Hawke's Bay Herald. THURSDAY. AUGUST 18, 1887. SECURITY OF CAPITAL.

Hawke's Bay Herald, Volume XXII, Issue 7825, 18 August 1887, Page 2

Hawke's Bay Herald. THURSDAY. AUGUST 18, 1887. SECURITY OF CAPITAL.

" If we had son,,, guarantee that ca|iital would be safe here, tliere are hundreds of things \vlii?h we conlil produce in this colony. ... It would be judicious for us to Miy that our property tax shall not o\ceud iv eerUin sum for five or nix years." So spoke Sir Robert Stout at t'liristclmroli, and with both propositions ■wo heartily agree, lint how do theses sentiments agree with the actions of the Ministry of which Sir Itolieit Stout is the head ? Ao previous Minibtiy lias done *o much to aliirm capital. We presume that all will admit thai if capital invested in (mi; way is Iliiuatciied the alarm will not lie confined to tl 1( . ra pjtal in that particular form of investment, but to all capital. This must bo more especially the case if what, has hitherto been considered the safest investment., and which absorbs the greatest amount of invested capital, is attacked Ut us apply these principles to New Zealand. What is the principal medium f or t|, e invctnmut of oapitivl, and what has been looked upon as the leu security:' The answer is "the land." It is therefore manifest I Iml the most tknsferotw attack on capital is an attack on capital invested in land Sir llobert Stout and Mr JJallniice have) between them, done everything they could to shake the feeling of security i» this class of investment, by their wild theories on land nationalisation, and the expropriation of large estates. II follows, then, that these two men have been the meutcst obstacle to the investment of capital in New Zealand. Yet now one of thorn tolls us that it is the want of a gimißiitee thai capital is safe which prevents hundreds of things being produced in

the colony ! The only remedy that he suggests is a promise that the property tas shall not be raised beyond a stutad sum for live or six years. This, wo may say en pmswil, is, .we hclisvc, a vwy good suggestion, and one which we hope to see carded out. But would that alone restore conlideiicc ? It would be like saying to the English capitalist: "We will guarantee not to tax your capital beyond a certain amount, but we will no! guarantee that the capital shall not be partly confiscated by legislation.'' Of what use is such an assuuvnee as that 1 The very first thing an investor looks at is the security for his capital. The possible taxation he may bn called upon to pay can he met by charghft a higher rate of interest— and that is the effect of the property tax now — but he cannot so guard against, the confiscation ot his capital by unjust laws.

Sir Robert Stout, no doubt, had in his mind's eye whon he spoke the establishment of manufacturing industries rather than increased production from the soil. But as we have said, if capital in one form ii attacked, all capiLal will take alarm. Moreover, agricultural and pustoral pursuits must be the backbone of New Zealand for decades yet to come. In the dim future, with a population of millions, New Zealand may become a great manufacturing nation, exporting her mamifac tured products to other countries. But at present the ciy for " protection to local industries" is the best proof that manufactured goods could not bs exported at a profit. If, with the natural protection afforded by the cost of bringing goods from Europe to New Zealand, colonial manufacturers cannot compete with imported products, it is on the face of it evident that goods made here could not be exported at a prolit. Therefore only the local market could be supplied. The main consumers of manufactured goods must be those settled on the land. If land-settlement is discouraged by threats of unjust laws then must the market for locally-manufactured products be circumscribed. To use artificial means like Customs duties to tempt manufacturers to start their industries here, and then to reduce the market for their produce by attacking the security of tennie inland, is the "statesmanship" of the Premier and Mr Ballance.

To hear the advocates of Protection talk, one would think that New Zealand is behind the rest of tho world in manufactures. But the reverse is the cise. Those dependent oti industiial pursuits in the colony are stated in the last census returns to number 13"I2 per cent. This is a higher proportion than in the United States or any other country in the world except Belgium, Germany, Vrancc, and England. This shows wonderful progress in so young a country, and as population increases manufactures will increase. The great aim of our politicians should not be to force certain industries artificially, at the cost of the settlors on the land, but, by reducing taxation to the lowest limit, to bring down the cost of living, and so attract settlers. The chief need of Mew Zealand is men with moderate capital, who will devclope our latest natural resources, and iti so doing they would make a market for manufactured goods.

To this end land should be offered to

them on easy terms —let them have the choice of a leasehold or a freehold — and in sulliciently large blocks to enable them to live upon the proceeds of tho land and to employ labor. Potato patches in tho bush or in the mountains fifty or a hundred miles away from a market are not what intending settlers want. The practical farmer with capital knows what he is about, and our land-laws as at present administered do not attract him to New Zealand, He knows that, though a small farm may pay well near a town, the further a(ield he goes the larger must be the area to enable him to get a living. Above all, security of tenure must be offered. Pi oposals for the seizure of large estates, for " bursting-up " taxes, and experiments in tho direction of land nationalisation are just the things to drive away the men we most want, and those who advocate such schemes are the greatest enemies of labor.