The Lyttelton Times. SATURDAY, FEBRUARY 18, 1865.

Lyttelton Times, Volume XXIII, Issue 1361, 18 February 1865, Page 4

The Lyttelton Times. SATURDAY, FEBRUARY 18, 1865.

Again there reaches us an authoritative statement of the financial condition of Southland. If we make use a second time of reliable figures which prove the indebtedness of our sister province, out of the mouths of its leading men and the columns of its newspapers, we trust ,that our object in so doing will not be a se>cond time mistaken. We have no interest in running down the character of Southland or its people; on the contrary, we have every reason for sympathising with it and them. To be of service in the present time of difficulty is not only our duty as neighbours, but it is a course distinctly to our advantage to take; nay more, if we forsee the future correctly, Canterbury will be compelled to help in extricating Southland from its difficulties. Accordingly, we turn to an examination of the affairs of that province with even more than a friendly interest, and by no means in a contemptuous or supercilious spirit. And it will be well for Southland, if she really hopes for assistance, to lay her affairs open to the colony, and not to be offended at the inspection which they must undergo. The province has suffered by concealment ; and rumours worse, perhaps, than the facts have floated about. "We have never listened to such rumours about the state of the Southland finance ; but now, when, after the lapse of many months, an authoritative statement of her liabilities is put forward by the Treasurer of the province, we take leave to examine it as fully as may seem necessary. The Southland Treasurer tells the world very plainly what is the state of his public account. To be thoroughly clear, we put it in the shape of a short sum, thus : — Authorized and Secured Debts ... £310,000 Unfunded Liabilities 120,000 _______ £430,000 Interest and Sinking Fund for the coming year 60,000 [ £490,000

The amount to be provided in the coming year is therefore very nearly half a million sterling. The last item of the three, the year's interest, is included by the Treasurer in the principal sum, because he declares that" it is beyond the present capacity of the province to meet" the annual charge on the debt, "and even beyond its probable capacity at an early period." That is to say, go long as matters remain as they are, the province is accumulating its liabilities at the rate of some £60,000 a year in the item of interest alone. That we may not seem to be mistaken on this point, let us' turn to the newspaper account of the same matter. The Southland Times says that " the liabilities of the province are nearly half a million, while the revenue is very little more than sufficient to cover the departmental expenditure —that expenditure being reduced to its lowest possible figure." And conversely— " Were the whole of the provincial funds devoted to the liquidation of the liabilities— the province being left meanwhile to take care of itself, without Superintendent, Executive and Provincial Councils, Police, Pilot service, &c.—there would not be nearly sufficient to pay the interest and sinking fund." There cannot well be a more urgent case for interposition. It must be observed also, in examining this account, that the first item is like the rest, to a great extent at least, ijot only a liability but an urgent and pressing'claim. There are debentures to set against the amount, but they have not been sold; and the money which is here entered been for the most part borrowed from other sources and upon unlegalized, we might say illegitimate, securities. The debentures, should they ever be disposed of, will remove a considerable portion of the debt from the position of a pressing claim against the province to that of a funded debt. But there will still, by the Treasurer's showing, remain £180,000 of urgent liabilities; and even the interest upon the funded debt itself cannot be paid. What Southland actually requires is that her £300,000 of debentures should be speedily sold; that a further principal sum of £180,000 should be raised to meet urgent liabilities to the end of the present year, and that next year shall find the province in possession of a clear yearly income from land of at least £40,000, for the purpose of paying the interest and sinking fund alone as they become due. The province of Southland has a resource in its railways. But, unfortunately, though these railways actually represent money, they are yet unfinished, and therefore profitless. It may be a question whether as a whole they would pay for working at present; but at any rate the Government are " unable to finish them, or even pay interest on the debt already incurred on account of them." They look forward, however, to selling one if not both of the lines, as it stands in its partly finished state.

Another resource of the province, and the greatest of all, is the land. It was chiefly on the security of the land revenue that the debts of Southland were incurred; and it is the failure of this source of supply that has brought the province to such a pitch of bankruptcy. The land is not lost or granted away. It simply won't sell. The Treasurer says that the land revenue might have been expected to decline; but it has done more, it has ceased altogether. The failure of this branch of revenue is imputable chiefly to the fact that the price of land was suddenly raised from ten shillings to two pounds an acre. The change was made by the Assembly in the session of 1863; and it appears to have been made to an extent never intended by the people of the province themselves, but have been suddenly decided on by a few members of the General Assembly. "With whatever design the alteration was determined on, it was carried out, to say the least, at a most unfortunate time. The price of land became two pounds an acre at a period of desperate depression; it met with strong opposition from a large section of the public; and accordingly, not only was there a natural unwillingness to buy at the price, but buyers seem to have looked forward to a reduction at some future time, and to have held over till then even such purchases as they would otherwise have made.

Still the land is there; it is a resource as an available security to offer to creditors. It is that sort of property which may be

very hard to use for immediate wants, but will justify the interposition of powerful friends, if such can be found, who will help the province through its difficulties as a matter of business, if they can see their way to make themselves safe at last. To sell the land at such a low price as must tempt purchasers would speedily realise a sum sufficient to pay off all liabilities, principal and interest, and to finish the railway besides. But this would be wild mismanagement. The land is worth and will ultimately realise a very good price; and, if properly managed, will replace Southland, in time, in as flourishing a position as she ever occupied among the Southern provinces. The price is now two pounds, and to lower it by half would have all the disadvantages of a middle course. The change would perpetuate the feeling of instability; it would not realize enough money in' a sufficiently short time to liquidate any considerable part of the debt; and it would decidedly lessen the value of the security to be offered to the money-lender for the remainder. Land is too precious a possession to be thrown into the market to meet a temporary pressure; its great value lies in affording a Bure prospect in the future, if it be carefully managed. Such a security is really all that is needed as a basis for successful "financial operations, and as long as Southland possesses such it need, not quite despair. We are glad, therefore, apart from the implied compliment, that the Provincial Council of Southland are not only content to abide by the Canterbury price, but desire to assimulate the land regulations as closely as possible to the Canterbury model. We suspect that this policy has its chief supporters among the interested class of sheepfarmers ; but there is a deeper wisdom in it than is traceable to any desire for gain by these gentlemen. And something is done for quite another class, by the proposition that land shall be given by free grant to immigrants who pay their own passages. We cannot but think this a very expensive way of importing population, and one not so serviceable to those imported as it may seem at first sight. Having made these propositions for improving the security which the province has to offer in its lands, the Council, it seems, has asked the General Government to do two things. First, to buy the Bluff and Invercargill Railway, some miles of which are completed; and secondly, to guarantee the debentures of the province, that they may sell more readily. We see also among the bills passed by the Council a new Debenture Ordinance, from which it is to be inferred that the province is asking for power to consolidate its liabilities into a new loan. But our files are incomplete just at this interesting point, and we cannot be sure of what the real proposal on this head

Having learnt the state of the finances, talked over the difficulties, discussed the price of land question, and addressed the above-mentioned requests to the General Government, the Council was prorogued. And we must adjourn for the' present the consideration of what the General Government may say to the requests; what, in the, very probable case of their refusal, ought to be the course taken by the province of Southland; and what consequences the other provinces of this island must be prepared for in either case.