FINANCIAL STATEMENT.

Evening Star, Issue 9772, 31 July 1895, Page 2

FINANCIAL STATEMENT.

PACIFIC CABLE.

(Continued from Supplement,) RECIPROCITY WITH CANADA.

I feel sure that it will be gratifying to all in this country to know that a-Tariff Treaty has been arranged (subject to the approval of the Legislatures of both countries) between Canada and Now Zealand, The main features of the Treaty are that some of our groat staple products will be admitted into Canada free. Under the proposals a considerable expansion of trade may be looked for in the products brought forth by country settlers, as well as of trade generally in the-colony. As soon as the neoo sary preliminaries to confirm the proposal have been completed there will be a free market between Canada and New Zealand for wool and woollen manufactures, blankets, flannels, tweeds, rugs, live stock, frozen and fresh meat, bacon and hams, fish, hides, condensed or preserved milk, flax, barley, oats, wheat, flour, seeds, binder twine, coal, kerosene, oil, safes, organs and pianofortes, tallow, lumber, and timber. In addition to the articles on the free list named above concessions in favor of the following articles are made Should a duty be placed in New Zealand upon agricultural implements, they are to be admitted free from Canada, and a concession of 21, per cent, below the general tariff rates is also provided upon twine of all kinds, ropes, cordage. As Canada is a large manufacturer and exporter of binder twine, ropes, and cordage, the competition which will ensue in this country in that industry will remove any friction that may have existed, and ensure at least a fair value upon this article. There will also be a deduction equal to 10 per cent, off the Customs tariffs upon leather and 5 per cent, upon boots and shoes, harness, and saddlery as between the two countries. This latter proposal will, I trust, meet with the approval of the people of this country, inasmuch as, under ordinary conditions, it should enable our own manufacturers to gain a portion of the trade in Canada and to export a considerable quantity of these articles from New Zealand, while they will at leost fully hold their own with the Canadian article. Tnere will also bo a concession of 5 per cent, below the tariff rates allowed upon manufactured furniture, and a similar concession is to be allowed upon New Zealand furniture introduced into Canada. Particulars generally will bo obtained from the memorandum of agreement which I shall presently road. Upon careful scrutiny of the document it will be seen that the possibilities of trade with Canada are under tliis Tariff Treaty very great. The Canadian Dominion is within twenty days’ steam of New Zealand. In considering the proposal as submitted by me I would ask hon. members to recognise that the country with which wo propose to enter into a Tariff Treaty has a population of some five millions, and as years go on the two countries must, as the result of this friendly interchange of treaty, reap mutual and lasting benefits. I would ask hon. members to give to this important proposal, thus briefly sketched above, their most careful and impartial consideration, recognising that any expansion of markets for New Zealand products means increased national prosperity. With our land settlement and with our increasing productive powers going on apace it is absolutely essential, to enable onr country to prosper, that fresh markets should be found in other countries for our products. We propose now to begin with two Great British dependencies, and I sincerely hope that the movement will be supported with spirit and enterprise by our fellow colonists in all parts of the country. I have had some statistics prepared which I attach for the information of hon. member, so as to show the possibilities of trade with Canada. It is, a* I have said in speaking of the South Australia proposals, very difficult to estimate the degree to which the possibilities of trade will extend under a treaty such as I bavc sketched to you. Unlike South Australia, which is closer to New Zealand, and the people of which are more familiar with our commercial conditions and requirements, I am of opinion that at first the growth of trade between Canada and Now Zealand will be slow, from tb6 fact that new connections will have to be opened up by commercial houses in both countries, which would probably entail visits to the respective countries by representatives of those houses, and necessarily there would b,e some delay qt the inception of the proposed interchange of trade. 1 should not, however, expect to have to provide more than £5,000 during th.e first year as the result of concessions upon the articles named as likely to be imported here by Canada. I may in this respect be mistaken, and in order to ensure that a sufficient sum is provided I have, in estimating the finances, allowed for the amount being doubled if neces- : ary.

Memo respecting improved commercial relations and reciprocal tariff regulations as agreed on in a conference held informally at Ottawa on 10th June, 1895, between Sir Mackenzie Bowell, Premier, etc., and tin Hon. George Foster, Finance Minister, etc., as representing Canadian interests, and tho Hon. J. G. Ward, Treasurer and Postmaster-General, as representing New Zealand interests, subject to the approval of the Governments and Legislatures of Canada and New Zealand respectively.

The following-named articles when the produce or manufacture of New Zealand and imported direct into Canada, and when the produce or manufacture of Canada and imported direct therefrom into New Zealand, to be admitted in both cases free of Customs duties viz. ; (I) Animals (live), excepting hogs ; (2) frozen or fresh meats; (3) bacon and hams ; (4) fish; (5) hides • (6) milk (condensed or preserved) ; (7) wool and manufactures composed wholly or in part thereof —viz., blankets, flannels, tweeds, and rugs; (8) Hax (phormium); (9) barley; (10) oats; (11) wheat flour; (12) seeds; (13) coal; (14) kerosene oil (petroleum); (15) safes; (1(J) organs and pianos; (17) tallow; (18) lumber and timber, planks, boards, and dimension stuffs, rough or manufactured, including doors, sashes, ami blinds; (19) binder twine.

