SOME REMARKS ON THE RESOURCES OF NEW ZEALAND.

Press, Volume XXVIII, Issue 3779, 1 September 1877, Page 5 (Supplement)

SOME REMARKS ON THE RESOURCES OF NEW ZEALAND.

Bx Sea Jttmtts; Vogel,

(From "Fraser's Magazine.") The writer of the article " Australia and New Zealand," in the last number of " Fraser •« Magazine,'' took a very gloomy view of the position of New Zealand. I think I am not unfairly describing his principal'argument when. I say it is substantially this —that the prosperity New Zealand enjoys has followed the expenditure of large amounts of borrowed money, and that as this expenditure comes to an end tliere will be a reaction consequent upon the cause of .that prosperity being withdrawn. This argument is fairly urged, and the 'article is very able, bnt I submit that the writer's reasoning, so far as New Zealand is concerned, fails because he has had to trust to the observation, of others for some of the facts which he accepts. No matter how clever and diligent a writer may be, he • is in j ■m inquiry of this kind at a great di?-,| advantage if his statistical information is not supplemented, by personal knowledge. [ Supposing the accounts he relics to 'be all i true they may not be exhaustive, and the ekver commentator, if he had been abl» to judge for himself, might have *ecn many qualifying circumstances to disturb the judg« ment which he forms on the reports of others. In the present case, if the author had been in New Zealand, he would fcCoantae that he had mistaken cause for effect. Tlie prosperity of the colony has not been caused by the expenditure of the borrowed money, but it is an effect arising from the objects to which the expenditure has been devoted. Of the £10116,000 spent on public works and immigratidn, £6,866,000 has been expended in the colony; the balance has been u?ed in England for the purchase of railway plant and the pay-< ment of passages of immigrants to the colony. At no time it has been reckoned were more than 6000 labourers employed on the public works—_ number so small compared with the total labour employed in the colony, that a gradual reduction could not have, and as a matter of fact has not had, any distressing effect on the colony. The prosperity of New Zealand it con* sequent upon the opening up of the large additions of country to profitable settlement. The railways have made land available which was before shut out from a market. The railways completed and open are paying, it, is estimated, about 8 per cent, net-on the capital expended, which very much rednoes the burden of their cost. But such a return is th V least part of the good they are effecting. T!ieT H*ve given, not a fanfly. hut an intrinsic v_.ua of many miliums additional

of conjectural value, but value for use, which value in the shape of returns is making itself felt throughout the country.

The employment on public works has for some time been much reduced, but the effect has not been what the writer anticipated. During the month of. March last £90,000 worth of land was purchased from the Government in the Province of Canterbury alone. Instead of the labour market being overstocked, the Agent-General has instructions during the next five months to send out 5000 immigrants. A curious effect of the employment on the public works, and the demand for labour for opening up land for settlement showed itself on the gold-fields. There can beno question that only a small portion of the gold of New Zealand has yet been secured, but as the labor of the colony became absorbed, as I have described, the yield of the gold-fields fell off. Now that again the demand for labor has lessened, the prosecution of gold-mining has come more into favor. In Otago rich quartreefs have been discovered, the yield from which promises to be large. On the west coast of the Middle Island, and in Nelson, alluvial mining has received a considerable impetus, and there has been quite a revival in the value of mining property at the Thames. During the month before the April mail left, £60,000 was paid in dividends to the shareholders in the Thames mines. The writer has not taken into account the strain on the colony caused by the payment of interest on works uncompleted. At the present time interest is being paid on some three millions of unfinished railways. This is much less than has been the case during some part of the last seven years. The gradual use of and returns from the railways, as they are completed, are surely to be set against the gradual reduction in the number of laborers employed.

