscellaneous expenses which it is found convenient to throw upon the loan. Altogether, the anuual charge for interest on the public works account by the end of the time mentioned, will not be less than, : and may considerably exceed, -6350,000. I Even then, we shall be only half way through the scheme, and the demand on the public revenue will be far Bhort of the maximum. To suppose that a sum of that magnitnde can coutinue to be paid out of borrowed money is absurd. Snchan accumulation of compound interest would ruin the country outright. Besides, our creditors would not stand it; and the bare suspicion that we were driven to such extremities would damn__e our credit. This resource, therefore, is not available. At the best it simply postpones the day of reckoning; and, as it adds so much the more to the debt, whatever temporary relief it imparts is dearly paid for. Another course, advocated by some of our Northern contemporaries, is to fall back on the land revenue. We do not mean merely that tbe land fund should be charged with all railway expenditure within the province, as sow ordered, but

that it should be thrown into the common stock, and treated as general revenue. To a Canterbury audience we need not dwell on the many arguments against such a proposal They will reject it without hesitation. Canterbury and Otago will fight to the last gasp against any encroachment on their land fund. But we may suggest that the best preservative i 8 to prepare beforehand against emergencies which are plainly imminent, and which, if encountered unprepared, will plunge the colony into embarrassments so desperate as to render the sacrifice of the land fund inevitable.

Tho third and last course is to impose a fresh tax. This is what Mr Yogel looked forward to. If extraordinary sums were wanted, an income tax, or house-tiix, would not, be thought, be a hardship. INTor would it have been if confined within the limits he anticipated. From £40,000 to £60,000 might be raised out of New Zealand for three or four years without any intolerable pressure. But the raising of the amount that will soon be necessary is a very different matter. Whatever tax is selected for the purpose, must be applied on a scale which very few of those who talk most freely about -it have realised. It must be capable of such expansion that it can be made to return six times Mr Vogel'a estimate. Then comes the question whether the remedy will not be as bad as the disease. May it not be feared that so vast an increase of the public burdens will work incalculable mischief, by paralysing the energies, and stifling the industrial enterprise of the country ? __ or the public will do well to observe that the extra revenue required to meet the loan charges— not this year or the next, but by the time the authorised railways are completed—will amount to nearly five times the proceeds of the stamp duties, and be not far from half the whole receipts from customs. And this it must be remembered, will be so much clear addition to the present taxation.