TUESDAY, FEBRUARY 15, 1881. ANOTHER ATTACK ON NEW ZEALAND'S CEEDIT.

Evening Post, Volume XXI, Issue 37, 15 February 1881, Page 2

TUESDAY, FEBRUARY 15, 1881. ANOTHER ATTACK ON NEW ZEALAND'S CEEDIT.

In the London Economist of 25th December, which was published immediately prior to toe departure from England of the last San Francisco mail, appeared one of the most bitter and injurious attacks on the credit of New Zealand which has yet seen the light. It is given under the guise of a 2st£er to the editor, signed "A New Zealand Colonist," and dated simply " New Zealand, 1880." It ! itt founded on an article in the Lyttelton Times in which certain statistics of 1870 and 1879 are compared, to the great apparent disadvantage of the latter. The gist of the comparison is that, whereas in 1870, New Zealand, with a population of 250,000, had a total national debt of £4,215,114, a yearly interest of £210,755 to pay, and exports valued at £4,600,000— in 1879, with a population of 445,000, she had adebt of £28,944,113, a yearly interest of £1,535,000 to pay, and exports valued at .£5,743,126. The ''New Zealand Colonist" sums up his sase thus : — "It is therefore patent that since 1870, wjth £24,728,999 additional borrowed money awl an increase in the population of 195,000, or 78 percent., the yearly value of the exports have (s\c)' fallen from £18 8s to £12 18s lid per head, while the national 3ebt has increased from £16 17s 24 to £65 0s 10* d per head, and the yearly interest on £he same has inoreased from 16s 10id to £3 9s par head. The yearly interest, as compared with value of the annual exports, has inoreased fawn 4*5 per cent, to 26$ per cent, of the value of the annual exports ; or more than one-fourth part is absolutely required for interest alone on the state debt. This is not an agreeable picture, but happily, as we