The actual extent of the debt of New Zealand appears to be accepted by the writer as excessive, and he assumes that the colony must suffer in consequence. The result is apparently not arrived at from a considera- ) tion of the circumstances of the colony so r much as from a comparison of the debt of j New Zealand with that of other colonies. The author, in dealing with his subject ' (" The British Trade of Australia and New 3 Zealand ") in a large and comprehensive, not . to say philosophical, manner, has scarcely 1 given sufficient heed to the very different cir- . cumstances of the colonies, arising out of 3 configuration, size, and climate. For example, j he comments upon the want of cultivation of i wheat in some colonies. With the opinions £ in favor of free trade which he advocates, he i would certainly not desire that a colony should grow grain which it could import y cheaper, and neglect producing that by exf porting which it could profitably pay for the r imported. Now New South Wales and r Queensland are not suited for wheat, whilst i South Australia grows it to advantage. J* Still, when comparing the land under wheat in South Australia and New f Zealand, it has to be remembered that ? successful' as the former is with wheat, the c success of New Zealand is much greater, r The writer indeed incidentally refers to this c when he mentions that, the average yield of i wheat to the acre in New Zealand is* thirty--0 one to thirty-two bushels, whilst in South c Australia it is "at the best of times'' eleven o and a half bushels to the acre. Queensland ( presents a remarkable instance of the difficulty n of judging the colonies from a single standy point. Although this colony may not corns pare with its neighbors in those respects d which have most remarkably aided their progress, it has peculiar qualifications of its own. ■ The development of settlement in Queensland since it became a colony is marvellous. 0 The storage of water has given a value to imy mense tracts of its territory which a few c years ago would not have been considered r possible. It is now turning attention to the . production of those articles for which its a climate is suited. To omit, as the writer has a done, all reference to the production of sugar ,f in Queensland, is to overlook-one of the great c hopes of this colony. Not as a temperate, ,f but as a mildly tropical country, Queensland s has no reason to fear comparison with other , r colonies, or to be timorous of the great efforts it it has made to develop its resources, r To return to New Zealand. There is no r reference made to the. Native wars which" in; 8 tames; past desolated that colony, whilst it is f asserted that none of the colonies "have t tasted.the bitterness of war taxes." Nearly c a third of the public debt of New Zealand 8 might be attributed to Native disturbances, ± instead of all being set down to voluntary a expenditure on the part of the colonists. f New Zealand, the writer says, "rejoices in a ~' debt of nearly £20,000,000, or something like c £50 per head of the population, which itself n does not reach 400,000, Maoris included." . This statement exceeds the license which k may be permitted to a statement in round . figures. The population at the end of 1876 a is officially estimated at 399,221, exclusive of j Maoris; with Maoris added, over 444,000. t The public debt, less the amount cancelled by . sinking fund and the money unexpended in x hand, could not have amounted at the end of 1876 to more than £18,500,000. • This gives a 1 debt of less than £42 15s a head, instead of the £50 stated by the author. He is right in including the Maoris, for they contribute j f largely to the taxation, and many of them ! are very rich. Supposing, however, they [ were excluded, the debt would be less ! than £46 10s per head. I do not attach 5 much importance to the excessive esti- , piate which the author has made, for the [ debt per head of the population conveys no r meaning if it is nnassociated with the question , of what the debt is for, and the capacity of the population to meet its annual charges out of their earnings. With the wages prevailing in New Zealand, the labouring classes, as well I as the more wealthy, would not be distressed by double the amount per head of population payable for taxes in this country. The only true test of a country's burdens is the weight with which they fall on the earnings of tho people. I might also aak the author to consider what Government expenditure in the Colony means. In Great Britain the expenditure from the Consolidated Revenue does not mam interest on the cost of the railways, nor does it mean much of the cost of education, police, gaols, and lunatic asylums. In the Colony the revenue supplies all this, excepting some fees for education. When the capital burden per head of the public debt in this country has to be compared with that of New Zaii:ind, the capital cost of the railways should be added, and the capitalised burden of the poor rate?. In a paper recently read by Mr Hamilton before the Statistical Society of London, the following passage occurred : — In contrasting the indebtedness of New Zealand with that of the United Kingdom we must add to the National Debt the .cost of railways, and capitalise the poor-law rates, which do not exist in the colony, thus:— UNITED KINGDOM. National Debt, as it *tood 1875-6 Expended on the poor, average for ten years ending Lady Day, 1675. Jg9,2.6,0i>07 capitalised at* per cent. ... 280,000,000 • iiaiisv-av';*, 16,61- miles ODoa Decaiaber, 1875 ... ... ... G30,000,000 \ ' ' 41,037,000,000 ] Of 449 12a Id per head for United Kingdom. ] I have already said that at the end of 1576 - the public debt in New Zealand amounted to ] £42 15s per head, including Maoris, or £46 10s i i without them. It has to be borne in mind 3 that New Zealand has an immense landed i estate. The railways have enormously added f to its value. Its extent is about thirty-four c millions of acres. For the last five yean it s has averaged for sale* and leases an annual a return of £820,000. The popuhtion of the r ooionv increase* so fast that calculations based fc on tiie population to-day :m> fallacious to- o morrow. It is evident, if papulation is to be s a test, that a country whoae population i_- s creased rapidly would be justified—nay, 1 would be prudent —in more largely discount- o ing the future than one vrhose population was o nearly stationary. Again, railways in New b Zealand may be regarded as substitutes for ii ordinary roads. These used to be made at v the cost of the colony, and it was considered b fortunate if tbe tolls yielded enough to main- p tain them. Now the railways are yielding a tl considerable part of the interest oa their cost. w The balanco may fairly be set down against st the cost of ordinary roads, only that balance p will soon be bridged over. And _ieanwhile, fe in place of ordinary roads, they are w

