Evening Post. MONDAY, APRIL 9, 1894. SHAM SELF RELIANCE.

Evening Post, Volume XLVII, Issue 83, 9 April 1894, Page 2

Evening Post. MONDAY, APRIL 9, 1894. SHAM SELF RELIANCE.

+ It may, we suppose, be taken for granted that tbe Government does not intend to invite Parliament nnxt session to authorise a Public Works Loan. We regret this, for wo believe tho time has arrived when the necessities of the country demand the aid of borrowed money, to carry on a colonising policy, and complete public works which are now entirely unproductive, although large sums of intorest-bcaring money have been spent on their construction. Tho time also is opportune for borrowing on favourable terms. We believe that the Government would have done a popular thing in resolving to propose a woll-oonaidered scheme for tho prosecution and completion of public works by moans of a new loan, although we confess wo should have been very sorry to see the expenditure of a loan ontrusted to such an unscrupulously jobbing Ministry as that at present in office A fresh loan, however, wonld have averted much suffering which, in default of borrowing, wul have to bo endured ere long by a. Krgo Boot ion of the population of the colony. The times are unmistakably dull now, but there aro worso bofore us. The depression is bound to become greator with every week whioh passes until there is a change of policy and of Government. The present policy is that of living from hand to mouth — living on capital, and surreptitiously increasing the burden on posterity without tho prerent generation doing any thing which may help posterity to bear the burdou. That the doepening depression, arising mainly from distrust on the part of capital of the policy and aims of tho present Ministry, most injuriously affect the revenue of the ourrcnt year, cannot be questioned. The Colonial Treasurer will find that, with every industry in the country paralysed, universal distrust prevailing, public works almost at a~ stand stillj and unemployed everywhere olamonring in vain for work, even the remarkable elasticity of the New Zealand revenue will fail, and money will become scarce in the Treasury as well as in almost every business establishment and household in the colony. It may be asked — How, then, does the Ministry hope to be able to carry on during the year if it does not borrow? The answer is sufficiently plain to those who are behind the scenes. It is intended to live on the proceeds of loan conversions. That is, it is intended to use in aid of current revenue the accrued sinking funds of several loans, whioa are to be converted into inscribed stock. In other words, the oolony this year is to live (as, indeed, it has in a great measure lived for sevoral years past) on the savings of former yeara— on the (inking funds laid np by the colony in better times towards the relief of posterity and the reduction of the public debt. Tho net debt of the colony will, of course, not only be incroased by the amount of the sinking funds so absorbed, but still L farther by the price paid for conversion, for, of oourso, any reduction of interest has to bo paid for by an increaso in the principal. The precise extent of the conversion operations now in progress at Homo is described in the following extract from the Financial Times of 15tn February : - " The Bank of England invites holders of " debentures of the following issues, being " loans whioh formed part of the public debt " of the colony, to bring in their bonds for " conversion into 3\ per cent, consolidated " stock, inscribed _nt tho Bank. Applica- " tions will be received, and the conversion ( made, on the terms follc-ing :— " five per cent. Contois (annual drawings). "For every J!100 in Consols debentures,

" inscribable on or after 16th April, 1894. "Do Ventures for conversion may be deposited " at the Bank on or after 19th February, " but not later than 21st March. The " annual drawing for the redemption of tbe j •' Consols debentures will take place on 22nd " March, and debentures brought in for con- •' version before that date will not be affected "by the drawing. Holderß of Consols deben- " turps drawn for redemption in respect of " which no application for conversion has been " made np to 21st March will be allowed to " receive in exchange for each drawn de- " benture £102 of 3i per cent, stock, pro- " vided application be made and debentures " deposited at the Bank before 15th April. " All debentures drawn for redemption not " bronght in for conversion under the above " terms will be paid off at par on and after "the 16th April, 1894. £378,800 five per " cents, of the loan of 1863, redeemable 1914. " For every £100 in debentures of this loan, " £115 10s of 3} per cent. Consolidated " stock inscribable at tho Bank on or after " 2nd Juno. Debentures may be deposited " at the Bank on or after 19th Febrnary, " but not later than 31st May noxt, " when the offer given as above to " holders will expire. Debentures still " outstanding of the undermentioned old " provincial loans will be aocepted for " conversion into 3Jt per cent consolidated " btock on torms which can be ascertained " on application at the Bank :—(1): — (1) Lyttel- " tun and Christchurch Railway Loan, re- " deemable 1894 to 1897 j (2) Auckland Loan, " redeemable 1806; (3) Nelson Loan, redeem- " able 1896 ; (4) Otago Loan, redeemable " 1898: (o) Canterbury Loan, redeemable " 1915 to 1910. Tho right is reserved in tho " case of any debentures specified, not " brought iv for conversion on the terms " now notified, to either redeem the same " by the proceeds of the sale of 3J per cent. " stock, or to convert them into such stock "on torms to be notified by the Bank "of England. Tho Consolidated stock " will in every case rank j>ari ptusu with " the New Zealand 3i per cent Consoli- " dated stock already inscribed at the Bank, " redeemable at par Ist January, 1940." It is, we believe, estimated that the result; of these conversions will bo to releaeo something like £300,000 of accrued savings, which will then be available for current use It ia on this sum that the Government depends to make both ends meet during the present financial year. Of course, this is a poliny which can only last for a very short timo. When all tho loans are converted and all the sinking fund accumulations absorbed, the colony will be loft with an immonsoly increased national dobt, which will present a very serious obstacle to any further direct attempt at borrowing, however urgent tho need for it may be. Tho operations now in progress will add very nearly half a million to the net debt. The presont system is one of tho worst possible systems of borrowing. It is borrowing on the sly, with really nothing to show for tho liability incurred. Yet its authors havo the impudence to assert that the polony is living within its means, and is pursuing a self-reliant policy, when it is giving enormous drafts on the futnro, in order to be permitted to use for present necessities the accumulated savings of former years and of a more prudent policy. In reality, New Zealand is now burning the candle at both ends, and is advancing rapidly towards a most serious financial and economic crisis.