shall show present^ neither id it at all a faithful one. The writer, in hia oagorneas to depreciate luh adopted country, easts all conaideration of grammar to the wind, zi well as truth, and mixeH up decimals and vulgar fractions in a style which is slightly confusing ; but let that paes. He has npt yet completed his indictment against thi3 Colony, proceeding in the following cheerful strain : — "But this statement, formidable as it is, by no means represents in its true light the danger that holders of New Zealand stock incur. The word repudiation is not only frequently heard in private, but has been mentioned in the House of Representatives. The fact is, that unless the capitalists of Britain will go on lending, New Zealand cannot pay the interest on her debt. The interest, for years past has been paid out of loans, but, as the Parliamentary paper with refer&nce to the last five million loan conclusively shows, that loan wa3 anticipated by bills before the loan was negotiated — before it was even certain that it would be negotiated. In fact we were bankrupt, and it was only by our creditors making a further advance that the bankruptcy was hidden from the world. The worst feature of the case is that the bulk of the population will not submit to direct i taxation. Government proposed to put on a Property Tax of one penny in the pound on all kinds of property, exempting those who had less than £200 clear. There was such an outcry that the exemption was extended to £500, and now furniture and personal effects are exempt also laic). Even now the shopkeepers are making a great outcry about their stocks being taxed, though very few have £500 clear. The private indebtedness of the Colony is enormous, and the banks have been very heavy losers during the last two years. The banks attempted to stop all overdrafts, but they found that they were simply sowing ruin broadcast, and that the whole Colony would go insolvent. But they have greatly restricted their operations, and instead of the bountiful supplies of a few years back, the scantiest possible accommodation is given even to legitimate trade. We have in the Colony about 90,000 adult males. Of these 10,900 are in Government employment ! All these are non-producers. Of the remainder a very large number are loafers, doers of odd jobs, tradespeople with not a tenth of their time employed, publicans who do more harm than good, and the usual supply of professional men. Deducting all these, is it possible that the remainder of the 90,000 can keep all the rest of the colony, pay a million and a half of interest on the public debt, and, it is believed, quite as much more on the private debt?" Such is our melancholy case, as stated by this precious Boi-d4sant "New Zealand Colonist." He doea not conclude, however, without offering a panacea for all these ills, and he shall give it in his own words. He says:— "The remedy is simple. Let British capitalists sternly reiuse another loan. Don't be persuaded by the cry of economy. All that is being done now is to spread the unexpended balance of the loan over the two years still to elapse before another can be contracted. Every effort will be made to pay the interest for those two years, but then, if no further loan is floated, the crash must come. — I am, &c, A New Zealand Colonist."" Fortunately for this colony, Sir Julius Vogel, with his usual promptness and energy, instantly addressed to the Economist a brief but most able and complete reply to this malignant attack on our credit. Characterising the Economist's correspondent as " dishonest," and the figures quoted from the Lyttelton Times as "so fallacious and misleading " (remarking that " a stronger phrase might be used "), that "they will not bear consideration," Sir Julius Vogel proceeds to justify these expressions in the clearest possible manner. He shows that the Economist's correspondent, in his estimate of the National Debt in 1879, took only the '' general" indebtedness and excluded the provincial, while in that for 1879 he included the provincial debt, beside also including a large sum unspent, and it was in this way that the unfavorable comparison was made up. The provincial debt, which is included in the amount for 1879, amounted in 1870 to £3,053,355, making the public debtthen £7,268,000 instead of the £4,215,000 on which he bases his calculations, which, consequently, are utterly worthless for purposes of comparison. Sir Julius Vogel goes on to point out that the diminution of the proportionate exports to population in 1879 as compared with 1870, is due solely to the decreased yield of gold, which, he remarks, "is a contingency that has to be looked forward to in every country where gold is found near the surface, and the hope of the country depends on other industries replacing, the diminished mining one." He demonstrates that this has been realised, for deducting the gold yield in each case, the exports for 1879 would be £4,608,485 as compared with £2,436,090 in 1870, and of these sums, wool and grain, which only yielded respectively £1,703,944 and £142,008 in 1870, produced £3,126,439 and £662,849 in 1879, there being thus fourfold the export of grain, while even that does not represent anything like the increased supply, tor the importation of grain has largely diminished, while the exportation has increased, and the Colony now virtually supplies itself with grain beside exporting as above, and the same applies to other articles of common consumption. Sir Julius further points out that the comparison of the debt per head is meaningless, because the burden must be measured by the capacity of the population to maintain it, and the annual burden weighed much more heavily on the earnings of the people in 1870 than 1879. He ridicules the idea of "repudiation" as an absurdity, the public debts of the Colony being a first charge on its revenues, and as no expenditure can take place without the warrant of the Governor, the Governor who signed a warrant for other expenditure when the public debts of the Colony were in arrear, would be gnilty of an infraction of the law tantamount to a misdemeanour. If, therefore, the Colony were really pressed, it would simply have to reduce its other expenditure. Sir Julius Vogel explains that the only objection to direct taxation was on the ground that it was unnecessary, and that the Government employes included all railway officers and servants, persons paid by fees for registering births, &c, so that the real number of Civil Servants, properly so-called, is very much smaller, and many of the socalled Government employes are really producers. He expresses unbounded confidence in the solvency, resources, and future greatness of New Zealand, remarking that " New Zealand, with its exceptional advantages, like a person accustomed to exceptionally good health, has been unduly depressed by a little illness." Sir Julius Vogel surmises that the Economist's dishonest correspondent must be " one of those who, having greatly benefited by the policy of the last few years, does not care that his fellow colonists in less favored districts should do the same," and he adds, " The jealousy between different districts, and the necessity of commencing works in some and deferring them in others were the greatest difficulties to contend with in the promotion of tho policy which fitted the Colony to become the home of a vary large population." In making this prompt, incisive and cogent exposure of a malicious tissue of misrepresentations, Sir Julius Vogel has once more done good service to the Colony with which his name has long been so eminently associated, and he deserves, and we are certain will havo, the hearty thanks of every genuine " New Zealand Colonist."