net results the means for carriage and the motive power. Experience in New Zealand has indeed proved that a small number of people may, as I have said, safely discount the future, "if they can rely on a large increase ef population. In 1559, when the Province of Canterbury possessed less than 13,000 people, the Superintendent, Mr Moorhouse, conceived the idea of constructing a tunnel between Lyttelton and Christchurch, a mile and threequarters in extent, to do away with the serious disadvantage under which a great part of the settled country of the province labored in being shut out from convenient access to the coast. The cost of the tunnel alone, without the railway on either side, was estimated at a quarter of a million, and for the few people the province it wasamost serious undertaking. In fact, Mr Moorhouse's proposal may be said to be the first conception of the importance to the colony of executing large public works to improve the means of communication and open up the lands for settlement. The tunnel was made, and Canterbury has ever since been, and is now,- one of the most prosperous places in her Majesty's dominions. This is at.least proof that no hard-and-fast rule can be laid down to forbid a community from committing itself to great expense upon the faith of an anticipated large increase of population. ' In connection with cultivation in New Zealand the author says :— According to the returns of last year about 2,400,000 acres were under cultivation, of which 91,000 acres were sown in wheat. This is a small proportion, and of course precludes the Colony from being able to export grain, indeed, it has to import, which is always an extravagant position for a young colony to assume. The writer labours under a mistake in this passage. New Zealand does export more grain and flour than it imports, as will be seen from the following figures:— Value of imports of flour and grain of all kinds, excepting rice— 1873. 1874. 1875. .£193.853 £126,432 £116,919. Value of exports of the same kind— 1873. 1874. 1875. £148,587' £319,018 £239,795. In respect to the general reflections contained in the article about the relative proportions of the value of imports and exports, it may be said that all theories on this subject are liable to disturbance from causes which, whilst they affect the amounts, are of a more or less exceptional nature. Especially is this the case in sparingly populated countries like New Zealand. Take, for example, the following amongst other causes liable to disturb theories built upon the uniform interchange of trade. In New Zealand some 600 miles of railway have been built during the last few years; besides that, some 300 miles are in course of construction. The plant required has represented an abnormal increase of imports. The increased demand for labor for public works, and for the preliminary operations in connection with bringing land under cultivation, reduced the gold production, and therefore the exports. The large number of persons going to the colony involved the use of a great many ships, which led to a considerable excess of available freight, consequently larger stocks of goods were sent than were required for immediate consumption, and the imports were abnormally" increased. Hence the imports during 1875 exceeded those of 1876 by over £1,100,000. Again, the variable value of produce, of wool especially, is liable from year to year to much affect the declared value of exports. Another cireumstatce to be taken into account is the reshipment of imports. Victoria has, for example, a very large intercolonial trade, whilst New South Wales and New Zealand ship to the Pacific Islands considerable quantities of the goods they import. As far as the future is concerned, the wool, the gold, the agricultural produce, and timber exported from the colony are likely to maintain a fair proportion to the imports. It is, of course, well understood that that proportion, for prosperity's sake, should be somewhat less than the value of the imports to account for

the introduction of fresh capital and the expenses and profits yet to be realised, although -represented shy: ___oipation in the declared vSue of the imports. I will not, however, go into the question of the relations to be desired between exports and imports, for it is a very large one, and in its many bearings so fascinating as to be likely to lead one into lengthy digressions. Suffice it that there is nothing in New Zealand's position to warrant fear of an unhealthy relation between the exports and imports of the country. For the' rest, what better assurance of the well-being of the country can be required than that which the facts supply? In the face of those causes, such as diminished' expenditure and employment on public works, upon which the writer relies, the prosperity of the colony has increased. There is a good demand for labor. Besides the immigrants whose passages are paid by the Government, the number of other immigrants arriving exceeds the total number of departures from the colony. Land is eagerly bought, the railways are immensely used, thousands of happy homes are being created, the people are content and employed, the wealth of the oountry increases, and those who only show their interest in the colony by investing money in it, whether in mortgage or joint-stock enterprises, get so large an annual return for their investments that they get back their capital in a few years, in addition to the interest which in this country they might have obtained. i

Is it to be wondered at that those who know these things continue their investments in the colony, undeterred by written theories? New Zealand, with its serviceable climate, its freedom from droughts, the extraordinary capacity of its land, its splendid watercarriage, and its capabilities to- support millions of human beings, is the country of greatest promise to- suitable immigrants. Its population at the end of 1869, including Maoris, was 282,000. Its present population is not far short of half a million. In ten years it is likely to be the most populous of all the Australasian colonies. Had it not been for the native difficulties, now happily set at rest, New Zealand would probably by this time have a larger population than all the,. Australian continent.