The following articles, when imported under like conditions and in like manner, to receive in both countries preferential treatment as follows: —viz,; (1) agricultural implements, including also axes, hatchets, scythes, forks, rakes, hoes, shovels, and spades, if made dutiable under the New Zea> land general tariff, to bo free; (2) twines of all kinds, ropes, and cordage—a rate equal to 2>J per rent, ad valorem less than the general tariff rates current at date of importation ; (3) leather—a rate equal to 10 per cent , off the rate current at the date of importation ; (4) boots and shoes, harness, and saddlery—at 171 per cent, ad valorem, or in case the general tariff rate in both countries bo 25 per cent, the preferential rate to he 20 per cent.; (5) furniture—at 20 per cent ad valorem. Mackenzie Bowet.i.. Gf.ouoe E. Foster. J. G. Ward, Colonial Treasurer of New Zealand.

THE CANADIAN-PACIFIC MAIL SERVICE, To enable the trade between Canada and New Zealand to be successfully carried on, it is advisable that regular steam communication between the two countries should be established. With this view, an agreement between the Canadian-Pacific Steam Ship Company and the Government will be submitted to the House for approval. The line of steamers at present running between Canada and Australia is subsidised for a period of about eight years by the Canadian Government, and also fora shorter period by the New South Walts Government. It is proposed that this line of steamers should run to either Auckland or Wellington, and in return for a monthly service, to be conducted with a view to necessary expedition and accommodation, touching at Fiji and Honolulu, to give the company a subsidy of £20,000 per annum for a period of years to be fixed. I believe that the advantages—direct and indirect—which will be gained by the colony if this proposal be given effect to' will more than warrant this outlay ; and that the whole of the sum of £20,000 cannot in any case be a direct loss to the colony, inasmuch as the line of steamers so subsidised will carry mail matter upon which, under ordinary circumstances, we would have to pay a poundage rate The advantages of such a service in developing our tourist traffic cannot be over-estimated. With the establishment of this service it is not intended to abandon or weaken our support of the San Francisco line, which gives us an important connection with America. Our policy is to have a fortnightly connection from Now Zealand by the two lines to America and Canada respectively. In order to prevent the concessions upon the duties between the two countries and the proposed subsidy to the line of steamers between Canada and New Zealand being provided for out of our present revenue, I propose to make up from £IO,OOO to £20,000 per anmVm by

A READJUSTMENT OF THE DEATH DUTIES.

So fay as I can learn New Zealand is tho only colony‘where property devolving upon a widow or widower js exempt from succession duty, and I believe there is np such ejeeinption in England at tlie present day. As the law here now stands all property devolving upon a widow or widower is absolutely exempt, and where cither takes a life estate in property yielding a yearly income of less than £SOO the duty is postponed until the death of the life tenant. In comparison with other countries this appears to me to be much too liberal, and I propose 1. To exempt all estates under £3OO. 2. Subject to such exemption to abolish the exemption on all property devolving upon a wife or husband absolutely. 3. In order to determine the rate of duty, that all property disposed of by will, settlement, gift, or family arrangement be aggregated as in England. An amendment of the Deceased Persons’ Estates Act, 1881, will be introduced so as to give effect to the above proposals. Independent of the fact that it is desirable to provide for the loss of revenue by the admission of certain articles from Canada free,. I see no reason why, where valuable legacies have been left, they' should escape taxation which they do: not escape in other countries,

The important question of establishing a Pacific cable by an all-British route to Canada and England has engaged the attention of the Government daring the recess. The matter proceeds somewhat slowly, owing to the fact that several countries are interested with New Zealand in the establishment of this link via the Pacific, and joint action is necessarily required. Thn Canadian Government are very much in earnest in their desire to have their country connected with the colonies by a cable touching the Pacific Islands en route. The matter is one of much importance to New Zealand. At the present time, as lion, members are aware, our cable connection crosses a number of territories outside the British Empire, and in the event of war the maintenance of communication through so many countries would be greatly imperilled, owing to the isolated position we occupy ; and there probably is no country to which, in this respect, an outbreak of war would be of more serious consequence. Thin fact renders it all the more necessary that we should do all in our power to hasten the establishment of a Pacific cable, quite independent of the commercial advantages thereof. It is proposed to ask the House to assent to the necessary legislation to give the Government power to co-operate witli Canada and other countries interested in pushing forward this project. A careful analysis of the cost and of the commercial possibilities resulting from the establishment of such a cable demonstrates that it would not involve any heavy contribution or responsibility on the part of New Zealand. I feel sure that hon, members on both sides of the House will recognise the importance of our endeavoring to remedy the unfortunate position of affairs, which might, should an emergency arise, result in seriously affecting the industries of New Zealand. CONVERSION OPERATIONS.

While in London I took the opportunity of making full inquiries as to the prospects of converting our future stock into 3 per cents. As the result of careful and extended inquiries, I am of opinion that this can be done with much advantage to the country in the way of a further large saving of our annual interest charges. In the delicate and difficult operations that surround large financial transactions it is obvious that many matters of detail require to be provided for, and it becomes important to choose an opportune time to canyout a conversion scheme of magnitude. It has occurred to me as a matter for careful consideration whether a scheme could not be formulated whereby the addition to our debt arising from further conversion operations could not be so provided for as to prevent such increases becoming a permanent addition to the public debt. In my opinion, a portion of the interest charge which would be saved to the country by a successful conversion operation could be fairly utilised as a sinking fund to provide for the extinguishment of thp additional debt created by the conversion. lam convinced that a very large saving of the annual charge can be effected, and if any extra debt can be provided for at maturity it is easy to see that the country will bo a great gainer by the ideas I am now placing before you, it they arc carried to a practical and successful issue.

THE EXTINGUISHMENT OP THE PUBLIC DEBT.

The question of the extinction of our loans has given me much concern. The time is approaching when, in my opinion, it will add to the stability of the.colony, and place it in the forefront of honor of any country in the world, if we would resolve to make a moderate sacrifice in providing, along with our annual interest, a -mall payment to the loan, to be extinguished within a reasonable period, upon a system somewhat similar to that which is now applied to our Loans to Local Bodies. The question of how the various Administrations use the Sinking Fund of the colony would, under such a proposal as I am endeavoring to sketch, completely disappear, inasmuch ns the Sinking Fund would be included in the annual payments of interest. If we realise to the full the advantages that would follow a general conversion of our Stock into 3 per cents., and utilise the large annual saving m interest thus obtained to ropay our indebtedness, the ability of tfie taxpayers to provide the Redemption Fund will not be taxed beyond present limits. I fully recognise the fact that financial authorities urge that a borrowing country should not provide a sinking fund until it has ceased to borrow. Circumstances alter cases, and I say that with our prospects of obtaining money at ppeh a low rate as would enable us to provide for the gradual reduction and extinction of our debt, without adding to onr annual burdens the provision of a sinking fund, is a course that has much to coipmend it. While posterity has doubtless to reap the reward of the efforts of ourselves and those who have preceded us, and should bear its full share of the burdens created to make the country, still as prudent men we should, while recognising tho necessities of the times in which we live, endeavor to make onr legacy as light as possible for those who will follow us. I think there is much to he said for this proposal, and I am seriously of opinion that it would give greater stability to this country were we—when the right time arrives—to adopt an effective system for the extinction of our indebtedness. LOCAL BODIES’ LOANS.

The general lowering of the values of money has necessarily brought before me the question of the rates of interest which are being paid by local bodies for the moneys they require for carrying on their public works. It is, of course, difficult to make a charge retrospective in its application where a commitment for a period at a particular rate of interest has been agreed to by a local body. But I am decidedly of opinion that the advantage to be gained by the cheapening of money should apply to local bodies throughout the country, and it seems to mo desirable that the rates which are now being paid to investors in the securities of local bodies should be lowered, go as to be in keeping with those wo are paying for our borrowed moneys, I propose, after due notice has been given, to readjust the lending rotes of the Government departments, and to take the necessary steps to relieve such local bodies as have funds provided from these institutions for carrying on their finances. In connection with this I desire, however, to point out that, unless the other financial institutions of the country are agreeable to conform to the system which has been initiated by the Government, wo will not stand by and allow any unduo advantage to be gained by them to the detriment of the Government institutions from the colony’s action in lowering interest rates. The more the question of

CHEAP MONEY is thought out by all classes in the country the more it will be seen that it is of the first importance to the future prospects and development of New Zealand that we should be placed upon a footiug at least equal, if not superior, to that of countries closer to the consuming markets of the world. This should not be a question that should rouse any party feeling. It is one with which the interests of the country arc very closely hound up—so much so as to render it essential that we should combine to ensure the best possible results for all classes of the community, in order to enable them to profitably carry on the operations vital to the well-being of the polony. I repeat my often-expressed opinion that the rates for money, both for public and private use in New Zealand, have been and are still too high, and still beyond the power of the general community to continue to pay.

LOCAL GOVERNMENT. The Hon. the Premier will at an early date submit for the consideration of the House important proposals for the improvement ot local government in this colony. It will be more convenient for the financial portion of the proposals for such a change as is contemplated to be brought before this House simultaneously with the whole local government scheme, and I shall therefore only direct the attention of hon. members to the change contemplated. The money provided in the Estimates under the he»d of “permanent charges ” amounts to the same as was there last year. This, however, is only approximate, and, in addition, under the Public Works Fund other moneys will be available for main roads, which up to the present time have been maintained by the local authorities.